As ESG disclosure standards tighten, the way companies calculate carbon emissions across their supply chains is becoming a new source of regulatory risk. In a column for JoongAng Ilbo, Attorney Sungwoo (Goni) Kim of SOLARIS examined the decarbonization challenge facing the automotive industry and why accurate steel disclosure matters.

The column looks at how the scope of a company's raw-material disclosure shapes its climate strategy. The key points are as follows.

• (Background) Steel is one of the most carbon-intensive raw materials, and the automotive industry, as a major consumer of steel, has an important role to play in reducing emissions.

• (Issue) A company recently faced a greenwashing complaint from a civic group after its sustainability report disclosed only the steel used inside its own plants, leaving out parts sourced from suppliers.

• (Implications) Accurately measuring emissions across the entire supply chain and disclosing them transparently is a basic prerequisite for growing demand for low-carbon steel and demonstrating corporate climate leadership.

  
  

SOLARIS will continue to study emerging issues in environmental and energy regulation and provide practical legal advice that helps companies reduce legal risk in a complex regulatory environment.

- Original column: Automotive Decarbonization Starts with Accurate Steel Disclosure