How sustainability indices and ratings make our commitment quantifiable

In a world where commercial success is intertwined with acting responsibly, investors are placing greater emphasis on principles relating to sustainability, environmental protection and social commitment in their investment strategies.
This opens up a unique opportunity for businesses: By publicizing their efforts surrounding corporate social responsibility, they make themselves more attractive to private shareholders and investors who are interested in sustainable investments and can boost their image too.
Sustainability indices and ratings play an important role in this. They provide an objective basis for evaluating a company’s environmental and social commitment and help win the trust of customers and investors.

In sustainable stock exchange listings, the share price is influenced not just by hard financial indicators, but also by criteria relating to environmental, social and governance matters (ESG criteria). The most prestigious sustainability index is the Dow Jones Sustainability Index (DJSI). It measures the share performance of companies that are at the forefront of their industry in terms of ESG criteria, as selected by the rating agency S&P.

The top 20 percent of the most sustainable large-scale enterprises in Europe are listed in the DJSI Europe. In 2021, we became the first and only company in the steel industry to make the grade and be admitted into this exclusive circle. In 2023, we were ranked in the 91st percentile in our sector, proving that we are continuing to perform better than or equally as well as 91 percent of all steel companies rated when it comes to sustainability.

Aside from the DJSI Europe, our listing in the FTSE4Good index since 2020 highlights our untiring commitment to corporate responsibility and the progress we have made in this respect. This FTSE4Good is compiled by FTSE Russell, a subsidiary of the London Stock Exchange Group, and serves as a benchmark for efforts and achievements relating to environmental management, climate change, human and labor rights, supply chains and anti-corruption.

To gain an objective impression of a company’s performance in terms of environmental, social and governance factors, investors, analysts and customers also turn to specialist sustainability ratings for guidance. These ratings can refer to the group as a whole or individual sites within it.

Sustainability ratings are important to us because they present our actions as a business from an external perspective and provide a benchmark for assessing our path toward sustainability. All of these rankings are based on our efforts to minimize our carbon footprint, select our suppliers with care and consideration and fulfil our social responsibility.
Below is an overview of the key sustainability ratings in which we have achieved good rankings:

EcoVadis is one of the leading providers of sustainability ratings and assesses more than 100,000 companies across four categories: Environment, Ethics, Labor and Human Rights, and Sustainable Procurement. Both we as a group and our individual sites have been recognized by EcoVadis on several occasions over the years. voestalpine Stahl GmbH has achieved a gold medal from EcoVadis and voestalpine Tubulars GmbH & Co KG a platinum one, underlining their pioneering position in their respective fields. voestalpine Stahl Donawitz GmbH has also been awarded a platinum medal.

Our commitment to climate protection has earned us an A- score from the Carbon Disclosure Project (CDP). This means we have shown an outstanding level of leadership as a company by taking coordinated action on climate protection and implementing best practices in an exemplary way. This places us among the top 22 percent of all companies in our reference group. We also performed well in the highly demanding category of water consumption, achieving a B score in the water security score report.

The Science Based Targets initiative (SBTi) is a joint partnership involving the Carbon Disclosure Project (CDP), the UN Global Compact, the World Resources Institute, and World Wide Fund for Nature (WWF) aimed at achieving the Paris Agreement climate protection goals. It supports companies in reaching their greenhouse gas reduction targets through scientific standards and clearly defined measures. In 2023, our targets for reducing greenhouse gas emissions were evaluated and validated by the SBTi.

Sustainalytics examines the extent to which companies are exposed to industry-specific ESG risks and the effectiveness of their risk management strategies. We have achieved a good result in the Sustainalytics rating and are ranked 23rd out of the 156 companies rated in our industry.