DMC Global sustainability report: still no mention of Scope 3 emissions

US-based manufacturing group DMC Global is yet to report on Scope 3 emissions, despite referencing the Global Reporting Initiative and the Task Force on Climate-related Financial Disclosures – both of which recommend Scope 3 disclosures. 

The company, which posted revenue of US$654.1 million last year, reported a significant increase in Scope 1 and 2 emissions, due to the recent acquisition of Arcadia, a provider of architectural products to the buildings industry. 

Operational emissions went from 7,500 tonnes of CO2 in 2021 to 13,836 tonnes in 2022 (the first year Arcadia’s emissions were included in DMC Global’s assessment).

But the company’s sustainability report, which was prepared “with reference” to the Global Reporting Initiative’s (GRI) Core Standards, the US-based Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures (TCFD), makes no mention of Scope 3 emissions – despite the fact that these likely make up the majority of its carbon footprint.

This was already the case in its 2021 sustainability report. 

While a European company the size of DMC would now be required to report Scope 3 emissions under the Corporate Sustainability Reporting Directive, US companies are currently under no such obligation. The Securities and Exchange Commission (SEC) is set to publish its climate disclosure rules by the end of the year, but the current draft only requires Scope 3 disclosures in certain cases.

DMC Global sustainability: 2022 as baseline for upcoming targets

DMC Global owns and operates three companies (Arcadia, DynaEnergetics and NobelClad), which manufacture products for the buildings, energy, minerals and transportation sectors.

While the report includes abundant financial and product information, its environmental metrics are scarce: among them, the company shares that it powered its operations through 11.1% renewable energy in 2022 (up from 6.9% the previous year), and recycled 3,400 tonnes of metal (compared to 2,658 tonnes in 2021).

DMC Global, which is listed on the Nasdaq stock market, has not set any climate goals yet, but its latest sustainability report says it is taking “concrete steps to set meaningful targets and commitments”, using 2022 data as its baseline.

Oil and gas involvement identified as a transition risk

For the second time this year, DMC Global’s sustainability report also mentioned concerns about its links to the oil and gas sector.

Its subsidiary DynaEnergetics produces drilling equipment for oil and gas clients, but in its 90-page report, DMC Global makes it clear that it has no ownership stakes in oil and gas wells and doesn’t engage in drilling activities.

Further down, in a section about climate risk management, the company says it is monitoring “the potential reputational challenges stemming from our level of involvement in climate-related issues, particularly within the energy end markets encompassed by DynaEnergetics”. 

DMC Global is particularly worried about the potential ripple effects of such reputational challenges on “investor relations, employee dynamics, supplier and customer relationships, as well as banking relationships”. 

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