Letter from the Chairman

Dear readers,

The role of the private sector is changing. Today, stakeholders expect companies not only to generate value for their shareholders and employees but also for society and the environment in which they operate. In the context of social and economic recovery from the effects of the Covid-19 pandemic, environmental protection, climate change action and social equity are essential elements in the transformation toward a low- carbon and resource-efficient economy.

One of the main conclusions we could draw from the last Climate Summit in Glasgow, COP26, was the consensus among politicians, industry, customers and society in general on the need to accelerate the pace of decarbonization. This inertia is driving the transformation of all economic sectors, especially the industrial sectors, where the change in the energy mix plays a crucial role.

If we look at the industries to which Gonvarri’s activity has traditionally been linked, the impact of this transformation is global and intense. The automotive industry is moving unstoppable toward electrification and mobility services; steel production is seeing growing interest in low-emission steel, as it prepares for a true “Green Steel” revolution. In relation to renewables, the current context of war between Ukraine and Russia, where the renewed interest of many European countries in reducing their dependence on Russian-origin natural gas is leading them to review their energy and security of supply policies by setting new and more ambitious renewable energy targets for 2030, is a major conditioning factor.

From a risk perspective, climate risk represents a structural and long-term risk that causes capital reallocation. The profitability of business must be sustainable over time, and in the future we see that regulatory restrictions, financial markets and society in general are designing new very restrictive boundary conditions with CO2 emissions. This is why the  consolidation of our Carbon-Neutral Plan is a strategic priority for the coming years, which has also led us to commit to the Science Based Targets initiative and its Net-Zero framework, which establishes the highest level of ambition in the reduction of CO 2 emissions.

Taking advantage of the opportunities offered by this energy transition will help us to: reduce the environmental impact of our energy consumption, limit our dependence on non-native energy resources and explore new business areas linked to this new economy. The green economy poses changes in the production and consumption models, and to the extent that we can anticipate these changes, we will take advantage of the opportunities that this transition offers us.

At Gonvarri, 2021 also marked a change in the Strategic Plan. The Plan for the 2019- 2021 period has already been defined as one of its pillars the drive for growth and diversification of technological and innovative projects in markets with development potential. This pillar is still present in the new 22-24 Strategic Plan that, with the always fundamental reference of the Sustainability Policy, which helps us become aware of the challenges facing society, are the guide that directs our decisions and actions.

In this context, I present once again this year’s Sustainability Report for the 2021 financial year, where we renew and maintain our commitment to the Global Compact, promoting compliance with the 10 Universal Principles and aligned with the Sustainable Development Goals.

Finally, I want to express my deepest gratitude for the work and dedication of those people who make it possible for Gonvarri to continue to advance steadily in its business project. Honesty, humility, tenacity and hard work have always been our hallmark and our best guarantee of a job well done.

I invite you to take a closer look at our report and learn in detail about our progress on environmental, social and governance issues.

Thank you very much