Message From Our CEO
DATO’ SRI TAI HEAN LENG
@ TEK HEAN LENG
Managing Director/ Chief Executive Officer
It is my privilege to present to you our Sustainability Report for the financial year 2022. This report is part of the integral step by our Board and management to achieve our goal of fully integrated sustainability reporting and to be ahead of Bursa’s timelines for Task Force on Climate-Related Financial Disclosure (“TCFD”) and Scope 3 reporting.
In recognition of our relentless efforts to improve key pillars under Environment, Sustainability and Governance, in December of 2022, Bursa awarded to Masteel 3 Stars (out of a maximum of 4 Stars) ratings in FBM EMAS and is recognised as the Top 26-50% of all public listed companies in Bursa assessed by FTSE Russell. Masteel has also set a new industry standard for being the 1st ultra-low emitter of greenhouse gases amongst its peers in the steel sector in Malaysia.
The impetus for ESG implementation at Masteel is set from the top, with the Board of Directors having primary oversight and responsibility for our sustainability strategy, risk and opportunities, and initiatives. The Board is also ultimately responsible for our management and response to climate- related risks and opportunities.
This year, we also conducted an extensive materiality assessment process, to identify, prioritise, and validate the key sustainability matters that are material to our business and our stakeholders. The Sustainability Committee and the Board were both involved in this process, with the Board endorsing the materiality matrix produced from the assessment. In the continuation of our thrust to achieve our goal of fully integrated sustainability reporting, in 2022, we have voluntarily expanded our reporting to include the following areas:
TCFD is a framework that Masteel uses to assess and publicly disclose the climate-related risks and opportunities for our steel manufacturing industry. This includes the consistency of Masteel in reporting and engaging with our stakeholders on the climate action plan and enhancing market transparency. There are four pillars under the TCFD which are Governance, Strategy, Risk Management and Metrics & Targets. Masteel is able to closely assess and manage our climate-related risks and opportunities, as well as identify various strategies and financial planning, thanks to TCFD. Thus, it allows Masteel to grow positively despite the climate change issue.
Scope 3 Disclosures
As of 2022, Masteel took the lead in the steel industry by disclosing 5 categories out of the total 15 categories under Scope 3. This includes the categories 6 – Business travel, 7 – Employee Commuting, 8 – Upstream Leased Assets, 11 – Use of sold products and 13 – Downstream Leased Assets.
Pursuant to the latest amendments to the Main Market Listing Requirements on 26 September 2022, Public Listed Company is only required to disclose 2 categories of Scope 3 for the financial year ending on or after 31 December 2024. And in the coming year, Masteel plans to disclose category 5 – Waste generated in operations.
In 2022, Masteel disclosed a total of 3649.02 metric tonnes of GHG emissions covering five categories under Scope 3. This underscores Masteel’s commitment to achieving net-zero carbon by 2050 and ensuring Masteel is on track to achieving this goal.
The Significant difference/achievement between 2021 and 2022
Masteel continues to reduce our GHG emissions despite the fact that operations in 2022 will be at full capacity as compared to 2021 due to the Movement Control Order (MCO). In 2021, Masteel fully switched from conventional EAF to IF which saw a huge reduction in GHG emissions under scope 1 by 13.9% as compared to year 2020. In 2022, the total GHG emissions will be 376,780.73 metric tonnes covering Scope 1 and 2 as compared to 368,081.57 metric tonnes in 2021. There has been a marginal increase of 2.36% due to Masteel operating at full capacity in 2022 as opposed to 2020 and 2021 due to the Covid-19 pandemic business restriction.
Our target for future CO2 emissions reduction
Masteel is fully committed to achieving its set targets of a further 10% reduction by 2026 and another 15% by 2031 with various green and sustainable initiatives.
The working environment
This year, we introduced a series of new policies designed to protect our workforce and all individuals employed throughout our supply chain. The policies: Human Rights Policy, Prevention of Child Labour Policy, and Prevention of Forced Labour Policy, are comprehensive and focused, and apply both to Masteel’s staff as well as third parties we engage with. The policies address a myriad of issues such as non-discrimination, equal opportunity, employee’s rights; which include freedom of association and prevention of excessive working hours, and overall worker’s wellbeing, including the provision of a safe, clean, and conducive working environment. The policies will be made available in a range of languages, for easy comprehension by all members of our diverse workforce.
To sum up, FY2022 has been the watershed moment in the corporate history of Masteel where previous years of intensive capital investments coupled with the Board and management’s reprioritisation had resulted in outstanding ESG practices and a reduction in greenhouse gases.
Masteel is striving not only to meet all regulatory requirements on sustainability practices but to exceed them and aims to be the industry leader to achieve net zero carbon well before 2050.
“1st ultra-low emitter of greenhouse gases amongst its peers in the steel sector in Malaysia”
Sustainability Highlights 2022
“FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that Malaysia Steel Works (KL) Bhd has been independently assessed according to the FTSE4Good criteria, and has satisfied the requirements to become a constituent of the FTSE4Good Index Series. Created by the global index provider FTSE Russell, the FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices. The FTSE4Good indices are used by a wide variety of market participants to create and assess responsible investment funds and other products.”