Steel Sector’s Green Transition in Belt and Road Nations Shows Progress Amid Challenges, Study Finds

Sustainability Gains in Belt and Road Steel Industry

According to recent research published in Scientific Reports, the steel industry across Belt and Road Initiative (BRI) countries has demonstrated a steady upward trend in sustainability performance over the past two decades. The study, which analyzed data from 64 BRI nations between 2000 and 2023, reportedly found an average annual growth rate of 1.04% in sustainability levels, despite the sector remaining the largest carbon emitter among 31 manufacturing sub-sectors globally.

Sustainability Gains in Belt and Road Steel Industry
New Evaluation Framework Reveals Regional Patterns
Drivers and Obstacles in Green Transformation
ESG Investment Context and Steel Industry Impact
Corporate Initiatives and Regional Economic Significance
Research Implications and Future Directions

Sources indicate that BRI countries produced 1.43 billion tons of crude steel in 2024, accounting for 75.8% of global output. This dominant position in worldwide steel production makes the region’s environmental performance crucial for global carbon reduction efforts, analysts suggest.

New Evaluation Framework Reveals Regional Patterns

The study introduced an ESG-MI evaluation model that integrates environmental, social, governance, resource, and industrial dimensions to assess steel industry sustainability. According to the report, this marks the first application of the Environmental, Social, and Governance (ESG) framework at the industrial level rather than the corporate level.

Researchers identified a clear geographical transmission pattern in sustainable development, flowing from “Europe → East Asia → Middle East → Southeast Asia → South Asia.” This pattern suggests that sustainability improvements are spreading gradually across regions, the report states.

Drivers and Obstacles in Green Transformation

Industrial development and governance emerged as the primary drivers of sustainable development in the steel sector, while environmental performance remained a significant weakness across most BRI countries. The analysis also highlighted that resource supply chains in these nations are particularly fragile and vulnerable to external shocks.

Through obstacle degree modeling, researchers identified the top three barriers to sustainable development: industrial value added, crude steel output per capita, and the proportion of ores and metals in total exports. These factors reportedly demonstrated significantly greater hindering effects than other indicators examined in the study.

ESG Investment Context and Steel Industry Impact

The research comes amid growing global attention to ESG principles, which were first proposed by the United Nations to connect investors, enterprises, and sustainable development. Data referenced in the study shows that ESG investment in major developed countries reached $35.3 trillion in 2020, accounting for 35.9% of their total investment scale, with projections suggesting this could grow to $40 trillion by 2030.

Analysts suggest that the steel industry’s substantial environmental footprint – consuming 7% of global energy and emitting 9% of global carbon dioxide – makes its transition to sustainable practices particularly critical. The report notes that five of the world’s top ten steel-producing countries are located along the Belt and Road, with a combined capacity of 1.29 billion tons representing 68.7% of global total capacity.

Corporate Initiatives and Regional Economic Significance

The study highlights several corporate sustainability initiatives already underway, including JSW Steel’s climate action plan aiming to reduce carbon dioxide emission intensity by 42% by 2030. According to reports, these efforts involve increasing renewable energy usage, improving scrap steel utilization, enhancing energy efficiency, and optimizing production processes.

The economic significance of the BRI region underscores the importance of these sustainability efforts. World Bank data cited in the research indicates that BRI countries achieved a total economic volume of $36.5 trillion in 2023, with an average annual growth rate of 4.5% since 2013 – 1.6 times that of non-BRI countries. The region also contains 61.5% of the world’s population, making it one of the most economically dynamic areas globally.

Research Implications and Future Directions

The study’s authors emphasize that their work addresses a significant gap in systematic evaluation of steel industry sustainability across BRI nations. Previously, the lack of unified evaluation standards made it impossible to compare sustainable development differences among the 64 countries, according to the report.

Researchers suggest that future studies should focus on developing industry-specific ESG evaluation models, conducting systematic sustainability assessments across different industrial sectors, and comprehensively analyzing factors influencing industrial sustainability among nations. This approach could potentially optimize industrial layout and enhance sustainable development outcomes, the report concludes.

For more information on ESG frameworks, visit Environmental, Social, and Corporate Governance. Details about the Belt and Road Initiative are available at Belt and Road Initiative.