APL Apollo Tubes Ranks Well in ESG
APL Apollo Tubes Ltd
India’s popular structural steel tube brand, APL Apollo Tubes, emerged at the 80th percentile in the industry ranking on environmental, social and governance (ESG) in the S&P Global Corporate Sustainability Assessment for the year 2022, a major achievement since APL Apollo is one of the few Indian companies to be listed on the S&P Dow Jones Sustainability Index (DJSI) for the Emerging Markets of 2022.
It is important to note that APL Apollo Tubes had a 56th percentile in the same ESG assessment taken last year in 2021, whereas its competitor Welspun Corp Ltd ranked 14 among the 41 companies included in its industry group (66th percentile) in the S&P Global’s DJSI Corporate Sustainability Assessment (CSA). The S&P Global Corporate Sustainability Assessment (CSA) is an annual evaluation of a company’s sustainability practices and covers almost 10,000 companies worldwide. The assessment is based to obtain a deeper insight into a company’s ESG performance while providing access to the level of transparency that investors and stakeholders need to mark their progress towards sustainability.
According to a report by Ernst & Young, steelmakers are facing a major challenge when it comes to accelerating the decarbonisation agenda in line with the growing expectations of ESG performance. The report also stated that there has been a massive improvement in sustainability metrics within the steel industry in the past few years, and in order to improve the material efficiency, usage of high-quality iron ore and coal should be undertaken for steelmakers to more effectively work towards sustainability, a strategy to be rolled out across the value chain.
According to the International Energy Association, “To meet global energy and climate goals, emissions from the steel industry must fall by at least 50% by 2050, with continuing declines towards net zero emissions thereafter.” In order to achieve this goal, steelmakers are opting for sustainable or “green steel”, manufactured without the use of fossil fuels, which reduces the overall carbon footprint as compared to the traditional steel-making process. Many international and local companies are adopting green steel in order to decarbonise their company operations. They are collaborating with other partners to produce carbon-neutral steel. For example, BMW Group has sealed a deal with Swedish start-up H2 Green to source steel produced with up to 95% less CO2 emissions and without requiring fossil fuels such as coal. Similarly, Mercedes Benz has also bought an equity stake in H2 Green. In the Indian market, JSW Steel has earmarked approximately USD 1.23 billion (Rs 10,000 Cr) to reduce carbon emissions through various green initiatives and increase the use of renewable energy.
Companies and manufacturers are trying to better their ESG scores in order to sustain for the long-term future. Coming back to this year’s assessment, APL Apollo Tubes has received a score of 29 on its overall ESG performance. While this is a positive step in the direction of steel companies implementing ‘ESG’ practices in their overall business strategies, it is still uncertain whether other companies will follow suit when it comes to adopting transparent ESG practices in their overall operations.
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