Corporate sustainable development report 2009 strength performance passion holcim

Strength. Performance. Passion. Corporate Sustainable Development Report 2009 1 Corporate Sustainable Development Report 2009 Contents Vision and strategy 6 Priorities 10 Performance data 26 Methodology and assurance 32 Chairman and CEO statement 4 Introduction 2 Sustainable development is embedded in our vision, strategy and values 6 An organization with integrity 6 Managing sustainable development 7 Our SD priorities 8 Determining material issues 8 Performance against targets 9 Awards and ratings 3 Sustainable products and sustainable construction 10 Energy and climate 14 Resources conservation 18 Social commitment 20 Economic performance 26 Environmental performance 27 Social performance 30 Methodology 32 Assurance statements 33 Holcim response 35 Communication on progress 36 Commitment Holcim remains committed to sustainable development even in the face of global economic challenges. 80% of our product portfolio is composite cements. Continuous improvement CO 2 emissions per tonne of cement have been reduced by 21% since 1990. 70% improvement in the lost-time injury frequency rate since 2005. See page 12. Affordable housing project in Nicaragua See page 17. Check dams in Thailand See page 21. Community investment in Russia 2 Introduction The integration of the principles of sustainable development into our core business strategy and our aim to create value for all stakeholders has ensured that our commitment remains resolute, even in the face of current global economic challenges. Holcim is one of the world’s leading suppliers of cement and aggregates (crushed stone, gravel and sand), as well as further activities such as ready-mix concrete and asphalt including services. The Group has majority and minority holdings in around 70 countries across all continents. Covering the Group’s cement, aggregates and ready-mix concrete businesses, this fth Holcim Corporate Sustainable Development Report focuses on key facts and gures and highlights our most material issues: sustainable products and sustainable construction, energy and climate, resources conservation and social commitment. It complements our Annual Report 2009 and the more comprehensive information available on our website. www.holcim.com/sustainable The report and complementary information is aligned with the Global Reporting Initiative’s G3 guidelines and also forms part of our communication on progress for the UN Global Compact. The report itself has been assured against the principles of the AA1000 Assurance Standard and our WBCSD CSI commitments, with CO 2 and occupational health and safety data separately assured. Furthermore, an External Report Review Panel was established to review the report. A glossary dening the terms used in this report can be found on our website. www.holcim.com/sustainable Key to symbols: see page in this report see our Annual Report see graph data visit www.holcim.com/sustainable for more information reference to GRI indicator Contact us at Holcim Sustainable Development Ruksana Mirza Phone +41 58 858 82 30 Fax +41 58 858 82 34 sustainable.development@holcim.com Corporate Communications Roland Walker Phone +41 58 858 87 10 Fax +41 58 858 87 19 communications@holcim.com Investor Relations Bernhard A. Fuchs Phone +41 58 858 87 87 Fax +41 58 858 80 09 investor.relations@holcim.com 3 Awards and ratings The awards received by our Group companies and our continuous inclusion in the FTSE4Good and the Dow Jones Sustainability Indexes are the best evidence of our commitment to sustainable development. The table below highlights a sample of the many awards received at a local level. A complete list of awards received by Group companies in 2009, as well as in previous years, is available on our website. www.holcim.com/sustainable Ratings 9 For the DJSI assessment of company performance compared with others in the sector, visit www.holcim.com/sustainable Examples of awards received Group company Environmental awards Greentech Environmental Excellence Gold Award in the Cement Sector to Tikaria for environmental performance. ACC Limited, India Federación de Áridos awarded El Puente Gravel Pit with the First prize in Biodiversity in the category “big company” for rehabilitation work and level of biodiversity achieved. Holcim (España), S.A., Spain Gold Cup for Environment Protection by Ministry of Natural Resources and Environment for contributions to the environmental protection and preservation in Vietnam. Holcim (Vietnam) Ltd, Vietnam Special Jury Price of ALM (Aujourd’hui le Maroc) ecology trophy for engagement and environmental policy based on sustainable development. Holcim (Maroc) S.A., Morocco PEP – Partners for Environmental Progress award for the storm water conservation program at Theodore plant. Holcim (US) Inc., USA Social awards Award from Centro Mexicano para la Filantropía for being a socially responsible company. Holcim Apasco S.A. de C.V., Mexico Wirtschaftspreis Schleswig-Holstein for successful HR concept for employee recruiting/retention and the integration of migrants. Holcim (Deutschland) AG, Germany Fundación Adecco awarded Holcim España for integrating people with a disability. Holcim (España), S.A., Spain High-prestige award from CSR Hungary as an acknowledgement of activities in order to spread sustainable construction and to set an example on CSR to create value for stakeholders. Holcim Hungária Zrt., Hungary The Department of Conservation award in recognition of Holcim’s contribution to the community and conservation in the Buller region. Holcim (New Zealand) Ltd, New Zealand OH&S awards Special recognition for safety, occupational health and environment performance by The Colombian Safety Council. Holcim (Colombia) S.A., Colombia Zero lost-time injuries in South Carolina for Taylor Street, Lugoff, Simpsonville, Powderville, New Cut Road, Greer, Imo and Batesburg plants presented by Carolina Ready Mixed Concrete Association. Aggregate Industries Management Inc., USA Safety Award presented by Ready Mixed Concrete Association of Ontario for having no lost-time injuries. Holcim (Canada) Inc., Canada Golden Flag Safety Award by the Indonesian Ministry of Public Work for Occupational Safety. PT Holcim Indonesia Tbk., Indonesia Occupational Health and Safety Excellence Award presented by the Ministry of Labor of Nicaragua for the excellence on risk management practices and full legal compliance at Nagarote cement plant. Holcim (Nicaragua) S.A., Nicaragua 4 Chairman and CEO statement The need for companies to engage with stakeholders and society to ensure license to operate is more important than ever. In the two years since our last Corporate Sustainable Development Report, the economic crisis has affected many regions and sectors. However, as sustainable development is such a fundamental objective, we remain committed to its principles. Our commitment to sustainability engages our people, and also allows us to operate more ef ciently – providing us with competitive advantage throughout the entire value chain. The most important contribution to sustainable development is through products and services. By offering value- added solutions to customers, we ensure sustainability of pro ts and bene ts to society. Concrete is the most versatile, cost-effective and durable building material available; it substantially contributes to energy ef ciency in buildings and it is – in itself – a sustainable product. Our company is continually improving the ef ciency of our production processes and developing more “eco-friendly” products. At the end of 2009, over three-quarters of Holcim’s product portfolio consisted of composite or lower clinker content cements. The Holcim Foundation for Sustainable Construction continues to promote sustainable building practices and innovation in the construction industry. Holcim’s business depends on access to natural resources. Related responsibilities are taken very seriously. We must – like all players – try to increase the ef ciency of the use of scarce resources and avoid material loss in production processes wherever possible. We have, together with the International Union for Conservation of Nature (IUCN) created an expert panel to advise us on how to manage biodiversity. The panel has already visited Holcim sites in a number of countries and has provided invaluable guidance. Reduction of CO 2 emissions continues to be an area of focus. In 2009, we achieved the CO 2 emission reduction target earlier than planned, and are pleased to report that CO 2 emissions per tonne of cement were more than 20% lower than in the reference year of 1990. Holcim also actively participates in the policy debate on climate change and on effective regulatory incentives to improve energy ef ciency and CO 2 containment. “Sustainability is an integral part of the Group strategy. Even in difficult times, Holcim takes its environmental and social responsibilities very seriously. Programs to strengthen the safety culture across the Group will be continued without exception. The Board of Directors and Executive Committee is doing everything in its power to achieve the objective of worldwide comprehensive workplace safety.” Rolf Soiron, Chairman of the Board of Directors. Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assurance 5 This report re ects a number of new targets that have been set at an even higher level: • We now aim to further reduce our speci c net CO 2 emissions by 2015 to 25% below the 1990 benchmark. • We will be developing and rolling out a comprehensive biodiversity management system. Of sites situated in high biodiversity value areas, 80% must have biodiversity action plans in place by 2013. • Recognizing that building constructive and trustful relationships with communities in which we operate is imperative; all plants are bound to have community engagement plans by 2012. Safety of employees, subcontractors and third parties remains an area of concern and key focus. Management continues to improve the effectiveness and impact of safety programs and directives. To change mindsets and to embed a culture of safety can still be a challenge in some places, but we remain committed to our vision of “zero harm to people”. The current report describes our path toward sustainability, as we understand it for our industry. It discloses performance data across a broad range of indicators, including those from the Global Reporting Initiative* relevant to our speci c businesses and has been externally assured. A panel of external stakeholders has also contributed to this report with valuable guidance and comments. We have been in continuous contact with stakeholders and have recently joined the Corporate Support Group of the International Committee of the Red Cross (ICRC). We look forward to cooperating in speci c con ict-affected countries where both Holcim and the ICRC operate. Humanitarian actors like the ICRC substantially contribute to stabilizing the operating environment in such areas. Holcim’s efforts in the area of CSR and SD have been well recognized. The best evidence is the many awards received by Group companies. Holcim has also been con rmed as a member in the Dow Jones Sustainability World Index for the seventh consecutive year and the company again received the SAM Gold Class classi cation for 2009. We thank all those who are accompanying Holcim on its journey. We are grateful to customers, suppliers and partners for their continued support. A very special word of thanks goes to our employees all over the world, who have lived our values and have delivered on our commitment to build a sustainable future in these challenging times. Rolf Soiron Markus Akermann Chairman of the Board of Directors Chief Executive Of cer May, 2010 * This report is aligned with the Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines released in October 2006, at an application level of A+. “The development of new and sustainable products and services is of high priority. The rapid dissemination of existing expertise and new findings is heavily encouraged, while experiences gained in the market are being systematically incorporated into our research. This multiplication effect, as well as cooperation with leading universities and research institutes, has helped accelerate the pace of innovation.” Markus Akermann, Chief Executive Offi cer. Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assurance 6 of our business – our products and services, ongoing communications and, most importantly, the behavior of our people. The graphic below outlines group strategy and our approach to value creation. An organization with integrity Holcim applies the highest standards of business conduct. At a corporate level, we follow the Swiss Code of Best Practice for Corporate Governance while the Holcim Code of Conduct, which is applied throughout the Group, provides a consistent framework and clear direction for daily decision-making. In addition, the Holcim Compliance Policy spells out the rules for compliance with laws, regulations and Group-wide policies and directives. For more information on corporate governance and the Code of Conduct, please see pages 80 and 81 in our Annual Report. “We at Holcim are proud to work for a company with such a clear and effective vision and focus with regard to sustainable development. Our global strategy and standards, applied locally according to the requirements and realities of each country in which we operate, result in sustainable and responsible operations that are noted for their high performance, multiple initiatives and enduring commitment to the communities.” Eduardo Kretschmer, CEO, Holcim Apasco, Mexico. Visit www.holcim.com/sustainable to read more. Vision and strategy At Holcim, we believe that delivering value for all stakeholders while operating with integrity is key to our long-term success. Working within the triple bottom line Holcim remains a member of the DJSI World Index. Visit www. holcim.com/ sustainable for more information. Sustainable development is embedded in our vision, strategy and values Holcim is committed to creating value for all its stakeholders. We have placed sustainable development (SD) at the heart of our business strategy for many years because we believe it contributes in adding value and ensuring continued success. To meet the increasing demand for high-quality and sustainable construction products, which are critical for global infrastructure development and economic growth, we have fully integrated the principles of the triple bottom line (value creation, sustainable environmental performance and social responsibility) in our business strategy and into our product and service portfolio. See strategy house in the next column. The current, challenging economic climate has not weakened our commitment to sustainable development. We continue to strive to improve safety at all our operations, and to work on identifying new, sustainable business opportunities while minimizing the impacts of our extraction and production activities. Holcim’s values of strength, performance and passion are our promise to perform, providing the foundation for sustainable business relationships based on trust. We aim to deliver on this promise through all aspects Strategy Mindsets Base Goal Creation of Value Product Focus Sustainable Environmental Performance Better Cost Management Permanent Marketing Innovation Human Resources Excellence Corporate Social Responsibility (CSR) Geographic Diversification Local Management Global Standards People Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assurance 9 7 The Code of Conduct covers all aspects of our operations, including specic provisions on bribery and corruption. The code is very clear – violations will not be tolerated. Non-compliance with the code may be subject to disciplinary sanctions, including termination of employment, and this is explicitly stated within the code. Group companies are responsible for ensuring that employees and managers are aware of their responsibilities under the code and for implementing appropriate measures. These include training and information sessions, integration of Code of Conduct provisions into contracts and a requirement for employees to sign the code. Visit www.holcim.com Building on our existing program, in 2009 we refreshed the Holcim Value Creation in a Competitive Environment (VCCE) program. We rolled this out with a series of workshops on the rules of fair competition, also as contained in our Fair Competition Directive, which is binding for all Holcim employees worldwide. In 2009, 10 VCCE workshops were conducted covering Group companies in all regions. In 2010, further VCCE training will be conducted in all the consolidated operating companies of the Group. For more information, please see page 25 in our Annual Report. In addition to the Code of Conduct and Fair Competition Directive, we require our employees to comply with all relevant policies, including Group policies on alternative fuels and raw materials, corporate social responsibility, environment and occupational health and safety. Visit www.holcim.com/sustainable to download the policies. Managing sustainable development Responsibility for SD ultimately rests with every employee, and the commitment of line managers to implement Group targets and objectives related to SD is key to our aspiration to remain a leader in our industry. A steering group for SD operates as a sub-committee of the Executive Committee (Exco), and includes the CEO, the Exco members accountable for SD and occupational health and safety (OH&S) as well as senior SD managers. At Exco level, since 2010, accountability for SD and OH&S falls under Roland Köhler, and the Sustainable Development and Occupational Health and Safety departments report directly to him. A graphic illustrating our integrated approach is available at www.holcim. com/sustainable To assist us in managing our performance and ensure that global standards are maintained, various management systems are in place. The starting point in managing our performance is ISO certication. Holcim has also developed its own management tools. Examples of these include the Holcim Environmental Management System with its Plant Environmental Prole (PEP) monitoring and reporting tool, which goes beyond the requirements of ISO 14001, and the Holcim OH&S management system, which goes beyond the requirements of OHSAS 18001. See page 30. Visit www.holcim.com/sustainable Code of Conduct Our Code of Conduct provides the guiding principles against which to make decisions. Visit www. holcim.com/ sustainable for more information. For further information see page 26 and visit our website www.holcim.com/sustainable Cement, aggregates, concrete and other construction materials Payments Goods and services Monetary flows Source: Holcim, 2009 data* See page 26 for additional information on political contributions and subsidies. Non-monetary flows Dividends Capital Interest Capital Ta xes Services Salaries Labor Good neighbor Licence to operate SUPPLIERS Input costs (CHF 12.0 billion) SHAREHOLDERS (CHF 0.8 billion) CREDITORS (CHF 0.8 billion) GOVERNMENTS* (CHF 0.6 billion) EMPLOYEES (CHF 3.9 billion) DIRECT IMPACTS CUSTOMERS Net sales (CHF 21.1 billion) MULT IPLIED INDIRECT IMPACTS MULT IPLIED INDIRECT IMPACTS COMMUNITIES (See page 25) Retained in business (CHF 1.2 billion) and depreciation (CHF 1.9 billion) Categories purchased by suppliers: Raw materials Services including transport Operational material Energy Plant, equipment and infrastructure Traders Wholesalers Retailers Ready-mix concrete producers Concrete products manufacturers Construction contractors Individual customers HOLCIM Sales Economic impacts along the value chain Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assurance 8 Our SD priorities We constantly re-examine our SD priorities to enable us to focus on those issues which are the most material to our business and where we can make a meaningful difference. Continuity and focus are critical aspects of this re-evaluation process. Our current priorities are: • sustainable products and sustainable construction • energy and climate • resources conservation • social engagement (including employment practices, OH&S, community engagement and human rights). These priorities were con rmed by an External Report Review Panel, which we convened as part of our materiality review process (see below) and to review Holcim’s corporate SD report. The panelists’ biographies are available on our website at www.holcim.com/ sustainable Determining material issues Holcim has a well-embedded business risk management process for identifying risks at both corporate and Group company level. For more information, please see pages 28 and 85 in our Annual Report. Since 2007, a materiality review has been implemented at Group level to ensure the identi cation of SD risks and opportunities as well as the integration of stakeholder views. Since this process was introduced, materiality reviews have been conducted by many Group companies. Results reveal that the full list of material issues is consistent with the Group-level review, but there are differing weightings according to local circumstances. The results of the latest Group-level materiality review, incorporating the results of the Group companies’ reviews as well as the views of the External Report Review Panel at a consultation in September 2009, are shown in the graphic below. In conjunction with our business risk management system, the consultation con rmed that the issues identi ed on the matrix remain the most material for Holcim. The fundamental difference from the previous review was that almost all external stakeholders felt that water management and human rights should be re ected separately. The difference between the company and stakeholder view on water is likely to narrow as the new water management scheme is implemented. “Holcim demonstrates a credible approach to sustainability. However, I would like to see the Group take a clearer leadership in reducing absolute fossil CO 2 emissions. This is a key challenge for the entire cement industry. Efforts to increase the use of biofuels also need to be intensified over time.” Patrik Bosander, Business Development Director, Billerud AB. Corporate governance Customer and supplier relations Economic impact Low Medium High Economic Issues OH&S Employment practices and human rights Community involvement and stakeholder relations Social CO 2 and energy Ec0-efficient products Sustainable construction Atmospheric emissions Resources management and biodiversity Waste and transport Water Environmental Holcim view – result of Holcim business risk management process. External stakeholder view – result of interviews with 16 external stakeholders including academics, government officials, NGOs, suppliers, analysts and customers at a global level. View from Holcim and external stakeholders coincide. Range of external stakeholder views. Represents a clear difference between internal and external view. Low: Low level of concern to stakeholders and low level of current impact on Holcim. High: High level of concern to stakeholders and high level of current or potential impact on Holcim. Importance of issues – global view SD materiality review – aligning global stakeholder feedback with current Group priorities Review An External Report Review Panel was convened to review SD priorities, materiality and to comment on the report. Details of the panel can be found on our website. Visit www. holcim.com/ sustainable for more information. Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assurance [...]... Holcim Ltd, Rapperswil-Jona ( Holcim ): We have performed assurance procedures to provide assurance on the following aspects of the carbon dioxide (‘CO2’) emissions and occupational health and safety (‘OH&S’) data disclosed in Holcim s Corporate Sustainable Development Report 2009 Subject matter Data and information disclosed in the Corporate Sustainable Development Report of Holcim and its consolidated... Priorities Performance data PricewaterhouseCoopers assurance statement Methodology and assurance Holcim response Communication on progress PricewaterhouseCoopers assurance statement Independent Assurance Report on the carbon dioxide emissions and occupational health and safety data disclosed in the Corporate Sustainable Development Report 2009 of Holcim Ltd, Rapperswil-Jona To the Executive Committee of Holcim. .. Zurich) Visit www .holcim. com /sustainable to read more Chairman and CEO statement Vision and strategy Priorities Sustainable products and sustainable construction Performance data Energy and climate Overall, Holcim has improved its thermal energy Key data consumption from over 4,500 MJ per tonne of clinker in 1990 to 3,580 MJ per tonne of clinker in 2009, reflecting Visit www .holcim. com /sustainable  for... holcim. com/ sustainable for more information 26 Chairman and CEO statement Economic performance Vision and strategy Priorities Performance data Environmental performance Methodology and assurance Social performance Performance data Economic performance Sales in CHF billion Net sales Input factor (cost of all goods, materials and services provided) Depreciation and amortization Value creation for Holcim. .. improving the emissions of cement kilns Holcim s Priorities Performance data Energy and climate Key data Social commitment See pages 26–31 for full data tables Visit www .holcim. com /sustainable  for more information Sustainable products and sustainable construction Cement types produced by Holcim* in 2009 EN3 program aims to transform these challenges into opportunities for sustainable value creation across... Business Council for Sustainable Development, Brazil Visit www .holcim. com /sustainable to read more Chairman and CEO statement Vision and strategy Sustainable products and sustainable construction Priorities Energy and climate Performance data Methodology and assurance Resources conservation Social commitment Innovation in practice The Holcim Commercial Awards acknowledge excellence along the Holcim Value... assurance of the Holcim Corporate Sustainable Development Report (CSDR) 2009 The assurance process was conducted in accordance with AA1000AS (2008) We were engaged to provide Type 1 assurance, which covers evaluation of adherence to the AA1000APS (2008) principles of inclusivity, materiality and responsiveness (the Principles) The scope of our work also included an evaluation of Holcim s reporting against... CO2 emissions data in the tables in the section Environmental Performance on page 27 and the OH&S data (Fatalities & LTIFR) in the tables in the section Social Performance on page 30 of the Corporate Sustainable Development Report 2009 Criteria •  The WBCSD Cement Sustainability Initiative (CSI) Cement CO2 Protocol: CO2 Accounting and Reporting Standard for the Cement Industry, June 2005; •  The... this report, nothing has come to our attention that causes us to believe that the data and information mentioned in the subject matter and disclosed in the Corporate Sustainable Development Report 2009 of Holcim does not give a fair picture of Holcim s performance in the area of CO2 emissions and OH&S Zurich, March 19, 2010 PricewaterhouseCoopers AG Markus Nöthiger Stephan Hirschi ... stakeholders.” Melany Grout, Director, Conflict Risk Network Visit www .holcim. com /sustainable to read more Chairman and CEO statement Vision and strategy Sustainable products and sustainable construction Contributing to sustainable community development Community engagement that results in mutual trust and social acceptance remains a priority for Holcim in all countries of operation Related activities focus . Strength. Performance. Passion. Corporate Sustainable Development Report 2009 1 Corporate Sustainable Development Report 2009 Contents Vision and strategy 6 Priorities 10 Performance. businesses, this fth Holcim Corporate Sustainable Development Report focuses on key facts and gures and highlights our most material issues: sustainable products and sustainable construction,. page in this report see our Annual Report see graph data visit www .holcim. com /sustainable for more information reference to GRI indicator Contact us at Holcim Sustainable Development Ruksana