Sustainability Evaluation in the Steel Industry: A Supply Chain Performance-Based Model

Environmental, Social, and Governance (ESG) performance is increasingly relevant for corporate sustainability, mainly in high-impact sectors. Building on a previously developed ESG evaluation model, this paper adapts it to the steel sector, considering its specific context and challenges. The model evaluates an Anchor Company (AC), the buyer and focal point, and their Supply Chain (SC), outputting scores for each and a consolidated score, acknowledging the responsibility and potential impact of the SC. This work uses empirical data from a Brazilian steel company, which showed strong ESG maturity, and their suppliers, which showed decent ESG results. However, after integrating the scores, the final ESG score of the AC was significantly influenced by the SC, with 61% of the consolidated result structurally driven by the model's supply chain weighting, reflecting the dominance of scope 3 dynamics in the sector. The findings highlight that to promote effective sustainability, companies must go beyond their boundaries and actively address ESG risks and opportunities across their SC. This study contributes to the sustainability literature by proposing and testing a sector-specific ESG evaluation model in the Brazilian steel industry context, with practical implications for corporate decision-making and potential for adaptation to other regions and sectors.