Climate Change Data

Environmental Metrics

ESG Focus Areas

• Governance
• Economic Sustainability
• Environmental Sustainability
• Social Sustainability

Environmental Achievements

• Reduced GHG emissions intensity by 17.8%
• 94% steel scrap used in EAF
• 99.5% waste diverted from disposal
• 51 megaliters cumulative reduction in water use since FY 2020
• Annualised energy savings per employee: 1,924kWh (upstream), 1,288kWh (downstream)

Social Achievements

• Zero corruption case reported
• Zero substantiated complaint on breaches of customer privacy
• 77%-86% customer satisfaction index
• 12,647 hours of employee training
• 2,136 hours participation in various CSR projects

Governance Achievements

• 100% sites certified to ISO 37001
• Zero political donation
• Zero environmental fines and penalties
• 100% attendance for ABCMS related policies briefing and training
• Executive compensation linked to ESG performance

Climate Goals & Targets

Environmental Challenges

• Climate change (GHG emissions, water stress)
• Supply chain disruptions
• Scarcity of steel scrap
• Cybersecurity threats

Mitigation Strategies

• Process optimization and improvements
• Energy saving programs
• Transition to green energy
• Closed loop recycle water treatment facility investment (RM3 million)
• Comprehensive cybersecurity strategy
• Supplier Code of Conduct and Ethics
• Exploring alternative sourcing strategies for raw materials

Supply Chain Management

Supplier Audits: Annual supplier performance assessment

Responsible Procurement

• Supplier Code of Conduct and Ethics
• Pre-qualification process
• Due diligence
• ESG aspects included in Supply Chain Assessment

Climate-Related Risks & Opportunities

Physical Risks

• Rising sea level
• Tsunami

Transition Risks

• Carbon tax
• Carbon tariff
• Increased cost of raw materials and energy
• Increased global demand for steel scrap

Opportunities

• Increased demand for lower emissions steel
• Sustainable financing
• Environmental performance improvements
• Development of sustainable products and services

Reporting Standards

Frameworks Used: GRI, TCFD, UN SDGs

Certifications: ISO 9001, ISO 14001, ISO 45001, ISO 37001, MyHijau

Third-party Assurance: SIRIM QAS

Sustainable Products & Innovation

• Eco-labelled steel bar and wire rod

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Economic
• Governance

Environmental Achievements

• Reduced GHG emissions intensity from 0.56tCO2/tsteel to 0.46tCO2/tsteel (17.8% reduction)
• 94% steel scrap used in EAF
• 99.5% waste diverted from disposal
• 51 megaliters cumulative reduction in water use since FY 2020
• Obtained MyHijau green certification for steel bar and wire rod

Social Achievements

• Zero corruption case reported
• Zero substantiated complaint on breaches of customer privacy
• 77%-86% customer satisfaction index
• 12,647 hours of employee training
• Introduced commitment statement on labor standards

Governance Achievements

• 100% sites certified to ISO 37001
• Zero political donation
• Zero environmental fines and penalties
• Executive compensation linked to ESG performance

Climate Goals & Targets

Environmental Challenges

• Sluggish demand in the steel market due to absence of large infrastructure projects
• Depressed selling prices and higher input costs
• Weak construction market amidst rising inflation and operating costs
• Uncertain market conditions

Mitigation Strategies

• Cost mitigation measures and optimization of operational efficiencies
• Productivity improvement initiatives to offset higher energy prices
• Focus on cash flow and inventory management
• Growth of downstream businesses

Supply Chain Management

Supplier Audits: Annual supplier performance assessment

Responsible Procurement

• Supplier Code of Conduct and Ethics

Climate-Related Risks & Opportunities

Physical Risks

• Rising sea level

Transition Risks

• Introduction of new laws and regulations (carbon tax, carbon tariff)
• Increased cost of raw materials and energy
• Increased global demand for steel scrap

Opportunities

• Increased demand for lower emissions steel

Reporting Standards

Frameworks Used: GRI, TCFD, UNGC

Certifications: ISO 9001, ISO 14001, ISO 45001, ISO 37001, MyHijau

Third-party Assurance: SIRIM QAS

Sustainable Products & Innovation

• Eco-labelled steel bar and wire rod

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance
• Economic

Environmental Achievements

• Reduced GHG emissions intensity in upstream by 9%
• Reduced GHG emissions intensity in downstream (SPC) by 57%
• 94.7% recycled content used in EAF
• Zero environmental fines and penalties
• Completed 17 energy saving projects
• Completed one water management project, reducing water use by 85 megaliters since FY2020

Social Achievements

• Zero discrimination, harassment or violation of child labour or forced labour case
• RM53,253 community investment
• 491 employees & 1,060 hours participation in various CSR projects
• 19,544 hours trainings to employees
• Zero water quality/quantity, standards and regulations non-compliance incident

Governance Achievements

• Improved FTSE Russell ESG Score from 1.8 in 2023 to 3.7 in 2024
• 100% of companies reviewed for TCFD disclosure
• 100% declaration rate for half-yearly Gift and Entertainment Declaration
• Zero confirmed incidents on corruption
• ESG Assessment initiated on vendors

Climate Goals & Targets

Environmental Challenges

• Steel market remains volatile with economic uncertainty
• Structural overcapacity in the steel industry
• Cheap imports
• Absence of large infrastructure projects
• Climate change related risks (transition and physical)

Mitigation Strategies

• Cost mitigation measures and optimising operational efficiencies
• Productivity improvement, operational discipline and cost optimization, particularly on energy saving initiatives
• Growing downstream businesses
• Reducing GHG emissions via process optimisation & improvements, energy saving programs and transition to green energy
• Exploring green electricity to reduce dependence on coal generated electricity
• Research on and develop alternative or replacement materials in production
• Improve the quality of nearby coastal mangrove forest

Supply Chain Management

Supplier Audits: Annual performance assessments and ESG assessments initiated in 2024

Responsible Procurement

• Supplier Code of Conduct and Ethics
• Vendor ESG assessment

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity and frequency of extreme weather events such as flood
• Rising sea level
• Changes in precipitation pattern and extreme variability in weather pattern

Transition Risks

• Introduction of new laws and regulations such as carbon tax, carbon tariff, CBAM
• Increased compliance requirement
• Exposure to legal liabilities
• Substitution of existing products and services with lower emissions options
• Increase in cost of raw materials
• Increase in cost of energy
• Uncertainty in market signals
• Change of customer preferences towards favouring low-emission steel
• Stigmatisation of sector
• Increased stakeholder concern or negative stakeholder feedback

Opportunities

• Improved access to capital with participation in sustainable financing
• Lower embedded emissions by improving energy efficiency and utilisation of renewable energy in energy mix
• Increased demand for lower emissions steel

Reporting Standards

Frameworks Used: GRI, TCFD, UN Sustainable Development Goals, Bursa Malaysia’s Sustainability Reporting Guide, FTSE4GOOD Bursa Malaysia ESG Indicators

Certifications: ISO 9001, ISO 45001, ISO 14001, ISO 37001, ISO 50001, MyHijau

Third-party Assurance: HLMG Group Internal Audit Department

Sustainable Products & Innovation

• 8 products certified with SIRIM Eco Labelling Scheme and MyHijau mark