Advantages of using steel pipes for ESG practices in the automotive sector
Steel pipes are used in the automotive industry in the assembly of passenger and commercial vehicles and trailers, as well as in the motorcycle segment. Their uses are diverse, but recently another aspect has begun to be taken into consideration: the advantages of using steel pipes for ESG (Environment, Social and Governance) practices.
This is an agenda that is on the radar of the major automotive assembly plants, but there is still a long way to go. According to the “ESG in the Automotive Sector” survey, released in September 2022 by the Automotive Business content platform, only 43% of companies in the segment – auto parts industry, light and heavy vehicle assembly plants, technology suppliers and car dealerships – have a defined agenda with strategic objectives and targets, and only 30% have a budget dedicated to the topic.
Lowest CO2 equivalent emission on the market
It is in this scenario that Vallourec’s contribution to the implementation of the ESG Agenda gains momentum.
We invest in ESG practices from the start of production. Our steel pipes are called “Green Pipe”, as they are manufactured from high quality coal from our eucalyptus forests, certified by internationally recognized bodies.
The manufacture of coal is carried out in a continuous carbonization vertical reactor, completely automated, an innovative technology developed and patented by Vallourec, with zero methane emission and 95% use of energy from the raw material, which means that our pipes have the lowest CO2 equivalent on the market.
It is also worth noting that while a conventional rectangular kiln takes 16 days to produce 50 tons of charcoal, our vertical reactor is capable of producing up to 22 tons of high quality coal in just 16 hours.
We can also highlight:
- 87% of the electricity consumed at Vallourec is low carbon;
- 100% renewable energy to produce seamless steel pipes;
- 97.6% of waste is recovered;
- 49% of steel used from recycled scrap;
- 60% reduction in water consumption in recent years;
- 98% of the water consumed is reused in Vallourec’s processes.
Why invest in steel pipes for ESG practices?
In general, in the market, steel is considered a material with a high level of recycling efficiency, since it is 100% recyclable and can be reused infinite times without losing quality.
Data from the Instituto Aço Brasil indicate that steel recycling, a sector that encourages the collection and recycling of material contained in products at the end of their useful life, using it in the manufacture of new steel products, contributes to the reduction of consumption of non-renewable raw materials, to the decrease of environmental pollution in general, to the prevention of accidents, to the reduction of steel production costs, saves energy and also reduces the occupation of areas for the disposal of obsolete products.
Many countries already have regulations aimed at reducing the amount of waste produced by vehicles at the end of their useful life, when they are scrapped. The directives that are part of the ELV (End-of-life Vehicles) document also set higher reuse, recycling and recovery targets and limit the use of hazardous substances in new vehicles and vehicle spare parts, which further extends the importance of using steel pipes for ESG practices.
Why use tubular solutions aligned with ESG practices?
The need to achieve metrics in relation to the environment, social and governance is going beyond investor accountability, as compliance is also being demanded by clients, partners and employees across all sectors.
According to a Deloitte study, one out of every five clients is changing their lifestyle to incorporate sustainability. This indicates that the main groups of stakeholders, employees and clients consider sustainability as a key decision factor for future purchases. Knowing this, and identifying the main areas of interest to your audience, the entire production chain of the automotive sector should be aligned with ESG practices.
But without regulation and oversight, the process is inconsistent and lacks proven effectiveness. ESG principles can impact an organization’s brand, revenue, company valuation and market perception, as well as reducing risk. Therefore, in recent years, thousands of companies have incorporated ESG principles into their reporting metrics in various areas.
The study “Sustainability in the Leadership Agenda”, conducted by SAP, a technology company, points out that in Latin America the number of companies aligned to ESG practices skyrocketed in 2022, and the number of Latin American companies that have initiated or accelerated sustainability strategies in recent months reached 69%, compared to 46% in 2021. For most of them (63%), having a sustainability strategy is part of the company’s purpose or aspects related to the company’s reputation.
Good Practices in Business
As well as the importance of companies leading the change to become more socially responsible, adopting best practices around environmental issues and ensuring they work to serve the interest of all stakeholders, being aligned to ESG concepts is becoming a competitive differentiator. This is one of the strengths of our steel pipes for ESG practices.
Customers are starting to make purchasing decisions around companies that match their own ideals and employees want to work for companies that they identify with, and that are part of the solution, not the problem. At Vallourec, all our development of tubular solutions is aligned with our commitment to ESG practices.
