It gives me great pleasure to communicate with you once again through these pages of our Sustainability Report. While we have made good progress on the agenda of sustainability over the years of our presence in Poland, this agenda evolves continually and so do we as an organisation.
10 sustainable development outcomes
If you have read our previous reports, you will know that our corporate responsibility strategy, which until recently was based on the 4 pillars, has been translated into 10 sustainable development outcomes, to broaden the perspective of our accountability towards society. The truth is that the world needs and will continue to need steel. At ArcelorMittal we call steel “the fabric of life”. We regret that steel is often taken for granted, primarily due to the fact that it is everywhere and therefore largely invisible. When you think about the world around you, it is difficult to find objects which do not contain steel. In the morning you are probably awoken by an alarm in your mobile phone, which contains steel. Hearing it, you sit on a mattress, which contains steel springs. Then you have a toast from a steel toaster and boil water in a kettle, which has steel elements. On your journey to work you sit on a bike, in a car, on a bus or on a train, which again is made of steel. And your office building also contains steel structures, although this is not something you often think about. So we are indeed part of your everyday life, making it easier, safer and more convenient.
At the same time, however, we realise that steel production has an impact. This is why we identified the 10 sustainable outcomes, based on our six material issues: occupational safety, greenhouse gas emissions, air and water emissions, accountability and transparency, occupational health and employee engagement. While some of them, like safety, are already well embedded in our DNA, others are more ambitious and will be achieved over a long term horizon driven by appropriate resource allocation. The structure of this report is already based on those outcomes. It is also our first report based on GRI G4 – the most recent reporting standard. This is an indication of our intense desire to create transparency.
Achievements of 2015
I would like to make a few specific comments on our achievements in 2015. First and foremost, it was a year with no fatalities at ArcelorMittal Poland. I could not be more glad as each fatality is one too many and we are making each and every effort to eradicate fatal accidents from our operations. Second, it was an important year in terms of investments - we started the investment package for our Unit in Krakow, whose value significantly exceeds PLN 500m and includes a reline of blast furnace no. 5, modernisation of BOF no. 3 and extension of hot rolling as well as hot dip galvanising capacity.
Last but not least, it was a year in which we continued our work in the scope of environmental projects, which will allow us to meet the requirements of best available techniques resulting from the EU directive on industrial emissions, effective in 2018. We carried on with the modernisation of byproducts department in our Zdzieszowice coke plant (cost of over PLN 200m), commenced the modernisation of the dedusting system of sinter belt no. 3 in Dabrowa Gornicza (cost of over PLN 160m) and prepared the project dedicated to the modernisation of the dedusting system of the steel shop in Dabrowa Gornicza (cost of over PLN 100 m). These cost intensive projects highlight our genuine intention to treat environmental protection with utmost seriousness.
Challenges of 2015 and near future
In 2015 we had to face a severe impact of unfair imports on our operations. The fact that cheap steel is being dumped on the European markets by China, as well Ukraine, Belarus and Russia in the case of Poland, affects us to a great extent. The steelmaking associations such as Eurofer and Polish Steel Association (HIPH) are bringing this to the attention of both the EU and Polishgovernment. It is important that decisions are made on the modernisation of trade defence instruments (TDIs), which will protect our markets from unfairly priced steel products. TDIs applied in the USA are far more effective. Whilst on this topic, I want to be well understood: we, the European steel industry, love competition as it drives innovation and improvement. But it has to be competition based on level playing field.
Another aspect of competitiveness I should mention is energy prices. Steel industry is energy intensive and at is impossible for us in Poland to compete with steelmakers in the neighbouring countries if for example energy prices in Poland are around 40 per cent higher than in Germany. And finally, I would like to mention the CO2 issue. While the reality is that steel has a significant carbon footprint in manufacturing, in application it can help reduce emissions significantly. According to Boston Consulting, in certain products, for every tonne of CO2 produced during the steelmaking process, 6 tonnes are saved through the applications of steel. This is not taken into account by emissions trading schemes. We at ArcelorMittal understand and support the need for a lower carbon footprint in the economy, but at the same time believe that measures must be applied globally. Otherwise the European steel industry will collapse and the reduction of carbon emissions will not be achieved as steel will continue to be produced in the regions in which stringent environmental regulations do not apply.
To sum up, 2015 was a year of great achievements but at the same time we had to face some challenges, of which not all have been solved. We believe, however, that our 10 sustainable development outcomes provide the right framework to address our material issues. You can find out the details on the following pages of this report. I wish you a happy reading and I am looking forward to updating you on our progress next year.
With best wishes,
Chairman of the Board of Directors