Larfarge 18
Larfarge 18
Larfarge 18
Report 2018
Highlights 2018
CLIMATE
AND ENERGY
CIRCULAR
ECONOMY
ENVIRONMENT
COMMUNITY
Cover picture: Colleagues working on the Grand Paris Express (GPE), the largest infrastructure project in Europe. Our building materials and sustainable solutions
are helping to make sure the GPE is environmentally friendly and in line with the Universal Climate Agreement signed at COP21. Aggregates come from our nearby
quarries in the Seine valley. These are delivered by barge, which is a more environmentally friendly method than by road (two barges can handle the load of 220
trucks). Most of the earth excavated from the GPE tunnels and stations will be removed the same way, traveling as far as Le Havre to re-landscape some of our
quarries along the Seine.
Contents
Page
Embedding
sustainability
Sustainability ambitions
14–17
Materiality
Achievements and targets
Creating
value
Value creation
18–21
The LafargeHolcim Integrated
Profit & Loss Statement
Climate
and energy
2030 commitment
22–29
CO2 emissions overview
Our actions
Task Force on Climate-related
Financial Disclosures
Circular
economy
Using alternative resources
30–35
Co-processing
Sustainable construction and solutions
Note: The Group is LafargeHolcim. However, both Lafarge and Holcim are names used in various countries
where those brands are established and recognized, and this is reflected throughout the report.
This report also serves as our Communication of Progress (COP) to the UN Global Compact.
02
Our 2018 performance of 576 kg of
net CO2 per tonne of cementitious
material has positioned us as the
most carbon-efficient cement and
concrete company in our peer group.
06
In many communities we have a
net positive water impact. In India,
Ambuja Cement is calculated as
being six times water positive.
08
In 2018, LafargeHolcim
spent CHF 47.8 million on
community programs.
Dear stakeholders
In 2018, LafargeHolcim consolidated its 2018 while working for LafargeHolcim. policies and relevant new studies. Other
position as a global leader in building This is unacceptable and everyone in our agenda items are reviews of sustainability
materials and solutions. At the same time, organization, starting with the Board, reports and results, sustainability risks and
we are conscious of the bigger picture recognizes their responsibility to ensure we opportunities and a review of sustainability
and strive to ensure that we live up to develop and practice a zero-harm culture. targets and action plans. In 2019, we
the responsibilities that come with our will additionally conduct a materiality
presence in many diverse countries. We The Health, Safety and Sustainability review with inputs from an external
aim to demonstrate, with our actions, Committee (HSSC) has been working closely stakeholder panel.
how we are a responsible and ethical with the sustainability team reviewing our
company, with sustainability as a core sustainability framework and receiving Finally, we thank the company’s employees
value. Sustainability creates value for our regular updates on key environmental and for living up to our commitment to health
business, our shareholders and society, and social topics as well as on our performance and safety and sustainability. Our success
we aspire to be a leader in this field and against key indicators. We have noted depends on their dedication and efforts.
leverage resulting opportunities. the positive trends of reduced net CO2
emissions and water withdrawal per tonne
It is pleasing to see that our safety of cementitious material, and we are
program, supported by the dedication and committed to go further.
hard work of our employees, is having
an impact. Our global Lost Time Injury To ensure that we approach sustainability
Frequency Rate has improved significantly in a structured manner, the HSSC has set
over the last three years for employees an agenda of topics to be discussed at Adrian Loader
and contractors alike. However, despite scheduled meetings. Standing agenda Chairman of the Health, Safety
a notable reduction in year-on-year items for each meeting are an update on and Sustainability Committee
fatalities, 19 people lost their lives in achievements, results, controversial issues,
10
Adrian Loader
Member of LafargeHolcim Board of
Directors and Chairman of the Health,
Safety and Sustainability Committee
“We aim to
demonstrate,
with our actions,
how we are a
responsible and
ethical company,
with sustainability
as a core value.”
Dear stakeholders
Our products are the basis for human Our cement plants provide an excellent contribute to projects in areas ranging
development and prosperity, and indeed, a opportunity to address society’s from education and training through basic
world without concrete is hard to imagine. waste problem. healthcare and safe water. Over the past
It provides infrastructure, housing, and four years, more than 15 million people
mobility for billions of people around In 2018, we treated over 51 million tonnes have benefited from our community
the world. Compared with other building of waste. This increase of 6 percent versus programs worldwide. Every contribution
materials, concrete is resilient, versatile, 2017 makes us one of the largest waste of a LafargeHolcim employee has a direct
affordable, recyclable and essentially processors. Plastic waste and marine impact on people’s lives. As a participant in
local. Not only does it have many benefits, littering moved to the forefront of public the United Nations (UN) Global Compact,
but those benefits endure for decades or attention. We are part of the solution with LafargeHolcim stays committed to the ten
even centuries. two million tonnes of plastic waste treated, universal principles.
predominantly in emerging countries
In 2018, we made excellent progress in where the problem is most urgent. I would like to thank our employees,
executing our Strategy 2022 – “Building customers and suppliers for their
for Growth.” In the context of our growth Last year, we reduced our water partnership in creating sustainable value
strategy, I believe that sustainability is a withdrawal in our cement plants by and growth.
great opportunity for us. Our innovative 7.5 percent worldwide, with a special
products and solutions enable customers focus on water in dry areas. In some
around the world to reduce their impact communities we already have a net
on the environment and build more quickly positive water impact, for example those
and efficiently. served by our subsidiary Ambuja Cement
in India.
We are cogniscent of the carbon footprint
of the building materials industry. Our business is truly local. We are Jan Jenisch
LafargeHolcim is at the forefront of efforts determined that our activities continue Chief Executive Officer
to mitigate climate change. Since 1990, we adding value to the communities and
have reduced our net carbon emissions countries in which we operate. Many of
per tonne of cement by 25 percent. our 75,000 employees around the world
12
Jan Jenisch
Chief Executive Officer
75,000
Employees
2,300
Operating sites
4
Strategic
sustainability pillars
7
High focus
materiality issues
14
Embedding sustainability
Sustainability ambitions
The global megatrends of population Buildings and infrastructure have come At LafargeHolcim we are committed to
growth, urbanization and rising living into focus in this challenge. While on one contribute our share along our entire
standards offer significant business and side they form the very basis for societal value chain. Our 2050 vision for the built
growth opportunities in our industry. The development, they also account for 30 to environment rests on four strategic drivers:
global building materials market is worth 40 percent of worldwide CO2 emissions, Climate and Energy, Circular Economy,
CHF 2.5 trillion annually and is continually with around 5 percent occurring during the Environment and Community.
growing. At the same time, these trends construction phase. Also, they consume
are challenging our planet through substantial amounts of raw materials In the center of all our activities to address
increased carbon emissions, depletion and generate significant volumes of the four drivers is Innovation. We will
of natural resources and an increase of waste. Society thus urgently needs to continue to develop innovative products
waste. As countries develop, solutions for find solutions for a more sustainable and solutions for a built environment
sustainable prosperity are needed. built environment. that meet these criteria, satisfying a
continuously growing market demand for
sustainable solutions.
Water management
Global focus
and standards,
local accountability Maintain Monitor and manage
Internal waste Air emissions Local economic
Local focus and management management value creation
accountability Employee diversity Materials recycling and Supply chain
and inclusion circular economy management
Materiality internal update of our material issues matrix, we present the focus of our
Alongside our robust business risk matrix, shown above. In preparation for efforts and where we monitor and
management process, we conduct the transition to integrated reporting, manage, giving an estimated size of the
material issue reviews to ensure a full material issues review will be impact of the most material issues and
that sustainability risks, as well as conducted in 2019. showing how we approach each issue –
opportunities, are correctly prioritized. either globally or locally.
The issues material to our stakeholders
In 2018, the Health, Safety and are environmental, social and
Sustainability Committee reviewed an governance-related. In the revised
Strategic pillars
The graphic below shows our four strategy pillars and the lead metric and targets we are aiming to achieve. 2017 performance
and targets have been restated according to the revised scope of consolidation. Details on our scope can be found on page 69.
Sustainability
pillars CLIMATE CIRCULAR ENVIRONMENT COMMUNITY
AND ENERGY ECONOMY
Target 2022
restated with 2018 scope 560 60 291 5.0
Target 2030
restated with 2018 scope 520 80 262 5.0
Note: See methodology and assurance section for details of consolidation scope.
Our performance against all targets and operating principles is shown in the performance data tables on pages 64–68.
16
Achievements and targets Climate Environment
Aligning with the timeframe of the Group In 2018, our net CO2 emissions per tonne Over the last four years we have reduced
Strategy 2022, we are now stating interim of cementitious material decreased to water withdrawal in our cement plants by
2022 targets, replacing the 2020 and 2025 576 kg CO2/tonne, a 1 percent reduction around 19 percent (or 73 liters per tonne
targets previously in place. For climate from 2017 and equal to a 25 percent of cementitious material). Over this period
and water, we have adapted the targets to reduction compared with 1990 emissions. the initiative has created water awareness
reflect the performance level we will achieve, This exceeds our year-on-year reduction in our plants and we have refined our
rather than a percentage reduction. We objective and positions us well to deliver measurement methodologies. Today,
have revisited our climate target based on our new carbon reduction target of we are shifting our focus to consider
new external references and accounting for 520 kg CO2/tonne by 2030. We have our total impact on water resources in
current national climate change ambitions achieved this by reducing our clinker- the communities where we operate,
in the countries in which we operate (see to-cement ratio and consuming less particularly in water-scarce areas. In
page 23 for more details). For beneficiaries energy per tonne of product, mostly by consequence, we will revise our ambitions
we now state the target as a yearly figure using alternative fuels and improving the to reflect water impact, which we intend to
rather than an accumulative total. efficiency of our processes. reduce by focusing on the most vulnerable
areas of operation. In some communities
We are operating 270 cement and grinding Circular economy we already have a net positive water
plants, 663 aggregates plants and 1,448 We are one of the world’s largest waste impact, such as those served by Ambuja
ready-mix concrete plants globally for processing companies. In 2018, we treated Cement, which we have calculated as being
which we are setting higher standards on 52 million tonnes of waste, an increase of six times water positive.
key environmental, social and corporate 6 percent versus 2017. More than 11 million
governance topics. In some cases, these tonnes was used as fuel and alternative raw Community
have replaced former targets. These materials that we fed into our kilns. In many countries we enlarge the positive
operating principles cover human rights, impacts of our operations – such as direct
drinking water and sanitation, stakeholder We co-process all types of waste, including employment, tax revenues, infrastructure
engagement, quarry rehabilitation and solid shredded waste from industrial and development and local procurement –
biodiversity, environmental management municipal origin, spent solvents, used tires, beyond the factory gate. In 2018,
systems, air emissions, our Code of waste oils, contaminated soils, industrial 2.9 million people benefited from our
Business Conduct and our Supplier and sewage sludges and demolition community programs worldwide – with
Code of Conduct. We will continue waste. Depending on the waste regulation over 15 million having benefited over the
reporting our performance against these in a country and the development of its last four years.
principles annually. waste market we can reach a fossil fuel
replacement rate of more than 90 percent.
value
Creating
The LafargeHolcim Integrated
Profit & Loss Statement 19
18
Value creation
Creating value through sustainability a vital role in helping us achieve our valuation can be practically implemented
The building materials market is worth sustainability ambitions. The LafargeHolcim and shared it with the World Business
CHF 2.5 trillion per annum globally and IP&L 2018 results are displayed in the Council for Sustainable Development
is expected to continue to grow by graph on page 21. (WBCSD) and other parties.
2–3 percent each year. LafargeHolcim
is the leader in building materials that Why impact valuation?
The IP&L statement tool complements
provide infrastructure, housing and The IP&L is not intended to be a definitive
our traditional financial and
mobility for billions of people all over the statement of our financial accounts.
sustainability metrics to give us
world. Our products are resilient, versatile, Rather, it is a tool to allow us to understand
an indication of the scale of our
affordable and increasingly recyclable. and share with stakeholders the extent of
extended impacts. It provides a
These benefits endure for decades or even our impacts and to track progress against
compass, pointing us in the direction
centuries, making them an investment our sustainability framework. The tool
of increasing sustainable value
in our collective future. Indeed, a world enhances decision-making processes
creation for shareholders, society and
without our products is unimaginable. and sustains value creation in the long
the environment. This is the fourth
term, by raising awareness of risks and
consecutive year we have produced
The Group Strategy 2022 is focused on opportunities posed by externalities
an IP&L.
building for growth, and sustainability is (through quantification), and enabling
a key element. Our vision is to be analysis on what the impact could be on
recognized by our industry and by society the bottom line.
as being at the forefront of sustainable
construction solutions and innovation,
and by our stakeholders as a responsible
The discipline of impact valuation
We published our first IP&L together
CHF 3.0 billion
Retained value
and ethical company. with our subsidiary Ambuja Cement in
2014. Since then, the discipline of impact
1 Impact valuation refers to the application of welfare economics to determine the positive and negative value contribution
of business activities to society in monetary terms.
2
Available at: https://www.lafargeholcim.com/sites/lafargeholcim.com/files/atoms/files/impact-valuation-white-paper.pdf
20
Financial Socio-economic Environmental TBL
8,216 97 4 5
-54
919 5,234
-5,236
-548
2,987 -971 -152 -34
Retained value
Stakeholder value
investments
Strategic social
Inclusive business
Industrial accidents
Employee education
own operations
CO2 upstream and
Air
Water
Biodiversity
Waste
Secondary resources
line calculation
Triple bottom
TRIPLE BOTTOM LINE CAN BE USED TO ASSESS OPPORTUNITIES BEYOND COMPLIANCE
COMPLIANCE WITH GOVERNANCE, SOCIAL AND ENVIRONMENTAL REQUIREMENTS AND STANDARDS
The IP&L statement is not part of LafargeHolcim’s financial reporting or projections. The IP&L is intended to raise awareness of externalities that may or may not affect
LafargeHolcim’s business, and to assess their relative importance. It contains preliminary considerations that may be subject to change. Furthermore, the IP&L may
also change, for example as valuation techniques and methodologies evolve. It should be considered as indicative and it neither represents any final factual conclusions
nor is intended to assert any factual admission by any person regarding the impact of LafargeHolcim or any of its related parties on environment or society.
What the IP&L tells us In the Environmental dimension, the where we operate, and particularly in
The IP&L indicates that our triple-bottom- most significant externality is our CO2 water-scarce areas. In some communities,
line calculation – taking into account the emissions. These account for 75 percent of we already have a net positive water
monetized social and environmental our total cost to society, and represent the impact, such as those served by Ambuja
impacts – is 1.8 times the company’s largest negative impact of our operations. Cement, where we calculate being six times
retained financial earnings. In 2018, our net CO2 emissions per tonne water positive (see case study on page 38).
of cementitious material decreased to
The value created in the Socio-Economic 576 kg CO2/tonne, a 1 percent reduction The IP&L highlights challenges but
dimension is mainly driven by the from 2017 and equal to a 25 percent also opportunities that can help us to
“stakeholder value” externality, which reduction compared with 1990 emissions. maximize our sustainable value creation for
measures our contribution to local This exceeds our year-on-year reduction shareholders, society and the environment.
economies through the multiplied effect of objective and positions us well to deliver We are confident that, as we continue to
salaries, taxes and social investment. our new carbon reduction target of implement our sustainability framework,
520 kg CO2/tonne by 2030. We have the IP&L will assist us to measure the
Sadly, and despite all our efforts, we regret achieved this by reducing our clinker- effectiveness of our programs.
that 19 employees and contractors lost their to-cement ratio and consuming less
lives in 2018, down from 31 in 2017. The energy per tonne of product, mostly by Where can I find more details?
human cost of an occupational accident using alternative fuels and improving A document containing all the assumptions
cannot be monetized, but even if only the the efficiency of our processes. and the calculation values used, together
lost capacity of a person to generate income with a short animation explaining the
is considered, the cost is considerable. Water usage continues to have a negative IP&L statement, can be found on
impact. However, over the last four years our website (www.lafargeholcim.com/
The impact on lives and families is we have reduced water withdrawal in our Sustainability-reports).
immeasurable. Health and safety is a core cement plants by around 19 percent (or
value of the LafargeHolcim Group and we 73 liters per tonne of cementitious
will continue to act to improve the safety material). We now believe that we should
and the health of employees, contractors, shift our focus to consider our total impact
third parties and communities.3 on water resources in the communities
energy
Climate and
CO2 emissions overview: our
2018 performance 23
Our actions 24
576 kg
net CO2 per tonne cementitious material
25%
reduction of specific CO2 emissions since
1990. This is equivalent to over 40 million
tonnes CO2 avoided compared to 1990
performance levels
22
Climate and energy
2030 commitment compared to 1990 – translating to net in Paris. Aligning with the Group Strategy
LafargeHolcim cement is among the most emissions of around 460 kg CO2/tonne – 2022, we have now stated an interim 2022
carbon efficient in the world. Since 1990, exceeds the standard for a 2 degree target of 560 kg CO2/tonne, replacing our
we have reduced our net carbon emissions scenario, consistent with the low-carbon previous 2020 and 2025 targets.
per tonne of cement by 25 percent. We technology roadmap defined for our sector
lead the international cement companies, by the International Energy Agency (IEA). In our scenario planning, we considered
with the highest reduction compared to the impact of a high, medium and low
our 1990 baseline. We are revisiting this ambition based on variability of regulatory framework
new external references and revised internal incentives on our potential to reduce
We have achieved this by reducing our scenario planning, and accounting for emissions. Our goal is consistent with
clinker-to-cement ratio and consuming less current national climate change ambitions in a “medium” variability of regulatory
energy per tonne of product, mostly by the countries in which we operate, as well as framework incentives, which we arrived at
using alternative fuels and improving the limited progress toward those targets. by following the recommendations of the
efficiency of our processes. Task Force on Climate-related Financial
With our revised target of 520 kg CO2/tonne Disclosures (TCFD). We will continue to
We measure our climate goal in terms of by 2030, we remain the most ambitious monitor developments and update our
reduced net CO2 emissions (measured in company in our sector. We are still scenario planning in line with the TCFD
kilograms of CO2 per tonne of cementitious committed to reducing emission levels in recommendations.
material, or kg CO2/tonne). Our current 2030 line with a 2 degree scenario, as agreed
emissions reduction target of 40 percent at the COP21 world climate conference
Scope 1: Direct emissions from our Scope 2: Indirect emissions from the Scope 31: Other indirect emissions
operations: decarbonation of raw materials generation of purchased electricity assessed (extraction and production of
and fuel consumption for cement consumed in the company’s owned or purchased materials and fuels, transport-
production and on-site power generation. controlled equipment. related activities in vehicles, employee
commuting).
Our CO2 reporting is aligned with the WBCSD-CSI | GCCA CO2 Accounting and Reporting Standard for the Cement Industry
and aligned with TCFD recommendations on data disclosure. Further details can be found in our performance data tables and
CDP disclosure.
2018
1
LafargeHolcim’s Scope 3 emissions have been assessed according to WBCSD-CSI Scope 3 methodology. For this purpose, we assessed the most significant of our
suppliers’ emissions due to clinker bought and used in the production process during 2018. We also consider fuel- and energy-related activities (not included in
Scope 1 and 2), upstream and downstream transportation and distribution, business travel and employee commuting.
Progress toward target average of 28 percent of constituents to providing a solution to the growing waste
In 2018, our net CO2 emissions per tonne replace clinker, resulting in one of disposal problems faced by society, and
of cementitious material decreased to the lowest levels of clinker content in helping to keep fossil fuels in the ground.
576 kg CO2/tonne, a 1 percent reduction the sector. At the same time they help to reduce
from 2017 and equal to a 25 percent our CO2 emissions, as most of them emit
reduction compared with 1990 emissions. While we aim to further reduce our clinker less CO2 than traditional fuels. Other
This exceeds our year-on-year reduction factor, the limited availability of mineral sources, such as biomass, are considered
objective and positions us well to deliver components in some markets, or the carbon neutral.
our new carbon reduction target of absence of specific product properties in
520 kg CO2/tonne by 2030. others, act as limiting factors. In markets Energy efficiency
where these factors are favorable, our Cement production is an energy-intensive
Our actions replacement rates have reached 50 percent. process. Energy costs and security of
supply are key business drivers. Improving
Clinker substitution Waste-derived fuels and biomass our energy efficiency reduces the carbon
It is during the production of clinker, the Another key way to reduce the carbon intensity of our products and lowers our
main component of cement, when most intensity of our cement production is to production costs.
CO2 emissions associated with cement use pretreated waste and low-carbon fuels.
occur. The majority of these emissions These serve as a replacement for fossil We have reduced our energy consumption
are unavoidable, as they result from the fuels that provide the energy needed to per tonne of clinker to 3,518 megajoules in
chemical reaction that occurs when the raw operate a cement kiln. 2018 (1990: 4,532 megajoules), among the
material (limestone) calcinates into clinker lowest rates in the sector. Since 1990, we
in the kiln. This decarbonation process We currently source 18 percent of our have increased our cement production
is our largest source of CO2 emissions, energy from alternative fuels, low- by around 79 percent, while our annual
accounting for 68 percent of our total carbon fuels and biomass. In some of our energy consumption has increased by
Scope 1 emissions in cement production. operations, we have been able to meet just 18 percent.
90 percent of our energy requirements
Replacing the clinker in our final cement with alternative fuels, but we also Our cement manufacturing facilities
products with alternative mineral acknowledge our potential to increase alone account for around 85 percent of
components such as pozzolan, slag or this rate significantly in the coming years. LafargeHolcim’s total energy consumption.
fly ash reduces the carbon intensity (See further information on our Geocycle Our technical center of expertise – the
of the cement. A significant portion of operations on page 31). Cement Excellence Manufacturing team,
these constituents come from waste based in Holderbank, Switzerland – is
or byproducts recovered from other Using these alternative energy sources responsible for monitoring and optimizing
industries. Currently, our products use an diverts waste from incineration or landfill, all Group cement operations, including
energy efficiency.
25%
reduction
since 1990
585
582
576
24
Renewable electrical energy Carbon capture and low-carbon products We have significantly invested in the
and on-site electricity generation Innovation has played, and will development of low-carbon solutions, led
In 2018, we continued to expand our continue to play an important role in by our R&D center in Lyon, France. Thanks
renewable energy portfolio. We invested in reducing emissions from the cement to this commitment, today we have a broad
or purchased renewable power when it was and construction sectors. We are portfolio of low-carbon projects – including
economically advantageous, and optimized continuously exploring new strategies low-carbon clinker, cement, concrete, and
our low-carbon power-producing assets and technologies, such as carbon capture binders – and we are seeking opportunities
(such as waste heat recovery units) across and usage or storage. LafargeHolcim is in carbon sequestration. (For more
our production plant portfolio. working on several projects with different information on our innovation program
partners to test and demonstrate new and products, please see the “Creating
We are also investigating opportunities for breakthrough technologies for the future value” chapter on page 18).
generating renewable energy by using our of carbon capture.
land for wind turbines or solar panel farms.
For example, ACC in India has started using
solar power in the cement manufacturing
process at its grinding units at Kudithini
and Thondebhavi in Karnataka. We intend
to use about 30 megawatts of solar power
at these plants, to meet more than half of
their annual power requirement. Switching
to solar power will reduce CO2 emissions
by 38,000 tonnes a year – the equivalent
of planting 45,000 trees and saving
90 million liters of water – by avoiding the
consumption of coal-fired electricity.
(See also the case study on wind energy
on page 29.)
Transport efficiency
When transporting the products we
manufacture, we aim to use low-fuel-
intensity options, such as rail, wherever
possible. Our trading division also has
well-established routes to transport
intermediate and final products by boat
or barge. Nonetheless, road transport
remains our principal logistics method.
Our advocacy: Carbon pricing We engage proactively and transparently The identification, assessment and
mechanisms with governments and other external effective management of climate-related
In implementing our CO2 reduction plan, stakeholders on climate policies and risks and opportunities are fully embedded
we focus on countries where a relevant carbon pricing mechanisms. We support in our risk management process, and
value is placed on carbon efficiency, the use of carbon pricing as a means to subject to continuous improvement.
such as emissions trading or comparable incentivize the uptake of innovative low-
regulations. For example, in 2018, against carbon solutions and ensure a level playing In the table below we map where the
the backdrop of the revised Phase 4 of the field across geographies and among recommended TCFD disclosures can be
EU Emissions Trading Scheme, we began industries. We advocate for stable, fair and found in our mainstream reports. We will
a project to optimize our CO2 emissions consistent policy frameworks. continue to enhance our disclosures in
performance in Europe, with clear targets, future reporting cycles.
actions and accountabilities. Task Force on Climate-related
Financial Disclosures Additional metrics and targets are detailed
Increases in carbon pricing can have a As a leading business committed to in our submissions to CDP. Documents are
significant impact on our company as a ensuring transparency and action around available on www.cdp.net.
large carbon emitter. In the short term, climate-related risks and opportunities, we
the evolving legislative environment on support the voluntary recommendations of
greenhouse gas emissions could impact the Financial Stability Board TCFD.
around one third of our existing clinker
production.
Board oversight Risk and opportunities CO2 risk identification Reporting CO2 metrics
Management’s role Link to financial planning CO2 risk management Details Scope 1, 2 and 3
26
Concrete absorbs CO2 during in the air, but also in secondary These can include weather (rain and
its life cycle products such as crushed concrete used moisture), surface coatings, surfaces under
as a base course for a road. Recent studies2 water and soil, and the quality of concrete.
demonstrate that more than 20% of the Current regulations and GHG inventories
In addition to our range of measures
CO2 emissions from the manufacturing guidelines do not yet consider the effects
taken to reduce our carbon emissions,
of clinker can be reabsorbed by concrete of carbonation. LafargeHolcim continues
our final product, concrete, absorbs
structures and secondary concrete to collaborate with industry peers and key
significant amounts of CO2 from the
products. stakeholders to incorporate this aspect
atmosphere during its life cycle. This
into existing GHG inventory and life cycle
process is called “carbonation” and results
The impacts of carbonation are an assessment methodologies.
from the reaction between the CO2
important parameter to be considered
present in the air with hydrated cement
when comparing the carbon performance
phases in concrete.
of different building materials over the life
cycle. Calculation models of CO2 uptake in
Carbonation is a slow process that can Ready-mix concrete trucks loading
concrete are complex and involve many Concrete can absorb more than 20% of CO2
last for many years and takes place not
different factors controlling the uptake. emissions from clinker manufacturing.
only in concrete surfaces exposed to CO2
2 CO2 uptake in cement-containing products: Background and calculation models for IPCC implementation.
Lafarge Paulding Cement Plant expected to generate more than 12 million Supporting SDGs
becomes the first LafargeHolcim kilowatt hours a year, enough to power
operation in North America to approximately 1,200 average households,3
harness wind energy and should eliminate the equivalent of at
least 9,000 tonnes of CO2.
In November 2018, LafargeHolcim
announced plans to build three wind To contribute to the community
turbines to help power its cement plant surrounding the Paulding plant,
in Paulding, Ohio. Adding the turbines we are creating three $5,000 Megawatt
is part of our commitment to improving Scholarships (one per turbine) to be
manufacturing operations, controlling awarded each year the turbines are in
costs and operating sustainably. operation. The scholarships will be given
Construction began in December to local high-school graduates pursuing
2018, in partnership with One Energy, a two- or four-year degree in a STEM Paulding, Ohio, USA
a local wind energy developer and (science, technology, engineering and Wind energy project inauguration
operator. The three turbines are mathematics) subject. at the cement plant.
28
Harnessing the wind in Morocco plant supplies its own wind energy, the
rest was obtained through purchase
Echoing a sentiment felt across the agreements with local wind energy
company, LafargeHolcim in Morocco partners. In 2018, the substitution rate
is convinced that growth and reached 75 percent (8 percent of which was
competitiveness rely on reducing costs, as provided by Tétouan’s wind farm), reaching
the investment in renewable energy over a record high of 97 percent in August.
the last 13 years demonstrates.
Our current wind energy purchase
The Tétouan plant is the first cement agreements supply about 70 percent of our
plant in the world to have its own annual electrical energy needs, but we plan
wind farm. Opened in 2005, with two to increase this to 90 percent by 2020.
extensions in 2008, the plant’s total
capacity is now 32 megawatts. The
motivation to switch to wind power was Supporting SDGs
driven by a desire to lower CO2 emissions
and reduce energy costs, as wind power
is less expensive than energy from the
national provider.
SDG 7: Affordable and SDG 9: Industry, SDG 13: Climate action SDG 17: Partnerships
clean energy innovation and Our targets to reduce for the goals
Our use of waste as an infrastructure carbon intensity, Our partnerships with
energy source and our Our solutions for promotion of sustainable initiatives such as the Energy
use of renewable energy sustainable and efficient construction, and Efficiency in Buildings
sources contribute to infrastructure and the innovative solutions Coalition and membership
this goal. most advanced R&D contribute to this goal. of organizations such as the
capability in the sector World Business Council for
contribute to this goal. Sustainable Development and
GCCA contribute to this goal.
economy
Circular
Co-processing 31
Sustainable construction
and solutions 31
Ocean plastics 34
52 million
tonnes of waste materials reused
in our operations
28%
constituents used to
replace clinker
30
Circular economy
Circular economy at work – community for the heating of buildings. By implementing this solution, Geocycle
management of construction and With the Geocycle Recycling Center, demonstrates that it can contribute
demolition waste the team is also setting a standard in to achieving the EU’s ambitious target.
recycling CDW. The company will continue to give a
LafargeHolcim continuously develops second life to discarded demolition
new business models that address waste By 2020, the European Union has materials and reduce the CDW going
challenges. One such case is Geocycle mandated that countries must be capable to landfills. This initiative has also
Austria, which is developing innovative of recycling at least 70 percent of their been recognized as a circular economy
solutions for construction and demolition CDW waste. Out of the total CDW coming best practice by the European Circular
waste (CDW). to the Geocycle Recycling Center, Economy Industry Platform.
35 percent is co-processed in our cement,
The Geocycle Recycling Center in Retznei, while another 35 percent is treated
Austria processes 130,000 tonnes of and used as recycled aggregates by
CDW every year. Geocycle, in cooperation construction companies. The remaining
with the biggest aggregate and concrete unrecyclable 30 percent is used as
partner in Austria, processes this waste backfilling material for the cement
and renders it reusable. plant quarry.
Supporting SDG
Our cement plant in Retznei is setting While we provide cement for construction
new benchmarks in recycling and through our manufacturing facilities, we
recovery, and the majority of the energy also offer a deconstruction and sorting
used by the plant is recovered from local service for CDW, and ensure it is recycled
pretreated waste. In addition, the waste at the Geocycle Recycling Center. This
heat from the kiln is reused by the local approach truly brings the circular economy
to life by closing the CDW loop.
Retznei, Austria
CDW being prepared.
32
Advancing sustainability
jury meetings. This network connects our methods in Niger and a community-driven
along the value chain of the Group to the drivers and decision-makers, neighborhood engagement project in
construction industry – the architects and designers, engineers, urban Detroit, USA. The winners were selected
LafargeHolcim Foundation for planners, contractors, NGOs and authorities, from more than 5,000 entries received
Sustainable Construction in addition to researchers and students of from 121 countries. The next Awards will be
the respective disciplines. open for submission from June 2019 until
The LafargeHolcim Foundation for February 2020.
Sustainable Construction plays an Expert conferences on
important role in promoting a greater sustainable construction More about the LafargeHolcim
focus on sustainability across the life The Foundation’s activities operate in Foundation and its activities at:
cycle of structures – from design to three-year cycles. Each cycle commences www.lafargeholcim-foundation.org
construction, use and maintenance, with an international symposium on
through to removal and recycling. The a contemporary theme of sustainable
Foundation enables us to interact with construction, bringing together Supporting SDGs
stakeholders along the value chain of construction professionals and specialists
our industry and encourage sustainable to exchange knowledge. The next cycle will
responses to the technological, begin in 2019 with a symposium on “Re-
environmental, socioeconomic and materializing construction” at the American
cultural issues affecting building University in Cairo, Egypt.
and construction.
LafargeHolcim Awards competition
To advance and endorse sustainable The Foundation also conducts the world’s
construction at national, regional and most significant competition for sustainable Reinterpreted construction traditions and new
global levels, our Foundation has created a design – the LafargeHolcim Awards. In techniques using renewable resources created
a community center open to all in the village of
unique and extensive network of renowned 2018, Global LafargeHolcim Awards were
Dandaji, Niger. The project, by Yasaman Esamili
experts. These include some of the world’s presented to a publicly accessible water (Iran) and Mariam Kamara (Niger), was honored
leading technical universities, which host infrastructure project in Mexico City, a village with a Global LafargeHolcim Award in 2018.
the Foundation’s symposiums and Awards complex supporting traditional construction (Photo: James Wang)
Bulacan, Philippines
Material ready for co-processing in cement kiln.
SDG 6: Affordable and SDG 12: Responsible SDG 13: Climate SDG 14: Life below SDG 17: Partnerships
clean energy consumption and action water for the goals
Our water production Our commitment Our programs to Our collaboration with
management The use of waste- to demonstrating prevent plastics academic partners to
programs and targets derived resources a positive global leaking into the promote sustainable
contribute to this goal. as alternative fuel change for biodiversity oceans contribute construction
and raw material contributes to this goal. contributes to
sources contributes to this goal. this goal.
to this goal.
34
Guayaquil, Ecuador
With our customer at the
Santana Lofts site.
19%
reduction of specific
freshwater withdrawal
84%
quarries with high biodiversity
importance with biodiversity
management plans (BMPs)
36
Environment
362
330
305
stormwater management
Saving water ● a ssessing water risks
2016 2017 2018
Although the construction material ● e ngaging with stakeholders on sharing
industry is not a large consumer of water water resources more effectively
compared to other industries, water is and efficiently, and contributing to
an essential resource in our operations. watershed-level sustainability by
Both the demand for water and its price facilitating greater access to water,
are expected to rise under the pressure recharging the groundwater table,
of population growth, urbanization and protecting and promoting biodiversity,
increased industrialization. and improving agricultural practices by
reducing water use
Likewise, lack of access to a reliable supply ● p
roviding more water to communities
of water is reaching unprecedented and the environment than we
proportions in many areas of the world, use at sites located in water-scarce areas
and is only likely to worsen. An assessment
of LafargeHolcim sites, using the WBCSD See the case study on page 38 on our
Global Water Tool, showed that around water stewardship programs.
17 percent of our cement sites are located
in water-scarce areas.
Costa Rica
Cartago quarry.
Water stewardship programs micro-irrigation schemes and the provision To avoid drawing on freshwater
of water to communities. By focusing resources for its operations, the plant’s
Marking a significant milestone in our on rainwater harvesting, drinking water rehabilitation plan involved creating a
sustainability journey, LafargeHolcim’s solutions and water use efficiency (both reservoir in the quarry. This artificial
Ambuja Cement in India is now six times internally and externally), Ambuja is lake, which operates on a closed-loop
water positive – an achievement that making a positive contribution to nature, system, is fed by rainwater recovery and
reinforces the company’s commitment as well as improving the livelihoods of recycling of the site’s used water.
to water stewardship for the benefit thousands of people.
of local communities. Other benefits of the lake include:
Thanks to the creation of an artificial
Ambuja’s total water withdrawal (water lake and a water recycling system, ● lower energy consumption from
debit) in 2018 was an estimated LafargeHolcim’s Cauldon Cement Plant in not pumping water from the river
6.7 million m3, a 2 percent reduction from the UK no longer withdraws freshwater ● a reduced risk of local flooding
the previous year. The 41.3 million m3 of from a nearby river. ● less chance of pollution as the lake
water provided to local communities and can be isolated from the river in
the environmental recharge from water The plant used to draw its water from the the unlikely event of an accident
projects (water credit) was up by River Hamps, labeled a UK Site of Special ● the creation of a natural habitat that
9 percent. The company is therefore more Scientific Interest and Special Area of forms a protective barrier for the
than six times water positive, with some Conservation, and an EU Special Area of fragile ecosystem of the River Hamps
plants up to 15 times water positive. Conservation. Each summer, parts of the ● t he creation of footpaths and
river dry up on the surface and become a bird-watching site.
Projects contributing to this water credit subterranean.
include the building of check-dams,
Supporting SDG
Cauldon, UK
The artificial lake at Cauldon Cement Plant.
38
Managing biodiversity contributed to the development of a Group- See the case study on page 40 on
As an operating principle, we expect wide strategy on karst1 management, and improving biodiversity through
our operations to have rehabilitation identified opportunities for protecting and rehabilitation in Belgium and Canada.
plans available for all our quarry sites. enhancing biodiversity at our quarries.
In addition, quarries of high biodiversity Tackling air emissions
importance are required to have a Following the completion of the project, we Air emissions are a key environmental
Biodiversity Management Plan in place. decided to implement FFI’s recommendations aspect of cement production. As an
By the end of 2018, 84 percent of our across all compulsory standards and operating principle, LafargeHolcim
quarry sites had rehabilitation plans procedures for the Group’s quarries. We expects that all cement sites measure
in place. have already integrated a new categorization and manage air emissions.
process into our Biodiversity Management
To help achieve the Group’s biodiversity System, and expect to implement other In 2018, we monitored the dust, NOx and
ambitions, our mandatory Quarry recommendations from FFI in the future. SO2 emissions from 95 percent of the
Rehabilitation and Biodiversity Directive clinker we produced; 83 percent of this
sets out the framework for managing Based on the new screening criteria, monitoring was continuous. To address
risks, and for protecting and enhancing LafargeHolcim has identified 283 quarries the gaps, the most significant of which
biodiversity. All our quarries are expected as being of a high level of biodiversity are in our Middle East Africa region, we
to comply with the rules and requirements importance, predominantly due to their have initiated a project to ensure that all
of the Directive by 2020. proximity to globally and nationally our plants will have continuous emissions
identified areas of high biodiversity value. monitoring equipment installed and annual
In 2018, LafargeHolcim and Fauna & Today, 84 percent of these quarries have spot measurements performed by 2020.
Flora International (FFI), a leading NGO BMPs in place.
focused on biodiversity, completed an The vast majority of LafargeHolcim plants
extensive 12-month project in Southeast We continue to assess the year-on- operate within best practice emission
Asia. As part of the project, designed to year improvements on the biodiversity ranges and some are among the best in the
mitigate our impacts on biodiversity, quality condition of our quarries using sector. However, a handful of high-emitting
FFI conducted a review of BMPs at sites the Biodiversity Indicator and Reporting plants, particularly in our Middle East Africa
in Indonesia and the Philippines. FFI System. For quarries with potential for region, have a major impact on total Group
also organized a stakeholder dialogue biodiversity enhancement, we work dust emissions. Our priority is to improve
on biodiversity in Malaysia, which led to toward generating a positive impact on their performance, and action plans are
specific recommendations for a BMP. It also biodiversity. either in place or being developed.
Costa Rica
Biodiversity assessment being undertaken.
1
Karst is a special type of landscape that is formed by the dissolution of soluble rocks, including limestone, gypsum and dolomite. Karst regions contain aquifers that
are capable of providing large supplies of water. Natural features of the landscape such as caves and springs are typical of karst regions.
Improving biodiversity through The results have been encouraging, with Evolving over time, the biodiversity
quarry rehabilitation Milieu proving to be an excellent example program demonstrates that wildlife
of how rare habitats can be created can flourish alongside industry. The
The LafargeHolcim Milieu quarry is our through close collaboration with the installation of nest boxes for various
biggest in Belgium, with an annual scientific community, local stakeholders species of owls and the American kestrel
capacity of ten million tonnes. At the and government agencies. Some of the have been particularly successful, with
quarry, we undertook a rehabilitation ponds are now colonized by protected 53 kestrels raised in 2018 and 32 in 2017.
project to create temporary and species: more than 40 bird species, We plan to work with the Peregrine Fund
permanent habitats for rare and protected and several species of dragonflies and and a number of universities to research
species, joining forces with Life in Quarries. damselflies, have been observed, and American kestrel genetics.
This group is co-financed by the European midwife toads have been successfully
Union, the Walloon Region, the quarry introduced to the site. For its biodiversity efforts at Berrymoor
sector and a range of partners including Pit, Lafarge received the 2019 Alberta
Parc naturel des Plaines de l’Escaut and Meanwhile, in Canada, Lafarge’s Sand and Gravel Association Award of
Gembloux Agro-Bio Tech university. Berrymoor Pit, situated 90 kilometers Excellence. The honor is presented to
west of Edmonton, has been engaged in aggregate producers in the province
Based on a 2016 biodiversity inventory a biodiversity and community outreach to recognize outstanding examples of
of the quarry, action plans were agreed program for the last decade. With the pit stewardship, community relations and
by the researchers, LafargeHolcim situated along the North Saskatchewan sustainable operations.
management and other stakeholders. River, a significant wildlife corridor, we
Alongside the normal extraction activities recognize the need to balance effective
at Milieu, we created open space around operations with the preservation and
protection of this diverse ecosystem. Supporting SDG
several ponds, and restored grasslands
and meadows. Temporary pools and Initially, Lafarge completed a wildlife
permanent water bodies were created, inventory of the pit, undertaking raptor
and seeds to promote meadows and and raptor nest, nocturnal and amphibian
flowering grasslands were sown. surveys, and using trail cameras. Bald
eagles were observed fishing on the
river, and an owl banding program was
conducted.
Berrymoor, Canada
Release of banded saw-whet owl.
40
Lafarge Malaysia: Investing in
reducing dust emissions
SDG 6: Clean water SDG 15: Life on land SDG 17: Partnerships for the goals
and sanitation Our ongoing biodiversity We have been working closely with
Our water management programs contribute to nature conservation NGOs at local and
programs and targets this goal. global levels to design and implement
contribute to this goal. sustainable biodiversity management
practices. This collaboration contributes
to this goal.
Responsible sourcing 47
15 million
People benefiting from our programs
over the last four years
42
Community
In 2018, LafargeHolcim countries spent Working with communities An example of this is the Supérate
CHF 47.8 million on social investments, We believe that our presence in a vocational training program in Ecuador,
inclusive business programs, and community brings many inherent initiated by the Holcim Ecuador Foundation
donations. In addition, around 8,700 advantages, such as direct employment, and Disensa, the LafargeHolcim
employees throughout the Group spent tax revenues, infrastructure development construction materials franchise store
over 60,000 hours on volunteering and local procurement. We seek to create chain in Latin America. The participants
programs in their local communities. Over even more shared value through our in the program are not only trained on
the last four years, these activities have social investment and inclusive business technical skills such as masonry and the
benefited an estimated 15 million people programs, which focus on employment building of structural elements, but also
directly. This demonstrates that for every creation and skills development, education, psychosocial competencies, administration
Swiss Franc we spend, we manage to create infrastructure development, health and and workplace safety. Graduates from the
a social impact going far beyond the actual sanitation, and environment. Our social program enjoy increased employment
monetary value. Going forward, we will investments are based on long-term possibilities in the construction industry,
further quantify and measure the shared strategies, implemented in collaboration reflecting its commercial and social value.
value created and seek to grow it. with specialized partners. Since its launch, 350 young people have
graduated from the Supérate program.
As a principle, we expect every country
to have formal stakeholder engagement
plans in place covering all our cement
sites and our most material aggregate and
concrete sites. These plans are developed
in collaboration with local stakeholders
such as municipal officials and community
associations. This requirement is formalized
in the LafargeHolcim Communities and
Stakeholder Engagement Directive.
Stakeholder engagement
In addition to continuous engagement
with the communities that host us,
LafargeHolcim engages with a range
of stakeholders at all levels of the
organization. The matrix on page 44 lists
our key stakeholder groups, the issues
we engage with them on, and how
we engage with them.
Communities Community advisory panels Local impacts (environmental and social) Ongoing
Plant open days and tours Health and safety
One-on-one meetings Creating shared value
Community forums
Social media
44
Managing human and labor rights These consultations involve interviews Community impact
Our approach to managing human rights and focus groups where participants are 9 Community impact
is risk based and fully aligned with asked to identify risks and opportunities 10 Land management
the UN Guiding Principles on Business relating to employment practices (including 11 Security guards
and Human Rights. within contractors and suppliers) and 12 Bribery and corruption
community impacts. 13 Support of armed actors
Our Human Rights Directive outlines 14 Grievance mechanisms
our commitment to respecting relevant A self-assessment is conducted using
international standards, including the a tool that guides representatives of Following an assessment, prioritized
principles contained within the Universal local management through a number recommendations are presented to the
Declaration on Human Rights, the of questions that systematically cover country CEO and a detailed local action
Organisation for Economic Co-operation potential business-related human rights plan is developed. Where an issue has
and Development’s Guidelines for risks. Based on the answers, the tool been identified as medium or high risk,
Multinational Enterprises and the prioritizes the topics and indicates where a mandatory remediation plan is enforced.
International Labour Organization’s action is or may be required.
Fundamental Conventions on Labour The most commonly raised issues in
Standards. Additionally, we participate in All assessments cover the following assessments relate to working conditions,
the UN Global Compact (UNGC). 14 indicators, as well as any additional community impacts and contractor
issues relevant at a local level. management.
As an operating principle, we expect our
operations to adhere to human rights Employment practices 2015 Modern Slavery Act
where we operate. We have developed 1 Child labor The UK Government published the Modern
a Human Rights Management System, 2 Forced labor Slavery Act in 2015, requiring companies
categorizing countries into low, medium, 3 Freedom of association with operations in the UK to publish
or high business risk, using the UN Human 4 Non-discrimination an anti-slavery statement. Our company
Development Index and Freedom House’s 5 Working conditions in the UK, Aggregate Industries, issues
Freedom in the World Index. 6 Minimum wage an annual Modern Slavery Transparency
7 Health and safety Statement on its website:
All countries identified as high risk (and 8 Contract workers www.aggregate.com/sustainability/reports-
countries where an incident has occurred) and-policies
are required to conduct a full Human Rights
Impact Assessment (HRIA), while all other
countries must conduct a self-assessment.
46
Responsible sourcing covered by high ESG impact suppliers These include the following:
LafargeHolcim has a short and predominantly (2017: 53 percent), had been qualified.
local supply chain; more than 90 percent We will strive to achieve full coverage as ● Decent working conditions
of our approximately 112,000 suppliers soon as possible. ● Health and safety
are from the local market. With our large ● Environment regulations and
geographic footprint, this poses challenges, Recognizing the importance of impact management
particularly in countries where business responsibility in our value chain, we have ● No discrimination and freedom
practices are not well regulated. issued a Supplier Code of Conduct, informed of association
by the UNGC principles, and the code is ● No child or forced labor
In 2018, 34 percent (2017: 31 percent) of communicated to all suppliers. However, ● Anti-bribery and corruption
our active supplier base were identified we recognize that the code in itself is not
as potential high environmental, social enough. In order to manage potential Qualification is initially done through
and governance (ESG) impact, accounting ESG impacts, LafargeHolcim identifies self-assessments predominantly conducted
for 55 percent of our annual total spend high ESG impact suppliers and ensures by independent qualification platforms
(2017: 51 percent). The majority of these they are qualified to work with us. In such as Avetta or Damstra, and
are contractors (84 percent) and the addition to standard technical and supplemented with fact finding and on-
remainder raw material, energy, equipment financial requirements, qualification site audits where issues are flagged.
and parts and packaging suppliers. By the entails demonstrating that the supplier is
end of 2018, high ESG impact suppliers, compliant with the ESG aspects contained
accounting for 62 percent of the total spend in our Supplier Code of Conduct.
Strengthening sustainable Holcim El Salvador implemented These workshops were greatly appreciated
procurement in Central America Sustainable Purchasing Forums in 2016. by the participants, benefiting them in the
In the initial forum more than 40 suppliers implementation and adaptation of their
To encourage alignment with the and contractor companies were given business processes, and helping them to
LafargeHolcim Supplier Code of an introduction to the LafargeHolcim deal with non-conformities. This not only
Conduct and Sustainable Procurement Sustainable Procurement Directive. helps them to become better partners to
Directive, our Central America cluster Subsequent forums were conducted in our company but also better companies –
has developed a program to strengthen 2017 and 2018. In all, more than 200 positioning them for sustainable growth.
supplier competencies in our focus areas people have received training in sustainable
of health and safety, climate, circular procurement. The program additionally
economy, environment and communities. included a financial health module in Supporting SDG
The program consists of supplier forums alliance with a leading financial institution.
and workshops where suppliers are
provided with documentation, tools Holcim Nicaragua developed forums in
and knowledge to enable them to run a 2018 attended by 35 strategic suppliers
sustainable business, aligned with our to support them in the development and
Supplier Code of Conduct. implementation of our requirements,
aligning them with our way of doing
Holcim Costa Rica implemented the business and the benefits for their
program in 2017, in partnership with the companies. In 2019, the forums will focus
Costa Rica
Business Alliance for Development. The on continuous improvement in health
Supplier development workshop.
initial workshop with 24 participating and safety.
suppliers covered an introduction to
sustainability, environmental awareness
(waste management, water and energy),
and human rights. Following the interest
shown by suppliers in these topics, the
program continued throughout 2018,
focusing on more specific topics including
anti-corruption, health and safety, and
administrative and financial management
for small and medium enterprises.
Case study: Recognition for project is the “Good Neighbors” volunteer district, offering tours of the mine, and
community relations initiative. In September 2017, all mine employees visited elementary school
employees spent a number of Saturday students to introduce them to beginner
The National Stone, Sand and Gravel work-shifts completing much-needed science, technology, engineering and
Association in the USA recognized repairs to roads, landscape beautification math topics related to mining.
LafargeHolcim’s Stringtown Quarry in efforts, trail building and various other
Oklahoma with the Platinum Award, its upgrades throughout town. Over 280 The quarry firmly believes in transparency
top honor, for Excellence in Community volunteer hours were donated to the Good and always maintains an open-door
Relations. The quarry won the award for Neighbors event over the course of two policy with its neighbors. This relationship
its highly successful 2017 community weekends. In addition to volunteer hours, ensures that the community is engaged
outreach campaign, in which it the site gave substantial in-kind donations, in how the quarry conducts its business.
engaged in initiatives that benefit local including 5,000 tonnes of road base and a
stakeholders. small bridge.
Given the small community and reduced Beyond the Good Neighbors program, the Supporting SDG
tax base, many local social projects that Stringtown Quarry was, once again, a key
would have normally been addressed by participant in the Atoka County Natural
the local government have unfortunately History Day Event. The day focuses on
become a lower priority in recent years. educating more than 500 students on
The Stringtown Quarry, however, the area’s natural history, with a focus on
continues to focus on community mining, given the critical role mines play in
projects that bring our employees and the community. The quarry also regularly Stringtown Quarry, USA
community together. The flagship hosted students from the local school Community day.
48
El Salvador: Bringing medical The Cessa Foundation was initiated with zika and chikungunya, a school health
care and preventive care to the establishment of a community clinic program and specialized health days and
remote communities over the located 500 meters from El Ronco Cement formed six health and safety committees
long term Plant. From inception, Holcim has provided to develop a preventive health program.
the facilities, medical staff and equipment,
while the Ministry of Health provides Holcim El Salvador’s healthcare program
Holcim El Salvador launched a community free medicine. currently benefits over 8,000 residents
health program in 1994 to improve in 32 communities. Every year, the clinic
communities’ access to medical care In 2006, to expand the reach of the offers more than 6,000 free consultations,
and support the prevention of diseases. program, a mobile clinic in the form of and at least eight specialized health
an ambulance was added in partnership days are carried out. Furthermore, the
with the Ministry of Health. Since then, the school health program monitors the
community clinic opens three days a week, physical development of students (size,
while the mobile clinic travels to nearby weight, nutrition, health status, etc.)
communities on the other two days. in 13 education centers.
El Salvador
Cessa Foundation clinic.
Affordable housing 51
1,300
granted national patents or patent applications
300
researchers within LafargeHolcim
50
Innovation
Innovating to lead inviting start-ups, technology providers, We continue to develop our “14Trees”
Innovation has been the lifeblood of universities and players in other industries joint venture with the UK’s CDC
LafargeHolcim – with the LafargeHolcim to exploit the potential at the intersection Group, by expanding the Durabric low-
Innovation Center in Lyon, France, as a between heavy industry and the tech carbon alternative housing solution.
case in point. The Innovation Center acts sector – with promising first feedback. The In 2018, together with 14Trees, the
as a hub in a network of local laboratories project leaders bring passion and fresh “SmartDiaspora.com” initiative was
and country-level innovation teams. The perspectives to our business, and in return launched. The project is aimed at the
innovation organization counts more than we offer our experience, our expertise, millions of people living away from their
300 researchers within LafargeHolcim. and one of the world’s largest industrial country of origin (diaspora), who send
Thanks to this networked approach, networks as a test bed for their ideas. money back to their home country.
customers around the world have The objective is to address the huge
benefited from tailormade solutions to Patents demand from those who are struggling
build more quickly and efficiently, and even We filed 13 new patent applications in to build homes in their original countries,
to reduce their impact on the environment. 2018, safeguarding innovation coming benefiting both these prospective
You can find examples of these solutions both from countries and the Innovation customers and the company.
in the case studies on Thermaflow and Center. Overall, LafargeHolcim owns about
AIRIUM on page 53. 190 active patent families, representing Through SmartDiaspora.com, someone
approximately 1,300 granted national who owns land can select from a one-,
We believe that innovation is emerging patents or patent applications. About two- or three-bedroom home design, team
through the collaboration of a network of three-quarters of the innovation pipeline up with a financing partner for a mortgage
actors, outside any single organization. is allocated to the Cement and Solutions and get a home built in around 12 to 16
In 2018, we embraced this spirit of open and Products segments. The main topics weeks once the formalities are completed.
innovation, connecting people and are low-carbon binders, ultra-high This all happens under the watchful eye of
organizations from inside and outside performance products and mineral an experienced local project manager, who
LafargeHolcim to find new solutions and thermal insulation. works with a pre-qualified contractor using
ways of working. Our aim is to find and high-quality, sustainable construction
exploit innovations along our entire value Affordable housing materials from LafargeHolcim and our
chain, from processes to products, from We are developing residential construction partners. Alternatively, if people want to
quarry to worksite. The LH Accelerator solutions to address the significant need buy building materials for a house their
illustrates how open innovation is working for affordable housing, particularly in family is building, they can easily do this
at LafargeHolcim today (see case study Asia Pacific, Middle East Africa and Latin through SmartDiaspora.com. They can also
on page 52). In this program we put ten America. Drawing on the expertise of our buy a ready-made house from one of the
start-ups worldwide together with our global R&D Center in Lyon, France, our many properties listed on the platform.
own experts, as well as mentors from solutions help address the enormous and
corporate partners China Communications growing challenge of providing decent and
Construction Company (CCCC) and Sika. sustainable housing, while contributing to
LH MAQER was introduced to the the bottom line. In 2018, affordable housing
digital start-up community at the end projects were in place or being assessed in
of 2018. Through this program we are 15 LafargeHolcim operating countries.
LH Accelerator – building Over six months in 2018, the LH materials and logistics, construction
innovation together Accelerator program at the LafargeHolcim equipment, construction services, and
R&D Center near Lyon, France, was the demolition and waste management.
If the building materials industry is going hub for ten young, innovative companies
to provide solutions to global issues such from Europe, Asia, the Americas and Africa Following the program’s success, it will be
as climate change and urbanization, to change the way the building materials repeated in 2019, with the LH Accelerator
innovation is paramount. Together with industry operates. They benefited from once again providing unmatched
partners Sika and China Communications access to LafargeHolcim’s leading facilities access to investors and partners in the
Construction Company, we launched the and the guidance of industry experts to construction industry.
LH Accelerator in 2018. Start-ups and take their ideas to the next level.
partners from around the world were Find out more about the first cycle of
invited to work collaboratively and to The program culminated with a “demo the LH Accelerator at lh-accelerator.org.
combine the start-ups’ new ideas with the day” in November, when the start-ups
proven experience of major players. The put forward solutions for areas in which
ambition was to tackle today’s challenges there is a clear need for innovative Lyon, France LafargeHolcim
along the entire construction value chain. breakthroughs: design and engineering, R&D center.
52
AIRIUM™ – providing insulation
In addition to the AIRIUM Thermoroof
solutions in Algeria solution for the country’s typical flat
roof terraces, Lafarge Algeria has also
Rising concerns about electricity costs developed AIRIUM Thermofloor for sub-
and a new focus on energy savings screeds, which offers the perfect blend
in Algeria have opened the door to of strength and insulation, fulfills both
fast-track deployment of AIRIUM leveling and insulation roles, and provides
insulation technology. a safe, healthy thermal and acoustic
correction layer.
AIRIUM combines building material and
insulation into one flowable material Our AIRIUM R&D taskforce conducted
that can be poured into any type of technical training for the local team in
cavity, with density adjusted to the December 2017, which was followed
given application. It is a local non- by the product launch in May 2018.
fossil fuel-based technology with great Following the launch, the market feedback
insulation properties in both cold and hot from builders, design professionals,
conditions. AIRIUM is also fire-resistant, government authorities and end users has
highly durable, recyclable and safe. been extremely positive. The project has
In Algeria, homeowners and builders generated strong interest in the Algerian
using AIRIUM for new constructions or market, with the pipeline of prospective
renovating their roof terraces can customers increasing daily.
count on energy savings of more than
30 percent per year. Algeria AIRIUM project.
75,000
Employees
66
Health and safety
audits
54
People
In 2018, our performance improved Health and safety (H&S) is our core purpose was to cascade our “Key Lessons,”
significantly, with the number of on-site value. We aim to achieve a zero-harm which have been published for most
fatalities (employees and contractors) culture and zero fatalities. Our Ambition on-site fatalities since 2017, reaching all
82 percent lower than in 2017. Our global “0” strategy focuses on six areas: Safety members of the workforce. Additionally,
Lost Time Injury Frequency Rate (LTIFR) On-site, Zero-Harm Culture, Systems three “best practice challenges” were
for employees and contractors on-site and Processes, Road Safety, Health and successfully rolled out, with almost 2,000
reached 0.79, an improvement of 13 Contractor Partnership. As part of this entries, 140,000 votes and more than
percent compared to 2017 (0.91). We are strategy, we implement standardized 15,000 participants, demonstrating great
very pleased to see that the new strategy, global programs in every country where commitment from employees at all levels
combined with years of dedication and we operate. In 2018, we launched 17 of the organization.
hard work, is starting to have an impact. revamped H&S Standards and conducted
an organizational transformation called Promoting road safety
One employee and 18 contractors lost “One Team, One Program” to establish a In 2018, we continued to make progress
their lives in 2018. These deaths are leaner, more horizontal and locally with our road safety program, maintaining
unacceptable. Statistically speaking, focused structure. our focus on transforming driver skills and
compared to 2017 this represents a behaviors. A driver qualification program is
39 percent overall improvement, and a 90 H&S is promoted through engagement being delivered and includes robust
percent improvement in employee fatalities and communication campaigns. In 2018, in-cab training, with a pass/fail assessment.
(ten in 2017). We counted 17 fatalities with the theme of our Global H&S Days was “I Regions that have implemented the
third parties compared to 33 in 2017. improve H&S every day at my workplace.” program have shown significant
Employees were asked to evaluate improvements. For example, our Middle
Everyone in our organization, beginning incidents that could happen or had already East Africa region qualified over 50 percent
with our Board and Executive Committee, occurred at their workplace and describe of its drivers and in 2018, reduced road
has taken responsibility to ensure that we how to ensure they do not reoccur. The fatalities by 47 percent compared to 2017.
live and practice a culture of zero harm.
In-vehicle monitoring systems (IVMSs)
are mandatory and are being installed in
all our trucks. IVMSs proactively monitor
safe driving performance, and now cover
over 50 percent of the kilometers driven
globally. In India, our Transport Analytics
Center (TAC) played an instrumental role
in providing the country with well-
structured and systematic analytics for
driver and transporter performance.
As a result, India reduced road fatalities
by 79 percent year-on-year. In 2018,
four countries – Zambia, Lebanon, the
Philippines and Indonesia, representing
30 percent of global kilometers driven –
connected to the TAC.
Ewekoro, Nigeria
Safety check.
56
More boots, less pants – a trust building, together with a shift from a
cultural transformation punitive to a coaching culture. This simple
delivering zero harm change steadily improved the credibility
of the management team by making them
involved and visible in the field.
LafargeHolcim Mexico embarked on a
transformation journey in 2018 with a As a result of these initiatives, overall
very simple recipe: more boots (more H&S performance has shown rapid
time on the feet in the field) and less improvement, as the LTIFR (employee and
pants (less time sitting in the office). After contractor on-site) chart demonstrates. Supporting SDGs
years of significant efforts in training The achievement of zero lost time injuries
and the implementation of standards, on-site in 15 million hours worked is an
procedures and engineering controls, incredible achievement by any standard,
the expected step change had not and is a leading example for the Group.
materialized. Results were stagnant,
even disappointing, with employees and
contractors still being injured at work.
LTIFR employees and contractors on-site (Mexico)
The Mexican team decided to spend
quality time in the field engaging and 3.00
empowering employees on the shop
Performance Target
floor. They decided to create a mandatory 2.50 2.50
program for all managers, making sure
they would be out at the job sites early in 2.02
2.00
the morning, which is where and when
2.01
the most relevant decisions affecting
health and safety are made. 1.50
Guayaquil, Ecuador
Employees in control room.
58
Working for LafargeHolcim I genuinely believe that Lafarge creates a
visible economic and social value for our Karbala, Iraq Muna Abd Ali Abdulateef, Control
“With a background in chemical Room Operator at Karbala Cement Plant.
country, starting with the communities
engineering and construction, I joined surrounding our operations. At the
Lafarge Iraq in October 2017. I received Karbala Cement Plant where I work, the
three months’ training and then joined Group invested significantly in a long
the Karbala Cement Plant team as rehabilitation process of the plant. We now
Control Room Operator, reporting provide high-quality cement products to
to the Production Department. It is our region, which are used in important
my responsibility to ensure my team infrastructure projects such as the Karbala
achieves the maximum production rate Refinery and the Basra Faw Port.
using the minimum energy and heat
consumption. By doing this, we protect Lafarge Iraq’s people development
our local environment by controlling approach is a leading example, not only
the gas emissions from the chimney. in the cement industry, but in the whole
In the control room, we have a group country. Developing local teams for long-
of safety indicators to monitor that our term employment, with special attention
department and the wider plant are on gender diversity, is very important
operating safely. to me – especially as diversity does not
get enough attention in our country yet,
As an international company, Lafarge particularly in industry.
offers its engineers the opportunity to
constantly learn and develop new skills, LafargeHolcim is contributing to reviving
whether they are experienced or new the Iraqi industrial sector by rehabilitating
graduates. In fact, Lafarge provides cement and ready-mix plants, providing
training to its entire staff across every job opportunities. In short, having
department, and has helped me in an internationally recognized leading
both my professional and personal Supporting SDG
company like LafargeHolcim in Iraq
development – I’m very pleased to work benefits the country and its people in
for a company that invests in its staff in many ways.”
this way.
SDG 3: Good health SDG 4: Quality education SDG 5: Gender equality SDG 8: Decent work and
and well-being Our employee training Our diversity and inclusion economic growth
Our health and safety and development activities programs and targets Our direct hires, working
initiatives contribute to contribute to this goal. on gender diversity conditions and training
this goal. contribute to this goal. activities contribute to
this goal.
and assurance
Governance, performance
Performance data tables 64
Methodology and
consolidation 69
Assurance statement 71
Global citizenship 73
62
Governance and integrity
Governance The CoBC is supported by a variety of with the Organisation for Economic
Following the implementation of our speak-up channels, including the global Co-operation and Development (OECD)
country-focused, corporate-light operating “Integrity Line,” which enables employees on the Base Erosion and Profit Shifting
model, countries are empowered and to report any integrity-related concerns. (BEPS) project, including full compliance
accountable to implement local best Available in 36 languages, it is a safe with Country-by-Country reporting. In the
practices. and confidential way to report possible interests of transparency, we report on
CoBC violations or raise compliance- taxes paid per region on an annual basis
At a corporate level, the Head of related questions. (see page 68).
Sustainability reports directly to the CEO
and sustainability topics are regularly In 2018, 801 reports related to the CoBC 4. Tax risks management: We put the
discussed at Executive Committee level. were received by Group Investigations relevant processes and controls in
Additionally, the Health, Safety and through the Integrity Line and other place in order to limit financial risks
Sustainability Committee supports and channels. By the end of the year, 668 cases for the Group.
advises the Board of Directors on the had been closed. The remaining 133 cases
development and promotion of a healthy were still under investigation as at 5. Tax contribution: We engage in initiatives
and safe environment for employees 31 December 2018. to simplify and improve tax regimes to
and contractors, as well as on sustainable encourage investment and economic
development and social responsibility. Beyond the CoBC, we have specific growth in all communities where we
This includes climate-related matters, directives and programs to deal with anti- operate, including by paying taxes locally.
which are a regular agenda item. bribery, corruption, sanctions and trade
restrictions, as well as fair competition, Our “Approach to Tax” statement
In 2018, the Health, Safety and in each case supported by compliance is available on our website at
Sustainability Committee held four regular tools and targeted training. In 2018, www.lafargeholcim.com/Sustainability-reports.
meetings. The Head of Health & Safety a total of 13,520 employees completed
and the Head of Sustainable Development compliance training modules and a Transparent engagement
were present at all meetings. The Chairman further 14,790 underwent the fair We engage with integrity and in
of the Board and the CEO attended competition training. accordance with the highest ethical
the meetings of the Health, Safety and standards. Our credibility in the
Sustainability Committee as guests. Responsible tax communities in which we operate
LafargeHolcim is committed to acting with depends upon working together fairly and
Compliance and integrity transparency, integrity, and the highest honestly, and is ensured through internal
The Group maintains a comprehensive, ethical standards and will not tolerate practices, guidelines and rules, as well as
risk-based compliance program with anything that compromises this in our our adherence to external schemes. As
dedicated resources at local, regional and “Approach to Tax.” an example, LafargeHolcim fully adheres
Group level, with central steering. to and complies with the code of conduct
Our Tax Strategy is built on five pillars: associated with the EU Transparency
Our Code of Business Conduct (CoBC) Register, to which we are registered.
ensures that directors, officers and 1. Full compliance and alignment to
employees share the company’s business strategy: We comply with Our stakeholders have emphasized the
commitment to conducting business with tax laws in a responsible manner and important leadership role that we can play
transparency and integrity. It provides align our tax strategy with our in terms of advocacy and engagement.
guidance on how to put this commitment business strategy. Our advocacy positions can be found on
into practice, and helps to ensure that we our website at www.lafargeholcim.com/
adhere to the laws and regulations in our 2. Tax governance: We apply diligent care Sustainability-reports.
operating countries. The CoBC is available and judgment to ensure all decisions
in 28 languages and has been issued are well-considered and documented.
in all Group companies. In associated
companies, or joint ventures where we 3. Tax transparency: We value open and
do not exercise equity or management constructive relationships with tax
control, all available means have been used authorities and support efforts to
to seek the adoption of the CoBC or at least increase public trust in tax systems.
equivalent standards. We support and work in collaboration
Producing companies # 61 61 60
Clinker producing sites # 144 140 139
Grinding and blending sites # 61 64 64
Aggregates sites # 493 489 464
Asphalt sites # 80 84 82
Ready-mix sites # 1,278 1,270 1,221
Kilns operated # 194 180 180
Quarries operated # 714 709 680
Units key
Mt – million tonnes
M GJ – million gigajoules
M m3 – million cubic meters
M CHF – million Swiss Francs
Note 1: Taken from LafargeHolcim Annual Report, five-year review, page 280.
Note 2: Cementitious material is defined following the CSI definition: Total clinker produced plus mineral components consumed for blending and production of cement
substitutes, including clinker sold, excluding clinker bought.
Note 3: Conservative estimate based on the LafargeHolcim iCare Sustainable Solutions questionnaire. See methodology and consolidation section on page 69 for more details.
Note 4: Includes alternative raw material, industrial mineral components (consumed and sold externally), alternative fuels, volume of return concrete recycled, secondary/
recycled aggregates and recycled asphalt.
64
Reporting on target areas
2022 2030
Unit 2016 2017 2018 target target GRI ref
CEM specific CO2 emissions – net (kg/tonne cementitious material) kgCO2/t 585 582 576 560 520 305-4
CEM CO2 emissions – Gross (Scope 1) (note 5) Mt 120 122 126
CEM CO2 emissions – Net (Scope 1) (note 5) Mt 115 118 121
CEM CO2 emissions from raw materials Mt 78 80 82
305-1
CEM CO2 emissions from fossil fuels Mt 38 38 39
CEM CO2 emissions from fossil-based waste fuels (Scope 1) Mt 4 4 5
CEM CO2 emissions from biomass-based waste fuels (Scope 1) Mt 0 0 0
CEM CO2 emissions from electricity consumption (Scope 2) Mt 8 8 8 305-2
Other segments CO2 emissions from fuels (Scope 1) Mt 7 9 9 305-1
Other segments CO2 emissions from electricity (Scope 2) Mt 0 0 0 305-2
Absolute gross emissions (Scope 1) Mt 127 131 135
Absolute emissions (Scope 2) Mt 8 8 8
CEM energy consumption total M GJ 596 600 620
CEM thermal energy consumption (note 6) M GJ 523 527 545
CEM thermal energy consumption fossil fuels M GJ 437 438 450
CEM thermal energy consumption waste-based fuels M GJ 57 55 60
CEM thermal energy consumption biomass-based fuels M GJ 29 34 35
CEM thermal substitution rate % 17 18 18 302-1
CEM electrical energy consumption M GJ 72 73 75
CEM electrical energy renewable M GJ 6 7 8
CEM electrical energy non-renewable M GJ 66 66 67
Other segments thermal energy (note 7) M GJ 81 96 97
Other segments electrical energy M GJ 1 1 1
Water (note 8)
CEM specific freshwater withdrawal – liter/tonne cementitious l/t 362 330 305 291 262
Total water withdrawal – all segments M m3 164 157 154
Total freshwater withdrawal M m3 138 129 132
Freshwater withdrawal from ground water M m3 39 33 34
Freshwater withdrawal from surface water M m3 70 75 79
303-1
Freshwater withdrawal from municipal water or other utilities M m3 14 12 14
Freshwater withdrawal from other water sources M m3 15 9 5
Non-freshwater withdrawal M m3 13 14 11
Rainwater harvested M m3 13 14 11
Total water discharge – all segments M m3 74 67 63
Water discharge to ground or soil infiltration M m3 7 6 6
Water discharge to surface water M m3 61 54 55 306-1
Water discharge to off-site treatment M m3 1 1 1
Water discharge to others M m3 5 6 1
Total water consumption – all segments M m3 90 91 91 303-1
Sites with recycling systems # 1,264 1,320 1,315 303-3
Note 5: Gross CO2 emissions are the total emissions resulting from the chemical decarbonation of limestone and the emissions resulting from the burning of fossil-based fuels
and pre-treated waste-derived fuels. Compared with gross CO2 emissions, net CO2 emissions do not include CO2 from alternative fossil fuels.
Note 6: Includes non-kiln fuels.
Note 7: Includes captive power plants.
Note 8: Excludes captive power plants.
Communities
New beneficiaries in reporting year M 2.9 2.8 2.9 5 million p/a 5 million p/a
Total beneficiaries in reporting year M 5.4 6.6 6.6
Community spend M CHF 57.4 52.8 47.8
Contribution by partners to total community spend % 20 23 22
Social investment projects % 67 75 73 201-1
Donations (cash and in kind) % 8 7 7
Inclusive business projects % 9 4 3
Overhead % 16 14 17
Reporting on implementation of operating principles and health and safety Expected performance
Unit 2016 2017 2018 2022 2030 GRI ref
Note 9: H&S performance indicators for 2016 and 2017 follow the WBCSD-CSI Guidelines for measuring and reporting, and have been restated
according to the consolidation scope described in the methodology and consolidation section on page 69. Data for 2018 is reported following the GCCA
Sustainability Guidelines for the monitoring and reporting of safety in cement manufacturing, issued November 2018, and is consolidated to the same
scope. See the methodology and consolidation section on page 70 for more details.
66
Reporting on implementation of operating principles and health and safety
Expected performance
Unit 2016 2017 2018 2022 2030 GRI ref
Environmental compliance
Number of countries reporting major non-compliance cases (note 10) # 5 6 9 0
307-1
Fines and penalties paid (CHF) M CHF 0.3 0.5 0.4 0
Environmental Management Systems
Cement sites with an ISO 14001 certification % 81 81 80
100
Cement sites with an EMS equivalent to ISO 14001 % 89 85 87
Biodiversity
Quarries with rehabilitation plan in place (note 11a) % 84 73 84 100
Quarries with high biodiversity importance (note 11b) # 309 318 283
304-1
Quarries with high biodiversity importance with biodiversity 304-3
% 82 76 84 100
management plans in place
Total rehabilitated area ha 15,061 14,604 14,539
Air emissions
% clinker produced with continuous monitoring of dust, NOx and SO2 emissions % 77 82 83
% clinker produced with annual monitoring of dust, NOx and SO2 emissions % 93 95 95
Coverage (note 12)
Dust: Percentage of clinker production % 99 99 100
NOx: Percentage of clinker production % 99 98 98 100
SO2: Percentage of clinker production % 99 98 98
VOC: Percentage of clinker production % 94 86 90
Mercury: Percentage of clinker production % 88 87 89
Dioxins/furans: Percentage of clinker production % 81 87 89
Emissions
Total dust emissions tonnes 12,336 12,686 17,624
Total NOx emissions tonnes 206,627 197,595 192,388 305-7
Total SO2 emissions tonnes 47,002 38,315 40,173
Total VOC emissions tonnes 6,614 7,663 7,873
Total mercury emissions tonnes 1.0 1.5 1.4
Total dioxins/furans emissions gTEQ 3.0 2.2 2.9
Specific emissions
Specific dust emissions (g/tonne of cementitious materials) # 63 63 84
Specific NOx emissions (g/tonne of cementitious materials) # 1,053 999 934
Specific SO2 emissions (g/tonne of cementitious materials) # 239 194 195
Improvement
Specific VOC emissions (g/tonne of cementitious materials) # 36 44 42
Specific mercury emissions (mg/tonne of cementitious materials) # 8 8 7
Specific dioxins/furans emissions (ng TEQ/tonne of cementitious materials) # 18 12 15
Note 10: A “major” non-compliance case is any regulatory non-conformity which 1) seriously threatens the quality of environmental compartments (air,
water, soil), 2) directly or indirectly endangers human, animal and plant health/life, 3) if made public, would stir public concern and emotion, i.e. would
negatively affect the company’s image, or 4) results in a significant fine or penalty (monetary or non-monetary sanctions). Aligned with DJSI, we have
applied a reporting threshold of CHF 10,000.
Note 11a: The LafargeHolcim Quarry and Rehabilitation Directive was issued in late 2016, and is being rolled out across the Group. This figure refers to
the number of quarries compliant with the new directive.
Note 11b: According to new categorizations following FFI recommendations. See page 39.
Note 12: If the emission has not been measured in 2018, the 2017 measurement has been used to estimate the 2018 performance at kiln level.
Communities
Stakeholder engagement plans available and
% 59 75 79 100
reviewed in last three years – cement and grinding sites
Human rights assessments conducted – countries – cumulative since 2014 % 49 63 70 100
Income taxes paid by region
Total Group M CHF 860 871 787
Asia Pacific M CHF 277 179 227
Europe M CHF 131 297 114
201-1
Latin America M CHF 196 237 313
Middle East Africa M CHF 146 124 96
North America M CHF 110 34 38
Suppliers
Suppliers from national markets % 83 87 90 414-1
Suppliers with supplier code of conduct as part of contractual agreement % 32 40 51 414-2
308-1
Countries which have identified high ESG impact suppliers % 96 100 100 100 308-2
High ESG impact suppliers qualified (% spend) (note 13) % 52 53 62 204-1
Employees
By employment contract and age interval
Full-time employees % 99 98 99
Part-time employees % 1 2 1
405-1
Permanent employees % 94 95 96
102-8
Fixed-term contract employees % 6 5 4
Employees under the age of 30 % 14 14 14
Employees between 30 and 50 % 60 60 61
Employees above 50 % 26 26 25
Gender diversity
Gender diversity – females management level % 19 20 20
Gender diversity – females non-management level % 13 12 11 Improvement 405-1
Gender diversity – females total % 15 14 14
Turnover
Turnover total % 16 14 16
Improvement
Turnover voluntary % 7 7 8 401-1
Hirings % 8 12 11
Development
Hours of training per employee (management) # 35 36 38
404-1
Hours of training per employee (non-management) # 26 31 29
Managers who had an annual performance review % 91 89 91
404-3
Non-managers who had an annual performance review % 48 48 47
Social relations
Entities having strike actions over one week duration # 6 2 1 MM4
Entities where employees are covered by collective agreements % 52 56 59 102-41
Government relations
Political donations (note 14) CHF 63,611 65,462 54,176
415-1
Countries making political donations # 2 3 2
Total subsidies M CHF 96.4 97.9 93.1 201-4
Note 13: Figures taken from Annual LafargeHolcim Sustainable Procurement Scorecard. The figure is a consolidated view of suppliers of goods and
suppliers of services. It reflects the % of total spend of high ESG impact suppliers that had been qualified in terms of the stipulations in the LafargeHolcim
Supplier Code of Conduct.
Note 14: 2018 figure excludes PAC contributions in the USA and Canada. These amounted to CHF 101,759.
68
Methodology and consolidation
Scope of consolidation Methods of data collection All sites that were active during the
and reporting methodologies reporting year have been considered
To align with Group financial reporting, eligible for inclusion in our environmental
and in preparation for a transition to Economic indicators reporting. For sites that were active for less
integrated reporting, we have changed Financial performance indicators follow than six months, their impact has been
our consolidation scope to include the IFRS principles. estimated based on their production levels
entities covered in the Group consolidated and Group averages.
financial statements. The list of principal ● D
ata on net sales included represent
consolidated companies is presented in consolidated data from LafargeHolcim For environmental data, cement terminals
note 2.4 of the LafargeHolcim Annual Group and are consistent with those and RMX mobile plants are not considered
Report 2018. The Group consolidates a reported in the LafargeHolcim Annual material, and are therefore excluded from
subsidiary if it has an interest of more Report 2018. the consolidation.
than one half of the voting rights or is ● D
ata on net sales of sustainable
otherwise able to exercise control over solutions were collected through ● C
O2 and power: We use the WBCSD-
the operations. LafargeHolcim’s reporting system CSI Cement CO2 and Energy Protocol
and respective protocol – iCare@ version 3.1 to calculate CO2 emissions
Changes in scope of consolidation LH | Sustainable Construction between the 1990 baseline and the
The effects of the changes in questionnaire. Data are gathered at reporting year. For CO2, all historical
consolidation are: Country/Group Reporting Unit level, data have been recalculated according
and cover all business segments and to the Protocol, to enable comparison
● T
he following entities, which were their industrial production sites. The of data over time. Historical data
consolidated at 100 percent in previous Sustainable Construction questionnaire are also restated to reflect changes
reports, are excluded: was conducted across 62 entities, in consolidation of companies and
– L afargeHolcim companies in Morocco, representing more than 96 percent acquisitions/divestments. The reporting
Ivory Coast, Guinea, Cameroon, Benin, of our products and services sales. coverage of the CO2 data is 100
UAE, Oman and Qatar The Sustainable Construction survey percent. For data not reported in 2018,
● C
ement Australia, which was collects data on products and services the last available measurement or
consolidated at 50 percent for contributing to greenhouse gas the Group average has been used to
environmental indicators and 100 reduction along the construction life estimate the 2018 performance. The
percent for health and safety indicators, cycle, resource efficiency and the circular coverage of energy data per segment
is excluded. economy, higher energy efficiency in is at least at 98 percent. Default CO2
buildings, affordable housing, richer emissions factors for fuels are taken
Data for 2016 and 2017 have been restated biodiversity and increased transparency from the CSI guidelines. Operations
according to the revised consolidation. in products. can overwrite these default values if
● D
ata on supplier assessments were more precise values or measurements
Divestments and acquisitions collected through the annual Sustainable are available. For electricity, default
For business divested during the year, Procurement Scorecard. emissions factors are taken from publicly
environmental, social and stakeholder available International Energy Agency
engagement data are excluded for the Environmental indicators information. Operations can overwrite
entire year. For health and safety, data Environmental performance indicators these default values if more precise
are included up to the time of divestment, follow the reporting guidelines of the values or measurements are available.
when respective operations ceased to be World Business Council for Sustainable In 2018, 63 percent of default emissions
under LafargeHolcim control. Development – Cement Sustainability factors were overwritten with more
Initiative (WBCSD-CSI). precise emissions factors. Emissions
When a new site is acquired by from captive power plants are included
LafargeHolcim, its procedures and In 2018, environmental data were collected in the performance data table under
definitions for non-financial data might through LafargeHolcim’s reporting system “Other segments: CO2 emissions
not necessarily be in line with our and respective reporting guidelines – from fuels.”
standards. Accordingly, we give the new iCare@LH | Environmental questionnaire.
site time to meet our standards and report
performance according to those standards. For environmental data, we assess that
This should not happen later than the the reported data this year covers the full
second year after acquisition. scope of cement activities and at least
98 percent for all other product lines.
● E
missions: We use the WBCSD-CSI Health and safety Data are gathered at Country/Group
Guidelines for Emissions Monitoring Health and safety (H&S) performance Reporting Unit level, and cover all business
and Reporting in the Cement Industry indicators for 2016 and 2017 follow the segments and their industrial production
Protocol (2012). Eighty-one percent of WBCSD-CSI Safety in the Cement Industry: sites, including Corporate and above
clinker produced in 2018 is covered Guidelines for measuring and reporting, country regional and service entities.
by measurements of dust, NOx, SO2, and have been restated according to The 2018 social data are derived from a
VOC/THC, heavy metals (Hg, Cd, Tl, the consolidation scope described in the survey covering 80 entities representing
Sb, As, Pb, Cr, Co, Cu, Mn, Ni and V), “Scope of consolidation” section above. more than 99 percent of the total Group
PCDD/F. The full production from a kiln Data for 2018 are reported in line with workforce, including majority-owned
is included in this coverage only when the GCCA Sustainability Guidelines for entities and managed assets.
emissions of all pollutants (all 17 listed the monitoring and reporting of safety in
pollutants) are monitored, otherwise the cement manufacturing, issued in November Among other aspects, the social survey
production contribution from the kiln 2018. These guidelines stipulate that collects data on employees, headcounts
is considered zero. If the emission has road fatalities involving contractors “off and labor relations, and includes questions
not been measured in 2018, the 2017 company premises and not branded or to verify that child labor is not used.
measurement has been used to estimate regular” should be excluded. A regular
the 2018 performance at kiln level. contract is defined as “longer than 30 days Stakeholder engagement
● W
ater: The CSI Protocol for Water continuously or collectively on a rolling indicators
Reporting has been used as a reference 12-month period.” As an impact of the GCCA In 2018, stakeholder data were collected
to measure the water performance of guidelines, four fatalities (three contractors through LafargeHolcim’s reporting system
the Group. The coverage of the water and one third party) that would have been and respective protocol – iCare@LH |
data is on average 94 percent, and up included under the previous CSI guidelines Stakeholder questionnaire.
to 99 percent for cement activities. Data have been excluded in 2018.
from captive power plants are excluded. Data are gathered at Country/Group
● W
aste and recycling: Waste comprises H&S data are gathered at site level and Reporting Unit level and cover all
all forms of solid or liquid waste further consolidated at Country/Group business segments and their
(excluding wastewater) and is defined as Reporting Unit level. The data cover all industrial production sites.
hazardous or non-hazardous based on business segments and their industrial
the legislation of the country in which production sites, including Corporate and The 2018 stakeholder data are derived
the site operates. Overburden has been above country regional and service entities. from a survey covering 60 entities
excluded from non-hazardous wastes representing more than 95 percent of the
disposed on-site. Data from captive In 2018, H&S data were collected through total Group workforce, including majority-
power plants are excluded. LafargeHolcim’s reporting system – iCare@ owned entities and managed assets.
● B
iodiversity and quarries: A new LH | H&S Incident management module. Among other aspects, the stakeholder
directive and related standards Data are segregated according to on- survey collects data on corporate social
regarding rehabilitation plans are site and off-site incidents, and cover responsibility spending and beneficiaries,
currently being implemented. Their employees, contractors and third parties. volunteering activities, political donations
implementation is not yet complete. For The hours worked used to calculate and subsidies, human rights management
transparency, we have reported only the incident rates for employees and (other than labor-related human rights),
number of quarries with rehabilitation contractors on-site are calculated and/or stakeholder engagement activities and
plans in place that are aligned with the estimated locally by business units. community engagement structures.
new directive.
Social indicators Reporting cycle
In 2018, social data were collected through The LafargeHolcim Group will continue
LafargeHolcim’s reporting system and to report annually.
respective protocol – iCare@LH | Social
questionnaire.
70
Assurance statement
Independent assurance statement by To support clarity in this process, o Undertook management interviews
Deloitte LLP to LafargeHolcim on the LafargeHolcim use the World Business and documentation checks to
2018 Sustainability Report Council for Sustainable Development – understand and test the reporting
Cement Sustainability Initiative (WBCSD- boundary, consolidation and
What we looked at: scope of our work CSI) Guidelines for CO2 and energy, validation checks at Group level for
LafargeHolcim engaged us to perform emissions, water, and health and safety complete, accurate and appropriate
limited assurance on its Sustainability (up to 2017), the Global Cement and presentation of the information
Report (“the Subject Matter”) for the year Concrete Association (GCCA) guidelines for submitted by business units;
ended 31 December 2018. health and safety (for 2018), and iCare@
LH guidelines for social and stakeholder o Understood, analysed and tested on
What standards we used: basis of our engagement subject matters when a sample basis the key structures,
work and level of assurance preparing the 2018 Sustainability Report systems, processes procedures and
We used the International Standard (altogether the ‘reporting criteria’). WBCSD- controls relating to the aggregation,
for Assurance Engagement (ISAE) 3000 CSI Guidelines are publicly available and validation and reporting of a sample
(Revised), issued by the International iCare@LH guidelines are available upon of material indicators disclosed
Auditing and Assurance Standards request from LafargeHolcim. We have within the 2018 Sustainability Report;
Board to carry out our limited assurance carried out our assurance against this
engagement on the Subject Matter. To criteria and it should be read together with o Conducted trend analysis to identify
achieve limited assurance, ISAE 3000 the 2018 Sustainability Report. and query anomalies in reported data;
requires that we review the processes
and systems used to compile the areas on What we did: key assurance procedures o Checked the quantitative and
which we provide limited assurance. This To form our conclusions, we undertook the qualitative disclosures in the 2018
standard requires that we comply with the following procedures: Sustainability Report against our
independence and ethical requirements understanding of the sustainability
and to plan and perform our assurance • Interviewed management at governance and management
engagement to obtain sufficient and LafargeHolcim, including the structures and performance over
appropriate evidence on which to base our Sustainable Development team and the year; and
limited assurance conclusion. It does not those with operational responsibility for
include detailed testing of source data or sustainability governance, management, o Read other information included
the operating effectiveness of processes performance and reporting; in the 2018 Sustainability Report
and internal controls. This is designed to to identify any inconsistencies
give a similar level of assurance to that • Determined material quantitative and with our understanding of the
obtained in the review of interim financial qualitative indicators and disclosures business’ circumstances.
information. This provides less assurance in the 2018 Sustainability Report,
and is substantially less in scope than a by considering criteria such as the • For Scope 1 and 2 CO2 emissions:
reasonable assurance engagement. outputs of the company’s materiality
process; peer reporting; susceptibility o Interviewed management and
Inherent limitations of misstatement due to error or fraud; those with operational
The process an organisation adopts to whether a misstatement or control responsibility for sustainability
define, gather and report data on its non- deficiency was noted in the prior-year; performance at a sample of
financial performance is not subject to the indicators or disclosures related to five Group Reporting Units;1
formal processes adopted for financial estimates and estimation methods;
reporting. Therefore, data of this nature changes in calculation methods from o Visited a sample of five sites2
can be subject to variations in definitions, prior-year; to understand and review data
collection and reporting methodology collection processes and to verify the
with no consistent, accepted standard. • For selected material indicators and a accuracy of source evidence collected
This may result in non-comparable sample of related disclosures: on-site with respect to Scope 1 and 2
information between organisations and CO2 emissions only; and
from year to year within an organisation as oR
eviewed and evaluated the criteria
methodologies develop. for measurement and reporting
of each indicator as set out in the
Reporting Criteria;
1
razil LafargeHolcim, East Canada, Holcim South Germany, ACC, AIUK
B
2
Pedro Leopoldo Cement Plant (Brazil), Bath Cement Plant (East Canada), Dotternhausen Cement Plant (Germany), Gagal II Cement Plant (India – ACC), and Cauldon
Cement Plant (UK – AIUK).
72
Global citizenship
Global Reporting Initiative UN Global Compact (UNGC) In order to demonstrate our commitment,
This report, with additional information With our integrated approach to we publish a yearly Communication
on our website, is prepared in accordance sustainable development, LafargeHolcim of Progress (COP). All our COP reports
with the Global Reporting Initiative (GRI) aims to embrace the UNGC principles. We are available on the Global Compact
Standard at comprehensive level. To locate strive to implement the ten principles of website through the following link:
the elements and information contained the Compact and to use it as https://www.unglobalcompact.org/what-
within the Standard, including disclosures a basis for advancing responsible is-gc/participants/6028. This year, our
on management approach to economic, corporate citizenship. At the same time, Sustainability Report is our COP for 2018.
environmental and social aspects, use the Compact provides LafargeHolcim with
the GRI index at www.lafargeholcim.com/ the opportunity to further push our own This latest report highlights key
Sustainability-reports. ongoing programs and processes in the actions implemented in 2018 against
areas of human rights, labor standards, the the Compact’s principles as well as
For a detailed explanation of the GRI environment, and anti-corruption. confirming our sustainability priorities
indicators and for more information and performance targets.
on the GRI Gold Community go to
www.globalreporting.org.
2018
Sustainable Development
Jens Diebold
Phone +41 58 858 5480
groupsd@lafargeholcim.com
Investor Relations
Swetlana Iodko
Phone +41 58 858 8787
investor.relations@lafargeholcim.com