MASTEEL’S APPROACH
TO SUSTAINABILITY
Message From Executive Vice Chairman
DATO’ SRI TAI HEAN LENG
@ TEK HEAN LENG
Executive Vice Chairman
As we move forward in 2024, Masteel remains deeply committed to strengthening our corporate governance, sustainability, and transparency to all stakeholders. In an era where responsible business practices define long-term success, we recognise that our ability to create lasting value depends on our dedication to sustainability principles and adherence to both local and globally recognised sustainability frameworks. We have systematically embedded internationally acclaimed ESG standards into our operations, including the Global Reporting Initiative (“GRI”), the United Nations Sustainable Development Goals (“UN SDGs”), the International Sustainability Standards Board (“ISSB”) both IFRS S1 and S2, and the Bursa Malaysia Sustainability Reporting Guide (3rd Edition). The adoption of these frameworks are in line with our vision as it serve as the foundation of our sustainability journey, ensuring that we operate with accountability, resilience, and a forward-thinking approach to risk management.
Masteel achieved the highest Sustainability Rating (Platinum) by RAM Sustainability, becoming the first company in Malaysia to receive this prestigious recognition. We have made other strides in sustainability by earning The Star Media Group’s 2023 Most Outstanding ESG Initiative of the Year and Gold Winner in Supply Chain Management for Large Companies. For the second consecutive year, we secured The EDGE ESG Award 2024 Gold Winner for “Most Improved Performance over 3 Years” (below RM300M Market Capitalisation). Additionally, our 4-star FTSE Bursa Malaysia EMAS rating places us in the top 25% for ESG performance, reaffirming our commitment to responsible steel manufacturing.
In 2024, we reassessed our materiality matrix, reinforcing our Board’s commitment to sustainability governance. Since 2022, we have disclosed Task Force on Climate- related Financial Disclosures (“TCFD”) and further strengthened our reporting by adopting IFRS S1 & S2 in 2024, aligning with Malaysia’s National Sustainability Reporting Framework (“NSRF”) as part of our efforts to enhance our ability to identify and mitigate climate-related risks.
The significant difference / achievement between 2023 and 2024
One of our most significant advancements in 2024 has been our continued investment in energy efficiency improvements and successfully obtaining the ISO 50001:2018 Energy Management Systems Certification. We have successfully become the 1st steel mill in Malaysia to incorporate the “Direct casting + Direct Rolling” technology that completely eliminates the use of fossil fuel in the heating of billets for the making of steel bars. Masteel mastery of this technology had reduce our reliance on external energy sources and significantly lowered our overall carbon footprint. Additionally, we successfully obtained the ISO14064 certification for Greenhouse Gas (“GHG”) Validation and Verification from British Standards Institution (“BSI”), further solidifying our commitment to environmental responsibility. As a result, we have achieved a notable reduction in carbon intensity (Scope 1 & 2) across our operations recording a 0.489 tCO2e/mt for our steelmaking plant and 0.112 tCO2e/mt for our rolling mill plant in FY2024. These improvements are part of our long-term strategy to reduce carbon emissions, targeting a 10% reduction by 2026 and an additional 15% reduction by 2031, ultimately supporting our ambition to achieve net-zero emissions before 2050.
Driving Climate Awareness Through Research and Public Engagement
As our sustainability efforts evolve, we believe that public education on climate change is a corporate responsibility. In 2024, Masteel partnered with the Institute for Democracy and Economic Affairs (“IDEAS”) to launch the research paper “Asserting Climate Change Leadership in ASEAN: Carbon Pricing for the Malaysian Steel Industry.”
We also collaborated with the Malaysian Green Technology and Climate Change Corporation (“MGTC”) to construct a 1-tonne CO2 Cube at MGTC’s compound, serving as a powerful visual representation of the impact of a metric tonne of carbon dioxide emissions. Through these initiatives, we reaffirm our commitment to raising public awareness, advocating for policy improvements, and leading the steel industry toward a more sustainable future.
Masteel Sustainability Grants: Driving Research and Innovation
As part of our corporate social responsibility (“CSR”) and commitment to sustainability, we initiated the Masteel Sustainability Grants, building on our Memorandum of Understanding (“MoU”) with Universiti Tunku Abdul Rahman (“UTAR”) in 2023. This initiative is designed to support academic research in Carbon Capture, Utilisation, and Storage (“CCUS”), a critical technology in the global transition toward a low-carbon economy and achieving net-zero carbon emissions by 2050. By fostering research collaborations, the Masteel Sustainability Grants will drive knowledge transfer, talent development, and industry-relevant innovation, benefiting not only the steel manufacturing sector but also government institutions, local communities, and global sustainability initiatives.
Continuing Upholding Human Rights & Ethical Business Practices
We are committed to upholding the highest standards of human rights within our operations and supply chain. As part of this commitment, we conduct an annual stakeholder survey to assess awareness and understanding of Masteel’s Human Rights Policy. In 2024, we achieved a notable milestone, with 85% of stakeholders acknowledging and understanding the principles outlined in our policy.
We maintain zero tolerance for human rights violations, ensuring strict compliance with ethical business practices across our entire value chain, including our partnerships with third-party affiliates. Our commitment to fairness, dignity, and respect remains unwavering as we continue to strengthen our corporate governance and ethical standards.
By embracing sustainability at every level of our organisation, we are reinforcing stakeholder confidence, fostering innovation, and future-proofing our company against evolving market demands and regulatory expectations.
Our commitment to ESG is not just a compliance measure, it is a fundamental part of Masteel’s identity. We will continue to lead with responsibility, balancing economic growth with social and environmental stewardship, ensuring that we create sustainable value for our stakeholders, employees, and the communities we serve.
We thank all our stakeholders for their continued trust and support as we work together towards a more sustainable and resilient future.
Thank you.
Dato’ Sri Tai Hean Leng @ Tek Hean Leng
Masteel has implemented a structured six-phase roadmap to enhance sustainability and reduce carbon emissions across our manufacturing processes from before 2018 to 2025. A significant reduction of 33.93% in emissions is due to our transition from an Electric Arc Furnace to an Induction Furnace combined with an Electric Arc Furnace in Phase I & II (2018-2019). By Phase III (2021), a full shift to Induction Furnaces further reduced emissions by 13.72%, followed by Phase IV (2022), where the adoption of Direct Billet Charging (eliminating LNG Reheating Furnaces) contributed an additional 3.68% reduction. Moving forward, Phase V (2024) will focus on a High-Speed Bar Upgrade and the adoption of ISO 14404-2, aiming for a further 5.50% reduction. Furthermore, in Phase VI (2025), we plans to increase billet production capacity by 15.0%, optimising operational efficiency while maintaining a strong commitment to sustainability. By integrating advanced methodologies, including enhanced emissions calculations in line with ISO 14404-2, Masteel is setting new industry benchmarks for sustainable steel manufacturing, reinforcing its dedication to environmental responsibility and Malaysia’s green transition.
Sustainability Highlights 2024
