Ternium S.A.

Climate Impact & Sustainability Data (2022, 2023)

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:19.28 million tCO2e (Scope 1 & 2 market-based) + 6.35 million tCO2e (Scope 3)

Scope 1 Emissions:16.6 million tCO2e

Scope 2 Emissions:1.2 million tCO2e

Scope 3 Emissions:0.8 million tCO2e

Renewable Energy Share:0.1% (2022)

Water Consumption:766.7 million m3 (total)

Waste Generated:102.5 thousand tons (total)

Carbon Intensity:1.7 tCO2e/t crude steel (scopes 1 & 2)

ESG Focus Areas

Climate Change
Safety
People Development
Community Development
Value Chain Sustainability
Integrity

Environmental Achievements

Recycled 2.8 million tons of steel scrap.
Achieved 99% material efficiency in steel operations.
Captured 261 thousand tons of CO2, preventing emissions in other industries.
Increased CO2 capture and usage by 40% compared to 2017.
84% of steel produced at ISO 50001 certified facilities.
100% of steel produced in ISO 14001 certified facilities.

Social Achievements

Reduced Injuries Frequency Rate (IFR) by 18% from 2020.
Reduced Lost Time Injuries Frequency Rate (LTIFR) by 25% from 2020.
Invested $7.4 million in training activities under Ternium University.
25% of women occupying positions at the Board of Directors (2023).
Launched Ternium Activo platform, enhancing customer experience.
Implemented a hybrid work scheme combining in-person and remote work.
Invested $21.2 million in community programs (85% allocated to education).

Governance Achievements

Increased participation in Usiminas' control group to 51.5%.
Implemented a comprehensive cybersecurity program, containing 8 cybersecurity incidents.
99.6% of eligible employees acknowledged the Code of Conduct & Policy on Business Conduct.
99.4% eligible employees received training on the Policy on Business Conduct.

Climate Goals & Targets

Long-term Goals:

Carbon neutrality in products and operations (subject to technological feasibility and market conditions).

Medium-term Goals:

20% reduction in emission intensity rates (scopes 1 and 2) by 2030 (compared to 2018 baseline).
40% renewable energy in energy mix by 2030.

Short-term Goals:

50% reduction in IFR and LTIFR by 2025 (compared to 2020).

Environmental Challenges

Three fatalities occurred in operations during the year.
Supply chain disruptions due to low water levels in the Paraguay and Paraná rivers.
Extreme weather conditions disrupting natural gas and energy supply.
Global uncertainty and economic instability in Argentina.

Mitigation Strategies

Deeply questioned procedures, actions, and training activities to prioritize safety.
Improved management of iron ore inventories, including new river transportation strategies and alternative sourcing agreements.
Strengthened analysis of climate-related risks and their potential implications.
Significant investments in electric arc furnace (EAF) steelmaking and direct reduction of iron ore (DRI) facilities.

Supply Chain Management

Supplier Audits: 94% of active service suppliers audited (2022)

Responsible Procurement

Supplier Code of Conduct
Sustainable Purchasing Policy
Exiros centralized procurement

Climate-Related Risks & Opportunities

Physical Risks

Extreme weather
Flooding
Droughts

Transition Risks

Regulatory changes (carbon pricing, ETS)
Market shifts towards low-carbon technologies

Opportunities

Development of energy-efficient products
Renewable energy projects
Carbon capture and usage

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC

Certifications: ISO 14001, ISO 50001, ISO 9001, IATF 16949 (planned)

Third-party Assurance: Third-party verification of GHG emissions

UN Sustainable Development Goals

Goal 1
Goal 3
Goal 4
Goal 5
Goal 6
Goal 7
Goal 8
Goal 9
Goal 10
Goal 11
Goal 12
Goal 13
Goal 14
Goal 15
Goal 16
Goal 17

Initiatives contributing to various SDGs, detailed in Annex 2.

Sustainable Products & Innovation

Lightweight, durable steels for low-carbon economy applications
Sustainable coil-coated steels for construction
Steels for electric vehicles

Awards & Recognition

Steelie Award 2022 (Excellence in Education and Training)
Sustainability Champion by worldsteel (five consecutive years)
One of the best places to work for the LGBTQ+ community in Mexico (three times)

Reporting Period: 2023

Environmental Metrics

Total Carbon Emissions:18.5 million tons CO2e (scopes 1,2 & 3)

Scope 1 Emissions:16.6 million tons CO2e

Scope 2 Emissions:1.1 million tons CO2e

Scope 3 Emissions:0.8 million tons CO2e

Renewable Energy Share:2%

Total Energy Consumption:235,542 TJ

Water Consumption:785 million m3

Waste Generated:94.6 thousand tons

Carbon Intensity:1.72 tCO2/t of crude steel (scopes 1 & 2, worldsteel methodology)