It may be a tough sell for its critics, but Algoma Steel Group
Inc. is positioning to make itself more attractive to investors who put their
money where their values are.
Earlier this month, the Sault steelmaker issued something it
called an "ESG position statement," announcing it intends to issue
its first "ESG report" at an undisclosed time in 2023.
ESG stands for environmental, social and governance.
The term was coined in an October 2005 report from the United
Nations Environment Programme Initiative.
The steelmaker's announcement received little media notice, with few, if any,
media outlets reporting any details from the seven-page position statement
aside from what was said in a news release.
But Algoma's announcement is significant because ESG has become
the gold standard used by many socially conscious investors to assess a
business's performance on sustainability and ethical issues.
Numerous mutual funds, brokerages and robo-advisors sell
ESG-based investment products.
The recent growth of these products has prompted businesses to
increasingly emphasize their ESG performance when competing for capital.
It has also led to some organizations being accused of
overstating their ESG achievements.
In recent months, Algoma Steel has been criticized for dangerously
high levels of carcinogenic emissions and for lagging far behind other
companies in accepting women into its boardroom and executive ranks.
"It is deeply
concerning to see that despite the existence of regulations, the Algoma Steel
mill has been allowed to operate in a manner that is harmful to the health and
well-being of the people living in the local area," said a letter signed last
month by 38 Algoma University faculty members.