With corporate environmental, social, and governance (ESG) disclosure standards recently becoming stricter, the methodology for calculating carbon emissions across the entire supply chain is emerging as a new regulatory risk for companies. In this regard, Attorney Sung-woo Kim of Solaris Law Office examined the decarbonization challenges facing the automotive industry and the significance of accurate steel disclosure through a column contributed to JoongAng Ilbo.

This column addresses how the scope of a company's raw material disclosure impacts its climate response strategy. The key details are as follows:

• (Background) Steel is a representative high-carbon raw material, and the automotive industry, which consumes it in large quantities, plays a crucial role in carbon reduction.

• (Issue) Recently, a company disclosed only the steel consumption inside its own factories in its sustainability report, excluding parts from suppliers, and was subsequently reported for greenwashing by civic groups.

• (Implication) Identifying accurate carbon emissions across the entire supply chain and transparent disclosure are the fundamental prerequisites for increasing demand for low-carbon steel and proving corporate climate leadership.

  
  

Solaris will continue to research various issues arising in the fields of environmental and energy regulations and provide effective legal advice to help businesses mitigate legal risks in complex regulatory environments.

- Original article link: Automotive Decarbonization Starts with Accurate "Steel Disclosure"

- Attorney Sung-woo Kim profile link: https://solarislaw.net/member-coo

The Importance of Steel Disclosure in Automotive Decarbonization

As corporate environmental, social, and governance disclosure standards become stricter, the method of calculating carbon emissions across the entire supply chain is emerging as a new regulatory risk for businesses. Attorney Sungwoo Kim of SOLARIS contributed an editorial to JoongAng Ilbo, examining the decarbonization challenges facing the automotive industry and the significance of accurate steel disclosure.

This article addresses how the scope of a company's raw material disclosure impacts its climate response strategy. The core points are as follows:

• (Background) Steel is a major high-carbon raw material, and the automotive industry, as a massive consumer, plays a vital role in carbon reduction.

• (Issue) A company recently faced a greenwashing complaint from a civic group after its sustainability report disclosed only the steel used in its own factories, excluding parts from suppliers.

• (Implication) Grasping accurate carbon emissions across the entire supply chain and maintaining transparent disclosure are the basic premises for expanding demand for low-carbon steel and proving corporate climate leadership.

  
  

SOLARIS will continue to research various issues in environmental and energy regulations and provide practical legal advice to help companies reduce legal risks in a complex regulatory landscape.