Gunung Raja Paksi To Lead Southeast Asia’s Steel Industry To A Greener Future – IAA

Indonesia’s largest private steelmaker Gunung Raja Paksi to lead Southeast Asia’s steel industry to a greener future through ESG Strategy

· Launched their new ESG Strategy Handbook today, where Gunung Raja Paksi aims to reduce its environmental and social impact in steel – traditionally, a major contributor to global carbon emissions – through goals that engages with suppliers, globally-recognized standards, and greenhouse gas reduction

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· To reach its ESG goals, GRP launches dedicated Sustainability Department to lead its sustainability efforts to be led by Sheren Omega

PT Gunung Raja Paksi Tbk (GRP), a member of Gunung Steel Group and one of the largest private steelmakers in Indonesia, has been on a mission to decarbonise steel production and reduce greenhouse gas emissions within the Southeast Asia region. Transforming traditional approaches within an industry that accounts for 8% of global emissions, GRP today announced the launch of their new Environmental, Social and Governance (ESG) Strategy Handbook, with the set-up of a new Sustainability Department aimed at addressing rising concerns about climate change and social issues, such as equality and human rights. The ESG Strategy Handbook was developed from GRP’s partnership with multinational consultancy firm, Environmental Resources Management.

These announcements are in line with industrial and regional shifts towards sustainability, including the Government of Indonesia’s (GOI) goal to reach net zero by 2060 or sooner. Steel continues to be a major component in Indonesia’s exports, where exports of steel and iron have increased by 92.88% , adding an additional US$20.95 billion in export value for the country. GRP’s business has been on the path towards sustainable steel production. The formation of the new sustainability department, headed by GRP’s Head of Sustainability, Sheren Omega, has been tasked with developing the company’s strategy as they venture into sustainable steel production. She has also played an active role in transforming GRP’s business processes and technologies. Through her contributions, GRP managed to achieve record profits in 2021. Prior to GRP, Sheren was a Manager for PwC Indonesia where she has executed key risk management and business process review projects in various industries ranging from manufacturing, telecommunication to non-profit organisations.

“At GRP, we have worked with industry experts to assess the steel landscape in the region, and we are confident that with our ESG Strategy Handbook, we are geared towards achieving a more sustainable production for steel manufacturing,” said Sheren Omega.

To guide the Sustainability Department, GRP also released its ESG Strategy Handbook that outlines the ambitions and key steps that the company will take towards sustainable steel production. This builds on GRP’s existing efforts, such as having their products certified by globally recognised standards, and their recent purchase of carbon credits – making them one of the first steelmakers in the region to do so.

Aligning with international standards such as the Sustainable Development Goals (SDGs), the Global Reporting Initiative (GRI) and ResponsibleSteel Principles, GRP has built its ESG goals around these five pillars:

· Responsible Procurement: Have majority of their key suppliers have their own policy on responsible conduct or operations

· Environmental and Social Compliance: Attain a high level of environment and social compliance across GRP operations

· Energy Transition and Low Carbon Solutions: Achieve a well-below 2°C-aligned science-based target (SBT) for greenhouse gas reduction and towards certified products

· Contributing to Responsible Environmental Management: Minimise adverse impact on human and the environment across all production sites

· Nurturing Talent: Maintain a supportive workplace for talent cultivation and career development

These five pillars are focused on driving efforts and providing guidance on priority actions when it comes to producing steel. They are also aimed at mitigating the impacts that came from the development of the steel industry such as the shortage of raw materials and supply chain issues.

“As the demand for steel increases in the region, we are responsible for producing steel in a way that causes minimal damage to the environment. By working towards bolstering steel exports in the region and ensuring that producing sustainable steel becomes top of mind for all steel manufacturers, we hope that the ESG Strategy Handbook can pave the way forward for best practices within steel manufacturing,” said Tony Taniwan, Former President Commissioner and Shareholder at GRP.

With their ESG Strategy Handbook, GRP hopes to guide the industry on overcoming these issues that are traditionally faced by the steel industry. The company aspires to not only drive profitability but also to minimise environmental impact by championing environmental stewardship and responsible steel processes. Having sustainability as their core value, this commitment would allow the company to take incremental steps in aligning business processes with environmental and social responsibilities to improve the welfare of the people and local communities.

“The rapidly growing economies of Indonesia and other Southeast Asian countries are still largely supported by the infrastructure and construction sectors. PT Gunung Raja Paksi Tbk (GRP) has been playing a key role in supplying the critical materials for these sectors in the region. In pursuit of net zero and sustainable business, the valuable contribution of the steel industry to demonstrate commitment and more responsible management of ESG risks across the value chain of operation is more urgent than ever. Our collaboration with GRP in shaping their ESG and sustainability aims to shape and strengthen its management of environmental and social impact to help bring about positive change.” said Setiaji Hadiprayitno, Country Managing Partner at ERM Indonesia.

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