Severstal steps up sustainability practices in North America

Steel maker Severstal North America is asking its suppliers to step up their sustainability practices, as it does the same.

The Dearborn, Mich.-based division of Russian OAO Severstal steel and mining company has joined both the United Nations Global Compact and the Conflict-Free Sourcing Initiative. The company said this week that it has outlined three key focus areas: safe and healthy working conditions; high environmental standards and strong business ethics.

Gerrit Reepmeyer, vice president, procurement for Severstal North America, said that while they are also requiring their business partners to follow the 10 principles outlined in the UNGC and the CFSI guidelines in the sourcing of minerals, it will be tolerant with firms that might need time to make adjustments to business practices.

“There could be a case where a supplier is non-compliant or in violation. We will actively work together to overcome that,” said Reepmeyer. “But if a supplier shows no initiative to do this, ultimately we will not be engaging with them anymore.”

Steepmeyer said the company has a defined set of Key Performance Indicators that it will use to measure its performance as well as its supplier partners. He said while they’ve tried to take a simple approach with the KPIs, they are also “meaningful.” Severstal NA wants to see the effort extend to its suppliers’ suppliers too.

Reepmeyer noted while this new sustainability initiative wasn’t a corporate directive, “We are in close contact with our partners in Russia and they have their own sourcing standards and sustainability programs.”

The company has already been working to increase its use of recycled steel and water at its two U.S. plants. Additionally, due to improvements at its Columbus, Miss. location, it was recently presented a check for more than $2.5 million from its local power company The Tennessee Valley Authority, for achieving significant energy efficiencies through TVA’s Major Industrial Program.

The greatest efficiency opportunity identified at the steel plant was retrofitting four 2,750-horsepower fans that send particulates from the plant’s electric arc furnace to a bag house for air pollution control. TVA estimates Severstal will save $1.6 million annually in energy costs. Using customized assistance from TVA, Severstal was able to reduce its total energy usage by 25,251,390 kilowatt-hours, enough to power 2,000 average homes.

Severstal is also hoping to earn Energy Star certification by 2014. Companies can earn the U.S. Environmental Protection Agency certification by exhibiting superior energy efficiency with buildings and plants that operate among the top 25 percent of similar facilities nationwide.