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July 10, 2002
Cement Companies Churn Out Action Plan to Promote Sustainable Development
    by William Baue

The Cement Sustainability Initiative, a consortium of ten global cement companies, recently released a report outlining specific steps to achieve sustainable development.

The need for concrete, the second most consumed material in the world after water, raises concerns for social investors over the environmental and social impact of concrete production and application. Cement is the main focus of these concerns as it is the only man-made ingredient in concrete. The other ingredients are sand, gravel, and water. Last week, the Cement Sustainability Initiative (CSI), a group of ten leading cement companies from around the world, released a report entitled Our Agenda for Action. The report addresses the environmental and social impacts of cement company operations and offers solutions to the problems it identifies.

"[Our] Agenda for Action is unique in that it outlines individual actions and joint commitments being taken by the ten companies in response to independent research," said Mostafa Tolba, the former Director-General of the United Nations Environment Programme (UNEP). Mr. Tolba chaired the external Assurance Group that monitored the independent research.

The ten member companies include Mexico-based Cemex (ticker: CX), France-based Lafarge (LG.PA), U.K.-based RMC (RMC.L), and Thailand-based Siam Cement (SCC), among others. The ten companies together produce about one third of the global cement supply and operate in two thirds of the world's cement markets. The CSI does not include any U.S.-based cement companies.

"[W]e actively invite other cement companies to join with us on the journey towards a more sustainable future," the leaders of the ten companies said in a joint statement.

The genesis of the CSI dates back to 1999, when three companies formed the Working Group Cement (WGC) under the auspices of the World Business Council for Sustainable Development (WBCSD). After seven other companies joined the WGC, it commissioned consultant Arthur D. Little to conduct a 10-week study to determine the major issues facing the cement industry.

These issues formed the basis of a two-year research project conducted by the Battelle Memorial Institute, a nonprofit research institute specializing in the technical aspects of sustainable development and the environment. The research resulted in the CSI's report. In addition to this research, the WBCSD convened a series of stakeholder meetings to identify the concerns of those outside the cement industry, such as local communities, employees, and environmental interest groups, among others. The meetings revealed that the industry's contribution to climate change is a primary concern to almost all stakeholders.

The report itself identified six priority issues: climate protection, fuels and raw materials, employee health and safety, emissions reduction, local impacts, and internal business processes. The report also outlines a number of key projects to address these issues, several of which are already under way. For example, the Carbon Dioxide Protocol was recently developed as part of the WBCSD-World Resources Institute Greenhouse Gas Protocol Initiative. All ten companies will publish individual performance data and targets for carbon dioxide emissions by 2006. They will use the Carbon Dioxide Protocol to measure, monitor, and report on their emissions.

CSI has also established the Health and Safety Task Force, which will create common reporting procedures and share best practices. The task force is still developing guidelines for an Environmental and Social Impact Assessment (ESIA), which will be used at all cement plant sites and at associated quarries. Overall, the report introduced a series of five-year programs for the ten companies. The companies will issue reports on their progress in 2005 and 2007.

While many other industry reports have identified the roadblocks to sustainable development, few have demonstrated the same level of commitment to addressing these issues as the Cement Sustainability Initiative.

"It is the first time an industry, using extensive research and stakeholder consultation, has critically examined its own performance on sustainable development, and then set out a specific plan to improve it," said Bjorn Stigson, president of the WBCSD.


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