Climate change is an issue of concern that needs immediate attention and mitigation actions by all stakeholders.
This issue is further exacerbated by industries that emit huge amounts of carbon dioxide into the atmosphere
which includes steel manufacturing activities.
The Group apprehends the importance of climate change and aspires to contribute in mitigating climate change
by reducing our environmental footprint as stated in our environmental policy statement. SSB is the key focus of
the Group as more than 90% of the GHG emissions of the Group are from SSB.
Our GHG Emissions
In FY 2022, the Group took its first step in GHG emissions reporting by disclosing Scope 1 and Scope 2 emissions
of SSB’s operations only. For FY 2023, we proudly announced that we have managed to achieve our last year’s
aim to expand the scope of reporting to include our subsidiary companies. Our GHG emissions calculations now
cover 100% of our sites in Malaysia.
The Group refers to ISO 14404 (Calculation method of carbon dioxide emissions intensity from iron and steel
production) and World Business Council for Sustainable Development and World Resources Institute (“WBCSD/
WRI”) GHG Protocol to calculate the GHG emissions. Both standards are internationally accepted standards
with credible emission factors and are recognised (parts as applicable) by certification programs such as
ResponsibleSteel. For upstream operations, the Group uses ISO 14404 to measure Scope 1 and Scope 2
emissions while for downstream operations, the Group uses GHG protocol to quantify Scope 1 and Scope 2
For the calculation of Scope 2 emissions in FY 2022, the Group utilised the Grid electricity Emission Factor
(“GEF”) of Peninsular Malaysia which was reported in ‘2017 Clean Development Mechanism (“CDM”) Baseline for
Malaysia’. The report was prepared by Malaysian Green Technology Corporation (“GreenTech Malaysia”). For FY
2023, we changed our grid emission factor reference to Peninsular GEF (2017-2019) released by Malaysia Energy
Information Hub (“MEIH”) in 2022. MEIH is a portal managed by the Energy Commissions (“EC”) of Malaysia. Due
to the new GEF being higher than the previous value, we have also revised our calculations for FY 2021 and FY
The graphs below show the Scope 1 and Scope 2 GHG emissions of SSB, the Group’s upstream operations.
Being a steel making company which only utilises EAF in its production of steel, SSB’s GHG emissions are mainly
contributed by indirect emissions from purchased electricity (Scope 2). Our Scope 2 emissions account for more
than 50% of the total emissions for upstream.
The graph below shows the Scope 1 and Scope 2 GHG emissions of the Group’s downstream (SSM, SPIM & SSP
and SPC) operations:
The GHG emissions of scrap based EAF is comparatively 2 to 4 times lower than steel mills that utilise blast
furnace (“BF”) or blast oxygen furnace (“BOF”). The shift from BF-based to EAF-based steel making is currently
part of the industry’s decarbonisation drive and strategy around the globe. As of today, scrap based EAF remains
as a greener option among the available iron and steel making technologies. EAF can use up to more than 90%
of recycled steel scrap, depending on the availability of raw materials and requirements of the finished products.
SSB, as a responsible steel maker, demonstrates our support to mitigate climate change by continuing to utilise
EAF for steel making. As described in section 5.3.6, SSB is practising circular economy by using EAF steel making
to maximise the use of steel scrap and reduce depletion of natural resources, thereby contributing to the
reduction of global GHG emissions.
As the operations in the Group normalised in the 2nd half of year 2021, SSB has selected FY 2022 as the
baseline year for GHG emissions and set a target to reduce GHG emissions intensity by 12% by FY 2025.
The graph below shows the GHG emissions intensity of SSB. The calculation of the GHG emission intensity is
guided by ISO 14404-4, Boundary 2.
SSB’s GHG emission in FY 2023 increased by 5.9% as compared to base year FY 2022 due to the increase in
production output, however, we managed to reduce our GHG emissions intensity by 17.8%. This is attributed
by steel making product mix which enables the use of 94% of steel scrap with a small quantity of coal
material replacement and process optimisation projects which combined in-depth steel making experience and
Though SSB has achieved the target to reduce GHG emissions intensity by 12% in FY 2023, SSB plans to sustain
its GHG emissions intensity until the next target review as steel scrap is becoming scarce as a result of dynamic
shift of demand of steel scrap and changing market requirement, where product mix will change accordingly.
For downstream, electricity is also the biggest contributor for our GHG emissions. The Group has selected FY
2023 as the baseline year of GHG emission and is currently exploring transition into green energy.
The Group has also put in place a group wide energy management program as described in section 5.3.4 to
reduce energy consumption via various internal efforts. In addition, we make concerted efforts to disseminate
climate change awareness amongst the employees by conducting ‘GHG Emissions Awareness Training’ to all
employees including the management team. The Group also sends representatives to attend seminars/webinars
regarding sustainability hosted by Federation of Malaysian Manufacturers (“FMM”) or Malaysian Iron and Steel
Industry Federation (“MISIF”), of which the Group is a member.
Aside from that, the Group continues to improve on the monitoring of its GHG and air emissions, water management and waste management to reduce the impact of climate change. The Group is also looking into preparing for the reporting of Scope 3 emissions. We are starting to prepare for the data collection of 2 categories of Scope 3, which are Employees’ Commute and Business Travel. Both categories are included in Bursa Malaysia’s Enhanced Sustainability Reporting Framework.
SSB, as the biggest GHG emitter in the Group, also participated and became a part of global effort to mitigate climate change by contributing information for the preparation of Malaysia’s Fourth Biennial Update Report (“BUR4”) and participated in UNIDO’s Online Discussion on Industry Deep Decarbonisation in FY 2023. SSB also signed up to become a supporter for TCFD, committed to take action against climate change and considering the impact of climate change on SSB’s business.
Transition Towards TCFD
FY 2023 marked a new milestone for the Group’s commitment in climate change. In the 3rd quarter of FY
2023, the SSC has formed a Working Committee (“WC”) to understand and work on the disclosure according to
the recommendations of TCFD. TCFD is a global consultative body established in year 2015 to disclose climate
The WC has studied the 4 pillars of TCFD framework and performed initial climate related risks and opportunities
assessment as well as initial scenario analysis for SSB, the biggest GHG emitter of the Group.
a) Risk Management
SSB conducted climate-related risk assessment utilising the same process as described in section 5.1.1. In
the transition to use TCFD framework, SSB has classified the identified climate related risks into transition
risks, physical risks and opportunities over the period of short to medium term and long-term. Transition
risks are further categorised into Policy and Legal, Technology, Market and Reputation whilst physical risks
are categorised into Acute and Chronic types. Opportunities are assessed in terms of sustainable financing,
environmental performance and products & services. The potential impacts on our business and operations
are listed down followed by risk rating, action plans and monitoring. The identified risk and opportunities
are then integrated into the existing SSB’s Environmental Risk and Opportunities Register.
For the strategy pillar, SSB focused on identifying our climate-related risks as well as opportunities arising
from the transition to a low-carbon economy. We evaluated our resilience to climate change impacts and
derived corresponding strategies to address them.
The scenario analysis of SSB is currently focusing on addressing the identified significant and major risks.
SSB adopts Intergovernmental Panel on Climate Change (“IPCC”)’s guideline and International Energy Agency
(“IEA”) for scenario analysis. SSB uses IPCC’s Representative Concentration Pathways (“RCP”) and selects
scenario RCP 8.5 for physical risk. As for transition risks, SSB uses IEA and selects Stated Policy Scenario
(“SPS”) for transition risks and opportunities.