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Our business

Our Business

How and where we run our steel and mining business.

Our progress

Our progress

This year saw important progress across our business, where we continued to meet the needs of all our stakeholders.

Action 2020

Action 2020 is ArcelorMittal's commitment to structurally improving profitability and cash flow generation.

Governance

Good corporate governance is about compliance, continuous stakeholder dialogue and being a good corporate citizen.

Fact book

Details of our steel and mining operations, financials, production facilities and shareholder information.

Henk Scheffer

It’s important to be able to tell our stakeholders not only how well our company performs environmentally, but what impacts we are having on society – both positive and negative. That’s what enables people to look at our company and say ‘Ok, their contribution goes further than I had realized.’

Henk Scheffer Sponsor of this outcome and group compliance officer

Hear more from Henk about our contributions to society
Outcome 10

Read more about this outcome on our website.

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Different forms of value

We define our contribution to society in terms of different forms of value: the economic contributions we make to stakeholders; the changes in natural capital, including reductions in our carbon and other air emissions; the value for our people – in other words, the benefits of the employment opportunities we provide; and what the benefits of our innovation in the products we create.

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These forms of value are of course intimately related. If we can develop more integrated thinking within the company, we will be better able to demonstrate how these forms of value relate to each other. This is the rationale behind integrated reporting.

Integrated thinking also helps us plan the right business strategies for the future. For example, we know that we can create value for our customers and for our workforce and the community by driving common social and environmental standards in our value chain, something we are pursuing through the ResponsibleSteel™ certification scheme.

Another example is how the cost of carbon could impact on both the social value and the financial value that ArcelorMittal creates. In Germany for example we employ 9000 people in steelmaking. In order to protect our ability to continue this economic contribution to the German economy, we need to ensure that our profit levels are well above the cost of carbon in a future European emissions trading scheme, so that we can also invest in long term value creation. This is a complex trade-off you can read more about here.

Measuring social impact

Social outcomes tend to be the result of many local factors and so for a global organisation, measuring impact at a global level will inevitably leave out much of the story. We want to develop a way to measure our impacts at country level. In 2016 we asked local operations to complete a dashboard assessment for outcome 10, prompting local management to consider the links between the social impacts of their operations, the profit they generate and their social licence to operate. In South Africa we have measured our social impacts in a standalone report since 2014 (the Factor report). In most countries, however, we do not yet measure social impact across the board, but in Poland, France, the US.and Canada we have begun to do so in our country-level sustainable development reports. We are now in the process of drafting a global framework to align future social impact studies with the 10 SD outcomes we want to achieve.

Six years of integrated reporting in South Africa

ArcelorMittal South Africa has for the last six years published an integrated report, including details of the economic and social contributions it has made to the country’s development.

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Our economic contributions

Steel is the backbone of many economies. The payments we make to government provide a substantial component of public spending – in 2016 we contributed a total of $4 billion to the treasuries of the countries in which we operate through a variety of taxes. Of course in many cases, steel is a core export and therefore a key source of foreign exchange – for example, ArcelorMittal was recognized as the leading exporter in both Ukraine and Bosnia & Herzegovina in 2016.

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$4bn

Our total tax contribution

ArcelorMittal is committed to its operations in Ukraine and we are proud to be recognised as one of the major drivers of the country’s economy.

Paramjit Kahlon
Chief executive officer, ArcelorMittal Kryvyi Rih

Driving social impact in the supply chain

Many people share in the success of our business. In 2016, we employed 198,517 people directly, and 43,044 as contractors, many of them in highly skilled jobs, and in communities where other employment opportunities are scarce. We spent over $41 billion on procurement in 2016, supporting thousands of further jobs in our supply chain in the 60 countries in which we have a presence. The impacts of this supply chain are numerous, and one example is illustrated by an award from a key customer, General Motors. The $7.6 billion we pay in salaries and wages also have further indirect impacts in each country as our workforce spend their wages in the local economy.

Award-winning supply chain diversity in US

ArcelorMittal USA is very pleased that our successful supplier diversity program has been recognised with this award.

Eric Knorr
Vice president, procurement, ArcelorMittal USA

Diversity in the supply chain creates long-term shared value for us and our stakeholders: our US diversity programme allows us to provide an opportunity for minority-, women- and veteran-owned businesses to win contracts with the company; and as we develop their capacity, we are building good relationships with new local suppliers, which can provide us with commercial advantages.

For example, in May 2016, General Motors presented ArcelorMittal USA with a top diversity award for promoting businesses owned by minorities, women and veterans in our supply chain.

ArcelorMittal USA has averaged more than US$200m in diversity spend with minority, women and veteran-owned business over the past two years. During this period the company has also doubled its diversity spend with qualified and certified diversity suppliers.

Performance at a glance

Metric Unit 2016 2015 2014
Total estimated direct economic contribution $ million 56,202 63,316 78,839
of which[1]        
Corporate income tax $ million 296 398 337
Local taxes $ million 390 465 544
Payroll taxes $ million 3,193    
Other taxes $ million 95    
Employee salaries, wages and pensions $ million 7,637 10,880 12,718
Supplier and contractor payments $ million 40,489 46,569 59,062
Capital expenditure $ million 2,444 2,707 3,665
R&D $ million 239 227 259
Dividends and payments to creditors $ million 1,417 1,978 2,164

[1] In 2016, the company undertook a review of all the taxes paid at a local level besides income tax. The figures published here are the result of that work, and represent a wider scope than reported in previous years. Details can be found in our Basis of Reporting.

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