Thank you for standing by, and welcome to the Sims Limited Investor ESG update. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one keypad. I will now like to hand the conference over to Mr. Alistair Field, Chief Executive Officer and Managing Director. Please go ahead.
Thank you, and good morning to everybody, and welcome to the Sims ESG briefing. As a kickoff, I would like to begin by acknowledging the traditional custodians of the land I'm on today, the Gadigal people of the Eora nation. We recognize and respect their deep and continuing connection to land and waters, their long tradition of innovation and their continued stewardship of this place. And I pay my respects to the elders, past, present, and emerging. The development of Sims' purpose we kicked off in 2018. This purpose that we set about is really a blueprint that guides our decision-making, governs our behaviors and frames our interactions with customers and partners across all of our jurisdictions and the communities that we operate in.
This is very clearly a purpose-led global strategy that we set out in 2018 and shared that with the market in 2019. When you have a look at slide five, we very clearly set that strategy and looked out to the year 2050. Obviously something that's still within our lifetimes and worked with a lot of thought leadership around economies and scientists and really futurists and academics. At that process and step, we worked around 120 mega trends with the potential to shape the world and assess both their probability and potential impact on Sims operations. We naturally distilled that list down to about 40 mega trends at the end of that process.
These trends we looked at created opportunities and threats for the broader environmental industry within which Sims operates. A really key part of our focus, strategy, integrated approach, when you bring that forward to where we are sitting today and you look at the tailwinds that sit behind Sims, we're in a very fortuitous position that we have set our strategy a number of years ago with a long-term outlook. These tailwinds that we see on slide five, when we look at increasing environmental challenges right across the globe, the push for higher quality in almost all the metals that we deal with, the demands for both copper and aluminum. Really the actual demand for recycled material is growing and then that is not slowing down at all.
When we had a look at all these mega trends that we covered, both from a social mega trend, environmental, technological or political, these were key aspects to our integrated strategy that we needed to take forward. When I have a look at our sustainability strategy that we have put in place and that we're gonna share partly with you today, that framework of operating responsibly, closing the loop, partnering for change, is really key to that framework and the actual discipline that we need to undertake to deliver these strategies that we've set about. The growth strategy that you can clearly see on slide five as well, is underway and has been for a number of years now, and we set those FY 25 targets in FY 19 and shared that with you.
We're on that journey, and it's a really important journey given the context of our purpose, but also the actual structure of this organization and the ability for us to deliver. I think partly that journey that I wanted to share with you also on slide six is where we look at the sustainability highlights that we've undertaken and are achieving already on that journey. The electricity and the renewable challenges and the reduction by 37% at this stage is a really good start. Likewise with a 21% carbon reduction that we've seen. All good starts for our journey. I think part of this is the actual executive management team and the board's commitment to delivering on this strategy and making sure that we continue to focus and learn on this journey as well, is really important.
I think from my point of view, a really good start for Sims, very clearly, in a very strong framework. I'd like to hand over now to Gretchen that can actually take you through the governance and the oversight of all of this.
Thank you, Alistair. It's a pleasure to speak with everyone today. I'll begin with governance. Our Chief Risk, Compliance and Sustainability Officer, Elise Gautier, who's with us today, is a member of the executive leadership team and reports to Alistair, as I do as the General Counsel. The seniority of these roles ensures that sustainability has a voice in executive discussions and decisions. Sustainability is the foundation of our business. It's integrated with our strategy, our business goals, and with our employee performance framework and our remuneration structures. The board and its five committees are structured to have oversight of our sustainability strategy, the goals and its performance. As Alistair mentioned, our management team, our board, is committed to our sustainability strategy.
We, as a management team, report to the board and its committees at each meeting on our progress, and the directors ensure that the company remains on track. Now, at our Investor Day back in March, we stated that we had allocated environmental CapEx to improvements to some of our shredders. I'll now give you some more context for the purpose of that CapEx. Historically, it was not possible to measure volatile organic compounds, or VOCs, from shredders. But ss technology has progressed and shredders enclosed, VOCs could be directed to a stack and measured. It's now possible to determine the level of VOCs through testing. With this ability to test, in some cases, we've found that we need to change the type of air permit that we have. We have air permits in each of the states in which we operate. Now, what are VOCs?
Shredder VOCs are believed to be mostly due to the presence of incidental levels of petroleum products and end-of-life vehicle in feed materials. In order to minimize VOCs, we take a number of steps prior to shredding materials, including removal of fluids such as oil and fuel. To be clear, shredding is a purely mechanical process. No chemicals are added, no heat is added in the metal shredding process. And also to be clear, Sims complies with applicable VOC thresholds at each of its facilities in each of the states that it operates. A finding from a recent study conducted for a competitor identified no health risks while operating at these thresholds. Now we're actively working with the U.S. EPA and the individual state EPAs on the implementation of advanced VOC controls at a number of our shredders.
We believe this is the right thing to do as it will lift the standards of our industry by deterring unsustainable participants from entering the market and participants with poor environmental practices from remaining in the market. Now, how do we determine whether to install advanced VOC controls? Several factors are considered, including the shredder size, the amount of material shredded, the throughput, the type of material, and the location of the shredder. Because of the size of the project, the significant design, engineering, permitting, installation process we're going through, and the cost, we need to take a cautious stage-gate approach with one shredder at a time. Based on the work to date, Sims will install VOC controls at its shredders in Chicago, Illinois, Jersey City, New Jersey, and Morrisville, Pennsylvania.
These shredders are our priority based on their size or the amount of material that they handle and their location. As a first step, we're also planning to test the VOCs at our shredder in Redwood City, California. The slide sets out the timing for the process. Now a case study. We've included a case study for your review that is illustrative of the regulatory framework in the U.S. We have a federal EPA, we have state EPAs, and then we also have some local authorities. We are a well-regulated industry. Now you may have seen press coverage regarding the denial of a City of Chicago operating permit for a competitor's facility in Chicago. In that case, our competitor was moving from a wealthy suburb to a disadvantaged, predominantly minority neighborhood in Chicago.
The mayor of Chicago denied the competitor an operating permit for a new facility. In contrast, we've operated in the Pilsen neighborhood of Chicago for over 30 years. This slide reviews our successful application process for a construction permit to build our advanced VOC controls. The history. In 2019, following the protocol approved by the U.S. Environmental Protection Agency, Sims performed a VOC test and agreed with the U.S. EPA, the appropriate throughputs or the operating restrictions for our shredder. Sims was prepared to use this as we went through the permit renewal process with the Illinois state for our air permit. However, Illinois asked that we retest. And again, this technology is very new. The testing is new, the advanced controls are new, and different regulators have different views on the appropriate testing protocols.
We engaged with the State of Illinois and, after discussion internally, we decided in light of our corporate purpose and our community's feedback, that we would just go straight to the installation of the advanced VOC controls. We were far along in our process of design and engineering. We knew that we planned to roll out these controls at some of our shredders, including Chicago, and we decided it made sense to start with Chicago rather than spend time testing and debating. The discussions with the Illinois Attorney General and with the Illinois EPA have been constructive and a necessary step to the approval of our construction permit.
We're very pleased that Illinois EPA granted our construction permit a couple of weeks ago. Separately, we're also renewing our city operating permit. Again, we're well regulated. In Chicago, we have both a city operating permit and a state air permit. The city permit is a three-year permit. We renew it on a three-year cycle, and we are currently in the renewal phase. Our renewals generally do not generate, you know, much public attention, but with our competitor's attempted relocation and the press with that, there has been a fair amount of press attention which you may have picked up. I think to conclude just on that case study, we've been in the community for 30 years.
We're focused on continuing to engage with the local community, where we've operated and we've built our relationships and that's really our priority. Now I hand it over to Elise.
Thank you, Gretchen. Good morning, everyone. It is a pleasure to be here today to talk to you about progress we have made in our ESG strategy. We have a lot to celebrate this year. We released our first climate report, which is going to be submitted for non-binding vote at the upcoming AGM, and we met some of our sustainability goals ahead of time. Today, we will focus on the good that we do, which is innate to our business model. Additionally, we will cover our sustainability performance in fiscal year 2022. In the next set of slides, I will explain in more detail Sims' leading role in the energy transition and decarbonization of our customers' supply chains. Sims has a diverse range of businesses. Sims Metal is at the core of the group.
Sims Municipal Recycling, Sims Lifecycle Services, Sims Resource Renewal, and Sims Energy in partnership with LMS Energy are adjacent businesses that provide the opportunity of diversification and access to growing areas with a strong alignment with our purpose and where we have the right to win. Each individual business assists our customers in lowering their respective carbon footprints. This role is increasingly important as governments and corporations accelerate the pathway to net zero. Sims Metal, for example, provides high quality recycled metal in place of virgin materials, enabling the avoidance of emissions, including those associated with the extraction, refining, and production. Sims Lifecycle Services helps its customers reduce their emissions and close their loops by providing circular solutions for technology, including a wide variety of IT asset disposition and electronics recycling services. Sims Municipal Recycling provides recycling services for recovering metal, glass, plastic, and paper from curbside collection programs.
Sims Resource Renewal aims to transform waste into valuable products. Finally, through Sims Energy, we convert landfill gas to renewable energy and contribute significantly to Australia's carbon emissions reductions. In fiscal year 2022, our entire portfolio of businesses generated 98%-100% green revenue. In other words, in fiscal year 2022, we not only created value to our shareholders by increasing our revenues by 56.6%, but we also enhanced the environment. On the next slide, research from the Ellen MacArthur Foundation shows that building a circular economy is key if we are serious about making real progress towards decarbonization. Moving to renewable energy will only address 55% of the global greenhouse emissions. The remaining 45% will have to come from the circular economy. Recycling of everyday goods such as cars, fridges, and washing machines is a key decarbonization lever.
Steel production accounts for 7% of global emissions and 28% of industrial emissions. We know that reducing emissions from the steel industry is essential to meet global emission targets. We also know that the decarbonization of the steel industry starts with scrap. Using more scrap and improving the quality of scrap is the first logical step to reducing emissions. The impact that scrap has on steel production is quite significant. Steel produced via an electric arc furnace or EAF, which can be charged with up to 100% scrap, produces 75% fewer emissions in its production cycle when compared to a blast furnace production. The decarbonization of the steel industry is hugely challenging and will require important investment in emerging technologies over the coming decades. Our positive impact is meaningful today.
8.3 million tons of ferrous metal recycled with Sims Metal last year had the potential to avoid 13.4 million tons of CO₂ equivalent. To put it into perspective, this is equivalent to the annual emissions of some of Australia's largest coal-fired power plants. On the next slide, as Alistair mentioned before, non-ferrous metal is a core pillar of our growth strategy. Copper and aluminum are critical for the energy transition. The increase of electric vehicles, power grids, solar panels and wind turbines is expected to continue driving demand and prices for both metals. Recycling aluminum, for example, saves 97% of greenhouse gas emissions produced in the primary production process. Copper requires 85% less energy than primary production. Moving to slide 18, here we cover the positive impact of our adjacent businesses.
In fiscal year 2022, the total avoided emissions impact of our SLS operations was 439 kilotons of CO₂ equivalent. That's equivalent to taking more than 90,000 cars off the road for one year. Sims Resource Renewal through the use of plasma gasification technology aims to divert more than one million tons of auto shredder residue from going to landfill and transforming it into useful products for society. Turning now to the sustainability strategy and fiscal year 2022 performance. Sims's sustainability strategy is designed to drive a positive impact on society, the environment, and for our stakeholders, including our shareholders and employees. As Alistair explained at the beginning, our growth strategy is embedded in our sustainability strategy. Our growth targets are blended with our sustainability targets, and they are key KPIs in the remuneration structure.
This strong alignment differentiates us and is incredibly important because it sets us up for success over the long term. It also makes our decision-making process easier as our ESG impacts and financial returns are equally considered. Our first pillar, Operate Responsibly, is about how we operate. It gives us a clear framework to engage with our customers and employees and ensures that our network of suppliers uphold our values. The objectives of the closed-loop pillar is to reduce the impacts on the environment and keep resources in use as long as possible by reducing waste. Finally, the Partner for Change pillar seeks to amplify our impacts and to build trusted relationships in the communities. You may have seen this diagram before on slide 21. It lists the nine ambitions and the 27 targets supporting our sustainability pillars.
I know it's quite a busy slide with very clear and detailed KPIs, so I will let you go through it in your own time by referring to our sustainability report. The targets presented here were set in fiscal year 2020 with the exception of some climate targets. In a pivotal year for climate action, we accelerated our carbon neutrality target and created or modified some of the other climate-related targets to ensure that we continue to challenge ourselves to do more. This year, we have achieved great progress across all our pillars, in particular in the Operate Responsibly pillar, where we met some targets ahead of time. We reached our goal of maintaining a gender-balanced board of directors, as well as the goal of increasing our women representation in senior management roles, representation which is now at 26%.
All our employees completed the training on human rights, modern slavery and labor rights. All our employees as well as agents were trained on the code of conduct and anti-bribery policies. As a business, we have a responsibility to ensure that we operate in an ethical manner. To that end, we are very pleased with the early achievement of these goals. The progress achieved and on other goals brings us closer to our ambitions. We have decreased our operational emissions by 21% compared to fiscal year 2020, which is our baseline year. We have also measured Scope 3 emissions for the first time, which I will explore later. 37% of electricity across all our operations was originated from renewable sources.
We achieved our best year on record for safety with the lowest recordable injury frequency rate ever of 1.1 per 200,000 hours, and experienced the lowest number of lost time injuries and critical risk incidents. Critical risks which often lead to fatality or serious injuries decreased by 88% in fiscal year 2022 compared to fiscal year 2019. I will explain in a minute the drivers of this progress. We have also reduced our gender pay gap from 9.4% in fiscal year 2021 to 8.2% in fiscal year 2022. We've rolled out our elevated human rights due diligence for new high-risk suppliers across NCH Metal and our global trade entities.
New suppliers from high-risk countries or industries are subject to additional due diligence steps that include completing a human rights questionnaire and screening for sanctions and adverse media. As you may know, we buy most of our material from commercial accounts and municipalities, and we have a very experienced commercial team that is trained to detect anomalies and suspicious behaviors when the materials are presented in our yards. While risks exist across our supply chain, we believe we are managing them effectively. Our performance is, of course, detailed in our sustainability reporting suite, which is a new format this year with a sustainability report, but also a data book and a climate report. Also, this year we have expanded the external assurance over our metrics, and in addition to assurance over our greenhouse gas emissions, we have had data relating to water, waste, and safety performance independently assured.
Moving on now to our progress on the Operate Responsibly pillar. On slide 24, as we said previously, this year we have achieved our best year on record in safety. It was primarily driven by the ongoing successful implementation of our critical risk management program. I'll provide more information on this shortly. Historically, women have been underrepresented in the scrap industry. We want to change this. Achieving gender diversity is a strategic imperative for NCH. There are studies that show that having a more gender-balanced workforce isn't just good for women, it's good for business. In industries where women are underrepresented, it is key to create an environment where women can excel.
Before we set our strategy to attract and retain female workers, we spent time through external research and with internal focus groups to better understand what was missing in our recruitment practices and what changes we had to make in our workplace culture, particularly in our operations, in order to attract and retain female workers. Some of the initiatives implemented in fiscal year 2022 included the launch of the program Women Leading @ Sims, which aims to support female leaders. We have just finished the first round, and we are pleased to see that 33% of participants were promoted during or after the program. We are running it again this year. The second round started in Q1 of fiscal year 2023. Within the past 12 months, the percentage of women who were hired for and promoted to senior leadership positions was significantly higher than previously.
In fact, it was double the percentage of fiscal year 2021. One of our biggest challenges is to increase women participation in our operations. To that end, we have modified the recruitment process for senior leadership roles and also formed partnerships with organizations like Women in Trucking in the U.S. to reach out to diverse talent populations more effectively. We are committed to eliminate the gender pay gap across the organization. This year, we adopted a global methodology for calculating the gender pay gap to unify what had previously been a disparate set of country-level metrics driven by local regulatory requirements. Importantly, we have implemented universal job gradings and redefined our salary structure to avoid entrenching bias in our system. At the end of fiscal year 2022, we reported a pay gap of 8.2%.
I'm really pleased to say that at the end of Q1 of fiscal year 2023, and after our annual pay review cycle, we have reduced the pay gap to 5%. Of course, we have more work to do, but the progress made shows our commitment and is the result of changes made during the year, which has enabled us to nearly halve the gap we had in fiscal year 2021. At the board level, with the appointment of Vicky Binns as non-executive director, four of seven non-executive board members were women in fiscal year 2022. Sims supports the continuous learning and personal development of each employee and continues to add more learning opportunities and programs to increase their skill levels, and they are also available in 6 languages to ensure accessibility for our diverse teams.
I have highlighted that 67,000 courses were completed last year via Sims University, up from 14,000 in 2019 when the tool was first launched. Finally, to ensure commitment and accountability of the management team and throughout other layers of the organization, we linked performance metrics and remuneration incentives to our sustainability strategy and targets I showed earlier. For instance, the fiscal year 2022 short-term incentive was linked to climate, safety, and gender diversity, and other cultural related KPIs. We all know that there is competition for talented people in the workforce, including millennials and Gen Z employees. One thing we know about these cohorts is that they want to make a difference and are attracted to organizations whose purpose and work aligns with their values.
At Sims, our purpose is what we do every day, and we see that young people are really responding to our culture of sustainable practices as well as the technical challenge we offer, as you can see on slide 25. This is feedback from our cadet program, whose purpose is to attract millennials and Gen Z cohorts at the very beginning of their careers. With regards to safety now, we continue to make significant progress in decreasing the number of critical incidents and injuries taking place in our sites. In fiscal year 2022, we have achieved our lowest recordable and lost time injury frequency rates on record, further improving on last year's previous record low. We continue to execute a multi-year focus on critical risks.
These were validated through a global taxonomy study of 10 years' worth of incidents that had taken place in our organization, and also based on employee feedback. The focus on critical risk drove to the simplification of our standards, development of training, but also, and very importantly, a monthly evaluation and enhancement of the critical controls that should be put in place to prevent a fatality or serious injury. This review is done globally via an app which allows best practices to be shared and controls standardized. In fiscal year 2022, we piloted state-of-the-art technologies in our management of safety. For example, we partnered with PreVenture, an Australian-based company that helps identify body stressors as employees perform their work tasks via the use of body sensors.
The information gathered is helping us redesign some of our work processes, rethink some of the tools used for certain tasks, and create rotation schedules. This will reduce ergonomic risks in our organization, especially in our Sims Lifecycle Services division. In our metal business, we are piloting a machine learning technology solution to provide early warning of fire by teaching the software to recognize abnormal heat signatures in piles of metals, while the technology disregards heat signatures from mobile equipment operating nearby. This allows us to keep thresholds at their lowest, so we can respond faster than ever before. We are also looking at technology to help detect potentially dangerous non-conforming materials such as batteries and gas cylinders in inbound loads before they become a hazard. We will continue to look at technology to help us manage safety on our sites.
Moving now to the close the loop pillar, where we set our climate targets. In line with our purpose, we acknowledge that climate change is a critical threat to the preservation of our planet, and greenhouse gas emissions are a form of waste. As such, in fiscal year 2022, we announced new targets for our climate action, which are more ambitious than those previously released. I would like to stress that our targets were developed following the Science Based Targets initiative methodology to align with the goals of the Paris Agreement. Despite our small carbon footprint, we are leading the way. In fiscal year 2022, we published our inaugural standalone climate report, which will be presented to shareholders for an advisory vote at the upcoming AGM. We have been really pleased to see the strong progress we have made against our targets, and I will talk to our approach now.
As I said, we have had strong performance in fiscal year 2022, decreasing emissions by 21% from our baseline year. This is quite an achievement, particularly if we consider that our metal sales volume increased by 17.5% over the same period. The main sources of our operational emissions in fiscal year 2022 were electricity accounting for 41% of our emissions and diesel for 53%. The core metal business generated the bulk of the group footprint, with North America metal contribution at 43%, ANZ metal at 39%, and UK metal at 10%. The primary driver of this decrease included the execution of new electricity supply agreements using 100% renewable electricity. In fiscal year 2022, we moved new sites to renewable electricity, such as Claremont in New Jersey, which is our largest electricity consumer, Kwinana in Western Australia.
There were also 10 sites in New Zealand and 5 SLS Circular centers across Europe and Asia. This adds to a number of other sites, including all U.K. sites, which are now using 100% renewable electricity. Additionally, we also reduce our diesel consumption as we rolled out a shredder optimization software across our Australia and New Zealand shredders that drive energy efficiencies, and we continued to electrify our equipment across our sites. The results gained from the electrification of equipment are not just lower diesel consumption, but also lower maintenance costs. In our reporting this year, we have gone into that decarbonization pathway, so I will touch on a few key points today.
Firstly, a tool we have introduced to help us drive emission reduction throughout our operations is the introduction of a shadow carbon price, which we have set at $100 per ton of CO₂ equivalent by 2030. This is being used as a lens to guide our decision making. As a leader, we also believe it is important to advocate for an orderly transition and of course, for the role of the circular economy in driving decarbonization solutions. This year, we've assessed our industry associations to ensure their lobbying positions were consistent with our policy, and we were pleased that there were no misalignments identified. You can find the full disclosure on our website. Regarding fossil fuel, we are exploring many different solutions, and we are engaging closely with OEMs, particularly for mobile plant.
In this, we are also including a non-operated joint ventures so we can leverage the scale of the group and encourage decarbonization in our value chain. Given the currently available commercial technologies for mobile plant and road vehicles in particular, and of course, the life cycles of our assets, we will not have completed the transition by 2030 or by 2025 for SLS, and so there will be a role for carbon offsets. In our climate report, we have outlined our principles for sourcing offsets, including a commitment to disclose the amount of offsets we use. Of course, we are absolutely prioritizing genuine reductions, which is what our purpose calls us to do, and we are holding ourselves accountable to that. At Sims, we believe tackling the climate change challenge requires the cooperation of all supply chain participants.
In fiscal year 2022, we completed measurement of our Scope 3 emissions for the first time, and this is also covered in our scope of external assurance. Our Scope 3 emissions amount to a total of 3.9 million tons of CO₂ equivalent. The major sources are from the steel and maritime sectors relating to the processing and freight of Sims's metal sold products. The contribution from our joint ventures, including SA Recycling and LMS Energy, was 1%. We have also estimated potential avoided emissions from the use of our products compared to making the same amount of steel from raw materials.
You can see here on slide 31 that in fiscal year 2021, the avoided emissions potential was around 13.4 million tons, which is more than 3.4 times our combined Scope 1, 2, and 3 footprint and is a powerful example of how the circular economy is critical to decarbonization. As I mentioned earlier, one of our sustainability pillars is to partner for change, and this is an approach that is essential for addressing Scope 3, as these are emissions that are outside of Sims's operational control. This is an action for Sims that is just beginning this year. Our ability to make significant reductions to Scope 3 emissions will depend on the decarbonization of the steel and maritime industries in line with the Paris Agreement, and these are both very challenging sectors.
When we talk about Scope 3, I do want to again highlight that an increase in our Scope 3 emissions, where it comes from use of our products, does represent a much greater positive impact elsewhere in the value chain compared to making metal from raw materials or indeed a cloud unit in the case of SLS. As I outlined, more than 75% of Sims's Scope 3 inventory comes from the processing of the scrap product we sell, particularly steel. Science Based Targets initiative and the steel sector are working to develop science-based target setting methodologies, tools and guidance for steel companies. This is, as I'm sure you all can appreciate, a very complex and costly transition for the industry to make.
In fact, an investor group in a climate change report highlighted that the sector was unlikely to reach net zero by 2050, also noting the key role that scrap plays in the decarbonization of the sector as a whole. We will look to the industry pathway as released by SBTi for guidance that is both credible and ambitious as to how it will drive our own ambitions. Third-party freight, particularly marine freight, is the other major contributor to Scope 3 emissions for Sims, and again, not likely to achieve net zero by 2050. The International Maritime Organization has set goals to reduce average GHG emissions intensity across international shipping by at least 40% by 2030 and 70% by 2050. With regard to freight, we will continue to monitor key developments of transport sector guidance.
We will also investigate ways we can support transport decarbonization, particularly for owner-drivers in our supply chain, as EV trucks start to become more accessible. As I said, we are at the start of our journey on this, and so this year we are engaging with customers and suppliers to understand their plans and to be able to improve our data sources, as well as looking to SBTI and others looking at this challenge. These are outlined in some depth in our climate report, which I hope shows the considered and credible approach we are taking with Scope 3, and as we said in our fiscal year 2023 climate report, we will provide an update on our progress in this space. Turning to our last strategic pillar, partner for change. A key pillar of Sims sustainability strategy is to partner for change.
We know that our purpose and goals cannot be achieved alone, and they require respectful, transparent, and reciprocal partnerships with the communities where we operate. In fiscal year 2022, we have laid some solid foundations to support greater engagement with our local communities. In fiscal year 2023, we have already begun to roll out more of this work, which will be integrated into a group social license framework. We have already piloted this in Australia, and importantly, we have taken an approach where we are integrating this with our measurements, risk frameworks, and skills development, so that this is done in a way that is complete and consistent and delivers for Sims and for our communities. In fiscal year 2022, we continued to strengthen our sustainability credentials.
We ranked 11th on the Corporate Knights Global 100 list of most sustainable companies, and number six in the Sustainability Magazine Top 100 Companies in Sustainability. We were also included in the Clean200 list of publicly traded companies that are leading the way in building a clean economic future. As I have covered, we have made progress, and we are very proud of that, delivering extremely strong performance. Of course, there is more to do, and this is a landscape which is continuously evolving. On this slide, I have highlighted some key projects we have started or will be undertaking over fiscal year 2023. Many of them I have mentioned already because we certainly are not standing still. There are some very significant projects here.
Looking at our responsible operations, for example, we are expanding our safety critical risk focus, and we will have an important touch point with our people when we conduct the safety culture survey again. We will also be doing our employee engagement survey this year and keeping ourselves accountable with strong links to remuneration. Relating to closing our own loops in 2023, we will continue to progress against the decarbonization pathway I have outlined today, including articulating further our Scope 3 ambitions. In 2023, we also expect to see our Sims Resource Renewal demonstration plant in Rocklea online, which is a development we are all looking forward to. There are significant programs already underway to mature our framework for social license. We will make inroads into exciting and promising areas.
In the metal business, we will continue trialing our technology to improve the quality of our shredded material by reducing tramp elements. Other opportunities currently being assessed include working with automotive manufacturers to assist with their sustainability initiatives. There is a lot of enthusiasm over these projects, which are very aligned to our strategic business outcomes, our values, and of course, our purpose. Create a world without waste to preserve our planet. Now, just before I hand it back, I wanted to mention again that our fiscal year 2022 sustainability reporting suite is available on our website, and we do welcome your comments. On this note, I will hand it to my colleague, Gretchen, to answer some questions that were received in advance.
Thank you, Elise. In advance of the call, we received four questions, and I was going to just address those first, and then we can open it up for other questions. The first two questions that we received were regarding orders from the California Department of Toxic Substances Control, the DTSC, regarding two facilities in California. The first question involves an order we received at our Richmond facility, and the questioner was asking about the substance of the order. This past May, the DTSC served our Richmond facility with an order to engage in an investigation of the facility. Based on what we believe is an incorrect assertion that the facility, our facility, is operating as a hazardous waste site. The order was not issued to determine if there was contamination or if that contamination was spreading beyond Richmond's borders.
The DTSC is attempting in California to expand their authority to regulate the metal shredding industry. We were not alone in receiving this order. Other metal recycling facilities received the same. As I mentioned earlier in my presentation, shredding is a purely mechanical process. No chemicals are added. We do support the regulation of our industry. It brings up, we believe it brings up the performance of all. We are working with the DTSC to try to find the appropriate basis for regulation for their regulation of our industry, something other than the existing hazardous waste regulations where our operations really don't fit. This order is suspended at this time until there's a court hearing on its validity. That is the same for the other shredders who've received the similar orders.
Those orders are all suspended until a court considers their jurisdiction. In March, moving to the next question. In March, at our facility in Redwood City, California, we received an order from the DTSC, in connection with a fire. We had had a fire at our end-of-life vehicle depollution station. As I mentioned earlier, we take a number of steps prior to shredding where we remove oils, gas, anything from the cars. There was a fire at the station. The DTSC issued us a notice of violation for the fire, and we've responded explaining the circumstances. They did not issue an enforcement order to investigate or to clean up, that was one of the questions.
Prior to receiving their notice of violation, we had fully cleaned the area, and it had been documented by an environmental consultant per our protocols. The next two questions that we received both deal with this. The VOC controls that we're planning to implement. One is with respect to our Chicago Paulina facility. They ask the question that we were sued for failing to show that we had reduced emissions at Paulina. I think there has been some confusion in the press coverage of the way the process works in the U.S. As I had said before, rather than retest, we had proposed the installation of the VOC controls. The Illinois EPA agreed.
In order to receive the court approval of the approach, the Illinois Attorney General needs to file a complaint, and then we simultaneously file with the Attorney General our settlement agreement, which states the kind of our process for implementing the controls, the timing, what it will look like. The complaint was not for failing to show that we reduced emissions, but rather it was for approving the settlement agreement that we filed jointly with the AG. As I mentioned before, the Illinois EPA has now authorized the construction permit. The final question we were asked is with respect to Rhode Island, and asked whether we were fined for operating without proper pollution safeguards. In this matter, we settled in April of 2020 with the state of Rhode Island.
This was really compliance, a compliance matter. As I mentioned before, as we've been able to test and as others, the same with other competitors or other, you know, operators in our industry, as we've been able to test, we've had discussions with each of the states whether we have the correct permit. In Rhode Island, the state believed we did not permit. This is a case where we disagreed, but we agreed to reach resolution on it. We agreed to file a permit for a permit application for the appropriate permit to potentially install VOC controls. Again, it's the same type of arrangement when you reach agreement, that agreement is filed with the court at the same time as the complaint.
That was really a compliance matter, whether we had the right operating permit. Those are responses to the four questions we received. We'll now open it up for any follow-up or other questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handsets to ask your question. Your first question comes from Scott Ryall from Rimor Equity Research. Please go ahead.
Hi, thank you very much. I just have two. One, I'll get to Elise's presentation, which I thought was really helpful. Thank you. I just wanted to clarify, maybe Gretchen, just given you were talking just now. Your part of the presentation being group counsel is more compliance driven rather than ESG driven. Is that a fair characterization?
Scott, it was more compliance driven, did you say? I couldn't hear the end of it.
Yeah.
It dropped off.
Yeah, sorry. Is it more compliance driven as opposed to ESG? I've never been on an ESG call where group counsel got on before, so.
Yes. I think, Scott, the reason that we did include some compliance, one, we wanted to highlight our governance framework and just how significant our sustainability strategy is to Sims, that it is important at the executive level. This is really the foundation. Now, the compliance matters, why we covered that, I think we've had a number of questions, and so we wanted to explain. I know the U.S. has a different regulatory environment in a different, you know, often a different way of handling matters, so we wanted to provide some transparency. That is. That was our theory in covering it tonight.
Okay, great. Thank you. I'll move to Elise then. Very helpful presentation, as I said, and congratulations for being transparent with your 2030 carbon price. That puts you certainly in a minority company. My question's just on decarbonization because there's a number of other metrics obviously in there that I'll go through at some other point. It's to do with I guess your diesel usage in Scope 1, but then also your transportation Scope 3, which you talked about a little bit. Can I just ask in terms of the Scope 3 transport emissions, how much of it is shipping versus road or land-based transportation, which I guess could be road or rail?
Thank you, Scott, for that question. Shipping represent 85% of that Scope 3 in transportation that we've disclosed.
Okay. That's the big one.
Yes, it is.
And then
It is one of our bigger one with the steel manufacturing and processing.
Yeah. I get the IMO work that the shipping companies are going through, so I'll park that. Maybe just talk about your own diesel utilization and then, you know, I guess this will also apply to the Scope 3 transport emissions that are not shipping. In terms of how you're thinking from a business, the most likely solutions to that is over the course of the next 10-20 years, what do you think are the most promising technologies that you're looking at at the moment, please?
Right now in order to decarbonize our Scope 1 and our fuel usage is really the focus in the first place is around electrification of our equipment. There is not a lot of options yet that are commercially viable in terms of converting some of our mobile equipment and trucks and so forth into something else at the moment. Really we're focusing on whatever we can electrify. We were pursuing that first. At the same time, we are trialing things in hopes to find something that will be viable in the future. We've referenced in the sustainability report, for example, hydrogen injectors.
We trialed that with some of our trucks and right now we're looking at maybe trying that with one of our static bailers and see if it yields interesting results for us and help us with decarbonization of the equipment using fuels.
I think maybe just to add to that, we're quite open to running these trials that Elise is talking about, and I don't think there's a silver bullet. I think we want to work with a lot of our customers and suppliers on finding solutions, and some of those might be efficiency improvements, you know, better than what we have today. I'll take that as a gain until we can get an ultimate solution. I don't think we're gonna shy away from taking opportunity to improve efficiencies, particularly in diesel, be it inbound trucking or external.
Okay, brilliant. That's all I have. Thank you.
Thank you.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Sue Lyn Stubbs from Macquarie. Please go ahead.
Great. Thank you for taking my questions, and congratulations to the team on everything you have achieved in FY 2022. My first question, in your climate report, you mentioned AUD 20-25 million ed allocated to environmental CapEx. Can you please provide some examples of those projects? Are those projects also subject to Sims' sustainability and 15% post-tax IRR requirements?
No problem. In terms of CapEx, in our financial feedback this year, we spoke about environmental CapEx focusing on our shredders and in particular the VOC management and in particular Paulina as a priority, followed then by the Claremont shredder. Those projects are underway at the moment. Well, that's the gist of that CapEx focused on shredders. Does that answer your question?
Yes. Is it also subject to the 15% post-tax IRR requirement?
Yes, they need to, and part of that is obviously from a competitive environment. You know, raising the standards in our industry, we feel is also, as the leader in the industry, we wanna make sure that these standards are upheld across the globe, which is a very difficult aspect. Setting a high bar is something that we believe in is right for the industry. Obviously from an environmental point of view, there's going to be a number of competitors that might not be able to meet that standard, which we think ultimately is good for the industry.
Great. Just my other question. What was the methodology behind the calculation for Sims's avoided emissions of 13.4 million tons of CO2? Has that been independently verified as well?
Yes. The calculation has been independently verified. The methodology behind that is the Greenhouse Gas Protocol for recycling companies. One thing I wanted to say is that we use the same assumptions as we calculated our Scope 3 to really calculating our avoided emissions as we wanted to make sure we compare apples to apples. I'm sorry, and it's the Greenhouse Gas Protocol for recycling impact credit that was used as a methodology.
Great. Thank you.
Thanks.
Thank you. There are no further questions at this time. I will now hand back to Mr. Field for closing remarks.
Firstly, thank you everybody for taking the time to come and join our discussion. Thank you for the questions. If you do have any further questions, please reach out to us via Anna, and we'll certainly answer the questions and get back to you. Have a good day, all of you. Bye-bye.
Thank you. That does conclude our conference for today. Thank you for participating, and you may now disconnect.
Thank you.