The Group is committed to progressively enhancing its sustainability practices in line with evolving global expectations. As part of this journey, we are strengthening our understanding of how environmental, social, and governance (ESG) considerations intersect with our business operations and influence stakeholder interests. In preparation for anticipated reporting standards, including IFRS S1 and S2, we are taking deliberate steps to enhance the comprehensiveness and transparency of our sustainability disclosures

Our first materiality assessment was conducted for the FY2022 Sustainability Report. Building on that foundation, we completed a refreshed traditional materiality assessment in October 2024. This update has allowed us to sharpen our understanding of the sustainability topics most relevant to our business and stakeholders

Materiality Analysis Process

  Materiality Analysis Results

The Group is currently in transition from traditional materiality to double materiality. This shift reflects our commitment to not only assess how our business activities impact the environment and social dimensions, but also how sustainability issues impact our business. We continue to develop and refine our approach to identifying and addressing the risks and opportunities that double materiality presents.

We considered the latest guidance from standard setters to identifying, assessing, and disclosing sustainability-related impacts, risks, and opportunities, including but not limited to:

•              GRI 3: Material Topics (2021);

•              The ISSB’s IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information; and

•              ISO 31000 Risk Management – Applying ERM to ESG-related Risks

While the Group continues to enhance its approach to materiality assessment by integrating best practices, the material topics identified since FY2022 have remained largely consistent, with some updates and considerations across the short, medium, and long term. The Group has established a three-year cycle for conducting its double materiality assessment process.

Sustainability Risks and Opportunities Management

The Group has embedded sustainability into its risk management framework, recognising ESG risks as immediate challenges rather than future threats. ESG considerations are integrated into strategic planning and proactively managed to enhance long-term resilience.

The process for identifying material sustainability risks and opportunities is as below: -

 a)            Identification

 The Group identifies sustainability-related risks and opportunities across its value chain, focusing on ESG factors that may reasonably impact cash flow, access to finance, or cost of capital over the short, medium, or long term. Financial impacts are estimated using professional or informed judgment, particularly where forward-looking data cannot be directly quantified.

 This process integrates existing risk management and stakeholder engagement outcomes, and relevant industry standards, including the Iron & Steel Producers – SASB Sustainability Accounting Standard. Identified risks are categorised under key material topics such as greenhouse gas emissions, air emissions, energy and water management, waste, workforce safety and health, supply chain, circular economy, ethics and integrity, and data privacy and security

b)           Analysis and Evaluation

 Each identified risk and opportunity is assessed based on its likelihood and potential financial impact. This evaluation underpins the prioritisation and supports the development of mitigation strategies and monitoring mechanisms, guided by defined metrics and targets.

c)            Treatment and Mitigation

 Mitigation measures are established and implemented for material sustainability risks. The Group tracks performance against relevant metrics and targets to ensure effective management and continuous improvement.

Sustainability-related Risks and Opportunities

 The table below presents the sustainability-related risks and opportunities identified through materiality assessment. The subsequent chapters on Governance, Environment, Economic and Social aspects will provide detailed disclosure for each material topic.

Climate-related Risks and Opportunities Management

The Group conducts climate-related risk and opportunity assessments in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and IFRS S2, applying its existing risk management framework to identify and evaluate potential climate-related issues.

The process for identifying material climate change risks and opportunities is as below:

a)            Identification

Using the TCFD and IFRS frameworks, along with insights from international steel industry reports, the Group identified 11 transition risks, 2 physical risks, and 3 opportunities that may materially affect cash flow, access to finance, or cost of capital over the short, medium, or long term.

 Risks are categorized as follows:

•              Transition Risks: Policy and legal, technology, market, and reputational risks.

•              Physical Risks: Acute (e.g., extreme weather events) and chronic (e.g., long-term climate shifts).

 Opportunities include:

•              Access to sustainable financing,

•              Enhancing environmental performance,

•              Developing climate-aligned products and services.

This assessment is integrated into the Group’s existing risk management processes and aligned with the SASB Industry Standard for Iron & Steel Producers. The identified risks and opportunities are mapped to key material topics, including greenhouse gas (GHG) emissions, energy management, water security, and supply chain management

b)           Analysis and Evaluation

Each identified risk and opportunity is assessed using a metric that evaluates both likelihood and consequence. This process determines the level of risk or opportunity and guides the prioritization of risks, mitigations, and monitoring efforts.

c)            Treatment and Mitigation

Treatment and mitigation strategies are developed to reduce the likelihood or impact of each risk.

•              Treatment: Avoid, reduce, transfer, or accept the risk.

•              Mitigation: Implement adaptation measures (e.g. flood defences, energy efficiency upgrades)

d)           Prioritisation of Risks

After mitigation strategies are outlined, the Group focuses resources on significant and major material risks, particularly those with the potential to impact its operations or strategic objectives, and ensures that scenario analysis is applied where it adds the most value.

e)           Scenario Analysis

The Group strengthen its climate-related risk management approach by conducting scenario analysis on significant and major risks. These analyses help evaluate the Group’s exposure under different climate scenarios, providing insights that guide the identification of risks that warrant immediate attention. This enables the Group to anticipate potential implications, assess impacts, and develop strategies to enhance long-term resilience.

Scenario analysis is guided by the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA). The Group considers both internal operational characteristics and external factors such as market and political dynamics

The Group monitors performance against established metrics and targets to ensure effective risk management and continuous improvement. The identified sustainability and climate-related risks and opportunities are incorporated into SSB’s Integrated Management System Risk and Opportunity Register.

Climate-related Risks and Opportunities

The tables below outline the identified climate-related risks and opportunities. We assess our resilience to climate impacts and develop corresponding strategies and management approaches to address them.

a)            Transition Risks

b)           Physical Risks

c)            Opportunities

d)           Insights of Scenario Analysis

Following are the insights from scenario analysis conducted on significant and major climate-related risks. The outcomes indicate that the previously developed management approaches and mitigations measures are consistent with, and aligned to, the strategic direction of the analysis.