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Corporate Sustainable Development Report 2011: 100 Years of Strength. Performance. Passion

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100 years of

Strength. Performance. Passion.

Corporate Sustainable Development Report 2011

100
1921 1922 1923 1924 1925 1926 1927 1928
1938 1939 1940 1941 1942 1943 1944 1945
1955 1956 1957 1958 1959 1960 1961 1962
1972 1973 1974 1975 1976 1977 1978 1979
Holcim’s original cement plant in
Holderbank in the Swiss canton
of Aargau.

1989 1990 1991 1992 1993 1994 1995 1996 The new Ste. Genevieve plant of Holcim US in Missouri.

2005 2006 2007 2008 2009 2010 2011 2012


Contents

Introduction
Performance against targets 2
Chairman’s statement 3
CEO interview 4
Vision and strategy 6
Q “Delivering value to your stakeholders is part of your mission. How do
you achieve results while operating with sustainability and integrity?
Are incentives for sustainable practices integrated into performance
compensation plans?”

SD challenges 10
Sustainable solutions and construction 10
Q “What is Holcim’s contribution to improve efficiencies in the building
materials industry?”

Energy and climate 14


Q “Holcim appears to be ahead of its competitors with regards to its level
of carbon emissions. How does Holcim plan to further reduce its CO2
footprint, while providing the construction materials for the schools,
hospitals, homes and infrastructure the world needs?”

Biodiversity and water 18


Q “Reducing energy use will in turn reduce CO2 emissions and water
consumption. How can Holcim ensure that the overall synergies between
energy, climate, biodiversity and water are taken into consideration?”

Our people 22
Q “There
 have been complaints from unions regarding labor
issues. What kind of measures is Holcim taking to prevent
unfair labor practices?”

Social commitment 28
Q “ How is Holcim’s business model able to improve the quality of life
of the poor?”
Performance data 30

Methodology and assurance 36

Key to symbols:
CR see page in this report Contact us at Holcim
Sustainable Development Corporate Communications Investor Relations
ARA see our Annual Report
Ruksana Mirza Roland Walker Bernhard A. Fuchs
see graph data Phone +41 58 858 54 61 Phone +41 58 858 87 10 Phone +41 58 858 87 87
Fax +41 58 858 54 59 Fax +41 58 858 87 19 Fax +41 58 858 80 09
www. visit www.holcim.com/
sustainable.development@holcim.com communications@holcim.com investor.relations@holcim.com
sustainable for more
information
GRI reference to GRI indicator

Corporate Sustainable Development Report 2011 1


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and

Performance against targets


assurance
Introduction

The following is a summary of our progress against our


main sustainable development performance targets.

Area Target Progress Target date Status 2011

Vision, strategy and corporate governance

Strategy Integration of SD materiality review in existing The SD materiality review has been integrated into the 2008 Achieved
business risk management (BRM) system for use existing BRM system and recommendations provided to and ongoing
by Group companies. Group companies. Work is continuing with integrating SD
issues fully into the standard BRM system. See CR page 9

Management ISO 14001 implemented by all cement plants This is a rolling target as newly acquired Group companies 2004 Cement 93%
systems and alternative fuels and raw materials (AFR) require time to implement management systems. AFR 95%
pre-treatment platforms. See CR page 31

Environmental performance

Climate and Reduce global average specific net CO2 emissions See CR pages 14 and 9 2015 21.8%
energy (kg CO2/tonne cementitious materials) by 25%,
using 1990 as reference.

Environmental Emissions monitoring and reporting The figure reported reflects the percentage of plants with 2004 88%
impacts standard implemented. continuous emission monitoring in place and includes our
operations in India. This is an ongoing target as newly acquired
plants and companies require time to implement systems.

Reduce global average specific nitrogen oxides, The specific SO2 emission target was exceeded in 2009. Due 2012 NOx – 21%
sulfur dioxide and dust emissions (g pollutant/ to the global economic crisis, efforts to reduce dust and NOx Dust – 29%
tonne cementitious materials) by 20%, using 2004 emissions focused on implementing primary measures. The SO2 – 65%
as reference. target date was thus revised to 2012 for dust and 2013 for NOx.
See CR pages 14 and 9

Quarry rehabilitation plans. This is an ongoing target as newly acquired plants and 2006 Cement
companies require time to develop and implement plans. – 100%
See CR page 33 Aggregates
– 93%

Biodiversity: 80% of sensitive sites to have The definition of sensitive sites was developed as part of a 2013 40%
biodiversity action plans. biodiversity management system developed in conjunction
with IUCN. The Biodiversity Management System was launched
in late 2010. See CR page 18

PCB equipment elimination. Electrical equipment containing PCB to be eliminated from See progress
the cement sector (cement and grinding plants) by the end of
2010, and for the non-cement sector (aggregates, ready mix
and asphalt) by 2011. By the end of 2011, only one cement plant
and three non-cement plants were not PCB free.

Social performance

Community Every Group company to have a community See CR page 29 2012 24%
involvement engagement plan covering all sites.

OH&S Reduce lost-time injury frequency rate by at least This objective has been achieved. We now plan to further 2009 See progress
30% per annum until it is under 2, using 2004 as reduce the rate to below 1.0 for 2013.
reference, from 2006 to 2009.

OH&S fatality prevention elements implemented. This target has been extended to 2013. The implementation 2013 See progress
standards will be reviewed and implementation assessed
starting in 2012.

OH&S contractor safety management Significant progress has been made. The target date remains 2012 See progress
implemented. 2012, after which implementation will be assessed.

We have already met a number of targets and details of these are available at www.holcim.com/sustainable.

2 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and

Chairman’s statement
assurance

Introduction
Current global events are bringing an
increased obligation on companies to
examine their economic, social and
environmental sustainability.

The past two years have provided many challenges In January 2012, we issued a Directive on the use of
for Holcim, but also many opportunities. Through the contract workers. The Directive formalizes the obligation
dedication, hard work and innovative qualities of our of Group companies to address all national regulations,
people, we have not just weathered the economic but also the core conventions of the International Labor
downturn, but have emerged leaner, stronger and more Organization and the requirements of the UN Global
focused. We have also experienced a number of changes Compact, to which we are committed.
in our leadership, but the commitment to sustainable
development remains resolute. The report again underlines the importance of our Code
of Conduct which is binding on all employees and also
In February 2012, Markus Akermann retired as CEO of introduces the new Anti Bribery and Corruption Directive.
Holcim, and was replaced by Bernard Fontana. Under
the leadership of Markus, Holcim established itself as The assurance of data for this report has been extended
a leader in the field of sustainable development and and now covers more environmental and social
played a significant role in driving the sustainability data. Details of this assurance can be found in the
agenda of the entire sector forward. He leaves a rich “Methodology” section on CR page 36. As in previous
legacy. There is no doubt that Bernard Fontana will reports, we have asked for the inputs of an External
ensure that this legacy is built on, and he has already Report Review Panel, consisting of a broad range of
made clear his determination to make a real difference, stakeholder groups. The panel provided inputs into the
especially in terms of Occupational Health and Safety. content of the report and has also provided a statement
with recommendations and observations which can be
This report details our ongoing activities in sustainable found on CR page 38. We would like to thank the panel
development and discloses data on a number of for their time and effort. It is truly appreciated.
performance indicators. The report also features
a number of important achievements. The water We also thank our employees for living up to our
management system we committed to implement in commitment to sustainable development. Our success
our previous report has been developed and is being depends on their efforts and dedication.
implemented throughout the Group. Our continuing
partnership with the IUCN has yielded a fit for purpose
Biodiversity Management System and work continues,
in collaboration with the IUCN, on implementing the
system throughout the Group. Rolf Soiron
Chairman of the Board of Directors

Corporate Sustainable Development Report 2011 3


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and

CEO interview
assurance
Introduction

CEO Bernard Fontana comments on


the importance of Sustainable Development
(SD) and his priority in this area.

Q In your view, what have been the most significant has galvanized the thought leaders in the industry
achievements of the company to date? Where has into action. The Foundation is building a very tangible
Holcim left its mark? legacy with numerous prize winning concepts now
A It is clear that the company has worked hard to ensure being built and becoming reality.
that SD is integrated into the business and into our
thinking. This is reflected not only in the way the Another important achievement has been the
business is structured with high level committees extremely effective and fruitful global partnerships
ensuring visible leadership, but also the measures with IGOs and NGOs that we have been involved
taken to ensure that SD is embedded in the company in. The results of these partnerships are impressive
culture. This is reflected in Holcim’s fundamental and have made a real difference. The co-processing
strategy with SD related disciplines as core elements in guidelines developed in conjunction with the GIZ and
the “strategy house”. SD related targets are entrenched the Biodiversity Management System developed in
in operational roadmaps and performance against conjunction with IUCN are good examples.
these targets is monitored and reported.
Q Where do you think the company could have made
Holcim’s people are proud of our achievements in SD more progress?
and are amongst our most demanding stakeholders. A Whilst we have made significant progress with
This pride, and a determination to make a difference, Occupational Health and Safety and have seen the lost
is an important component of the value proposition time injury rate and the number of fatalities in areas
that we offer employees. In the past decade Holcim under our direct control decline, there is still much
has doubled in size and expanded its operations into work to be done to achieve our long term vision of
every continent. Much of this expansion was due to “zero harm to people”.
acquisitions of companies with very different mindsets
and cultures. The way that Holcim’s people from very Holcim was a pioneer of co-processing and the use of
different backgrounds have embraced our SD culture alternative fuels, especially waste derived fuels, in our
is clearly evident. kilns. The benefits of co-processing are beyond dispute.
Whilst we have made significant progress in Europe
An important achievement has been the with thermal substitution rates (TSR) as high as 68%,
establishment of the Holcim Foundation for we have clear room for improvement in other regions,
Sustainable Construction. Through its activities, notably Asia Pacific. Improving the TSR will lower our
the Foundation has played a significant role in the environmental impact, conserve natural resources
promotion of sustainable construction techniques and and make us more competitive.

4 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges
Performance data

Vision and strategy


Methodology and
assurance

Introduction
Q Why is a commitment to SD so important to Holcim? Q How do you intend to drive sustainable development
A The long term nature of the business makes a forward? What would you like to achieve in the years
commitment to SD fundamental. Not only does the to come?
company have a significant environmental footprint, A I have made it very clear that my single most
which society expects us to minimize, but we also important priority in this area is Occupational Health
have a presence in our host communities for decades. and Safety. While I recognize and applaud the progress
It is thus vital that we address all elements of the that Holcim has made in this area, I am convinced
triple bottom line and have strong relationships with we can improve even further. A safe and healthy
communities and other stakeholder groups. A strong workplace is a prerequisite for motivated, productive
performance in SD also enables us to attract and and committed people. I expect all Holcim managers
retain passionate and committed people who are key to show leadership for their performance in this
to our continued success. area. My very first action as new CEO was to take
management responsibility for the OH&S team.
Q Sustainability and profits – can they really go I expect every single person in the organization to
together? Isn’t there a contradiction? play their part and to be responsible for their own
A They have to go together. In my view it is not a case of safety and the safety of their colleagues.
either profits or sustainability. The two can and should
be interlinked. We have a collective responsibility It is important that Holcim uses its leadership position
to manage the limited resources of the planet. We in SD to raise the bar in the sector. We will strive
simply have to do more with fewer resources. This to maintain our leadership in this area and we will
is a challenge, but provides opportunities too. As continue to engage with other players and collaborate
an example, meeting the challenges we face as an on sustainability issues through fora such as the
energy intensive industry in innovative ways can not Cement Sustainability Initiative.
only lessen our energy footprint and provide energy
security but can lower production costs and ensure a I expect Holcim’s people to “live” SD. If each of our
competitive advantage. 80,000 employees takes ownership and responsibility
for their work related and personal impacts, we can
SD initiatives and activities must pay their way. SD is make a real difference, not just to the company, but
not about how we spend our money; it is integral to to the environment and the communities which host
the way we make our money. That is the only way it us. As an initial step, volunteering activities are taking
can be truly sustainable. Ultimately, we are in business place across the Holcim world as part of our centennial
to provide products and solutions to our customers. celebrations. This will just be the start of the ongoing
We need to ensure that the solutions we provide are employee involvement in SD activities.
superior in quality, competitive in price and have the
lowest possible environmental and social footprint.

Bernard Fontana
Chief Executive Officer

Corporate Sustainable Development Report 2011 5


Introduction
Vision and strategy
SD challenges
Performance data
Vision and strategy

Methodology and

Vision and strategy


assurance

Q “Delivering value to your stakeholders is part


of your mission. How do you achieve results while
operating with sustainability and integrity?
Are incentives for sustainable practices integrated
into performance compensation plans?”
Jean Laville, Responsible
Investment Expert
Jean Laville, former Deputy Director, Ethos Foundation

A We believe it starts with our corporate values – strength,


performance and passion – which are a promise to perform
and to build trust with our stakeholders. Our mission is to
create value for all our stakeholders:
strength – being a solid partner
performance – delivering on our promises and providing
“Identifying and managing
sustainability risks and the best solutions for our customers
leveraging opportunities
is essential to fulfilling our
passion – caring about everything we do including our people,
mission to deliver value.” our customers, our communities and the environment.
Roland Köhler, Holcim
Exco Member

We have earned our reputation by delivering commercially Our Code of Conduct guides the way we do business.
superior solutions for our customers, making profits and Launched in 2004, it underpins our mission statement
providing a return to our shareholders. We create value for and sets out the behavior we expect from every
our employees, communities and for society at large, and Holcim employee.
we know our success depends on operating sustainably
and with integrity. Our Operational Roadmap sets targets for our ambitions
and includes several sustainable development
performance indicators. The remuneration of Holcim’s
executive committee (Exco) depends on how we perform
against these indicators.

6 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges
Performance data

Vision and strategy


Methodology and
assurance

Working within the triple bottom line Sustainable development strategy


Holcim has placed sustainable development at the
heart of its business strategy for many years. We
follow the three pillar approach of the triple bottom
Creation of Value line – economy, society and environment – within our
Goal
business strategy, because we believe it creates added
Product Focus Geographic Local
Diversification Management value for stakeholders. As the graphic shows, we think
Global
Standards the most important foundation on which everything
Strategy
rests is a workforce that gives its best.
Performance
Environmental
Sustainable

Management
Better Cost

Innovation
Permanent Marketing

Excellence
Human Resources

Responsibility (CSR)
Corporate Social

Embedding our commitments


The commitment of Holcim’s executive committee
drives our sustainable development performance, but
our success depends on every employee playing their
Mindsets part. We are taking sustainable development to the next
People level at Holcim, making it more tangible and relevant
Base
to everyone and mobilizing the entire workforce to help
For more information on corporate governance and the tackle the challenges through volunteering and other
Code of Conduct, please see ARA page 121. opportunities. Details can be found on CR page 25.

Our Sustainable Development Steering Committee


operates as a subcommittee of Exco. Chaired by
Exco member, Roland Köhler, who has responsibility
for the sustainable development function, the steering
group includes CEO Bernard Fontana, and Exco member
Benoît-H. Koch. A second committee made up of Holcim
Group company CEOs and functional experts advises
on the design and implementation of sustainable
development programs.
Economic impacts along the value chain

Cement,
aggregates,
concrete
and other
Goods and construction
services materials
Payments HOLCIM Sales
SUPPLIERS CUSTOMERS
Input costs (CHF 12.6 billion) Retained in business (CHF -0.03 billion) and depreciation (CHF 2.4 billion) Net sales (CHF 20.7 billion)

Categories purchased Traders


by suppliers: Dividends Capital Interest Capital Taxes Services Salaries Labor Good Licence
neighbor to operate Wholesalers
Raw materials Retailers
Services including transport Ready-mix concrete producers
Operational material Concrete products
Energy manufacturers
Plant, equipment and Construction contractors
infrastructure Individual customers
SHAREHOLDERS CREDITORS GOVERNMENTS* EMPLOYEES COMMUNITIES
MULTIPLIED (CHF 0.7 billion) (CHF 1.1 billion) (CHF 0.4 billion) (CHF 3.9 billion) (CHF 38 million) MULTIPLIED
INDIRECT INDIRECT
IMPACTS IMPACTS
DIRECT IMPACTS

Source: Holcim, 2011 data


Non-monetary flows
* See CR page 30 for additional information on political contributions and subsidies. Monetary flows

Corporate Sustainable Development Report 2011 7


Introduction
Vision and strategy
SD challenges
Performance data
Vision and strategy

Methodology and
assurance

Our company-wide management systems help us Operating with integrity


manage risks and achieve continuous improvement We aim to achieve the highest standards in the way we
consistently across the Group. They meet the conduct our business. At a corporate level, we follow the
international standards of ISO certification (see Swiss Code of Best Practice for Corporate Governance.
CR page 31) and are designed to help manage specific The Holcim Code of Conduct provides consistent direction
issues – for example our Biodiversity Management for the daily decisions we make across the entire Holcim
System, Water Management System and an Group. It covers all aspects of our operations. Group
Occupational Health and Safety Management System. companies are responsible for ensuring that employees
All our management systems have been approved and managers are aware of their responsibilities and that
by Exco, including monitoring procedures and key they meet the expected standards.
performance indicators. Group companies develop
additional policies and practices to meet their individual We are very clear about what we expect and violations
needs and to help them achieve company standards. are not tolerated. Responsibility for enforcement rests
primarily with line managers and where warranted,
Influencing our value chain violations are investigated and appropriate action taken.
In 2011, we embarked on a new Sustainable Procurement During 2011, employees in all regions attended workshops
Initiative for Holcim. We want to build on and on the rules of fair competition to help us meet our
strengthen the way we manage our supply chain, responsibilities under the Fair Competition Directive. In
and use our influence to promote sustainable and January 2012, we issued a new anti- bribery and corruption
responsible business practices. Our approach will focus directive as part of our company Code of Conduct.
effort on suppliers that pose the greatest risk, and will
include a new Supplier Code of Conduct and method Through the adoption of the Anti-Bribery and
for identifying and assessing critical suppliers. In 2011, Corruption Directive (ABCD) Holcim has mandated that
39 Holcim Group companies carried out customer each Holcim Group Company adopt a whistle-blowing
relationship surveys, including of key suppliers, to system (WBS) in the event it does not already have one
identify areas for improvement. We also implemented in place. Guidance has been issued to Group Companies
new directives on contractor safety and contractor to assist them in implementing a new WBS or in
employment relationships. measuring existing WBS systems.

For more
information
visit www.
holcim.com/
sustainable

8 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges
Performance data

Vision and strategy


Methodology and
assurance

Determining material issues SD materiality review – aligning global stakeholder


Holcim has a well-embedded Business Risk Management feedback with current Group priorities
(BRM) process for identifying risks at a corporate and Issues Importance of issues – global view

Group company level (see ARA page 42). We carried out Low Medium High
Corporate governance
our first sustainable development materiality review to and business ethics

Economic
identify the issues of importance to our business and our Customer and
supplier relations
stakeholders in 2007. Economic impact

CO2 and energy


We aggregate the issues emerging through the Holcim
Ec0-efficient products
BRM and Group company materiality reviews, and assess and innovation

their importance for the Holcim Group as a whole. We Sustainable construction


Environmental

consider the views and expectations of stakeholders Atmospheric emissions

through an External Review Panel. It should be noted that Resources management


and biodiversity
whilst some of the issues represent potential impacts
Waste and transport
and related risks, the mitigation of those impacts in many
Water
cases provides a solution or an opportunity.
OH&S

Our 2011 Group materiality matrix was developed in Employment practices


Social

and human rights


consultation with external stakeholders in September
Community involvement
2011. There have been some significant changes since and stakeholder relations

our last materiality review in 2010: Holcim view – result of Holcim business risk management process.
External stakeholder view – result of interviews with a range of
external stakeholders.
• “Corporate Governance” has been amended to
View from Holcim and external stakeholders coincide.
“Corporate Governance and Business Ethics” to reflect
Range of external stakeholder views.
an increased importance of business ethics Represents a clear difference between internal and external view.
• innovation has been added to eco-efficient products Low: Low level of concern to stakeholders and low level of current
impact on Holcim.
• the importance of “water” as an issue to Holcim
High: High level of concern to stakeholders and high level of current
has increased or potential impact on Holcim.

• the matrix now reflects the difference between The grey shaded areas are impacts. Our mitigation activities in
these areas may also provide solutions.
impacts and solutions. The blue shaded areas represent solutions to SD related issues.

A full list of the issues, sub-issues and definitions is


available at www. holcim.com/sustainable

Our priorities
Based on our 2011 materiality review, our current
sustainable development priorities are:

• sustainable solutions and sustainable construction


(including eco-efficient products and innovation)
• energy and climate
• biodiversity and water
• our people (including OH&S)
• social commitment (including community
engagement and human rights).

Corporate Sustainable Development Report 2011 9


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and

Sustainable solutions and construction


SD challenges

assurance

Q “What is Holcim’s contribution to improve


efficiencies in the building materials industry?”
Ashok B Lall, Principle, Ashok B Lall Architects

A Buildings are directly or indirectly responsible for over 50% of


global CO2 emissions, for around 50% of the global waste produced
Ashok B Lall, Architect
and account for more than 35% of global energy consumption.
Holcim’s product and process innovation is helping to develop more
sustainable construction solutions – from more efficient production
and distribution systems to cement with a lower carbon footprint.
Our main focus has been on developing composite cements with
reduced clinker content, by adding mineral components such
as blast furnace slag, fly ash and pozzolans. By 2011, 77% of our
“Increasingly, sustainability product portfolio includes these more sustainable cements,
criteria are an important factor
compared with only 30% in 1990.
in tender conditions. The
sustainable solutions offered by
our Group companies provide
a competitive advantage.”
Benoît-H. Koch, Holcim
Exco Member

Our Group company in the UK, Aggregate Industries, Holcim has a key role to play in promoting and developing
is also reducing its impacts on virgin resources by sustainable construction techniques and technology. The
producing and selling concrete products containing up Holcim Foundation for Sustainable Construction is one
to 62% recycled content. The building materials industry way we are meeting our commitment.
value chain is complex, involving many different
interests and issues. Demand for building materials Providing sustainable solutions
continues to grow against a background of population Holcim demonstrates innovation by creating value
growth, urbanization and developing economies. The through new solutions that meet the needs of our
challenge for us is to meet this demand while reducing customers and stakeholders in an increasingly fast-
our environmental footprint over a construction’s entire changing business environment. We aim to lead the
lifecycle. We believe that environmental, economic and industry in our innovative approach, providing customer
social considerations must be a top priority for Holcim solutions that achieve sustainability and cost efficiency.
and for others all the way along the building materials
value chain.

10 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges

Sustainable solutions
Performance data

and construction
Methodology and
assurance

We commit to:
• meet customer needs exceptionally well along the Key data See CR pages 30–35 for full data tables.
Visit www. holcim.com/sustainable
construction value chain Sustainable products and
for more information.
sustainable construction
• drive sustainability along the whole building lifecycle
• maximize efficiency in “cost to serve” along the whole
Cement types produced by Holcim* in 2011 GRI EN3
supply chain.
Slag cement 10%

23% Ordinary Portland Cement


Our industry is resource and energy intensive,
Pozzolan cement 8%
so sustainability is paramount when we plan 5% Masonry cement, oilwell
cement, white cement,
our operations and design new solutions for our special binder
customers. We take our ambition – zero fossil energy,
Fly ash cement 25%
zero emissions and zero waste – from the Holcim 14% Multiple blend cement
Foundation for Sustainable Construction’s Re-inventing
Limestone cement 15%
Construction Manifesto.
*All but Ordinary Portland Cement are composite cements. Composite cements
increased from 30% in 1990 to 77% of our product mix in 2011.
Fostering innovation
Our customers demand increasingly high performance
and innovative products as part of a full solution. label their products. We are currently working to extend
Holcim’s sustainable, cost-efficient solutions create value the methodology and tool to concrete and aggregates.
for our stakeholders, shareholders and society. More
information on our sustainable innovative solutions can Promoting sustainable construction
be found on ARA page 46. We created the Holcim Foundation for Sustainable
Construction in 2003 to raise awareness of the role
The solutions we offer are not just about physical of architecture, engineering, urban planning and
products. In the USA, we have created a new tool, CalQ, construction in achieving a more sustainable future.
to calculate customers’ materials score and produce The Holcim Foundation’s primary objective is the non-
the report they need for LEED certification. Customers commercial promotion of sustainable construction at a
have told us it is user-friendly and is the best available national, regional, and global level. We support initiatives
application for calculating regional materials and that contribute to sustainable construction by achieving
recycled content. More information on CalQ can be architectural excellence and enhanced quality of life.
found at www. holcim.us/calQ

The Holcim Foundation has brought together global


Holcim has also developed a tool which allows Group expertise to increase awareness of the role of the
Companies to support their customers in making built environment in sustainability. The projects, best
informed choices regarding CO2 footprints of specific practice and research we promote is inspiring architects,
products. This Product Carbon Footprinting (PCF) tool, engineers, planners, developers and contractors
which reports the embedded CO2 emissions per ton of worldwide to adopt more sustainable approaches
cement ‘cradle-to-gate’, is based on an open, transparent within their building projects.
and 3rd party approved methodology which has been
elaborated in close cooperation with the British ‘Carbon The Foundation also runs awards for sustainable
Trust’. The methodology and tool are compatible with construction. Further details about the awards and the
international standards. Besides allowing for Holcim- Foundation can be found on the Holcim Foundation
internal benchmarking and further CO2 mitigation, the website www. holcimfoundation.org
Holcim Group Companies can use these PCF-figures to

Corporate Sustainable Development Report 2011 11


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and

Creating value through innovation


SD challenges

assurance

At Holcim, we are developing new products to reduce


our environmental footprint and we are using state of
the art technology in our factories to manage the
impacts of our operations.

The production
process for our Holcim Optimo, Switzerland
new “Optimo” To be successful, our sustainable products must
range generates
achieve a quality that creates customer interest
between 10%
and demand. In 2010, Holcim Switzerland
and 19% less
CO2 during launched the “Optimo” range. Holcim Optimo,
production than made from fired shale, is a high-quality cement
traditional clinker. with a reduced environmental footprint. The
fired shale is mixed with additives and added to
clinker, gypsum and limestone. It requires a low
temperature and it contains organic material, so
it burns without additional fuel. The production
process for Optimo requires less energy and
generates between 10% and 19% less CO2 than
the production of traditional clinker.

It is not only the environmental performance that


makes Holcim Optimo an innovative product.
Ground-fired shale has physical and chemical
qualities that give the cement – or rather the
concrete for which the cement is used – excellent
qualities including high durability, reduced
permeability, improved tensile strength and a
low risk of cracks.

By the end of 2011, Optimo represented over


31% of Holcim Switzerland’s total sales and it is
helping to reduce the overall ecological impact of
the company.

For more information go to


www. holcim.com/en/press-and-media/stories/
greater-building-sustainability-with-holcim-
optimo.html

12 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges

through innovation
Performance data
Methodology and

Creating value
assurance

Our Hermosillo
Hermosillo innovations, Mexico plant in Mexico,
Our new Hermosillo plant in Mexico uses the latest which is a model
of sustainable
generation of technologies to optimize thermal energy,
construction.
reduce electrical energy and reduce water consumption
during production. The plant’s office building is a
model of sustainable construction. Non-conventional
thermal and photovoltaic systems provide energy used
for lighting, heating and air conditioning. Daylight is
channeled to the center of the building and water is
re-circulated for cooling. All grey water is treated in a
sanitizing pond and then used for irrigation. We are also
planning to re-plant the area with indigenous species
to restore biodiversity, mitigating the effects of the
plant’s construction.

Further details can be found on the website for the


Holcim Foundation for Sustainable Construction.

For more information go to


www. holcimfoundation.org

Porta Nuova, Italy


The Porta Nuova is a huge project to redevelop three adjacent neighborhoods across about 290,000 m2 of Milan.
From eight different countries, 25 architects have been engaged by Hines Group to produce the structure of this
new district. The project will incorporate new housing, shopping areas, offices, and cultural venues. A continuous
pedestrian area with green areas, squares, bridges, and a large park will seamlessly connect the different
neighborhoods efficiently and safely. Porta Nuova has been pre-certified under one of the most prestigious green
building rating systems, LEED. The new buildings are a model of innovation, incorporating the latest energy-
saving solutions and sustainable materials.

Holcim Italy is supplying high-performance, sustainable ready-mix concrete products, together with technical
and logistics services, to the main contractors of the project. All our products have been designed for
sustainability, using recycled aggregates, low-clinker cements and low-heat concretes. This has helped the project
to achieve LEED credits for using recycled materials, limiting the use of natural resources, and regionally sourcing
quarried and manufactured materials.

Due to the complexity of the project and the specific product needs of contractors, Holcim Italy had to provide
an integrated and customized solution for the Porta Nuova project. We provided our customers with high-quality
services, technical facilities, and certification support, as well as developing special sustainable products. To meet
project specifications and the customer’s requirements, we designed high-performance, specific-mix concretes
with high strength, low heat of hydration, and high workability even after long-distance vertical pumping.

Corporate Sustainable Development Report 2011 13


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and

Energy and climate


SD challenges

assurance

Q “Holcim appears to be ahead of its


competitors with regards to its level of carbon
emissions. How does Holcim plan to further
reduce its CO2 footprint, while providing the
construction materials for the schools, hospitals,
Holger Wallbaum, Academic
homes and infrastructure the world needs?”
Holger Wallbaum, Chair of Sustainable Construction, Swiss Federal
Institute of Technology (ETH Zurich)

A Holcim has committed to reducing CO 2 emissions per ton of

cement by 25% compared to 1990 levels. We will focus on three


main areas to achieve this reduction: reducing the clinker content
“Holcim’s sustainable energy
of our cement by replacing it with other mineral components,
strategy demands excellence in
energy management, reduced substituting fossil fuels with greener alternatives and adopting
resource dependency and increased
more efficient processes.
process efficiency to reduce costs
and provide energy security.”
Patrick Dolberg, Holcim
Exco Member

Today, the debate has broadened to reflect that fuels with waste-derived fuels wherever feasible. To
the greenhouse gas emissions associated with the foster innovation in this regard, Holcim has established
production of cement are only a small fraction of the a special energy fund which is described in the case
emissions in the total lifecycle of a building, and Holcim study on CR page 16.
welcomes this development. We are collaborating with
others in the sector through the Cement Sustainability CO2 efficiency
Initiative to drive efficiencies in the industry, including Over 95% of the CO2 emissions from cement come
the development of Environmental Product Declaration from the manufacturing of clinker, one of its key
for cement and concrete. components. About 60% of these emissions are
from the limestone used to make clinker and about
Apart from a willingness to play our part in contributing 40% are from the burning of fossil fuels. The scope for
to global greenhouse gas emission reductions, other using less energy to produce clinker is limited by the
key drivers for Holcim are energy security and cost available technology. By reducing the amount of clinker
reduction. With increasing energy costs and concerns we use per ton of cement, we can significantly lower
over energy availability in the future, it is clearly in the carbon intensity of the cement. We can also
Holcim’s interest to drive energy efficiency in our reduce emissions by using greener sources of
production processes and to substitute expensive fossil energy to heat the kilns.

14 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges
Performance data

Energy and climate


Methodology and
assurance

We are also looking at ways to limit rising energy


costs and improve our energy security, particularly in Key data See CR pages 30–35 for full data tables.
Visit www. holcim.com/sustainable
resource-constrained regions. By using energy from Energy and climate*
for more information.
waste derived fuels we can lower our emissions and
limit our use of fossil fuels. This can be a viable business Specific CO2 emissions GRI EN16

opportunity, providing a revenue stream as a total waste kgCO2/tonne cement % improvement

management solution and a product which we can 800 0

charge for. 750


764
756 -5

700 706 -10


Energy and CO2 performance 689

650 659 -15


Holcim has achieved one of the lowest levels of clinker 642

613
600 618 608 -20
in our cement in the industry, with an average 71% 595 599
591

550 -25
clinker content (the clinker factor). We have increased
500 -30
the energy efficiency of our clinker production process, 1990 ... 2000 ... 2005 ... 2009 2010 2011 ... 2015
reducing thermal energy consumption from over
4,500 MJ per tonne of clinker in 1990, to just 3,510 MJ Specific gross CO2 emissions Specific net CO2 emissions
 % improvement trendline
per tonne of clinker produced in 2011, equivalent to a
Sector average emissions
22% reduction. Since 1990, we have reduced the CO2 (WBCSD GNR database)
emissions per tonne of cement produced by 21.8%.
Comprehensive details of Holcim’s CO2 performance Absolute CO2 emissions GRI EN16
can be found in our annual submissions to the Carbon Million tonnes CO2
102.0
Disclosure Project at www. cdproject.net 100 97.3 97.2
99.1

94.8 94.3
92.6
89.9
90
Emissions trading and regulation
80.1
Holcim operates around the world and is subject to 80 78.2

mandatory trading schemes and other regulatory


70
initiatives in a number of countries. We are currently
59.6 59.0
60
part of the European Union and New Zealand emissions
trading schemes, and we are preparing to join 50
1990 ... 2000 ... 2005 ... 2009 2010 2011
trading schemes due to be implemented in Australia,
Quebec and India. Absolute gross CO2 emissions Absolute net CO2 emission

Due to the initial allocation of allowances being Thermal substitution rate by alternative fuels GRI EN5
followed by a decrease of absolute emissions resulting % of thermal energy from alternative fuels
12.0 12.0 12.2
from efficiency improvements and a decrease of cement 12
10.5
production due to the economic crisis, Holcim had 10 9.0

an excess of allowances in the EU ETS. In 2011, we 8


realized less revenue from the sale of allowances than in
6
the previous year. Financial details of our carbon trading
3.6
4
activities can be found on ARA page 54.
2

During 2011, Holcim received 51,243 carbon credits 0


1990 ... 2000 ... 2005 ... 2009 2010 2011
in support of wind power projects in India and an
* Due to ownership changes in 2011, and changes in the WBCSD protocol, figures for
alternative fuel project in Indonesia. We expect to
previous years have been restated.
continue receiving these credits in future.

Corporate Sustainable Development Report 2011 15


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and

Reducing our carbon impact


SD challenges

assurance

We are reducing our carbon footprint by improving


energy efficiency and by generating energy from
renewable sources and through our own
waste management.

Waste exhaust
heat from the Holcim Energy Fund
neighboring In 2010, we set up a special fund as part of our
cement kiln is
comprehensive energy strategy which provides up
used to dry the
to CHF 100 million every year to support energy
crushed limestone
aggregate used efficiency projects. The fund is partly financed by
in dry mortar the sale of excess CO2 emissions certificates.
products at our
Group company
Projects for electricity generation by means of
in Thailand.
waste heat recovery, wind power and alternative
fuels in place of fossil heat carriers have already
been approved. With these projects alone,
Holcim will save around 200,000 tonnes of
CO2 annually, approximately as much as the
annual CO2 emissions of a community of
30,000 inhabitants.

In 2010, we approved funds for five heat recovery


plants in Vietnam, India, Romania, Lebanon
and Switzerland. Construction is underway and
production will commence between the end of
2011 and 2013. Other projects approved for funding
include waste heat recovery plants in Canada,
Slovakia, Mexico and India and two installations
for the use of alternative fuels and raw materials
in Germany and France. These facilities will
be commissioned to begin operating from
2013 onwards.

For more information go to


www. holcim.com/case-studies

16 Corporate Sustainable Development Report 2011


Introduction

Reducing our carbon impact


Vision and strategy
SD challenges
Performance data
Methodology and
assurance

We are generating
Renewable energy renewable energy
At Holcim we currently generate about 25% of our through our wind
farms in India.
electrical energy needs from our own captive power
plants. Of the 25%, around 6.3% is generated from
renewable energy sources, such as waste heat recovery,
wind, hydroelectric power and biomass.

At the moment, we use power generation from waste


heat recovery in three kiln lines in Thailand. Nine other
projects are being developed with funding from the
Holcim Energy Fund.

Our Group companies in India, ACC and Ambuja


Cements generate wind power and have an installed
wind power capacity of 26.5 MWe.

For more information go to


www. holcim.com/case-studies

Waste heat recovery power generation


Waste heat recovery (WHR) offers significant potential for “CO2-free” power generation. As an example, our
Group company in Thailand generated about 170 GWh of electricity at their Saraburi plant in 2011. Several
other Holcim Group companies have launched WHR projects which are at different stages of development.
The five WHR projects approved under the umbrella of the Holcim Energy Fund in 2010 (see CR page 16) will
increase the WHR power generation by more than 20 MW by the end of 2012. The largest anticipated power
generation will be at the Gagal plant in India, with 7.2 MW net electrical power.

Further projects were approved in 2011 in Slovakia and India and are in the engineering phase. These projects
will be completed in 2013 and will generate approximately 8.1 MW net electrical power.

All these projects, together with the WHR power plant in operation since 1992 at the Saraburi plant, will
generate around 60 MW of CO2-free electrical power.

Holcim is working to further exploit WHR potential by evaluating new technologies to increase power
generation efficiency at low temperatures, and projects are currently being evaluated by at least seven
Holcim Group companies.

For more information go to www. holcim.com/case-studies

Corporate Sustainable Development Report 2011 17


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and

Biodiversity and water


SD challenges

assurance

Q “Reducing energy use will in turn reduce


CO2 emissions and water consumption. How
can Holcim ensure that the overall synergies
between energy, climate, biodiversity and water
are taken into consideration?”
Julia Marton-Lefèvre,
International conservation
Julia Marton-Lefèvre, Director General, IUCN (International Union
organization representative
for Conservation of Nature)

A We appreciate our reliance on nature’s services, such as climate


regulation and good water quality, and we recognize that there
are complex relationships between biodiversity, water, climate
change and energy. That is why we have set ourselves very clear
targets and strategies to reduce our impacts, including targets for
“Water is a critical resource for
each individual issue. When we identify potential conflicts between
communities at many places we
operate as it directly affects the targets we call upon the advice of experts to help us find the best
quality of life of thousands living
way to address potential trade-offs.
around our facilities.”
Onne van der Weijde, Holcim
Area Manager

Our partnership with the International Union for Conserving biodiversity


Conservation of Nature (IUCN) draws on the knowledge of During the first term of our partnership with the
leading experts to find practical solutions that we can use IUCN, a number of tools and recommendations
in the field. The partnership is already achieving concrete were developed as part of an integrated BMS. This
results through a new Biodiversity Management System is supported at the policy level with a Biodiversity
(BMS), which we are implementing alongside a critical Directive issued at the end of 2010. In early 2011, Holcim
review of our water management practices. extended its partnership with the IUCN for another
three years to focus on four key areas:
We realize Holcim activities impact on the environment
and we make it our responsibility to manage those • implementing the BMS and identifying indicators to
impacts. For example, through rehabilitation of our quarries measure our progress
we are creating important habitats and ecosystems. And • sector wide engagement
in India, Ambuja Cements has set ambitious targets for • policy development
reducing its water footprint, providing tangible economic, • working together to understand water risks and how
social and environmental benefits. we can respond to these risks.

18 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges

Biodiversity and water


Performance data
Methodology and
assurance

The partnership includes an expert panel to advise


and support Holcim in the implementation of the BMS Key data See CR pages 30–35 for full data tables.
Visit www. holcim.com/sustainable
in the Group. A key aspect of the BMS is to identify Water and biodiversity
for more information.
sensitive sites. Our Operational Roadmap sets a target
for 80% of sensitive sites to have a Biodiversity Action Water consumption
Plan (BAP) in place by 2013. By the end of 2011, 39% of 800

sensitive sites had such plans in place. The continuing 643


686

600
partnership with IUCN in implementing the BMS will 600

assist the Group in reaching the target. We also report


400 360
through the Cement Sustainability Initiative on the 300
243 254
number of sites with High Biodiversity Value and how
238 228
200
many of them have BAPs in place.
0
2009 2010 2011
Details of our approach to biodiversity management
and the expert panel can be found on our website at Cement, liters/tonne 
www. holcim.com/sustainable Aggregates, liters/tonne
Ready-mix concrete, liters/m3
Water management
In our last report, we responded to stakeholders by
Biodiversity sensitive sites
committing to develop a water management system 40
which we would implement by the end of 2013. We 35
32

have developed the system with support from Holcim 30

experts, Group companies and experts of the IUCN 23


21
24

20
Water Program. Approved by the Holcim Executive
15

Committee in December 2011, the new management 12

10 8
system comprises three elements:

0
2010 2011
• a Holcim Water Directive – issued under the Holcim
Environmental Policy to set general requirements to
Cement Aggregates
manage water in an efficient and responsible way Number of biodiversity-sensitive sites Number of biodiversity-sensitive sites
across all our operations Number of biodiversity-sensitive Number of biodiversity-sensitive
• a Holcim Water Measurement Protocol – a mandatory sites with Biodiversity Action Plans sites with Biodiversity Action Plans
in place in place
tool to provide reliable and accurate water
measurements across all Group companies
• a Holcim Water Risk Assessment Methodology –
setting consistent criteria and procedures to carry out
water-related risk assessment and risk mapping and
to determine the level of monitoring required at our
operational sites.

Our new Water Management System requires all Group


companies to establish their operational water footprint
and to develop plans to address water-related risks by
working with relevant stakeholders.

Corporate Sustainable Development Report 2011 19


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and

Enhancing biodiversity worldwide


SD challenges

assurance

We manage our impacts at sites around the world, and


we make it a priority to include important species when
we come to restore a site.

We enhance
biodiversity Conserving biodiversity in Switzerland
at our sites by In Switzerland, the closed Testori quarry at the Eclepens plant
protecting rare
contains rare habitats and species and is one of the best spots in
plant species
the region for dry meadows. When the plant was applying for an
such as the
Lizard Orchid extension to its existing Mormont quarry in 1999, the Company
in Switzerland. committed to improve biodiversity at Testori. The site had been
closed for many years and this was an opportunity to create rare
and important habitats for the area.

A multi-year comprehensive biodiversity study was undertaken and


based upon the results, an action plan was developed to promote the
dry meadows ecosystem and provide habitats for the Lizard Orchid
and Aspic Viper. The plan required some vegetation clearing, and in
order to protect the delicate soil, this was done using horses rather
than heavy machinery. The clearing is normally conducted in January
to minimize the disturbance to the vipers. The plant works with an
expert botanist to assist with the plan implementation and conduct
annual monitoring. Today, it is a hot spot for naturalists particularly
for the Lizard Orchid and other rare xerothermophilic species,
including the Pasque Flower and Bee Orchid.

For more information go to www. holcim.com/case-studies

20 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy

Enhancing biodiversity
SD challenges
Performance data
Methodology and
assurance

worldwide
Certified positive water balance in India
With increasing global pressure on the available water resources, there is a strong need
to step up conservation efforts. Our Group company in India, Ambuja Cements, seeks to
secure water supply not only for itself but also for the communities around its locations.
The Company set out to intensify its water conservation efforts over two decades ago.
In the course of time it has become not only “water neutral,” but “water-positive.” Ambuja
Cements is the first cement company in India to be certified as being water positive
by an external third-party verifier.

The terms “water-neutral” and “water-positive” refer to the balance between the amount
of water withdrawn by the Company and the amount of fresh ground water recharge
created by rain water harvesting in its plants, colonies, and nearby villages and through
the use of spent quarries as water reservoirs.

After a comprehensive study covering all its facilities (including operating plants, bulk
Ambuja Cements
cement ports, and offices), mine recharge, as well as structures in the community, it was
CEO and Area
established that in 2011, total harvesting and recharge (credit) was about twice (16,860 Manager for India,
million liters) the Company’s water consumption, or debit (8,389 million liters). The Onne van der
Company was thus water-positive by over 100% as assured by Det Norske Veritas (DNV), Weijde with the
water balance
an independent assurance provider.
certification.

Although the Company’s water conservation initiatives have been in place for a long time,
the third-party data assessment and verification was conducted for the first time, covering
all facilities, in 2011.

Ambuja Cements will continue its efforts to give back to nature and society by increasing
water credits through conservation, water harvesting, and recharge.

For more information go to www. holcim.com/case-studies

Corporate Sustainable Development Report 2011 21


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and

Our people
SD challenges

assurance

Q “There have been complaints from unions


regarding labor issues. What kind of measures is
Holcim taking to prevent unfair labor practices?”
Phee Jungsun, Director for Materials and Electric Power Industries,
Industri-ALL

A Holcim is committed to fair and transparent labor


Phee Jungsun, Labor
representative

practices. We have developed a Directive on the use of contract


workers, which came into force in January 2012, formalizing
the obligation of Group companies to address not only all
applicable national regulations, but also the requirements
of the UN Global Compact and the core conventions of the
International Labor Organization (ILO).

“I fully support an open


social dialogue with labor
representatives, facilitating the
resolution of questions at the right
level, in a transparent, open and
equitable manner.”
Bernard Fontana, Holcim CEO

Employee and contractor relations are handled at A safe working environment


Group company level. The Directive makes provision for Occupational Health and Safety (OH&S) is Holcim’s top
internal and external auditing of adherence to Holcim’s priority. Holcim expects its leaders to drive improvement
global standards. Holcim monitors labor practices in the through visible and exemplary leadership, social
Group through local Human Resources functions and dialogue and the development of proper behaviors. In
the global CSR questionnaire. The questionnaire also 2011, an in-depth safety review was conducted, resulting
monitors worker representation and grievance systems. in reinforced efforts to achieve the long-term goal of
“Zero Harm to People,” driven by visible leadership from
When they are brought to our attention, we take management at all levels.
grievances very seriously. Holcim is committed to
engaging with all relevant parties to come to a resolution During the year, Holcim continued efforts on behaviors
over grievance claims. So far, we have always been able to through intensive training and line management
resolve them in a constructive way. interventions such as safety observation tours and peer
reviews. The continued implementation of the OH&S

22 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and
assurance

Our people
management system and, in particular, the embedding of Our desire to be an attractive employer ensures that
the Contractor Safety Directive and the Fatality Prevention our wages match or exceed local industry standards.
Elements have shown encouraging results with a At lowest-paid entry level, our Group companies pay a
reduction of injuries for directly employed personnel. median of 39% above minimum wage.

The number of severe accidents involving directly The global nature of our Group results in a highly
employed personnel continues to decline in line with diverse workforce. Our senior management team has 60
the lost time injury frequency rate, which remains below nationalities represented. Gender diversity remains low
Holcim’s target level. and represents an opportunity for Holcim. In 2011, 12%
of our total workforce were women, with 9% of our top
Despite the ongoing efforts in the year under review, and senior management being female.
26 individuals (2 directly employed and 24 indirectly
employed) lost their lives while working for Holcim. While To foster a culture of mutual respect and trust, we
there is steady improvement in the number of fatalities in engage with elected employee representatives. In 2011,
areas under Holcim’s direct control, accidents with third on average 61% of employees were either represented
parties, particularly traffic accidents, remain a daunting by an independent trade union, took part in collective
challenge and resulted in the recorded deaths of a further bargaining, or both.
27 people. The Board of Directors and the Executive
Committee deeply regret this and will continually strive to Developing our people
achieve the vision of “Zero Harm to People.” Holcim takes the development of its people very
seriously and, despite the global economic crisis, we
Holcim will focus its efforts going forward by continuing have maintained a high level of training to meet
to embed the Fatality Prevention Elements and the our skills development requirements. Holcim strives
Contractor Safety Directive throughout the business. to maintain a work environment in which people
We will start assessing the effectiveness of the feel appreciated, know that they are contributing to
implementation of these directives across all regions the creation of value and have the opportunity for
and businesses. Holcim will further strengthen the professional and personal growth. Group companies
competence of its people in OH&S through intensive reported a total of 1,961,964 hours of training for
training and an improved safety organization. employees (compared to 1,241,160 hours in 2010),
of which 37% was received by non-managerial-
Holcim is fully committed to its vision of “Zero Harm to level employees.
People” and will also continue to work with others in the
sector through the Cement Sustainability Initiative. Engaging with employees
Employee satisfaction is important to Holcim. In the last
A responsible employer two years, 69% of Group companies have conducted
The vital role played by employees in the creation employee engagement or satisfaction surveys. In 97%
of value is recognized and clearly articulated in of these surveys, we have improved or maintained
Holcim’s strategy (see strategy house diagram on employee satisfaction.
CR page 7). The attraction and retention of top-class
people is considered as strategic and is reflected in In 2011, we carried out a Values and Engagement
employment conditions and practices throughout the survey in a number of Group companies and overall
Group. Holcim’s CSR policy states “we value diversity the results were encouraging. As examples, in Spain,
and promote equal opportunities in recruitment, despite extremely challenging market conditions, the
employment, development, and retention.” This includes engagement score was significantly higher than the
non-discrimination in respect of aspects such as gender, Spanish average, placing Holcim Spain just short of the
religion or ethnic origin.

Corporate Sustainable Development Report 2011 23


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and
SD challenges

assurance

top quartile of companies in that country. Seven Holcim


Key data See CR pages 30–35 for full data tables. operating companies in eastern Europe conducted a
Visit www. holcim.com/sustainable
Our people simultaneous launch of the Values and Engagement
for more information.
Survey. All of the companies achieved engagement
Female workforce GRI LA2, LA14 scores higher than the European average with
% of female workforce three achieving scores placing them in the top
15
13 13 13 quartile for Europe.
12 12 12
12
9 9 9 Also in 2011, we carried out an employee opinion
9 8 8
7 survey at our headquarters in Switzerland. The survey
6 measured employee engagement and commitment

3 to Holcim values. We achieved slightly higher than the


global average for our employee engagement score.
0
Female 2009 Female 2010 Female 2011 Following the survey, we invited employees to join
focus groups to help advise the Holcim headquarters
Top management level Middle management level
Senior management level Other employees leadership team on issues and ideas for improvement.

Holcim’s annual “dialogue” performance appraisals


Fatalities – cement, aggregates and ready-mix concrete* GRI LA8
7 provide a good opportunity for every employee to
Number
800 of fatalities
discuss concerns and opportunities with their manager.
25 24
750 Now 86% of Group companies also have systems in
21
20
700 place to collect and handle employee grievances and
15
650
15 complaints, and 65% have arrangements to allow
600 complaints and grievances to be raised anonymously.
10 8
550 In 2011, a total of four incidents of discrimination were
5 3 reported across three Group companies and were dealt
500 2

0 with in accordance with the Holcim Code of Conduct.


2009 2010 2011

Directly employed (2009: 81,498/2010: 80,310/2011: 80,967)


Indirectly employed

* Numbers of fatalities are reported following the WBCSD reporting standards.

Lost-time injury frequency rate* GRI LA8

LTIFR LTIFR regional breakdown – directly employed


2009 2010 2011
3
Europe
2.1 2.0 1.6
2 4.4 4.1 3.7
Threshold
<2 North America
1
1.4 1.5 1.0
0 Latin America
2009 2010 2011 2012
1.7 1.1 2.1
Africa Middle East
Directly employed Target
3.0 2.0 3.0

*D
 ata for LTIFR are regrouped to reflect the CSI reporting standards. Direct employees Asia Pacific
include own and subcontracted personnel under direct Holcim supervision. The lost- 1.0 1.5 1.3
time injury frequency rate (LTIFR) is calculated as: Corporate
Number of lost-time injuries 2.7 0 0.7
x 1,000,000
Total number of hours worked and paid Total
2.1 2.0 1.6
Data include all cement, aggregate and ready-mix concrete operations.

24 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and

Engaging with our stakeholders assurance

Our people
We provide volunteering and development opportunities
that benefit local communities and are an excellent way
for our people to develop their skills and networks.

Holcim employees lend a helping hand


Holcim turns 100 years old this year and, as part of our centennial celebrations, we are building on our past
success by encouraging more people to take part in volunteering activities in their local communities. Projects
range from environmental clean-ups to teaching and tutoring young people, and supporting people with
special needs.

Holcim Argentina run a program called “Manos Voluntarias.” Employees share their skills with the community
through helping to run training sessions at schools and colleges, and supporting the company-run scholarship
program. Activities include technical training, language classes, a course on writing a CV, and training on
waste management.

Holcim Canada engages in a long-term partnership with “Habitat for Humanity” to provide housing for
less privileged families in the communities around its operations. As well as the satisfaction they gain from
making a difference to communities, Holcim employees benefit from the on-site experience of seeing our
products in use and from networking opportunities. In a related project, Holcim Canada invited three business
partners to join them in a Habitat for Humanity project to provide housing following the earthquakes in Haiti.
One of the drivers for the project was the sizeable Haitian community in Montreal. The invitation to business
partners to join in cemented relationships and demonstrated to customers the good work undertaken by
Holcim Canada, and is fully aligned with the triple bottom line concept of sustainable development.

Holcim Vietnam undertakes volunteering activities including the construction of houses for less privileged
families, the collection of pesticide waste from farmers, and the cleaning of beaches and planting of trees.

Holcim Italy and Holcim Switzerland both undertake “Community Days” in partnership with local NGOs to
benefit the elderly, disabled people, and people with addictions. Our employees get involved in activities such
as gardening, cooking, and helping at sheltered workshops. They benefit from the opportunity to enrich the
lives of others and to interact with their colleagues in a different environment.

For more information go to www. holcim.com/case-studies

Corporate Sustainable Development Report 2011 25


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and
SD challenges

assurance

Our leadership
and management Developing future leaders
programs help our People engagement and development, as well as leadership development,
senior managers
are of utmost importance to achieve the high performance targets
to develop the
Holcim has set to continue the sustainable growth of the Group.
skills they need
to achieve our Executive education programs were designed in conjunction with leading
sustainability universities to provide a platform where future leaders could meet with
goals. senior management and Executive Committee members and have an
open discussion on critical issues to challenge both their own thinking
and their core understanding of Holcim’s objectives across a range of
topics. As the triple bottom line (value creation, sustainable environmental
performance and social responsibility) is fully integrated in the Holcim
strategy, sustainable development receives the same attention and
commitment as other topics. Sustainable development case studies and
project work comprise an important element of the program.

All members of Senior Management and Middle Management are eligible


to attend Holcim’s management programs. To date, some 3,000 managers
have passed through these programs.

“ With the Galing Mason project


certificate in hand, Our Group company in the Philippines conducts an ongoing training
I will now be able project, the Galing Mason program, throughout the country. Participants
to support my
range in age and have very little or no formal education and generally
family through
work as temporary day labor or are unemployed. The objectives of the
the income as a
qualified mason. training are to improve the level of knowledge and skills of masons,
This gives my to enhance their employability and to promote appropriate cement
life perspective”. application technology. The collaboration with the Technical Education
Nilda, age 42, and Skills Development Authority of the Philippines, the Association of
who attended
Construction and Informal Workers and the Philippines Constructors
the training.
Authority gives the training recognition and acceptance in the Philippines
and abroad. During the seven-day training, the participants learn how
to prepare masonry materials and to perform basic masonry works.
The initial three days are conducted in a “classroom” setting while the
following four days are on-site. The on-site activity involves participation
in a community development project of the NGO Gawad Kalinga. This
organization seeks to empower poor communities to become self-reliant
and sustainable, which resonates very well with the overall goal of Holcim
Philippines’ CSR program and the mission of Galing Mason. Experience
has shown that after the week-long training, the participants have grown
together as a group that mutually supports each other, four new houses
are constructed in the community and all participants have passed the
exams and received the National Certificate for Masons Level 1, awarded
by the training authority.

For more information go to www. holcim.com/case-studies

26 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges
Performance data

Engaging with our


Methodology and
assurance

stakeholders
Improving health service delivery and the status of women
In India, our Group company Ambuja Cement operates plants in remote areas with insufficient or sometimes
dysfunctional health services. To improve this situation, the Ambuja Cement Foundation started in 2002 to
train local women as community health workers, called Sakhis. The focus of this – now nationwide –
initiative is to improve community health services with an emphasis on prenatal and child health in close
collaboration with government programs. Sakhis consult community members, conduct house visits,
implement household hygiene campaigns and holistic child development programs, inform about available
government services and collaborate with the respective government institutions.

The results after less than ten years of implementation are compelling: child and maternal mortality as well as
home delivery rates have decreased significantly; pregnant women are registered and receive pregnancy-related
services, and family planning as well as HIV prevention methods are known and used. Ties between community
groups and government institutions are strengthened and the local primary health centers have improved their
services. In addition to these outcomes, the status of women in general has risen through the respect for the Sakhis
and their important role in the community. Women increasingly participate in community affairs and are elected
into the community councils.

Providing access to housing to low-income families


The provision of sustainable housing solutions for low-income families continues to be a priority for Holcim.
The projects that are currently under implementation in Latin America and Asia already provide significant
learnings that are integrated into existing or new initiatives.

“Edificando Vidas (Building Lives)”, started in 2008, aims at introducing sustainable construction for
low-income clients in Nicaragua with a pilot program in the range of 400 houses. After the first years of
implementation it became clear that Holcim Nicaragua had to develop a new construction technology –
the Holcim Block – in order to serve this segment. It further proved absolutely crucial to develop models of
progressive housing and to include housing improvements as an option. The project in Nicaragua is supported
by both the Government and the International Development Bank. Capacity building for self construction as
well as for construction-related microenterprise development and community organization must be another
integral component of a successful housing program. “Construyendo Juntos (Building Together)” in Costa Rica
aims at sustainably improving employees’ quality of life through adequate housing. Participating families
are selected based on a socio-economic survey and, in addition to accessing a “home”, participate in capacity-
building modules on education, health and household economy. To develop the master plan and the technical
solution for the 64 housing units of Los Olivos, Holcim Costa Rica collaborated with construction companies
and developers, universities and consultants. Based on previous experiences and learnings from within the
Holcim Group, Holcim Argentina is currently conducting a feasibility study for a large-scale housing project
that integrates technical, financial, capacity-building and community development components. The goal of
the project will be to contribute to decreasing the housing deficit in Argentina through a participatory as well
as environmentally and culturally acceptable housing initiative. In the case of Argentina, the individual house
is not meant to be an end in itself, but an enabling platform for sustainable community development and
income generation.

For more information go to www. holcim.com/case-studies

Corporate Sustainable Development Report 2011 27


Introduction
Vision and strategy
SD challenges
Performance data
Methodology and

Social commitment
SD challenges

assurance

Q “How is Holcim’s business model able to


improve the quality of life of the poor?”
Fernando Almeida, former Executive President, Business Council
for Sustainable Development (BCSD), Brazil

A After water, concrete is the second most used commodity


Fernando Almeida,
Business representative
on the earth. The infrastructure it builds benefits every level of
society. The water infrastructure projects we have undertaken
in Sudan and the Philippines with the International Committee
of the Red Cross show how the poorest people in society gain
from concrete based infrastructure development.

“Our social engagement is


based on our goal to be a good
neighbor to the communities
in which we operate our plants
and quarries, and to join with
them in improving their lives.”
Andreas Leu, Holcim
Exco Member

We agree with the saying “business cannot thrive where Holcim has also delivered low-income housing solutions
societies fail.” To be truly sustainable, our solutions need in 14 countries, mainly across Latin America and Asia. An
to address all the elements of the triple bottom line – estimated 1,700 families have benefited from the projects
economy, society and environment. That way, we not only we have supported.
make a difference to people’s lives, but we can provide
solutions to a whole new customer base. Strategic community investment
Holcim’s approach to social engagement has always been
Our training programs help to improve the quality strategic, not philanthropic, so it is embedded within
of life of masons in many countries, improving their our core business and it creates value. We prioritize
qualifications and their employability. At the same time, projects that develop low-income housing, support
we are developing a global team of skilled workpeople, microenterprise and provide vocational training.
loyal to the Holcim brand and in a position to stimulate
the building materials sector. In 2011, Holcim Group companies invested CHF 38 million
in community engagement activities, representing over
1% of pre tax profits. Some 9.4 million people benefited
from the projects we supported.

28 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges
Performance data

Social commitment
Methodology and
assurance

We encourage Group companies to use our “social risk mapping exercise at corporate level and piloted
engagement scorecard” to determine whether a project human rights assessments in higher risk countries
meets the needs of the communities where it operates to assess our impacts in line with John Ruggie’s
and Holcim’s corporate responsibility objectives. The guiding principles.
scorecard can also be used to measure the effectiveness
of donations and to help determine the viability of We also monitor our human rights performance
proposed projects. In 2011, 65% of Group companies through Holcim’s annual CSR questionnaire. In 2011,
evaluated projects using the scorecard. 43% of Group companies had provided training for
their employees on equal opportunities policies and
Stakeholder engagement and strategic partnerships procedures, and 31% reported that they have run
Close cooperation with local stakeholders is vital for our training on human rights policies and procedures. Also,
business and it helps to build mutual understanding 61% of Group companies reported that they considered
and trust. Holcim engages with stakeholders through human rights in their major investment decisions.
a wide range of forums, including community advisory
panels, formal dialogue sessions, open days, and local
partnerships. We place real importance on developing
effective local relationships, and we have set a target
that all Holcim Group companies will have a formal
community engagement plan in place by 2012. By the end Key data See CR pages 30–35 for full data tables.
Visit www. holcim.com/sustainable
of 2011, 24% of Group companies had met the target. Social commitment
for more information.

Through our engagement activities, we aim to Community involvement GRI EC1


share responsibility and project ownership with Community spending (CHF million)

the communities where we operate. The types 10


10
of engagement we undertake are shown in the 9 9
8 8 8 8 8
table opposite. 8
7
7 7
6
6
5 5 5
In 2010, we joined the Corporate Support Group of the
4
International Committee of the Red Cross (ICRC), an 3
2
organization with exceptional credibility in protecting 2
1
the lives and dignity of victims of conflict and other
0
life-threatening situations. This year, we supported 2009 2010 2011
Donations and charity Infrastructure community projects
ICRC water and habitat programs in Sudan and the
Education projects CSR overhead
Philippines. We are also working with the ICRC to Community development projects Other
develop a training course for ICRC non-civil engineers
working on their water and habitat programs to build
Stakeholder engagement at local level GRI SO1
understanding of cement and its applications, and the
Type of engagement % of Group companies
ability to diagnose problems. Our aim is to run the first
2009 2010 2011
course in late 2012.
Needs assessment 46% 41% 59%
Stakeholder involvement in CSR planning 83% 80% 80%
Upholding human rights
CSR/SD memberships 79% 76% 80%
Holcim’s commitment to Human Rights is embedded Stakeholder dialogues 83% 86% 84%
in our Corporate Social Responsibility (CSR) policy Community engagement plans in place n/a 8% 24%
and reinforced by our participation in the UN Global Community advisory panels 38% 41% 61%
Compact. In 2011, we developed a specific human rights Cooperations 67% 65% 76%
management system. In this context we conducted a

Corporate Sustainable Development Report 2011 29


Introduction
Vision and strategy
SD challenges
Performance data
Performance data

Methodology and

Performance data
assurance

Economic performance KPI UNGC GRI 2009 2010 2011


principles
Sales in CHF billion
Net sales 3 EC1 21.1 21.7 20.7
Input factor (cost of all goods, materials and services provided) EC1 12.0 12.6 12.6
Depreciation and amortization EC1 1.9 1.9 2.4
Value creation for Holcim and key stakeholders EC1
Benefit to employees 3.9 4.0 3.9
Benefit to governments (taxes) 0.6 0.6 0.4
Benefit to shareholders (including minorities) 0.8 0.7 0.7
Benefit to creditors 0.8 0.8 1.1
Benefit to communities 0.036 0.042 0.038
Retained in business 1.2 0.9 (0.03)
Sales of cement (million tonnes) 3 131.9 136.7 144.3
Sales of mineral components (million tonnes) 3 3.5 4.1 5.1
Sales of aggregates (million tonnes) 3 143.4 157.9 173.0
Sales of ready-mix concrete (million m3) 3 41.8 45.9 48.4
Sales of asphalt (million tonnes) 3 11.0 10.6 10.3
Sustainable product
% of cement products containing mineral components 3 EN2 80% 77% 77%
Cement types produced by Holcim
Slag cement (%) 9 9 10
Pozzolan cement (%) 9 9 8
Fly ash cement (%) 26 26 25
Limestone cement (%) 14 13 15
Multiple blend cement (%) 17 16 14
Masonry cement, oilwell cement, white cement 5 4 5
special binder, MIC and other (%)
Ordinary Portland Cement (%) 20 23 23
Suppliers
Goods, services and materials purchased (CHF billion) EC1 12.0 13.0 12.6
Global suppliers screened using the HR1 HR2 96 98 99
self-assessment questionnaire (%)
Group companies screening local suppliers (%)
OHS standards (%) 92 87 98
EMS systems (%) 81 78 91
Labor standards (other than human rights) (%) 83 76 80
Social accountability or other human rights criteria (%) 75 72 76
Local suppliers screened (average)
OHS standards (%) 38 30 31
EMS systems (%) 30 29 26
Labor standards (other than human rights) (%) 44 33 30
Social accountability or other human rights criteria (%) 29 24 26
Government relations
Political contributions (CHF) SO6 279,491 106,400 151,304
Number of Group companies making political donations SO6 7 4 4
Average subsidies from national governments (grants, EC4 3.1 4.6 1.1
tax relief and other financial benefits) (CHF million)
Number of Group companies receiving subsidies EC4 15 14 14
Customer relations
% of Group companies conducting a customer survey PR5 75 84 80
% of those surveyed measuring customer satisfaction 88 87 92
% of Group companies with a specific customer health and PR1 54 43 33
safety policy
% of Group companies with a specific product information PR3 50 45 35
and labeling policy

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30 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges
Performance data

Performance data
Methodology and
assurance

Environmental performance KPI UNGC GRI 2009 2010 2011


principles
Number of plants included in evaluation
Cement EN3 143 150 149
Aggregates EN3 366 388 359
Ready-mix concrete EN3 1,031 1,195 1,205
Management systems
Implementation of ISO 14001 (% of plants)
Cement plants 92 91 93
AFR pre-treatment platforms 84 92 95
Aggregate plants 53 46 43
Ready-mix concrete plants 39 33 32
Environmental investments and environmental compliance
Environmental investments (CHF million) EN30 40 37 43
Provisions for site restoration and other environmental EN13 585 618 757
liabilities (CHF million)
Number of plants/quarries reporting non-compliance cases EN28
Cement 8 5 1
Aggregates 33 16 10
Ready-mix concrete 31 23 37
Non-compliance cases
Cement 9 6 1
Aggregates 40 18 11
Ready-mix concrete 41 38 54
Associated fines and penalties (CHF)
Cement 234,000 298,400 89,600
Aggregates 8,680 19,400 2,492
Ready-mix concrete 2,785,009* 38,200 33,702
Reducing CO2 emissions
Absolute gross CO2 emissions (million tonnes) 3 EN16 92.6 97.2 102.0
Absolute net CO2 emissions (million tonnes) 3 89.9 94.3 99.1
Specific gross CO2 emissions (kg CO2/t cementitious materials) 3 3 613 618 608
Specific net CO2 emissions (kg CO2/t cementitious materials) 3 3 595 599 591
Aggregates
Absolute gross CO2 emissions (million tonnes) 0.22 0.29 0.30
Specific gross CO2 emissions (kg CO2/tonne of product) 1.7 2.5 1.9
Ready-mix concrete
Absolute gross CO2 emissions (million tonnes) 0.08 0.11 0.11
Specific gross CO2 emissions (kg CO2/m3) 2.2 2.5 2.5
Asphalt†
Absolute gross CO2 emissions (million tonnes) 0.2 0.3 0.3
Specific gross CO2 emissions (kg CO2/tonne of product) 33 29 32
Indirect CO2 from purchased power (million tonnes) EN4
Cement 6.0 6.2 6.5

* This increase results from a settlement of approximately CHF 3.0 million paid by a Group company in the USA to the US EPA.
† Figures restated to include use of liquid fuels and natural gas which were previously not included.

Visit www. holcim.com/sustainable continued

Corporate Sustainable Development Report 2011 31


Introduction
Vision and strategy
SD challenges
Performance data
Performance data

Methodology and
assurance

Environmental performance (continued) KPI UNGC GRI 2009 2010 2011


principles
Energy
Thermal energy mix of clinker production (%) EN3
Coal 56 58 59
Petcoke 19 19 18
Heavy fuel 1 1 1
Natural gas 8 6 6
Shale and lignite 4 4 4
Alternative fossil fuels 10 10 9
Alternative biomass fuels 2 2 3
Thermal energy efficiency (MJ/tonne clinker) 3 3 3,606 3,553 3,510
Thermal substitution rate 3 3 EN5 12.0 12.0 12.2
(% thermal energy from alternative fuels)
Waste types used as alternative fuels (%) EN3 EN5
Waste oil 8 8 5
Tires 12 10 10
Plastics 14 14 9
Solvents 9 11 11
Impregnated sawdust 10 9 6
Industrial waste and other fossil-based wastes 28 29 30
Animal meal and animal fat 3 2 2
Agricultural waste/charcoal 9 10 9
Wood/non-impregnated sawdust 1 1 1
Other biomass 4 4 15
Dried sewage sludge, paper, carton and diaper waste 2 2 2
Clinker factor (average % of clinker in cement) 3 3 EN2 70.7 71.4 70.9
Fuel consumption (specific MJ/t)* EN3
Cement 2,932 2,919 2,838
Aggregates 22 25 25
Ready-mix concrete (MJ/m3) 31 33 27
Fuel consumption (total MGJ/a)*
Cement 443 459 476
Aggregates 3.0 3.9 4.0
Ready-mix concrete 1.2 1.0 1.2
Power consumption (specific) kWh/t*
Cement 105 104 100
Aggregates 2.8 2.8 3.0
Ready-mix concrete (kWh/m3) 3.7 3.7 3.7
Power consumption (total million kWh/a)*
Cement 15,890 16,360 16,809
Aggregates 366 441 482
Ready-mix concrete 135 154 163
Other atmospheric emissions
NOx EN20
Number of kilns reporting 133 132 125
Total emissions (tonne/a) 3 152,100 156,170 157,710
Average specific concentration 3 1,120 1,110 1,070
(g/tonne cementitious materials)
SO2
Number of kilns reporting 133 131 126
Total emissions (tonne/a) 3 24,670 24,880 24,680
Average specific concentration 3 180 180 170
(g/tonne cementitious materials)
* Due to ownership changes in 2011, some figures for previous years have been restated. Fuel consumption figures for cement includes kiln and non-kiln fuels.

Visit www. holcim.com/sustainable continued

32 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges
Performance data

Performance data
Methodology and
assurance

Environmental performance (continued) KPI UNGC GRI 2009 2010 2011


principles
Other atmospheric emissions (continued)
Dust EN20
Number of kilns reporting 137 136 133
Total emissions (tonne/a) 3 12,090 11,315 9,850
Average specific concentration 3 90 80 67
(g/tonne cementitious materials)
Mercury
Number of kilns reporting 126 129 120
Total emissions (tonne/a) 1.8 1.8 1.4
Average specific concentration 0.013 0.013 0.01
(g/tonne cementitious materials)
Organics
Number of kilns reporting 113 128 123
Total emissions (tonne/a) 5,080 4,800 5,250
Average specific concentration 37 34 36
(g/tonne cementitious materials)
Dioxins/furans
Number of kilns reporting 127 129 120
Total emissions (grams/a) 5.2 2.7 2.4
Average specific concentration 0.038 0.019 0.016
(micrograms TEQ/tonne cementitious materials)
Implementation rate of continuous emission monitors (%) 85 91 88
Biodiversity and resources conservation
Number of biodiversity-sensitive sites 3 EN13
Cement n/a 23 35
Aggregates n/a 32 24
Number of biodiversity-sensitive sites with Biodiversity
Action Plans in place
Cement n/a 12 15
Aggregates n/a 21 8
Approved mining plans by local authorities
Cement 97 100 99
Aggregates 95 94 98
% of sites with quarry rehabilitation plans in place 3
Cement 91 100 100
Aggregates 95 96 93
Water
Water consumption l/t EN8
Cement 360 300 254
Aggregates (water withdrawal) 643 686 600
Ready-mix concrete (l/m3) 238 243 228
Water consumption (total million m3/a) EN8
Cement 49 42 38
Aggregates (water withdrawal) 86 107 98
Ready-mix concrete 9 11 10
Water recycling systems EN10
Cement 78% 82% 83%
Aggregates 45% 54% 63%
Ready-mix concrete 72% 82% 80%

Visit www. holcim.com/sustainable continued

Corporate Sustainable Development Report 2011 33


Introduction
Vision and strategy
SD challenges
Performance data
Performance data

Methodology and
assurance

Environmental performance (continued) KPI UNGC GRI 2009 2010 2011


principles
Transport
Road (%) EN29
Cement 74 74 74
Aggregates 87 84 83
Ready-mix concrete 100 100 100
Rail (%)
Cement 17 17 18
Aggregates 8 7 5
Water (%)
Cement 9 9 8
Aggregates 4 4 8
Other (%)
Aggregates 1 5 4
Waste management and recycling
General waste management system (%) EN22
Cement 98 98 98
Aggregates 81 90 91
Ready-mix concrete 76 80 83
Returned concrete recycling system (%)
Ready-mix concrete 27 21 21

Social performance KPI UNGC GRI 2009 2010 2011


principles
CSR strategy
% Group companies with a specific CSR strategy 3 94 86 88
Employment practices
Group employees by region LA1 81,498 80,310 80,967
Europe 20,800 19,690 19,602
North America 8,016 6,668 7,543
Latin America 12,626 12,710 12,867
Africa Middle East 2,256 2,213 2,140
Asia Pacific 36,858 38,172 37,942
Corporate 942 857 873
Employee turnover (%) LA2
Europe 15.6 10.6 13.9
North America 29.5 20.7 14.0
Latin America 12.7 11.8 10.6
Africa Middle East 3.7 2.9 3.6
Asia Pacific 7.3 7.1 6.7
Corporate 23.2 13.7 12.2
Personnel expenses (CHF million) LA3 3,939 4,035 3,859
Europe 1,577 1,402 1,283
North America 918 793 744
Latin America 471 529 519
Africa Middle East 92 95 84
Asia Pacific 632 986 1,001
Corporate 249 230 227
% of female workforce LA13
Top management level 3 7 9 9
Senior management level 3 8 8 9
Middle management level 3 13 13 13
Other employees 12 12 12

Visit www. holcim.com/sustainable continued

34 Corporate Sustainable Development Report 2011


Introduction
Vision and strategy
SD challenges
Performance data

Performance data
Methodology and
assurance

Social performance (continued) KPI UNGC GRI 2009 2010 2011


principles
Employment practices (continued)
Notice given for operational changes LA5 5-6 5-6 5-6
weeks weeks weeks
% Group companies conducting employee satisfaction surveys 27 41 47
% Group companies with employee grievance procedures 81 88 86
% where grievances can be submitted anonymously 63 76 65
Training
Hours of training per employee LA10
Senior management 32 31 35
Middle management 47 37 47
Other organizational levels 23 20 37
Average all levels 27 23 38
Occupational health and safety
Number of fatalities – cement, aggregates and 3 LA7
ready-mix concrete
Directly employed 8 3 2
Indirectly employed 15 21 24
Other* 5 4 27
Lost-time injury frequency rate LA7
Directly employed 3 2.1 2.0 1.6
% Group companies with serious disease programs LA8 83 86 94
% Group companies with joint health and safety committees LA6 98 98 98
% of workforce represented by committees LA6 74 88 88
Human rights
% Group companies giving training on equal opportunity policies HR3 56 41 43
% Group companies giving training on human rights policies HR3 44 34 31
Community involvement
Community spending (CHF million) 3 EC1 36 42 38
Donations and charity 9 9 8
Education projects 5 5 5
Community development projects 7 10 8
Infrastructure community projects 7 8 8
CSR overhead 6 7 8
Other 2 3 1
Community spending breakdown (%)
Donations and charity 27 21 21
Education projects 15 14 14
Community development projects 18 24 22
Infrastructure community projects 18 18 20
CSR overhead 16 16 20
Other 6 7 3
Stakeholder engagement
Stakeholder engagement at local level (% of Group companies) SO1
Needs assessment 46 41 59
Stakeholder involvement in CSR planning 83 80 80
CSR/SD memberships 79 76 80
Stakeholder dialogues 83 86 84
Community engagement plans in place n/a 8 24
Community advisory panels 3 38 41 61
Cooperations 67 65 76

* These reflect fatalities in areas out of our direct control and influence, mainly traffic related accidents on public roads.

Visit www. holcim.com/sustainable

Corporate Sustainable Development Report 2011 35


Introduction
Methodology and assurance

Vision and strategy


SD challenges
Performance data
Methodology and

Methodology
assurance

We continue to develop a robust framework for


managing and reporting SD performance.

Methods of data collection and ready-mix concrete business segments; all data
We collect information from Group companies using from all principal consolidated Group companies are
the following tools: Plant Environmental Profile (PEP) included in this report at 100%.
questionnaire; equipment data and operating statistics
based on annual plant technical reports; corporate Restatement of historical data – Holcim now reports CO2
CO2 inventory according to the WBCSD/WRI Cement and resources use according to Version 3 of the WBCSD/
CO2 Protocol; corporate Occupational Health and WRI Cement CO2 Protocol. All historical data have been
Safety (OH&S) questionnaire; corporate social recalculated according to the updated Protocol, to enable
responsibility questionnaire. comparison of data over time. Historical data are also
restated to reflect changes in consolidation of companies
Our data collection systems enable monitoring of and acquisitions/divestments.
performance at three operational levels: individual
plant performance, Group company and corporate Social performance – Personnel data represent
consolidation of global performance. consolidated data from Holcim Group plants and
companies covering all of the Group’s consolidated
System boundaries operations. OH&S data are collected for all operations
The scope of our reporting is outlined below. via monthly reports and an annual survey, which
is then revalidated by our regular business process
Economic performance – Data included represent system. Data are segregated according to on-site
consolidated data from Holcim Group plants and and off-site (logistics-related) incidents, and cover
companies covering all of the Group’s operations, directly and indirectly employed, third-party service
and are consistent with those reported in the Holcim providers, visitors and others. This is consistent with
Annual Report 2011. the WBCSD CSI Guidelines for Reporting. All other
social performance data are derived from the CSR
Environmental performance – CO2 and energy: the questionnaire, which covers all Group companies,
scope of data collection for CO2 and resources use and are fully consolidated.
includes integrated cement plants, grinding stations
and terminals. Consolidation of data is consistent Reporting cycle
with the WBCSD/WRI Cement CO2 Protocol where Holcim has publicly reported SD performance for the
operational control is used as a criterion. last seven years. A full report is published each second
year (the last in 2009), with data and performance
Where Holcim owns between 20% and 50% of the Group information updated on our website every year.
company and does not have management control, data
are proportionally consolidated; below 20%, the data are External assurance
not reported; all other companies are reported 100%. PwC has undertaken external assurance of our reporting,
including a review of our materiality process and of the
Other environmental data – The Plant Environmental draft report. Full details of the scope of the assurance
Profile (PEP) self-assessment questionnaire is the source which included CO2, OH&S and selected environmental
of performance information and data related to all data can be found in the assurance statement on
other environmental impacts of the cement, aggregates CR page 37. An independent expert panel also reviewed
the report and their statement is on CR page 38.

36 Corporate Sustainable Development Report 2011


Introduction

Methodology and assurance


Vision and strategy
SD challenges
Performance data
Methodology and

PricewaterhouseCoopers
assurance

assurance statement

Independent Assurance Report

To the Executive Committee of Holcim Ltd. Rapperswil-Jona (‘Holcim’): • Site visits


We have performed review procedures to provide assurance on the following Visiting selected plants of Holcim in Switzerland, Canada, Mexico, Lebanon
aspects of the 2011 Corporate Sustainable Development Report of Holcim. and Indonesia. The selection was based on quantitative and qualitative
criteria; Interviewing personnel responsible for internal reporting and data
Further information on the responsibilities and methodology, the collection at the plants we visited and at the country Head Office level;
assurance procedures performed, the observations, the conclusions and the • Assessment of the performance indicators
recommendations are set out in the full version of the assurance report which Performing tests on a sample basis of evidence supporting the CO2
is made available by Holcim at: http://www.holcim.com/ emissions, other emissions (NOx, SOx, dust) and OH&S related data,
sustainable/assurance relative to completeness, accuracy, adequacy and consistency;
Subject matter • Assessment of the processes and data consolidation
Data and information disclosed in the Corporate Sustainable Development Reviewing the appropriateness of the management and reporting
Report of Holcim and its consolidated subsidiaries for the period January 1, processes for CO2, other emissions (NOx, SOx, dust), OH&S and CSR
2010 to December 31, 2011 on the following aspects and with the indicated questionnaire reporting;
level of assurance: • Inquiries and interviews regarding AA1000 adherence
Inquiries and interviews with selected executive and senior managers, the
• Nature and extent of Holcim’s incorporation of the AA1000 AccountAbility
SD steering committee and staff from the SD department representing
Principles Standard (AA1000APS) principles (inclusivity, materiality and
different functions in the Group, regarding Holcim’s adherence to
responsiveness) with respect to stakeholder dialogue (limited or
the principles of inclusivity, materiality and responsiveness, including
moderate assurance);
Management’s commitment to the principles, the existence of systems,
• The application of the WBCSD Cement Sustainability Initiative (CSI) procedures and processes to support adherence to the principles and the
guidelines to the reporting and disclosure of CO2 emissions, other embedding of the principles at corporate level;
emissions (NOx, SOx, dust) and OH&S data (reasonable assurance); • Review the Corporate Sustainable Development Report
• The internal reporting system and procedures, including the control Reviewing the coverage of material issues within the SD report against
environment, to collect and aggregate CO2 emissions, other emissions the key issues defined in the stakeholder engagement processes, material
(NOx, SOx, dust) and OH&S data (reasonable assurance); issues and areas of performance covered in peers and good practice
reports, as well as topics raised by plant and local head office levels of the
• The internal reporting system and procedures, including the control Holcim organisation.
environment, to collect and aggregate social data and information from
Holcim’s CSR Questionnaire (reasonable assurance); Conclusions
In our opinion
• The cement-related CO2 emissions data in the tables in the section • The external WBCSD CSI reporting guidelines for the reporting of
Environmental Performance on page 31, the other emissions data (NOx, CO2 emissions, other emissions (NOx, SOx, dust) and OH&S data are
SOx, dust) on pages 32/33, the OH&S data (Fatalities & LTIFR) in the applied appropriately;
tables in the section Social Performance on page 35 of the 2011 Corporate • The internal CO2 emissions, other emissions (NOx, SOx, dust), OH&S and
Sustainable Development Report (limited assurance). social (CSR) data reporting guidelines are applied properly;
Criteria • The internal reporting system and procedures to collect and aggregate
• The AA1000 AccountAbility Principles Standard (AA1000APS(2008)) CO2 emissions, other emissions (NOx, SOx, dust), OH&S and social (CSR)
• The following WBCSD Cement Sustainability Initiative (CSI) guidelines data are functioning as designed and provide an appropriate basis for
its disclosure.
– Cement CO2 Protocol, June 2005 Based on our work described in this report, nothing has come to our attention
 afety in the Cement Industry: Guidelines for measuring and reporting,
–S that causes us to believe that the data and information mentioned in the
October 2008 subject matter and disclosed in the Corporate Sustainable Development
Report 2011 of Holcim does not give a fair picture of Holcim’s related
 uidelines for Emissions Monitoring and Reporting in the Cement
–G
sustainable development performance. Furthermore, nothing has come
Industry, March 2005
to our attention causing us to believe that Holcim does not adhere to the
• Holcim internal data reporting guidelines to the CO2 emissions, other AA1000APS(2008) principles.
emissions (NOx, SOx, dust), OH&S and social (CSR) data reporting;
Main observations and recommendations
• The defined procedures by which the CO2 emissions, other emissions According to AA1000AS(2008) we disclose main observations and
(NOx, SOx, dust), OH&S and social (CSR) data are gathered, collated and recommendations for improvements in relation to Holcim’s adherence to the
aggregated internally as part of the data management of Holcim; and AA1000APS (more details in the full version of the assurance report)
• The principles summarized in the section “Methodology and assurance” • Inclusivity: Holcim’s management has a strong commitment to inclusivity
on page 36 of the Corporate Sustainable Development Report which and stakeholder engagement. We recommend that Holcim continues
define the scope of the reporting. to work on ensuring a systematic and structured approach to the
AA1000APS(2008) principles at Group Companies level, and that the
Responsibility and Methodology company in general continues to strengthen the coherence of stakeholder
The accuracy and completeness of sustainable development indicators engagement activities, guidance on stakeholder involvement internally
are subject to inherent limitations given their nature and methods for and balance their stakeholder selection and involvement.
determining, calculating and estimating such data. Our assurance • Materiality: Holcim’s management systematically takes the principle
report should therefore be read in connection with Holcim’s internal of materiality into consideration when making decisions regarding
guidelines, definitions and procedures on the reporting of its sustainable sustainability at management level. The identification of material issues
development performance. is based on Holcim’s business risk framework and tools. Going forward we
The Holcim Executive Committee is responsible for both the subject recommend reassessing the materiality and potential impact of topics
matter and the criteria. Our responsibility is to provide a conclusion on the and issues on Holcim with a group-wide consistent approach.
subject matter based on our assurance procedures in accordance with the • Responsiveness: Holcim is committed to being responsive to stakeholders
International Standard on Assurance Engagements (ISAE 3000). Furthermore, and communicate on sustainability issues. We recommend further
by applying the AA1000AS, our responsibility is to express a conclusion on and strengthening the comparability and quality of sustainable development
make recommendations for the nature and extent of Holcim’s adherence to related internal reporting platforms allowing to comprehensively
the AA1000APS(2008) principles. disclosing Holcim’s sustainable development performance
For those subject matters with a limited assurance the evidence-gathering and effectiveness.
procedures are more limited than with a reasonable assurance (for example, Zurich, 27 April 2012
an audit of financial statements), and therefore less assurance is obtained PricewaterhouseCoopers AG
than in an overall reasonable assurance engagement.
Main Assurance Procedures
Our assurance procedures included the following work:
• Evaluation of the application of external and internal reporting guidelines
Reviewing and assessing the application of the external WBCSD CSI
measuring, monitoring and reporting guidelines and the Holcim internal
data reporting guidelines (see section ‘Criteria’); Urs Honegger Stephan Hirschi

Corporate Sustainable Development Report 2011 37


Introduction
Methodology and assurance

Vision and strategy


SD challenges
Performance data
Methodology and

Statement of Holcim’s External Report


assurance

Review Panel
Holcim’s Corporate Sustainable Development Report
highlights steps towards sustainable development and
addresses major sustainability issues for the building
materials industry.

Since 2007 Holcim has invited an External Report Review Panel to SD challenges
review SD priorities, materiality and to comment on the Corporate The External Report Review Panel expects Holcim to recognize its
Sustainable Development Reports. The terms of reference of the responsibilities beyond its fiscal boundaries analyzing both risks
External Report Review Panel, its members and the full statement and opportunities. As the company is in the business of providing
can be downloaded from www. holcim.com/sustainable services to the built environment new, more energy efficient
building materials with a lower impact than cement should be
Summary of the statement explored and innovation in this area supported.
Compared to previous reports the panel acknowledges the
advancements achieved and the many initiatives that have At the same time, there are opportunities to use cement more
been launched or will be initiated in 2012, such as the Supplier efficiently. Particularly in developing countries, the technical
Code of Conduct. knowhow of the use of cement is rather weak amongst downstream
users. To ensure more efficient use of its materials, Holcim should
Holcim has been responsive to comments made by the panel in bring the knowledge downstream and ensure adequate training.
previous years and the report reflects recommendations suggested This could be done through affordable housing projects that exist
during the first on-line consultation in September 2011 and during in several countries; a good example is Solusi Rumah in Indonesia.
individual interviews early 2012. The panel would like to know Holcim’s strategic view on affordable
housing and suggests that Holcim raises the bar within the sector
The panel believes that the Q&A format chosen for this report is an and becomes part of consultative structures which are emerging
interesting approach to highlight controversial issues, bearing in between NGOs, governments, state owned enterprises, customers,
mind that the answers to the questions are solely Holcim’s response financial institutions and community stakeholders in this area.
and are not officially endorsed by the respective member of the
panel or its stakeholder organization. One of the biggest challenges in sustainable development is the
connectivity and linkages between the different sustainability
Vision and strategy issues. To address this, Holcim should highlight synergies between
A 15 to 20 year perspective is needed to fundamentally review SD issues, such as explaining how its biodiversity activities
the cement, aggregates and concrete industry. In order to do so, contribute to climate change or how its work on water influence
the External Report Review panel expects Holcim to formulate biodiversity management or impacts local communities. In addition,
visionary targets for 2020 and to take into consideration existing Holcim should encourage schools and universities to prepare future
international targets such as the Aichi biodiversity targets for 2020. leaders accordingly.
Furthermore, the panel recommends the creation of a think tank
with external stakeholders, coming from different sectors of society As a big multinational, Holcim should not only focus on the
and with different backgrounds, who can support Holcim in products but on the people that work with the products. Topics
this review. such as human rights, health, and disability should be further
explored in the report as they give a good indication on how Holcim
In the area of sustainable development, it is important to reach cares about people.
scale and to create value for all stakeholders. For future reports,
the panel recommends addressing the following questions:
What effects are being achieved with the different sustainability
initiatives? What’s the impact of the individual measures?

Examples such as the positive impacts of the Holcim Energy Fund


(see CR page 16) helping to save CO2 emissions of about 300,000
inhabitants are good. More of these examples are needed and a
bigger impact or scale should be aimed at. Holcim should consider
taking stock of the different initiatives and assess the impact of
bringing them together. In addition, measures for shared value
creation should be formulated.

38 Corporate Sustainable Development Report 2011


Introduction

Methodology and assurance


Vision and strategy
SD challenges
Performance data
Methodology and

Holcim response
assurance

We have considered the contents of the independent


statements of the report assuror and the External Report
Review Panel (ERRP) as well as feedback received from the
Panel during the preparation of the report.

We are encouraged by the recognition of advancements Future reporting recommendations


achieved and acknowledgement that Holcim has been We acknowledge the recommendation of the panel
responsive to comments made by the panel in previous to strengthen the reporting of the impacts of our SD
years and that the report reflects recommendations related programs. We will work with our partners and
suggested by the ERRP during the consultation with external stakeholders to develop methodologies
process for the compiling of this report. We are also to measure and report on these impacts.
encouraged by the overall findings of the report assuror.
Our response to the main themes contained in the We further take note of the recommendations to
statements is as follows: consider strengthening our reporting on a number
of issues such as our view on low income housing,
Targets human rights, health, and disability. We also take
We acknowledge the expectation of the ERRP to note of the recommendation to increase reporting on
formulate visionary targets for 2020 taking into account whistleblowing processes and include more regional
existing international targets and conventions. We data in our reporting. We will ensure that these issues
are aware that our current SD related targets extend are given due consideration.
only to 2015 and recognize the need to formulate new
targets. SD related targets will be considered in the Materiality process
existing Operational Roadmap process and also by SD We take note of the recommendations of PwC to
specific governance bodies such as the Sustainable reassess the materiality and potential impact of topics
Development Steering Committee (SDSC). In these and issues on Holcim with a group-wide consistent
processes we will take into account the Panel’s approach and extending the group of stakeholders
recommendations and also seek the inputs from in our consultation fora. We will review our processes
partners such as IUCN. for determining material issues both as a distinct
process for reporting purposes and also the continued
SD think tank integration of SD issues into our standard Business
We note with interest the recommendation to establish Risk Mapping process. We will ensure that future
a “think tank” comprising external stakeholders, coming consultation forums include a representative cross
from different sectors of society and with different section of stakeholder groups.
backgrounds. We recognize the value that such a body
could provide in strategy development and target In conclusion, we thank the panel and our assurors for
setting. The establishment of such a body will be tabled their recommendations to improve our SD performance
for consideration. and strengthen our reporting. Their contribution is
highly valued and appreciated.

Corporate Sustainable Development Report 2011 39


Introduction
Methodology and assurance

Vision and strategy


SD challenges
Performance data
Methodology and

Communication on progress
assurance

Global Reporting Initiative (GRI)


This print report, with additional information on our Holcim, along with 580 other organizations from over
website, is aligned with the Global Reporting Initiative 50 countries, is an Organizational Stakeholder of the GRI
(GRI) G3 Sustainability Reporting Guidelines, at a GRI- and we are a member of the GRI Stakeholder Council.
checked application level of A+. To locate the elements To learn more about the Organizational Stakeholder role
and information contained within the guidelines, in the GRI, go to www. globalreporting.org/OS
including disclosures on management approach to
economic, environmental and social aspects, use the For a detailed explanation of the GRI indicators, visit
GRI index at www. holcim.com/sustainable www. globalreporting.org

Report
Application Level C C+ B B+ A A+
Report on: Report on all criteria listed Same as requirement for
1.1 for Level C plus: Level B
G3 Profile 2.1 - 2.10 1.2
Disclosures
3.1 - 3.8, 3.10 - 3.12 3.9, 3.13
4.1 - 4.4, 4.14 - 4.15 4.5 - 4.13, 4.16 - 4.17

Not Required Management Approach Management Approach


Disclosures for each Disclosures for each
G3 Management Indicator Category Indicator Category
Approach
Disclosures

Report on a minimum of Report on a minimum of Report on each core G3 and


10 Performance Indicators, 20 Performance Indicators, Sector Supplement* Indicator
G3 Performance including at least one from at least one from each of with due regard to the
Indicators & each of: Economic, Social Economic, Environmental, Materiality Principle by either:
Sector Supplement
and Environmental. Human rights, Labor, a) reporting on the Indicator or
Performance Indica-
Society, Product b) explaining the reason for
Reponsibility. its omission.

*Sector supplement in final version

Read the full GRI application level check statement at www. holcim.com/sustainablewww.

UN Global Compact (UNGC) Holcim is involved in the expert group on “Responsible


With our integrated approach to sustainable Business and Investment in conflict-affected and
development, Holcim aims at embracing the UNGC high-risk areas” as well as in the “supra-environmental”
principles. We strive to implement the 10 principles stewardship strategy group.
of the Compact and to use it as a basis for advancing
responsible corporate citizenship. At the same time, Our annual communication on progress (COP) to the
the Compact provides Holcim with the opportunity to UNGC outlines Holcim’s continued commitment to the
further push our own ongoing programs and processes Compact’s philosophy, intent and principles. This latest
in the areas of human rights, labor standards, the document highlights key actions implemented in 2011
environment and anti-corruption. against the Compact’s 10 principles as well as confirming
our sustainability priorities and performance targets.
Review the COP at www. holcim.com/sustainable

40 Corporate Sustainable Development Report 2011


1912 1913 1914 1915 1916 1917 1918 1919 1
Holcim from 1912 to 2012
Countless companies are founded every year, yet not
many survive for long. That makes it worthy of note when

1929 1930 1931 1932 1933 1934 1935 1936 1


a company celebrates its 100th anniversary, as Holcim is
doing in 2012. Founded in 1912, in the village of Holderbank
in the Swiss canton of Aargau, it has grown steadily, first

1946 1947 1948 1949 1950 1951 1952 1953 1


as “Holderbank” and then later as Holcim, to become one
of the world’s leading construction materials companies.
It now has a significant presence on every continent.

1963 1964 1965 1966 1967 1968 1969 1970 1


1980 1981 1982 1983 1984 1985 1986 1987 1 Holcim is a worldwide leading producer of
cement and aggregates. Further activities
include the provision of ready-mix concrete
and asphalt as well as other services. The
Group is active in around 70 countries and

1997 1998 1999 2000 2001 2002 2003 2004 2


employs more than 80,000 people.

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