BlueScope Steel Limited
GovernanceGovernance
Governance body oversight and management's role
Board and Committees (pp. 177–178). The Board is ultimately responsible for strategic direction on climate and sustainability and has four standing Committees to assist. Board and Committee Charters are reviewed at least annually. The Board, Committees and management, as applicable, consider trade-offs associated with climate-related risks and opportunities (CRROs). In FY2026 the Board approved the CRROs for inclusion in the report. From 1 February 2026 three committees were discontinued and the Safety and Sustainability Committee (SSC), Audit, Risk and Technology Committee (ARTC) and People, Culture and Remuneration Committee (PCRC) were established. The SSC reviews targets, the decarbonization pathway and enablers at least annually and considered half-yearly CRRO updates; the ARTC reviews and recommends the climate-related disclosures; the Nomination Committee reviews Board skills and competencies at least annually.
Management (p. 178). The MD&CEO is responsible for day-to-day management, including climate strategy and CRROs, supported by the Executive Leadership Team (ELT). In FY2026 the Chief Executive Climate Change and Sustainability was responsible for the CRRO framework, targets and disclosures; from FY2027 the CFO will be responsible.
Remuneration (p. 178). Under the FY2026 STI, 10 percent of the MD&CEO's STI scorecard and 10 percent of each Executive KMP's STI scorecard were allocated to climate-related objectives.
StrategyStrategy
Climate-related risks and opportunities
Table 1 (pp. 182–187) sets out five climate-related risks and opportunities (CRROs), each with a description, type or driver, time horizon and key exposures. Short term is 1–5 years (the immediate financial planning period), medium term 5–10 years (aligned to strategic plans) and long term 10+ years (reflecting the 2050 net zero goal) (p. 175).
| CRRO | Type (driver) | Time horizon |
|---|---|---|
| Risk 1: shifting customer preferences and/or competitor decarbonization trajectories could lead to increased product substitution and loss of revenue or sales | Transition risk (Markets) | Medium; long |
| Risk 2: changes in climate policies may outpace decarbonization enablers for competitive industrial transitions, reducing competitiveness | Transition risk (Policy, Technology) | Short; medium; long |
| Risk 3: more frequent and severe physical climate-related hazards could damage and disrupt operations and supply chains | Physical risk (Acute, Chronic) | Medium; long |
| Opportunity 1: the energy transition and growing requirement for resilient infrastructure could drive increased demand for steel | Markets; Products/Services; Resilience | Short; medium; long |
| Opportunity 2: evolving customer preferences are increasing demand for lower embodied carbon and circular product solutions | Markets; Products/Services | Short; medium; long |
Business model and value chain
Value chain (p. 176). A table covers upstream activities (raw material extraction, production and processing; steel sourcing in non-steelmaking regions; materials transport), BlueScope's operations (recycling, ironsand extraction, steelmaking at PKSW in Australia, North Star in North America and Glenbrook in New Zealand, metal coating and painting, long products, pipe and tube, steel building materials and steel buildings) and downstream activities (distributors, customers), with locations, plus government, investors and communities.
Where CRROs are concentrated (Table 1, pp. 182–187). Risks 1 and 2: steelmaking in Australia and New Zealand, with customers (Risk 1) and governments (Risk 2) in the external value chain. Risk 3: steelmaking in Australia, North America and New Zealand plus midstream and downstream (68 selected sites across Australia, New Zealand, North America, China and Southeast Asia), with customers and suppliers. Opportunity 1: steelmaking, midstream and downstream across Australia, North America, New Zealand, Pacific Islands, Southeast Asia and China; Opportunity 2: steelmaking in Australia, North America and New Zealand; both with customers.
Effects. Each CRRO lists effects on business model, strategy and decision-making, for example lower demand or prices for certain products (Risk 1, p. 182) and higher regulatory, operating and input costs (Risk 2, p. 183).
Strategy and decision-making
Strategy and pathway (p. 180). Decarbonization commitments are anchored by two mid-term 2030 targets (steelmaking and non-steelmaking) and a long-term 2050 net zero goal, underpinned by the Capital Allocation Framework. BlueScope takes a dual-stream approach, combining near-term asset optimization with longer-term technology evolution, and calls its pathway indicative. Achieving the 2050 goal depends on five enablers: ironmaking technologies at commercial scale, firmed large-scale renewable energy, competitively priced green hydrogen, economic raw materials, and supportive and consistent policies. The Board considered strategic projects underpinning the Company's climate transition plan (p. 177).
Actions (pp. 181, 184). Near term: the EAF at New Zealand Steel (hot commissioning July 2026) and the North Star debottlenecking program. Longer term: Project NeoSmelt, a pilot facility in Kwinana, Western Australia focused on proving the feasibility of DRI and ESF technology. Non-steelmaking (about eight percent of GHG emissions): energy and process efficiencies. BlueScope also engages governments, customers, suppliers and communities.
Resourcing (p. 193). In FY2021 BlueScope committed up to $150M over five years to projects supporting the 2030 targets and longer-term decarbonization ambitions, with total estimated spend of approximately $300–$400M to 2030; FY2026 investment under this program was $139M, net of grants received for New Zealand's EAF.
Financial position, financial performance and cash flows
Unless otherwise stated, effects are described at the level of the consolidated financial statements, expressed as effects on Earnings before Income Tax (EBIT); current effects are for FY2026 (p. 181). Based on information to date and where separately identifiable, none of the identified climate-related risks and opportunities (CRROs) is expected to result in a material adjustment to the carrying amounts of assets and liabilities within the next annual reporting period (p. 181).
| CRRO (Table 1) | Current (FY2026) | Anticipated |
|---|---|---|
| Risk 1, product substitution (p. 182) | Not material | Medium and long term not quantifiable; earnings may decline by approximately $9M per annum for every one percent of domestic sales displaced to export markets |
| Risk 2, climate policy (pp. 183–184) | Not material | Short term not material; medium term up to $60M per annum decrease in EBIT; long term material but not quantifiable |
| Risk 3, physical hazards (p. 185) | Not material | Medium and long term not material; average annualized losses of up to $20M by 2100 if unmitigated |
| Opportunity 1, demand for steel (p. 186) | Not material for renewable energy-related demand; not quantifiable for climate resilient products | Up to $50M EBIT annual uplift for renewable energy-related demand; not quantifiable for climate resilient products |
| Opportunity 2, lower embodied carbon (p. 187) | Not material for earnings | Not quantified based on available analysis |
Climate resilience and scenario analysis
Assessment (pp. 188, 190). Four scenarios were developed in CY2024: Accelerated Leap (~1.5°C), Coordinated Climb (~2.0°C), Fragmented Lanes (~2.0°C) and Unchanged Paths (~4.0+°C by 2100). BlueScope concludes its current strategy is broadly resilient across all of the scenarios tested, with implications and responses set out for Port Kembla Steelworks, North Star and Glenbrook, and a resilient balance sheet providing flexibility (p. 190). Management considered developments since the analysis and concluded it remains an appropriate basis for the current period (p. 188). The scenarios are described as hypothetical constructs of possible futures, not definitive predictions or forecasts (p. 191).
Method (p. 191). Scenarios are based on IPCC and IEA published scenarios (SSP1-2.6 and SSP5-8.5 for physical risk; the IEA NZE pathway for transition). The time horizon is 2100, with the 2030s and 2040s for key transition drivers and 2030 and 2050 for physical risk. The physical assessment covered 71 sites; the transition assessment covered Australia, New Zealand and the United States, and midstream was not separately modeled. Assumptions cover climate policies, macroeconomic trends, regional variables, energy use and mix, and technology.
Risk ManagementRisk Management
Processes for identifying, assessing and managing climate-related risks
Integration (p. 179). Climate change is recognized as a material risk within BlueScope's Risk Management Framework, which provides an integrated approach to risk identification, assessment, evaluation and treatment in accordance with ISO 31000 and guided the assessment and management of climate-related risks and opportunities (CRROs). The assessment extended to controlled businesses, sites and services, including business units and joint ventures.
Process (Figure 1, p. 179). Scope and criteria; identification; analysis and evaluation; treatment; reporting; monitoring and review. Identification drew on the climate physical risk assessment, Quarterly Business Reviews, capital allocation decisions, business unit risk registers, the Climate Change Council, industry and supply chain peer reporting, sustainability disclosure standards and the outcomes of climate scenario analysis. Each CRRO was rated 1–5 for likelihood and consequence across short, medium and long-term horizons through workshops and placed on a risk rating matrix; quantitative materiality thresholds guided prioritization for reporting. Opportunities were assigned a treatment option (for example pursue, accelerate, monitor). Half-yearly CRRO updates were provided to the SSC in FY2026. The process was initially aligned to the (now superseded) Task Force on Climate-related Financial Disclosures (TCFD) framework.
Metrics & TargetsMetrics and Targets
Climate-related metrics
Scope 1 and 2 GHG emissions (p. 192), absolute gross, without offsets:
| Metric | FY2026 ktCO2-e |
|---|---|
| Scope 1 GHG emissions | 8,490 |
| – Consolidated accounting group | 8,480 |
| – Other investees | 10 |
| Scope 2 (location-based) GHG emissions | 1,710 |
| – Consolidated accounting group | 1,710 |
| – Other investees | 10 |
| Total Scope 1 and 2 GHG emissions | 10,200 |
| – Consolidated accounting group | 10,190 |
| – Other investees | 10 |
Numbers are rounded to the nearest 10 ktCO2-e. Measurement follows the Greenhouse Gas Protocol (2004), except for Australian operations within the NGER scheme, where jurisdictional relief has been adopted (early adoption of AASB S2025-1, p. 175); boundaries use the equity share approach unless superseded by that relief (p. 192).
Other metrics (p. 193). About $1,522M of FY2026 revenue (nine percent of Group consolidated revenue) is associated with activities vulnerable to transition risks and about $15,466M (93 percent) with activities aligned with opportunities. About $8,060M of PPE (over 99 percent of Group total assets, based on the assets included in the assessment) was assessed as vulnerable to physical risks. FY2026 investment under the decarbonization program was $139M, net of grants received for New Zealand's EAF. Carbon prices are applied in investment cases and forecasting; at 30 June 2026 the ACCU price used was $38t/tCO2-e and the NZU price NZ$54.8t/tCO2-e (as printed). Executive remuneration: p. 178.
Climate-related targets
Targets (Table 2, p. 194). The 2030 targets together cover around 99 percent of Scope 1 and 2 emissions; the 2030 targets and the 2050 goal consider the six Kyoto Protocol GHGs and cover Scope 1 and 2.
| Target | Scope | Type; performance reporting | Base year | Target year |
|---|---|---|---|---|
| Steelmaking: 12 per cent emissions intensity reduction by 2030 | PKSW, Glenbrook and North Star | Intensity (tCO2-e per tonne raw steel); gross GHG emissions | 2018 | 2030 |
| Non-steelmaking: 30 per cent emissions intensity reduction by 2030 | Midstream; excludes downstream | Intensity (tCO2-e per despatched tonnes); gross GHG emissions | 2018 | 2030 |
| 2050 net zero goal | All global operations | Absolute (tCO2-e); net GHG emissions | n/a | 2050 |
FY2026 performance (pp. 194–195). Steelmaking emissions intensity is 16 percent below the FY2018 baseline (target 12 percent by 2030); non-steelmaking intensity has reduced 13 percent since FY2018; total Scope 1 and 2 emissions of 10,200 ktCO2-e are four percent lower than 2018. External validation was not formally obtained for the targets; the Board receives an annual update on whether there is a reasonable basis to view the 2050 goal as achievable in the stated timeframe; the 2030 steelmaking target will not be revised. The 2030 target was not derived using a sectoral decarbonization approach. No offsets were used or surrendered in FY2026 (p. 195).