This article first appeared in The Edge Malaysia Weekly on November 27, 2023 - December 3, 2023

These regulatory tools such as carbon taxation can build momentum for more organisations to adopt ESG principles. As more companies report on their ESG endeavours, we will inspire one another to be more sustainable.” - Tai

Malaysia Steel Works (KL) Bhd (Masteel), the premier steel manufacturer with factories in Petaling Jaya and Klang, clinched the gold award in the most improved performance over three years category for companies with a market capitalisation of less than RM300 million, at The Edge Malaysia ESG Awards 2023.

Datuk Seri Tai Hean Leng, its managing director and CEO, says the company has cumulatively invested RM250 million to reduce the greenhouse gas (GHG) emissions in its manufacturing process.

As a result, it successfully cut its GHG emissions by 42.9% in 2022, (equivalent to a reduction of 130,000 tonnes) as compared to 2018.

“This investment allowed us to replace the old electric arc furnace process with new induction furnace technology, which reduces our carbon emissions while producing less waste,” he says.

It is also the first steel mill to be admitted as a constituent of the FTSE4Good Index.

Masteel specialises in the production of high tensile steel bars, mild steel bars and prime steel billets. Its wholly-owned subsidiary MS Express Sdn Bhd is involved in the transportation and logistics of steel bars and billets, while its associate company Bio Molecular Industries Sdn Bhd is involved in the business of radiopharmaceuticals.

Masteel has invested in new technology to reduce its greenhouse gas emissions - Photo by Masteel

Radiopharmaceuticals or medicinal radio compounds are a group of pharmaceutical drugs that can be used to diagnose certain medical problems or treat certain diseases.

Tai says the company has also significantly improved its disclosure on sustainability matters to enhance transparency.

“Our 2022 Sustainability Report includes voluntary disclosures that are compliant with the Global Reporting Initiative, FTSE4Good Index and Task Force on Climate-Related Financial Disclosures (TCFD), which exceeds the Bursa Malaysia’s reporting requirements,” says Tai.

“We also earned the three-star ranking in Bursa Malaysia’s FTSE4Good ESG Ratings.”

The firm went beyond Bursa Malaysia’s requirement to include TCFD indicators for its sustainability report, as it is particularly relevant to the company’s bankers, investors and corporate business associates.

The TCFD also provides an established framework that allows the firm to structurally improve its ESG performance.

Tai says the firm’s sustainability journey is ongoing and it is aiming for higher targets to achieve.

“The main challenge this year is to identify how we can exceed our ESG performance in the previous year,” he says.

Tai feels proud that the company has won the ESG award, especially as a winner from one of the “hard-to-abate” sectors where carbon reduction is a more challenging task than other industries.

Moving forward, he says the company will continue to invest in technology to improve its ESG performance and reduce production cost. He hopes more private companies will prioritiese ESG as the sustainability trend is maturing and irreversible.

“Sustainability reporting for public companies has matured in Malaysia. And we hope to see more private companies adhering to sustainability reporting requirements, whether it is mandated or voluntary,” he says.

He adds that carbon taxation should be considered by regulators as an effective tool to encourage companies to rapidly decarbonise.

“These regulatory tools such as carbon taxation can build momentum for more organisations to adopt ESG principles. As more companies report on their ESG endeavours, we will inspire one another to be more sustainable.”

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