G20 SFWG input paper:

The role of policymakers inmobilising private financeto ensure a credible and justtransition in steel and cement

Prepared by India Initiative on Climate Risks and Sustainable Finance (IICRSF)
led by Climate Bonds Initiative with its partners ODI and auctusESG

Summary• As the major consumers of steel andcement, governments have significant
leverage. Public authority purchasing power
totals around USD11tn each year and can drive
the pipeline of investment opportunities.2
Public procurement accounts for up to 25% ofsteel and 40% of cement global demand.3

Credible transition plans are
the means to access private
capital required for thetransition of both sectors• GSS+ bonds are being issued to anincreasing extent in the steel and cement
sectors but represent only 7.2% and 11.8% of
all volume, respectively (see Figures 2 and 3).
Part of the reason their potential has not been
fully exploited, particularly for sustainabilitylinked bonds (SLBs), is the lack of standards,
notably sector-specific criteria.
• Transition plans are increasingly becoming an
integral part of the screening methodologies
employed by financial institutions, which
due to recent legislation, such as the Corporate
Sustainability Due Diligence Directive (CSDDD),

4%
2%
0%
Iron & steel

CementChemicals

Aluminium

Source: https://iea.blob.core.windows.net/assets/86ede39e-4436-42d7-ba2a-edf61467e070/WorldEnergyOutlook2023.pdf

Figure 2. Share of steel GSS+ debt, 2019–H1 2024
GSS+

Vanilla

% GSS+

20%

20

16%

15

12%

10

8%

5

4%

0

0
2019

2020

2021

2022

2023

H1 2024

GSS+ percentage

25

Source: CBI database

Figure 3. Share of cement GSS+ debt, 2019–H1 2024
20

GSS+

Vanilla

% GSS+

25%

16

20%

12

15%

8

10%

4

5%

0

0
2019

2020

2021

2022

2023

GSS+ percentage• This decade is crucial to the transition of thesteel and cement sectors, in which emerging
markets (EM) will play a crucial global role.
Over 70% (1091 Mt/yr) of coal-based steel blast
furnace capacity will need reinvestment by 2030,
and the majority of this will take place in EM.1
This offers a significant opportunity to switch tolower-intensity production methods this decade.
Demand for steel and cement is also expected
to rise over 30% and 45%, respectively, by 2050
and will be led by emerging markets.

6%

USD Billions• Steel and cement are
pivotal to meeting
the Paris Agreement
objectives but while
fuel substitution canhelp address emissions
from steelmaking, itcannot fully address
those from cement.
Steel and cement are theprincipal sources of industrial
emissions, accounting for over 7% and 6% of
global CO2, respectively, in 2022 (see Figure 1).
However, their production processes are
inherently different. Most emissions fromsteelmaking come from blast furnaces and theirhigh reliance on the use of coal, whereas mostemissions from cement production result fromchemical reactions, rather than fuel combustion.

Figure 1. Industry sector share of global CO2 emissions, 2022

USD Billions

This is the decade of change forsteel and cement, which as thetwo largest industrial emittersglobally are crucial to the netzero transition

H1 2024
Source: CBI databaseare required to prepare and document theirown transition plans. Accordingly, financing
opportunities will be determined by the availability
and credibility of corporate transition plans.
Further improving the alignment of transition
plans and bond frameworks, especiallyfor SLBs, is critical to unlocking financing
opportunities in hard-to-abate sectors.

Credible transition plans support credible
SLBs, thereby facilitating the financing of thetransition in the steel and cement sectors. All
steel sector SLBs and 80% of those for the cement
sector are issued by companies that include
three key elements of transition plans (action
plan, finance plan, and governance mechanism),aligned with Climate Bonds’ methodology.

Key points for G20 Sustainable FinanceWorking Group discussions:more certainty to companies and investors,
driving large-scale, price-reducing demand
for green products and more ambitioustransition plans.

1. Leverage public authority demand
for low-carbon steel and cement via
supportive policies, including examples
such as green public procurement, which cancreate a favourable market for low-carbon
and innovative products. This would provide

G20 SFWG input paper: steel and cement transition Climate Bonds Initiative

2. Engage with all relevant stakeholders,such as the workforce and local communities,
relating to remediation measures to reducetransition risks and impacts.

2

Of the 20 corporate transition
plans assessed in this paper,
90% have published atransition plan, or elements ofit through their annual reports,
but more needs to be done toincrease quality and credibility
Analysis of the transition plans of the 20
companies selected for this paper revealed
several common strengths and weaknesses.
Ten transition plans from steel and ten from
cement companies were examined and the main
findings include:• Lack of consistency and disclosure on
financing and a need for more transparent
and reliable data monitoring anddisclosure. Only half of the sample included
targets and action plans aligned or aligning with
Climate Bonds’ methodology, and assurance inemissions data verification was limited.
• The significance of policymakers in the
progress of setting ambitious targets andaction plans. All companies bar two, whose
performance targets and action plans were
found to be aligned or aligning with Climate
Bonds’ methodology, are based in jurisdictions
that have implemented or are considering
implementing transition plan legislation.

Embedding just transitionin transition plans ensurescomprehensiveness, prevents
disruptions, and optimisestransition pathways
The analysis also focused on just transition
elements and indicators, which recognise thatthe transition ought to prevent inequality andsocial disadvantage.
• Steel and cement companies are at theearly stage of addressing just transition
risks and impacts in their transition plans.
While some progress is observed, there isminimal coverage beyond narrative statements.
Of the 40% of companies that acknowledge
the importance of ensuring a just low-carbon
transition, and have explicitly committed to it,none has formulated concrete objectives.
• Existing just transition frameworks ordefinitions are referred to by 45% of theanalysed companies, especially the principles
and indicators set out in the Paris Agreement
and the ILO’s Just Transition Guidelines.
Only one company established a governanceframework to oversee and enact the transition
plan, with a specific system to manage andreview the transition plan’s ESG elements,
including the just aspect.

Key points for G20 Sustainable FinanceWorking Group discussions:
1. Foster international coordination on thedefinition of credible and Paris-aligned
transition plan components. The largest
steel and cement companies operating
globally acknowledge the need to transitionand have developed transition plans. The next
step in the process is to encourage accelerated
implementation and action, including by
providing clear guidance on what ‘good looks like’.
2. Develop sector-specific policy guidanceand criteria regarding crucial transition
plan elements and their credibility, providing
detailed information to companies. Steel andKey points for G20 Sustainable FinanceWorking Group discussions:
1. Prioritise international collaboration on
defining core elements of a just transition
for steel and cement, aligning with existing
internationally recognised definitions. Companies
within these sectors are subject to different
legislative frameworks and would benefit fromincreased coordination among major countries.

cement companies have made significant
progress in setting ambitious targets andaction plans, especially when encouraged
and guided by policymakers. Indeed, almost
all assessed companies setting aligned oraligning targets and action plans are based
in a jurisdiction that has implemented or isconsidering transition plan legislation.
3. Engage with steel and cementcompanies to assess transition impacts
and risks, disclosing how these areconsidered when developing and deliveringon transition plan objectives, and encouraging
them to link their plans and bond frameworks
to facilitate private capital flows.

2. Provide guidance on just transition
challenges and opportunities in these
sectors, promoting best practices andrecognising that companies are at an earlystage of addressing just transition issues.
3. Engage with steel and cement companies
to assess their industry-specific needs andpeculiarities, given that sectoral- and entitylevel studies and best practices are still limited.

Box 1. Transition of the steel and cement sectors is crucial for
emerging market economies
Demand for both steel and cement is
expected to have risen by 30% and 45%,
respectively, by 2050, led by emerging
markets (EM).4 There are, however, large
regional variations within this increase,such that the steepest increases are
expected to occur in India, Latin America,and Africa. This is mostly due to population
growth, urbanisation, and infrastructuredevelopment.5 In addition to this, steel andcement production facilities are already highly
concentrated in these regions, with over halfof the world’s steel and cement currently
produced in China, followed by India with over
7%.6 These industries inevitably represent avery large share of these economies.
This decade is crucial to the steel andcement sectors transition, EM can playa crucial global role, engaging in a justtransition that contributes to theirprosperity. In the steel and cement sectors,
asset lifetimes often exceed 40 years so theinvestment choices made today will create
long-lasting path dependencies, well beyond
2050 or even 2060, with the potential to create
future stranded assets.7 Globally, over 70% (1091
Mt/yr) of coal-based blast furnace capacity willneed reinvestment by 2030, and the majorityof this will take place in EM.8 This crucial point

G20 SFWG input paper: steel and cement transition Climate Bonds Initiativein the capital expenditure cycle, and the scaleof the reinvestment need, offer a significant
opportunity to switch to lower-intensity
production methods this decade. However,international coordination and support will beneeded to promote a just transition that ensuressocial buy-in and economic prosperity in EM.
Steel and cement are capital-intensive
industries so ensuring credible financing
will be critical to their transition, adding
to the transition challenges for EM. The
difficulties of raising funding for the EM net-zerotransition are well documented.9 This includes
the cost of capital: a reduction of 1% could save
EM USD150bn per year.10 Credible transition
plans provide an important tool for steel andcement companies to align their businessstrategies with the objectives of the Paris
Agreement. Furthermore, they allow access tofinance through credible SLB issuance. This
promotes transparency and the credibility of
EM investment projects, which contribute to
reduced risk perception by investors.
Debt market-based financing by companies
located in EM is increasing, even if the shareof SLBs originating from EM reached only 33%of the volume and 48% of total SLBs in 2023,
which was the highest level since 2019.11

3

1. Introduction
Climate change is a global emergency that
goes beyond national borders and requires
international cooperation. The 2015 Paris
Agreement, adopted by 195 members of theUnited Nations Framework Convention on
Climate Change (UNFCCC), aims to limit theincrease in global average temperature to 1.5°C
above pre-industrial levels. Reducing greenhousegases (GHG) can mitigate climate change anddeliver immediate benefits such as cleaner air,
reduced costs, good quality jobs, and greater
food and energy security. As of November
2023, 145 countries had declared or considered
net-zero emissions targets, accounting for
approximately 90% of global emissions.12
At an entity level, transition plans are key toa credible and Paris-aligned decarbonisation
process; to enable capital market actors to
identify and direct finance to credible investmentsthat will drive the global transition to net zero. Thisis dependent on implementing, monitoring, andupdating robust and ambitious transition plans.
Legislation on transition plans is alreadyin place in several jurisdictions with 15 G20
countries either having adopted or considering
legislation on transition plans or their disclosure,or both (see Figure 4).
Emissions from steel and cement industries
continue to rise, which makes this thedecisive decade for their transition, as aconfluence of factors could stimulate change
at pace. Total emissions from the steel industry
are still rising despite pledges and actions, so thatthe current decarbonisation progress is fallingbehind the Paris Agreement goals.13 However,
over 70% (1091 Mt/yr) of global coal-based blast
furnace (BF) capacity will need reinvestment by
2030, which presents a significant opportunity
to switch to lower-intensity production methods
this decade.14 Meeting new steel and cement
demand with fossil-based facilities would likely
result in long-term carbon lock-in and stranded
assets (due to their long life cycle), threatening
jobs, and putting the Paris-aligned pathway
out of reach.15 Steel and cement asset lifetimes
often exceed 40 years so the investment choices
will create long-lasting path dependencies. By
investing in technologies consistent with a netzero scenario, steel and cement companies can
avoid stranded assets and the risk of significant
economic losses.16
Financial support is one of the main barriers to
the transformation of these capital-intensive
industries. An estimated USD47bn annually isneeded to meet growing steel demand by 2050
while maintaining existing facilities, therefore,
innovative low-carbon technologies need to be
developed and promoted to transform production
processes. Moreover, an additional USD8–11bn
per year will have to be invested to transition

Figure 4. G20 legislation ontransition plans or their disclosure

No
25%

Yes
10%

Under
discussion
65%

Source: CBI research

the steel sector to net zero.17 This does not takeaccount of the decarbonisation requirementsof the cement sector, for which approximately
USD750–900bn in capex is required by 2050.18
Sustainable finance markets can absorb asignificant portion of the investment neededto accelerate the timescale. Labelled debt
(green, social, sustainable, sustainability-linked,
and transition (GSS+) bonds) that facilitate
investment in Paris-aligned projects havebecome a major global market, such that by
the end of 2023, Climate Bonds had recorded
USD5.5tn of cumulative GSS+ volume.19 Climatetransition finance also allows corporates to better
manage the risks related to regulatory changes
and divestments while allowing them to seize
new opportunities and market trends. This isparticularly important for corporates active inthe hard-to-abate sectors such as heavy industry,
agriculture, or energy that generate the greatest
emissions and will require substantial investment
to upgrade their technology and infrastructure.20
This paper aims to provide an overview ofthe steel and cement sectors, highlight theirimportant role in the net-zero transition,
and analyse corporate commitments todecarbonisation by assessing their transition
plans. It follows Climate Bonds’ policy guidanceon the transition of the steel and cement
sectors.21 These policies are complemented by
the Climate Bonds sustainable finance Criteria forthe two sectors, updated in 2023.22
Chapter 2 focuses on the transition financerequirements of the steel and cement sectors
and outlines how transition plans can help
companies raise sustainable finance.

Overview of the steel andcement sectors
Steel and cement are the two largest industrial
emitters globally, yet their respective
sources of emissions are inherently different.
Transition in steel and cement is vital as global
steel and cement are the two largest industrial
emitters with over 7% and 6% of global CO2
emissions, respectively, in 2022.23 Steel andcement production is also highly concentrated
geographically, as over half of the world’s steel
and cement is currently produced in China.24
Other large producing countries include India,
the EU, Japan, and the USA.
Most emissions from steelmaking comefrom its high reliance on coal use for the
production process, although provenmethods exist to reduce emissions.
Steelmaking can be classed as primary (making
new steel from iron ore) or secondary (using
mainly recycled steel), see Figures 5 and 6 in Box
2.25 Global production is dominated by primary
steel and the Blast Furnace–Basic Oxygen
Furnace (BF-BOF), which constitutes more than
70% of annual crude steel production and iswhere most emissions in the sector occur, due
to its high reliance on coal. Where steelmaking is
made using secondary sources, this is done bydirectly melting recycled steel scrap in an electricarc furnace (EAF), a well-tested and significantly
lower-emissions production process. Indeed,
the average blast furnace emissions intensity
amounts to 2.3 tons of CO2 per ton of crude steel
produced, whilst EAF intensity is three times
lower, 0.7 tons of CO2.26

List of acronyms
BF-BOF: Blast furnace–basic oxygen furnace
CCUS: Carbon capture, utilisation, and storage
EAF: Electric arc furnace
EM: Emerging markets
ESG: Environmental, social, and governance
GHG: Greenhouse gases
GSS: Green, social and sustainability
GSS+: GSS, SLB, and transition
IPCC: Intergovernmental Panelon Climate Change
KPI: Key performance indicator
SLB: Sustainability-linked bond
SLD: Sustainability-linked debt
SPT: Sustainability performance target
UNFCCC: United Nations Framework
Convention on Climate Change
UoP: Use of Proceeds

Chapters 3 and 4 analyse steel and cement
corporate transition plans and any just transition
aspects, respectively, against Climate Bonds
frameworks and indicators.

G20 SFWG input paper: steel and cement transition Climate Bonds Initiative4

Box 2. Steel and cement production process differences
There are two main ways of producing steel,using either primary or secondary sources.
Iron ore and recycled steel scrap are the main
inputs in steelmaking. Globally, scrap-based
production accounts for around 30% of thetotal metallic input to steel production, withiron ore making up the rest.29 Other than being
a crucial component in an EAF, scrap is also
employed at a rate of 15-20% with ore-based
inputs in the BF-BOF production, improving
the energy efficiency of this technology.30

Figure 5. Blast furnace steelmaking
Pellets
Scrap

Iron ore

Ladle(refining)

SinterEmissions intensity:
2.3 tCO₂/t of crude steel
Limestone(global average for
scope 1 and 2 in 2018)

BF-BOF constitutes more than 70% of annual
crude steel production with emissions intensityof 2.3 tons CO2 per ton of crude steel produced,
whilst EAF intensity is 0.7 tons of CO2 per ton of
crude steel.31 Increasing the use of renewableelectricity in EAF production can further reducethe carbon intensity of the steelmaking process.
However, such an increase would depend on
supplies of scrap steel, renewable electricity,and EAF available capacity.

Coal

Coke

Blast furnace(iron making)

Converter(steelmaking)Continuous
casting

Figure 6. Electric arc furnace steelmaking

Iron ore

The cement-making process also consistsof several steps. Emissions mainly occur inthe kiln and preheater/precalcinator.32 Theseemissions are linked to the current production
process and can be broadly separated into
combustion and non-combustion emissions.33

Ladle(refining)

Emissions intensity:
0.7 tCO₂/t of crude steel(global average for
scope 1 and 2 in 2018)
Coal/
Fossil gas

Globally, non-combustion emissions(calcination process) account for around 60%of the direct emissions in the production
process. They do not result from fuelcombustion but from chemical reactions in theclinker calcination process.34 These emissions
cannot be reduced by substituting fuels.

Electric arc furnace(steelmaking)Direct reductions

Continuous
casting

Scrap

Most of the remaining CO2 emissions are fuelcombustion emissions (about 30%). Fossil fuels(predominantly coal), biomass or alternative

fossil and mixed wastes are burnt to reachhigh temperatures to make clinker – the main
constituent of cement – in a kiln at around 1450°C.

Figure 7. Cement making process
Raw materials, energy, and resources

Clinker and cement manufacturing

QuarryCrusher

Transport Raw mill

Energy,mega-joule/ton

40

5

40

100

CO2 emissions,kilogram/ton

3

1

7

17

CoolerCement mill

Logistics

Total

3150

160

285

115

3895

479
319
Calcination
Fossil fuelprocess combustion

28

49

22

925

Kiln and preheater/
precalcinator

Source: https://www.mckinsey.com/industries/chemicals/our-insights/laying-the-foundation-for-zero-carbon-cement#cement

G20 SFWG input paper: steel and cement transition Climate Bonds Initiative5

Most emissions from cement production occur
as a result of chemical reactions, not fuelcombustion, so fuel substitution cannot fully
address the issue. Emissions resulting from thecement production process are inherently different
from steelmaking, see Box 2, Over 80% of emissions
occur in the kiln and preheater and precalcinator,(see the orange box in Figure 7), and can be divided
into combustion and non-combustion emissions.27
Non-combustion emissions account for around
60% of the direct emissions and do not result
from fuel combustion but from chemical
reactions in the clinker calcination process,meaning they cannot be reduced by substituting
fuels.28 Most of the remaining 30% are fuelcombustion emissions, caused by fossil fuel use.

Box 3. Iron vs steel and cement vs concrete
Iron is made by removing oxygen and otherimpurities from iron ore, while steel is an alloyof iron and carbon, combined with recycledsteel and other elements.38

Concrete, a mixture of cement, water, andaggregates (both coarse and fine), is thesecond most-used substance in the world
after water.

Even though the terms cement and concrete
are often used interchangeably, they are twodifferent materials. Cement is a fine powder
and a key ingredient in concrete production.39

Globally, cement also releases the mostemissions per dollar of revenue, around 6.9 kgof CO2/USD, much higher than iron and steel(1.4 kg), and chemicals (0.3 kg), see Figure 8.40

Figure 8. Emissions per dollar of revenue in selected sectors(kg of CO2/USD)
7
6

Sector-specific pathways are
critical for evaluation

Voluntary science-based guidance on
decarbonisation pathways for steel andcement presents some variance but is an
important indicator of credible emissions
reduction trajectories and permits someinteroperability. These pathways are key
to decarbonisation, as they are important
indicators of what a credible emission reduction
trajectory looks like over time, as well as thesignificance of different low-carbon technologies.
This supports business planning and provides
information to investors and policymakers.
Decarbonisation pathways for steel and cement
have been developed by organisations such as
the Transition Pathway Initiative, Rocky Mountain
Institute, Science Based Target initiative, andResponsibleSteel (RS) as well as by Climate
Bonds, which has developed science-based
guidance at the individual sector level (for bothsteel and cement). This can assist stakeholders
in identifying companies, assets, and projects
following 1.5°C-aligned pathways and support
informed investment decisions. Pathways
developed by different organisations differ, as
they are based on a wide range of scenarios:
they consider different types and shares oftechnologies, time profiles, scopes of emissions,and have distinct approaches to other crucial
aspects such as mitigation. However, someinteroperability is also possible, for example
between the Climate Bonds Steel Criteria and the
Responsible Steel Standard, which are otherwise
not equivalent.35

4
3
kg of CO2/USD

In the absence of agreement between
governments and industry players, thediverse range of existing climate andemissions-reduction targets within theindustry may not be consistent with a 1.5°C
future. Beyond the climate risks, this also creates
financial risks, chiefly in allowing for investments
in projects that extend the life of high-emitting
assets, which might then become stranded.

5

2
1
0
CementIron andsteel

Oil and gas

MiningChemicals

Source: https://www.mckinsey.com/industries/chemicals/our-insights/laying-the-foundation-for-zero-carbon-cement

Box 4. Standard and Criteria for evaluation
Ensuring funding flows to netzero-aligned projects is pivotal todecarbonising steel and cement.36 The
Climate Bonds Standard and Certification
Scheme is a screening tool that provides
investors and intermediaries with a clear signal
on the climate integrity ofCertified Climate Bonds, which
also contain cross-cutting
criteria. These Criteria address
additional consequencesby establishing qualitative
measurements such as
particular standards for theuse of biomass or hydrogenas a fuel, waste-derived
fuels, and CCS technologies,
as well as requirements foradaptation and resilience.

In April 2023, the Standards andCertification Scheme was expanded toallow for the Certification of non-financial
corporates, assets, and sustainability-linked
instruments. The steel and cement sector
Criteria also include a pathway that can enable
Certification of an entity andany debt instruments
issued by them including
sustainability-linked
bonds (SLBs).37

For the purpose of this paper, Climate Bonds’
science-based Sector Criteria are used throughout
the analysis. These Criteria are designed for binary
certification of capital investments, facilities, andwhole entities, and focus on setting CO2 emissions
thresholds, aligned with a 1.5°C decarbonisation
pathway, that need to be met at the facility orentity level, see Box 4.

G20 SFWG input paper: steel and cement transition Climate Bonds Initiative6

2. Transition plans and transition financing
The scale and investment required totransition the steel and cement sectors
cannot be achieved without significant
private sector finance, in addition to urgent
public funding required to support innovativeand low-carbon technologies. USD55–58bn
annually is needed to transition the steel sector
to net zero, while USD700–900bn in capex isrequired by 2050 to decarbonise the cement
sector.41,42 Although steel and cement companies
can utilise various types of financial instruments,
such as equity, loans, and guarantees, thischapter focuses on climate transition finance,
which earmarks funds for the dynamic processof decarbonising an entity, using the rapidly
growing labelled debt market (GSS+ bonds).43
Sustainable debt markets are a criticalsource of financing and and USD9.2bn of
GSS+ bonds have been issued in the steel
and cement sectors, respectively, as of June
2024. By the end of 2023, a total of USD5.5tn
of cumulative GSS+ volume was recorded, of
which USD4.4tn (about 80%) was aligned with
Climate Bonds’ methodology, demonstratingthat most issuances show sufficient ambition
and transparency. 44 Appetite for labelled debt
remains strong, with green bonds seeing higher
oversubscription rates than unlabelled or vanilla
debt since 2018.
However, the potential of GSS+ issuances
remains to be fully exploited as they
represent only 7.2% and 11.8% of all
issuances in the steel and cement sectors,
respectively. This compares, for example, with
GSS+ bonds representing 20% of all issuances byelectrical utility companies since 2019. Electricalutilities have also raised more GSS+ bonds thansteel and cement companies in absolute terms(see Figure 11). A key difference is that sectors
for which detailed guidance, standards andcriteria, including sector-specific pathways, havebeen developed tend to attract more labelled
investment. Detailed guidance was produced
much earlier for key renewable energy sectors,
such as solar and wind from 2014–2016, while
for steel and cement, tools and guidance havebeen developed and published over the past few
years, starting with the 2020 International Energy
Agency roadmap and those of other organisations
mentioned in the previous chapter.45

Box 5. Debt instruments to finance the transition
and their credibility
Bonds can be used by corporates to financetheir climate transition either as Use ofProceeds (UoP) bonds or key performanceindicator (KPI)-linked general purpose bonds:• UoP bonds, such as green or sustainability
bonds, fund projects with specific anddedicated environmental and/or social
benefits. Adherence to standards andpredetermined UoP categories is essential todefining and disclosing their impact.
• KPI-linked bonds, such as sustainabilitylinked bonds (SLBs), are used for an issuer’s
general-purpose financing but are linked toambitious, realistic, and explicit sustainability
targets at the corporate level. They involve
penalties or rewards linked to not meetingor meeting pre-defined and time-boundsustainability performance targets (SPTs) for
each of its predetermined KPIs, in the form ofa coupon step-up or step-down.

Climate Bonds screens self-labelled debt
instruments for inclusion in its databases,
one of which contains SLBs.47 The eligibility
criteria are based on the relevant parts of
the Five Hallmarks for Credibly Transitioning
Companies.48 Specifically, it uses Hallmarks 1
and 5 to develop instrument-level assessment
criteria. Hallmarks 2, 3, and 4 are also screened
to track the development of entity-leveltransition plans that underpin the targets.
Climate Bonds’ SLB Database tracks whether
companies issuing SLBs have developed
the main elements of a transition plan,
including a) action plan, b) financing plan,and c) governance mechanism. The process issummarised in Figure 9.49

Figure 9. Climate Bonds sustainability-linked bond databasemethodology overview
SLBNO

Does the SLB use GHG
emission reduction targets?
YESNO

Do the targets exclude offsets and are
not measured in economic intensity?
YESNO

Do the GHG targets cover the sector
specific emission sources?
YES
Are the targets aligned withthe sector-specific pathway?
NO

Credible transition plans are critical tocredible SLBs, thereby facilitating thefinancing of the transition in the steel
and cement sectors (see Figure 10). In thesteel sector, 100% of SLBs that meet the SLB
database methodology criteria were issued
by steel companies which also publisheda transition plan that included a) an action
plan, b) financing plans, and c) governancemechanisms (see Box 6). All steel SLBs thatG20 SFWG input paper: steel and cement transition Climate Bonds Initiative

YES

No, but will be aligned by 2030

No, but is aligned on a %reduction basis, and has all the
key elements of transtion plans
No, and lacking transition plans

Fully-aligned
SLB

Strongly-aligned
SLB

Aligning SLBSLB not aligned

7

do not meet the methodology criteria were
issued by companies that have not published atransition plan. Similarly, in the cement sector,
over 80% of SLBs issued by companies thatpublished transition plans with the three key
elements listed above are aligned with themethodology. Around 40% of cement SLBs that
do not meet the methodology criteria were
issued by companies whose transition plans did
not align with the methodology.
In addition, current credibility issues with
SLBs, which are inherently transitionfocused financing instruments, areconstraining opportunities to finance thetransition in the steel and cement sectors.
SLBs have forward-looking KPIs, which represent
an opportunity for entities to link their netzero targets, and performance, with accessto sustainable finance. However, many earlyexamples of SLBs and transition bonds did nothave material or ambitious targets, leading togreenwashing concerns, such that as of 2023,
only 17% of the SLBs by amount issued werealigned with the Climate Bonds methodology.
However, the proportion is growing, at 35% byamount issued in 2023.46 As the market is still
nascent, a relatively low share of alignment is
expected but should increase as the market
develops. Related concerns also exist, forexample, about the relevance and reliabilityof targets set by the issuing entity, which are,therefore, difficult to benchmark against peers or
wider goals such as the Paris Agreement targets.

Figure 10. How credible transition planning supports credible
sustainability-linked bond issuance
Credible transition plans

Credible sustainabilitylinked bonds

Paris-aligned targets

Key performance indicators
Sustainability performance targets

Robust plans

Strategies to achieve the SPTs

Implementation action

Achieving the SPTs

Internal monitoring

Internal monitoring

External reporting

SLB reporting

Figure 11. Share of GSS+ debt in electrical utilities, cement, and steel,
2019–H1 2024
GSS+

VanillaElectrical
Utilities
Cement
Steel
0

25%

50%

75%

100%
Source: CBI databaseBox 6. Case study of a credible cement SLB:
Example of a leading manufacturer of building
materials. In 2022, the company reported
GHG emissions of 130 Mt CO2e, of which 60%
were scope 1 emissions, 4% were scope 2, and
36% were scope 3. As of November 2023, thecompany had issued seven SLBs, the GHG KPIs
of which only cover scope 1 emissions.
The company’s SLBs are assessed against
the SLB database methodology as aligning(i.e., not fully aligned) because while they
miss the Climate Bonds cement pathways of
539 kg CO2/t cementitious by 2025 and 463 kg
CO2/t by 2030, the targets still meet the rate of
reduction required by the pathway, meaning
they meet the speed of decarbonisation
required. Additionally, a robust transition planand targets are in place (described below).
The company’s scope 1 and 2 emission
intensity reduction targets of 22.4% by
2030 and 95% by 2050, compared to 2018,
are SBTi 1.5°C validated. The scope 3 targetsof 90% emissions reduction by 2050 anddiscrete medium-term targets for various scope
3 categories are all consistent with well below

2°C scenarios. While the alignment and breadth oftargets is to be commended, the company should
continue to front-load its emission reduction to
the short and medium term.
The company’s decarbonisation strategy
for scopes 1 and 2 is well defined: thecontribution of key levers, such as energy anddesign efficiency, clinker reduction, and energy
decarbonisation is quantified. For scope 3, thecompany anticipates the use of downstream
transport decarbonisation and supply chain
engagement to reach its targets.

Overall, credible governance structures
underpin the company’s comprehensive
transition plan, where climate-related
performance and strategy is subject to directboard oversight, executive committee
accountability, and is tied to senior
management compensation.
The financial commitment towards
transition and sector-specific levers, particularly
the decarbonisation of its asset base throughlower-emission cement, is notable.

Amount issued: USD147.5m
Issue date: 19 May 2022

Maturity Date: 5 April 2029

Financial mechanism type Step-up. FM Amount: 0.35
Key performance indicators: GHG Emission Intensity (Scope 1), Water Usage Intensity
Sustainability performance target: 520 kg CO2/t cementitious material by 2025,
Reduction of 25% vs 2018 by 2025
Assessment: Aligning

G20 SFWG input paper: steel and cement transition Climate Bonds Initiative8

3. Analysis of transition plans and key findings
For this analysis, transition plans developed
and published by 20 companies in the steel
and cement sectors were assessed against
Climate Bonds’ five hallmarks for transition
plans, see Annex 1 for more details.50 The 10
steel and 10 cement companies were selectedbased on:• Governance structures and mechanisms havebeen well documented and disclosed formost companies, with clear board oversightof their decarbonisation strategy. Oversightof transition-related aspects by additional
committees or subcommittees is also
becoming standard practice.

1. geographic diversity: all continents are
represented in the sample, except for Australia, and• However, there is a lack of consistency ordisclosure on the financing alignment withtransition plan objectives. Some entities,
especially those subject to EU Taxonomy
capex reporting, have begun to disclose capital
allocations for their decarbonisation. Outsideof the EU, disclosure ranges from an overall
estimate of financing needed to achieve net
zero by 2050, to detailed three-year budgets
and breakdowns.

2. size and coverage of market shares: thesample of steel and cement companies
represents more than 40% and 20% of the
global market share, respectively.51
The outcome of the analysis is a classificationof transition plans in the following categories:aligned, aligning, and not aligned.
Performance targets are considered:• Aligned; in line with the pathway or if they willbe by 2030.

• There is limited assurance in emissions data
verification, reinforcing the need for greatertransparency, consistency, and reliability ofdata monitoring and disclosures. Companies
take data from a variety of sources whencalculating emissions footprints, sometimes
relying on secondary data obtained fromaverage or estimated levels, or calculated bythird parties.52• Finally, with the exception of two companies,
all companies whose performance targets
and action plans were found to be aligned
or aligning with the methodology are basedin jurisdictions which have implemented orare considering implementing transition plan
legislation, see Figure 4.

Figure 12. Steel company transition plan alignment with
Climate Bonds methodology• Aligning; not in line due to a high baseline, but
the % reduction aligns with the sectoral pathway.
• Not aligned; not aligned whatsoever or lack ofappropriate targets.
The action plan is considered:• Aligned; all technologies, assets, and levers
identified in the plan are aligned with the
Sector Criteria.

Notaligned50%

Steel performance Aligned
target alignment & aligning(‘Ambition’)50%

Notaligned50%

Steel action
plan alignment(‘Action’)

Aligned& aligning
50%• Aligning; >50% of technologies, assets andlevers are aligned with the Sector Criteria.
• Not aligned; most technologies, assets andlevers are not aligned with the Sector Criteria.

Key findings
Of the 20 companies, 18 were found to havepublished a transition plan or included components
in their annual reporting publications. There arecommon strengths and weaknesses across thereviewed plans, especially regarding the Ambition
and Action elements of the Triple A framework.
• Half of the ten steel companies were foundto have set both targets and action plansaligned or aligning with the five hallmarks
methodology, see Figure 12.
• Of the 10 cement companies, 40% had set targets
aligned or aligning with the five hallmarks
methodology, and 60% had also developed an
action plan aligned or aligning with it. Hence,
most companies have set credible and robust
plans, but not targets, see Figure 13.

Source: CBI research

Figure 13. Cement company transition plan alignment with
Climate Bonds methodology

AlignedNotaligned60%& aligning
Cement40%
performancetarget alignment(‘Ambition’)• The vast majority, 90%, of steel and cementcompanies that published a transition
plan also disclosed the decarbonisation
technologies and assets they plan on utilising
as part of their decarbonisation strategies.

G20 SFWG input paper: steel and cement transition Climate Bonds Initiative

Notaligned40%

Cement action
planalignment(‘Action’)

Aligned& aligning
60%

Source: CBI research

9Box 7. Transition plan case study alignment with Climate Bonds methodology
The company analysed in this case study
is one of the largest steel producers, which
derives the majority of its revenues from its
steelmaking and manufacturing business.
This transition plan provides interesting
examples of how companies are making
progress, setting mid-term targets withcomprehensive plans, and disclosing their
low-carbon investments.

Hallmark 1: Paris-aligned targets
The company has mid-termtargets for its scope 1 and 2
emissions. This supplements
its 2050 target of reachingcarbon neutrality. Assessing its
mid-term targets on an annual percentage
reduction basis, they only slightly fall short of
Climate Bonds’ sectoral pathway -4.8% annual
reduction by 2030.

Hallmark 2: Robust plans
The company has acomprehensive transition plan,
within which it details the assets
and technologies it seeks tomaintain, adapt, and develop
to reach its target of carbon neutrality. It
has identified the key sources of emissions
in the steelmaking process, as well as thetechnologies it can utilise to tackle these.
Furthermore, it has identified the challenges
and collaboration required to implement its
transition plan.

Hallmark 3: Implementation action

Hallmark 4: GovernanceTransition plans: the company
aims to utilise both electric arc
furnaces, as well as an adaptationof its existing blast furnacetechnology, to help decarbonise asignificant bulk of its emissions. To support bothprocesses, it also plans to utilise 100% hydrogenbased direct reduction, increased scrap utilisation,
low-carbon power generation, energy efficiency
improvements, and carbon capture, utilisation,and storage (CCUS), to help fully decarbonise. All
these processes are eligible under Climate Bonds
Steel Criteria, pending them meeting the specificthreshold requirements. Hence, alignment can
only be checked on a case-specific basis.

The company has anenvironmental management
committee and green
transformation promotion
committee which areresponsible for collating risks andopportunities, tracking and implementing
progress against its transition plan, andcoordinating the relevant internal andexternal teams. This committee then reports
directly to the management committee andindirectly to the board of directors.

Financing plans: the company has estimatedthe capex investment need to fully decarbonise,
as well as a minimum investment in R&D. It
currently tracks and discloses its environmental
conservation capital and operating expenditure(including emission reduction, recycling, pollution
prevention and R&D, among others). The company
spent approximately 4% of its capex on its
transition in 2021.

Hallmark 5: Disclosure
The company discloses relevant
scope 1, 2, and 3 emissions data
together with breakdowns byemission sources, as well as avariety of energy, waste, water,
recycling, raw material, and other metrics.
It has also received independent third-party
limited assurance on all its emissions data,
as well as a risk analysis of its steel electrical
sheet plant.

Utilising the company’s existing tracking ofclimate-related investments and expenditures
to allocate the necessary capital for its
decarbonisation from now to 2030 will help
streamline and deliver capital to the appropriate
business segments to holistically reduce its
emission footprint and deliver on its targets. The
company also issued green bonds, with the UoP
considered ‘Aligned’ and hence included in the
Climate Bonds Green Bond Database.

G20 SFWG input paper: steel and cement transition Climate Bonds Initiative10

4. Socio-economic impact of transition, analysis of just transition
plans, and key findings
A just transition safeguards access toopportunities and prevents inequalities
from arising in the transition to net zero.
Ensuring a just transition can lead to a smoothertransition as it minimises possible social andpolitical disruption and contributes to social
buy-in. While a universally-agreed definition ofa just transition does not currently exist, somecommonly used guidance includes definitions
by organisations such as the OECD and ILO.
Likewise, no universally-agreed methodology toassess just transition plans currently exists.
Embedding just transition in transition
plans ensures their comprehensiveness,preventing possible disruptions andoptimising the transition pathway. A
just transition should involve anticipating,assessing, and addressing the social risks ofthe transition, while identifying and enablingsocial opportunities.53 Throughout this process,it should also ensure meaningful dialogue andparticipation in transition planning. Investingin a just transition would help the steel andcement industries to build a strong and resilient
workforce; safeguarding and developing
necessary skills for low-carbon and innovative
processes, and workforce availability.
To analyse just transition plans, indicators
were developed for the purpose of thispaper, based on the five hallmarks, see
Annex 1. The 20 companies assessed were
the same as in the previous section. The justtransition assessment was conducted separately,as currently no integrated evaluation framework
exists, and the criteria used were developed forthe purpose of this analysis.

Key findings
The steel and cement industries are in
the very early stages of incorporating andaddressing just transition risks and impacts
into transition plans. Within the sample
analysed, while some companies have shown
progress, there is minimal coverage beyond
narrative statements and recognition of theimportance of ensuring that no one is left behindin the transition to net zero. Furthermore, theanalysis of 20 steel and cement companies yields
the following findings:• Historically, just transition has mostly
been analysed from a global or regional
point of view.54 With the exception of a few
sector-specific initiatives, such as the coalphase-out and some initial focus on thetransition implications on the transportindustry, sectoral analysis of a just transition
and whether its elements are embedded inindividual company transition plans has beenvery limited.
• Many countries have committed to phasingout coal use, which carries a potentiallysignificant socio-economic impact thatshould be implemented under the frameworkof a just transition. Best practice highlights
how multi-stakeholder commissions andcommittees established at national level
ensure political support and buy-in, paving
the way to an accelerated net-zero transition.
This example can be replicated in the steel
and cement sectors.

• Of the 20 companies assessed, 40%
acknowledge the importance of ensuring that
their transition to net zero is just, to which they
have explicitly committed (indicators 1a, 1b).
While companies may be referencing the justtransition, they are yet to formulate it in concreteterms, with objectives, and a plan to achieve it.
• Of the 20 companies, 45% refer to existing
just transition definitions or frameworks, ofwhich those most often referred to are a) the
principles and indicators set out in the Paris
Agreement, and b) the International Labour
Organisation Just Transition Guidelines.55• Interestingly, while 25% of the sample havealso assessed some business socio-economic
impacts and risks of the transition to net zeroon external stakeholders (indicator 2a.2), only
15% have assessed how the transition might
impact their internal operations and staff(indicator 2a.1). This could be due to heightened
sensitivities in publicly disclosing information
about impacts on their own workforce.
• Only one company in the sample had establisheda governance framework to oversee and enact
the transition plan, with a specific system tomanage and review the transition plan’s ESG
elements, including the just aspect (indicator 2c).
• None of the 20 companies addresses theremaining just transition elements included in thetable (indicators 3, 4, and 5). This further reflects thefact that companies are generally at an earlier stageof considering how to manage and implement thejust transition than the climate transition.

Box 8. Case study on just aspects included in a steel
company’s transition plan
The company analysed in this case study isa large steel producer, which developed adetailed transition plan including some justtransition elements.

Hallmark 1: Paris-aligned targets
Not only has the company made an explicit
reference to just transition, but it expresslycommitted to making sure its low-carbon
transition is just. Additionally, its definition ofjust transition is built on specific legislation andinternational guidance, including principles andindicators set out in the Paris Agreement andthe International Labour Organisation’s Just
Transition Guidelines.

G20 SFWG input paper: steel and cement transition Climate Bonds Initiative

Hallmark 2: Robust plans
The company carried out an assessmentof socio-economic impacts and risks of thetransition on its operations, through engagementwith local communities. The company
established specific committees and working
groups to tackle all sustainability aspects of
the low-carbon transition and its internal andexternal impacts. This effort was also driven by
the increasingly stringent legislation.

Hallmark 3: Implementation action
Hallmark 4: GovernanceHallmark 5: Disclosure
The company did not address the remaining
just transition indicators, referring to hallmarks
3, 4, and 5, respectively.

11Annex 1. Methodology framework and indicators for transition
plans and just transition assessment
Five hallmarks for transition

Table 1. Climate Bonds five hallmarks for transition plans

Each company’s transition plan was assessedagainst the hallmarks for transition plans, which
in turn are captured in the ‘Triple A’ framework of
ambition, action, and accountability. These aredesigned to ensure the transition is science-led
and ambitious, and will reduce overall emissions
by excluding the use of offsets.56

1. Performancetargets

Ambition

2. Robust plansa. Set the strategy and plan to deliver on those KPIs
b. Prepare associated financing plan detailed cost estimates andexpected sources of fundingc. Put in place necessary governance frameworks to enact change

3. Implementation
actiona. Capex and opex alignmentb. Other actions detailed in the strategy

4. Internalmonitoringa. Ongoing re-evaluation and recalibration of headline
performance targets
b. Tracking performance against selected performance targets

5. Externalreportinga. External reportingb. Independent verification

Summary five hallmarks

Paris-aligned
targets

Performance targets

Action• Robust plans• Action

Accountability• Governance• Verification and disclosure

Just transition indicators
The indicators apply a just transition lens toeach hallmark and associated questions while
recognising the core differences between aclimate transition and a just transition. While
the just transition indicators do not neatly
map onto the five hallmarks, they aim to be asaligned as possible.
The just transition indicators focus on theplanning process, rather than implementation,
recognising that most companies are still on
a journey regarding a just transition. As such,there is a lack of data and reporting on justtransition plan implementation. The specificsof the indicators (worker impact assessment,
engagement with local communities and otherstakeholders) are also informed by Climate
Bonds’ collaboration with the Just Transition
Finance Lab at the London School of Economics(LSE) and LSE’s own research.57,58

a. Select sector-specific transition pathway aligned with Paris
Agreement goals
b. Set company specific KPIs that align as early as possible
with that pathwayc. Science-based, address scope 1, 2 and 3 emissions, short-, medium-,and long-term targets

Table 2. Indicators to assess a just transition plan based on the fivehallmarks
Just transition indicators
1. Performancetargets
Paris-aligned
targetsa. Does the company make reference to just transition (in transition
plan or elsewhere)?
b. Does the company have an explicit commitment to just transition?
c. Does the company use an international and/or national definition
for just transition, or objectives?

2. Robust plansa. Is there an assessment of socio-economic impact and risks (bothinternally e.g., worker impact assessment, and externally e.g.,
engagement with local communities and other stakeholders?
b. Does the company have a just transition plan to mitigate socioeconomic impacts?
c. Is there a governance framework in place to oversee and enact thejust transition plan?

3. Implementation
actiona. Are there detailed milestones for defined periods (e.g., annually),
and a clear execution plan? Where relevant, are capex and/or
opex aligned?
b. Is the plan already in place and have steps already been taken?

4. Internalmonitoringa. Is there a defined and regular (e.g., annual) internal process forevaluation, monitoring, and feedback?

5. Externalreportinga. Is there external disclosure of the just transition plan?
b. Are just transition plans subject to independent verification?

G20 SFWG input paper: steel and cement transition Climate Bonds Initiative12

Endnotes
1. https://www.agora-industry.org/data-tools/global-steeltransformation-tracker#c425
2. WEF_Green_Public_Procurement_2022.pdf (weforum.org)
3. Consumers can play a central role in decarbonizing cement andsteel | Industrial Analytics Platform (unido.org)
4. Steel Industry - The Net-Zero Industry Tracker | World Economic
Forum (weforum.org) Cement Industry - The Net-Zero Industry
Tracker | World Economic Forum (weforum.org)
5. Iron & steel - IEA; GCCA-Concrete-Future-Roadmap-Document-AW.
pdf (gccassociation.org)
6. World Steel in Figures 2024 - worldsteel.org; Key Facts & Figures(cembureau.eu)
7.https://iea.blob.core.windows.net/assets/49ae4839-90a9-4d8892bc-371e2b24546a/THEBREAKTHROUGHAGENDAREPORT2022.pdf
8. https://www.agora-industry.org/data-tools/global-steeltransformation-tracker#c425
9. The challenges of financing the energy transition in developing
economies | World Economic Forum (weforum.org); 3. Key challenges
in transition finance | OECD Guidance on Transition Finance : Ensuring
Credibility of Corporate Climate Transition Plans | OECD iLibrary(oecd-ilibrary.org)
10. Reducing the Cost of Capital (iea.blob.core.windows.net)
11. cbi_sotm23_02h.pdf (climatebonds.net)
12. https://climateactiontracker.org/global/cat-net-zero-targetevaluations/13. https://iea.blob.core.windows.net/assets/2d1710bf-a883-41738489-fb4d40ac522e/THEBREAKTHROUGHAGENDAREPORT2023.pdf
14. https://www.agora-industry.org/data-tools/global-steeltransformation-tracker#c425
15. A-EW_236_Global-Steel-at-a-Crossroads_WEB_V2.pdf (agoraenergiewende.org)
16. https://iea.blob.core.windows.net/assets/49ae4839-90a9-4d8892bc-371e2b24546a/THEBREAKTHROUGHAGENDAREPORT2022.pdf
17. Making-Net-Zero-Steel-possible-steel.pdf (amazonaws.com)
18. WEF_Net_Zero_Tracker_2023_CEMENT.pdf (weforum.org)
19. cbi_sotm23_02h.pdf (climatebonds.net)
20. cbi_ebrd_gcf_corptrans_23_02g_a.pdf (climatebonds.net)
21. Cement Transition Policy | Climate Bonds Initiative; Steel Industry |Climate Bonds Initiative.
22. Climate Bonds Initiative. 2023. Steel Criteria. https://www.
climatebonds.net/standard/Steel; Climate Bonds Initiative. 2023.
Cement Criteria. https://www.climatebonds.net/standard/cement.
23. World Energy Outlook 2023 (iea.blob.core.windows.net)

24. World Steel in Figures 2024 - worldsteel.org; Key Facts & Figures(cembureau.eu)
25. Climate Bonds Initiative. 2022. A Fork in the Road for the Global
Steel Sector. https://www.climatebonds.net/resources/reports/forkroad-global-steel-sector
26. IIGCC. 2021. Global Sector Strategies: Investor interventions
to accelerate net zero steel. https://www.climateaction100.org/
wp-content/uploads/2021/08/Global-Sector-Strategy-Steel-IIGCCAug-21.pdf
27. JRC. 2023. Decarbonisation options for the cement industry.
https://publications.jrc.ec.europa.eu/repository/handle/JRC131246
28. NewClimate Institute. 2020. Decarbonisation pathways for the
EU cement sector: Technology routes and potential ways forward.
https://newclimate.org/sites/default/files/2020/12/SGCCC-EUCement-paper-NewClimate_Nov2020.pdf
29. WSA. 2021. Scrap use in the steel industry. https://worldsteel.org/
wp-content/uploads/Fact-sheet-on-scrap_2021.pdf
30. WSA. 2021. Scrap use in the steel industry. https://worldsteel.org/
wp-content/uploads/Fact-sheet-on-scrap_2021.pdf
31. IIGCC. 2021. Global Sector Strategies: Investor interventions toaccelerate net zero steel. https://www.climateaction100.org/wp-content/
uploads/2021/08/Global-Sector-Strategy-Steel-IIGCC-Aug-21.pdf
32. McKinsey & Company. 2020. Laying the foundation for zero-carbon
cement. https://www.mckinsey.com/industries/chemicals/ourinsights/laying-the-foundation-for-zero-carbon-cement
33. JRC. 2023. Decarbonisation options for the cement industry.
https://publications.jrc.ec.europa.eu/repository/handle/JRC131246
34. NewClimate Institute. 2020. Decarbonisation pathways for the
EU cement sector: Technology routes and potential ways forward.
https://newclimate.org/sites/default/files/2020/12/SGCCC-EUCement-paper-NewClimate_Nov2020.pdf
35. The RS Standard covers 13 principles in the environmental, socialand governance domains, and these are the basis for RS ‘Certified
Site’ and ‘Certified Steel’ certification.
36. Climate Bonds Initiative. 2023. Steel Criteria. https://www.
climatebonds.net/standard/Steel; Climate Bonds Initiative. 2023.
Cement Criteria. https://www.climatebonds.net/standard/cement;
Climate Bonds Initiative.
37. https://www.climatebonds.net/climate-bonds-standard-v4
38. What is steel? - worldsteel.org
39. CEMBUREAU. 2021. The story of cement manufacture. https://
cembureau.eu/media/drylkjo0/manufacturing-process-factsheet_
update-jan2021.pdf

Author: Fabio Passaro
Contributors: Julia Ambrosano, Sofia Borges, Bridget Boulle,
Lily Burge, Leonardo Gava, Matthew MacGeoch, Magali Van Coppenolle,
Leandro Waquil, Xiaoyun Xu
Acknowledgements/reviewers: Neha Kumar, Sarah Colenbrander (ODI)
Editorial support: Stephanie Edghill
Design: Godfrey Design, Joel Milstead
Prepared by Climate Bonds Initiative.
© Published by Climate Bonds Initiative, July 2024
www.climatebonds.net

40. McKinsey & Company. 2020. Laying the foundation for zero-carbon
cement. https://www.mckinsey.com/industries/chemicals/ourinsights/laying-the-foundation-for-zero-carbon-cement
41. Making-Net-Zero-Steel-possible-steel.pdf (amazonaws.com)
42. WEF_Net_Zero_Tracker_2023_CEMENT.pdf (weforum.org)
43. cbi_ebrd_gcf_corptrans_23_02g_a.pdf (climatebonds.net)
44. cbi_sotm23_02h.pdf (climatebonds.net)
45. Climate Bonds developed the first version of the wind and solar
sector Criteria in 2016 and 2014, respectively. Solar Sector Criteria(climatebonds.net); Wind Sector Criteria (climatebonds.net)
46. https://www.climatebonds.net/files/reports/cbi_slb_
report_2024_04d.pdf
47. Sustainability-Linked Bond Database Methodology | Climate
Bonds Initiative
48. https://www.climatebonds.net/transition-finance-transformingcompanies
49. https://www.climatebonds.net/files/files/CBI_Method_SLBD.pdf
50. Financing Credible Transitions | Climate Bonds Initiative
51. The cement industry is highly fragmented and globallywidespread. Cement is a relatively low-cost commodity, especiallywhen compared to steel, and this makes rarely economical totransport cement further than 300 km. Therefore, the high localisationof its production resulted in the proliferation of many facilities aroundthe world. Key Facts & Figures (cembureau.eu)
52. IDDI_White-Paper_5-December-2023.pdf(industrialenergyaccelerator.org)
53. Making transition plans just: how to embed the just transition
into financial sector net zero plans - Grantham Research Institute on
climate change and the environment
54. Examples include the work of the ILO and the European Union:
Just transition (ilo.org), Just transition measurement approaches: A
catalogue for just transition regions (europa.eu)
55. Guidelines for a just transition towards environmentally
sustainable economies and societies for all | International Labour
Organization (ilo.org), ADOPTION OF THE PARIS AGREEMENT - Paris
Agreement text English (unfccc.int)
56. Transition Finance for Transforming Companies | Climate Bonds
Initiative
57. Mobilising global debt markets for a just transition - Grantham
Research Institute on climate change and the environment (lse.ac.uk)
58. Making transition plans just: how to embed the just transition
into financial sector net zero plans - Grantham Research Institute on
climate change and the environment

India Initiative on Climate Risks andSustainable Finance (IICRSF) (IICRSF) led by
Climate Bonds Initiative with its partners ODI
and auctusESG is a collaborative endeavour
with the overarching purpose of supporting theefforts of financial regulators and policymakers
at navigating the imminent transition; andsimultaneously preparing and engaging withbanks, DFIs, and businesses on disclosures,transition plans, and finance to build the required
narrative and consensus, with the tools required
to augment financial flows from domestic andinternational sources.

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or
debt instrument or investment product is for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.
The Climate Bonds Initiative is not endorsing, recommending or advising on the financial merits or otherwise of any debt instrument or investment product and no information within this communication should be taken
as such, nor should any information in this communication be relied upon in making any investment decision. Certification under the Climate Bond Standard only reflects the climate attributes of the use of proceeds of adesignated debt instrument. It does not reflect the credit worthiness of the designated debt instrument, nor its compliance with national or international laws. A decision to invest in anything is solely yours. The Climate
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G20 SFWG input paper: steel and cement transition Climate Bonds Initiative

13