Climate Change 2016 Information Request - LafargeHolcim Ltd

Transcription

1 Climate Change 2016 Information Request - Ltd 1 of 30 02/11/ :07 Climate Change 2016 Information Request Ltd Module: Introduction Page: Introduction CC0.1 Introduction Please give a general description and introduction to your organization. was founded in mid 2015 following the merger of Lafarge S.A and Holcim Ltd. The Group has a presence in 90 countries and has over 100,000 employees. In 2015 it recorded CHF 29.5 bn in net sales and has mt of installed capacity worldwide. The Group has 2,500 plants (including over 1,500 in ready mix concrete, over 600 in aggregates and over 200 in cement and grinding plants). The Group has solutions and services in cement, concrete, and aggregate solutions for the following businesses: buildings, infrastructure, distribution, oil and gas, affordable housing, and construction systems. Cement is manufactured through a large-scale, capital-and-energy-intensive process. At the core of the production process is a rotary kiln, in which limestone and clay are heated to approximately 1,450 degrees Celsius. The semi-finished product, clinker, is created by sintering. In the cement mill, gypsum is added to the clinker and the mixture is ground to a fine powder traditional Portland cement. Other high-grade materials such as granulated blast furnace slag, fly ash, pozzolan, and limestone can be added in order to modify the properties of the cement for special uses. Aggregates include crushed stone, gravel, and sand. They can also be recycled from concrete material. They are typically produced by blasting hard rock from quarries and then extracting it and crushing it. Aggregate production also involves the extraction of sand and gravel from both land and marine locations, which generally requires less crushing. Aggregates are used as raw materials for concrete, masonry, and asphalt and as base materials for roads, landfills, and buildings. As such, they are a key component of construction projects worldwide. There is a very broad range of customers for aggregates. Major customers include concrete and asphalt producers, manufacturers of prefabricated products, and construction and public works contractors of all sizes. Concrete is the world s second most consumed good by volume after water. One cubic meter consists of approximately 300 kilograms of cement, 150 liters of water, and two tonnes of aggregates. Ready-mix concrete is one of the largest markets for the cement and aggregates industries. CC0.2 Reporting Year Please state the start and end date of the for which you are reporting data. The current reporting is the latest/most recent 12-month period for which data is reported. Enter the dates of this first. We request data for more than one reporting period for some emission accounting questions. Please provide data for the three s prior to the current reporting if you have not provided this information before, or if this is the first time you have answered a CDP information request. (This does not apply if you have been offered and selected the option of answering the shorter questionnaire). If you are going to provide additional s of data, please give the dates of those reporting periods here. Work backwards from the most recent reporting. Please enter dates in following format: day(dd)/month(mm)/(yyyy) (i.e. 31/01/2001). Enter Periods that will be disclosed Thu 01 Jan Thu 31 Dec 2015 CC0.3 Country list configuration Please select the countries for which you will be supplying data. If you are responding to the Electric Utilities module, this selection will be carried forward to assist you in completing your response. Select country CC0.4 Currency selection Please select the currency in which you would like to submit your response. All information contained in the response should be in this currency. CHF CC0.6 Modules As part of the request for information on behalf of investors, electric utilities, companies with electric utility activities or assets, companies in the automobile or auto component manufacture sub-industries, companies in the oil and gas sub-industries, companies in the information technology and telecommunications sectors and companies in the food, beverage and tobacco industry group should complete supplementary questions in addition to the main questionnaire. If you are in these sector groupings (according to the Global Industry Classification Standard (GICS)), the corresponding sector modules will not appear below but will automatically appear in the navigation bar when you save this page. If you want to query your classification, please respond@cdp.net. If you have not been presented with a sector module that you consider would be appropriate for your company to answer, please select the module below. If you wish to view the questions first, please see Module: Page: CC1. Governance CC1.1 Where is the highest level of direct responsibility for climate change within your organization? Board or individual/sub-set of the Board or other committee appointed by the Board CC1.1a Please identify the position of the individual or name of the committee with this responsibility

2 Climate Change 2016 Information Request - Ltd The Strategy and Sustainable Development Committee of the Board. The Strategy & Sustainable Development Committee supports the Board of Directors in all matters related to strategy and sustainable development. It monitors developments with regard to these matters and briefs the Board of Directors accordingly. The committee deals with any matters within the Board of Director s authority, which are urgent and may arise between scheduled ordinary Board of Directors meetings, including the authorization to take preliminary action on behalf of the Board, followed by adequate information of the Board of Directors. See page 103 of the 2015 Annual Report CC1.2 Do you provide incentives for the of climate change issues, including the attainment of targets? Yes CC1.2a Please provide further details on the incentives provided for the of climate change issues Who is entitled to benefit from these incentives? group Business unit managers All employees Chief Executive Officer (CEO) The type of incentives Monetary reward Monetary reward Recognition (non-monetary) Monetary reward Incentivized performance indicator Emissions reduction target Energy reduction target Emissions reduction target Energy reduction target Emissions reduction project Emissions reduction target Energy reduction project Energy reduction target Efficiency project Efficiency target Behaviour change related indicator Energy reduction project Energy reduction target Comment compensation includes target for synergy achievement including energy savings. An important lever to achieve the target is the replacement of fossil fuels with alternative ones. For countries under Emissions Trading Schemes, the balance between allowances received for free and verified emissions is accounted for in performance compensation. Both legacy companies had recognition schemes and awards running in the reporting. The legacy Holcim Plant Award promotes best performers and improvers in cement manufacturing according to a fixed set of performance indices including energy efficiency as well as environmental performance. In addition, the Holcim Commercial Award acknowledges excellence in the products and services offered having innovation and sustainability as criteria. At legacy Lafarge, Behavior change is fostered via an internal certification program for key technical positions at plants such as control room operator, kiln coach or quality controller. This program aims at optimizing the running of plants, which includes energy efficiency and associated CO2 emissions reductions. The certification program is based on the acquisition of the knowledge level required for each position as well as of the know-how and adequate behavior required in given situations. Synergies including from operational performance and energy is one of the criteria for his variable compensation. Please note that this is also the case for some other executive committee members (annual report p.128). Page: CC2. Strategy CC2.1 Please select the option that best describes your risk procedures with regard to climate change risks and opportunities Integrated into multi-disciplinary company wide risk processes CC2.1a Please provide further details on your risk procedures with regard to climate change risks and opportunities Frequency of monitoring Annually To whom are results reported? Board or individual/sub-set of the Board or committee appointed by the Board Geographical areas considered Each country in which we operate clustered in the following geographical areas is being considered: Asia Pacific, India, Latin America, Europe, North America and Africa Middle East How far into the future are risks considered? 3 to 6 s Comment The Business Risk (BRM) aims to systematically recognize major risks as well as opportunities. In focus are a wide range of different internal and external risk types, among which environmental, energy and climate change related matters. The Group s risk profile is assessed both top down and bottom up. CC2.1b Please describe how your risk and opportunity identification processes are applied at both company and asset level 1. Scope and process All foreseeable potential risk and opportunities in the business are assessed, including all areas of the business, as well as the inclusion of external risk factors influencing the business environment. Several risks and opportunities categories relate to climate change, for example future regulations, resource availability, energy, power, alternative fossil fuels and supply chain interruptions. The risk assessment is not limited to hazard analysis, but also identifies mitigation measures and possible opportunities. The Risk process consists of the following steps: a) Risks as well as opportunities are assessed and prioritized; b) Top risks are analyzed more deeply regarding their causes and c) Analysis of the current risk situation is completed with a detailed assessment of consequences; d) Responsibilities concerning risks are clearly defined, and during the, risks and opportunities are systematically monitored and reported. 2. Asset level Each group company must undertake a risk assessment of their relevant business segments (cement, aggregates, ready mix and other building materials). This allows the development of a highly granular assessment of potential risks and opportunities which is stored in a centralized database. 3. Company level The Group s risk profile (asset/company) is established by top-down, bottom-up and functional risk assessments and mitigation measures are proposed and implemented at the appropriate level. The BRM analyzes the Group s overall risk exposure and supports the strategic decision making process. As such, the BRM process is closely linked with the Group s strategic process. 4. Responsibilities In addition to the Group companies, senior also conducts an annual risk analysis, and EXCO reports annually to the Board of Directors. The BoD analyzes the Group s risks and opportunities at least once a and discusses them with the EXCO as part of the annual strategy review. 2 of 30 02/11/ :07

3 Climate Change 2016 Information Request - Ltd 3 of 30 02/11/ :07 CC2.1c How do you prioritize the risks and opportunities identified? The Group s risk profile is established by top-down, bottom-up and functional risk assessments which are combined to a Group 360 risk analysis. Group Risk (GRM) involves the Board of Directors, the Finance and Audit Committee, the Executive Committee, corporate function heads and the Group companies in the risk assessment. The Executive Committee reports regularly to the Board of Directors on important risk findings. The risk assessment process consists of several steps. First, risks as well as opportunities are assessed and prioritized according to significance (EBITDA impact) and likelihood. Top risks are analyzed more deeply regarding their causes and a risk treatment is defined. The consolidated Group risk profile is established and Group risk initiatives are set up and monitored on their progress. Risk aims to systematically recognize not only major risks but also opportunities the company encounters. Potential risks are identified and evaluated at an early stage and constantly monitored. Countermeasures are then proposed from active risk mitigation, risk insurance or risk diversification and implemented at the appropriate level. The legacy Holcim Sustainable Development Committee was kept updated ly on climate change risks, based on the country assessment, as well as on a top down risk assessment, based on NDGAIN ology that considers the vulnerability of a country to climate change, as well as its readiness to cope with it. In case significant risks and/or opportunities related to climate change are identified, the SD Committee initiates (or proposes to the EXCO) specific actions to mitigate excessive risks or capture identified opportunities. The SD Committee met in early In the new Group, this process will fall under the Strategy and Sustainable Development Committee of the Board. CC2.2 Is climate change integrated into your business strategy? Yes CC2.2a Please describe the process of how climate change is integrated into your business strategy and any outcomes of this process 1&2). Climate Change as a cornerstone of s vision and strategy. Sustainability is identified as one of s four strategic pillars. identified the main concerns of our stakeholders through a materiality assessment done with the support of an external consultancy. We engaged DNV GL who undertook a process aligned with the GRI G4 reporting guidelines. We included external and internal stakeholders, peer and industry research, and wider sustainability trends to identify and prioritize the most important issues. Climate change has clearly been identified as one of the main concerns and this is why this topic is in the heart of our strategy. In early 2016 released its Sustainability Strategy: The 2030 Plan. Its overarching vision is that by 2030, one third of revenues will be generated from solutions with enhanced sustainability performance. To measure the achievement of the SD goals, 100% of cement plants report regularly (monthly and annually) on a wide range of climate change related indicators (such as absolute carbon emissions, electricity consumption ), and progress towards the targets is regularly monitored by EXCO, and actions to achieve it are regularly discussed. Quarterly scorecard has been adjusted to include the most important KPIs. 3). Climate change influence on s business strategy Influenced by regulatory changes such as the discussions around carbon pricing which we support and the opportunities related to green building which is one of the main current challenge which the sector faces and where we are leader, we have developed the 2030 plan. It defines targets and aspirations for 2020, 2025 and 2030, regarding carbon emissions per ton of product as well as for avoided emissions from the use of our products and services. These targets are being cascaded to countries. 4). Current strategy The main focus of the current strategy is along 4 main areas: i) increase resilience of s assets to climate change; ii) advocate for climate change regulations that reward carbon efficiency; iii) decrease embodied carbon emissions per ton of product, iv) increase transparency for environmentally conscious customers. i) Build resilience to climate change has taken actions to build resilience of its assets to climate change: for instance, in North America we have developed fast response plans to flooding to ensure 's ability to serve customers in the event of flooding, and which proved to be effective when such events occurred in Western states and near the Mississippi River. ii) Climate change regulations believes that tackling climate change requires a price on carbon to drive and incentivize actions that are in the interest of economic operators and society at large. Market-based mechanisms are the most suited mechanisms to reduce CO2 emissions, as they ensure the required flexibility to reduce emissions at the lowest possible cost, and as such should be considered in all countries interested to tackle climate change. Accordingly, contributes to the development of carbon regulations that are effective, efficient, fair and consistent. Our position on climate change which was released at the COP21 in Paris can be found at: iii) Decrease embodied carbon emissions With increasing energy costs and concerns over energy availability in the future, it is clearly in s interest to drive energy efficiency in its production. All these approaches lead to changes in operational practices. During the last s has achieved its emission reduction targets in advance, defining each time new and more ambitious targets. For 2020, our is goal to reduce CO2 emissions per ton of cementitious material by 33% compared to 1990, and by 40% by 2030, promoting operational efficiency, which can be achieved primarily acting on: a) improving energy efficiency, b) replacing fossil fuels with alternative ones and c) substituting clinker. These actions lead to changes in our operational activities, as well as investments decisions. iv) Communicate transparently with environmentally conscious customers has worked in the development of specific tools to provide Environmental Product Declarations and Carbon footprint of our products. In line with our 2030 Plan commitments, is developing a ology to identify solutions with enhanced sustainability performance and developing a label to direct customer choice more easily towards these products. 5). Mid - Long term strategy Innovation and investments represent the main areas in focus for the long term climate change strategy. Through the Getting the Numbers Right (GNR) projects of the WBCSD-CSI, can benchmark the performance of its assets with others in the industry. When EXCO takes investment decisions, the proposed new plant is benchmarked against the top 10% and top 25% of the industry and results are taken into consideration to finalize investments. s approach to sustainability reaches beyond the own business boundaries and encompasses the entire value chain; this implies addressing the role that our solutions can have to reduce carbon emissions of our customers. We have a target on avoided emissions - by 2030 we will help our customers avoid 10 million tonnes of CO2 being released from buildings each through our innovative solutions. For this reason, a ology to estimate carbon emissions saved over the life cycle of cement based solutions is being developed by, and we will use it to direct our innovation efforts. 6). Strategic advantage over competitors Through the Foundation for Sustainable Construction, the Group earns recognition from customers and other stakeholders in the construction space for its genuine commitment to sustainability, including areas like energy efficiency and climate change. The 2030 Plan marks an evolution in our approach to climate challenges by not only focusing on the company s carbon emissions, but also considering those of our customers, unlocking new sources of value. 7). Recent business decisions In 2015, Holcim Ltd and Lafarge S.A merged. Both companies were leading the industry in terms of carbon efficiency, and the merger will allow us to capitalize on

4 Climate Change 2016 Information Request - Ltd synergies from innovation and assets efficiency to further improve the performance of. is developing a protocol for accounting and reporting avoided CO2 emissions along the value chain of cement based products, which will impact in the range of solutions the company provides to the market, allowing us to provide innovative products to address climate and environmental challenges. To increase transparency, several Environmental Product Declarations have been developed and communicated to customers. CC2.2c Does your company use an internal price of carbon? Yes CC2.2d Please provide details and examples of how your company uses an internal price of carbon s 2030 Plan promotes the use of Social and Environmental P&L ology as a fundamental tool to assess the initiatives proposed (future investments) to achieve the company s SD targets. This ology quantifies the equivalent economic value on the social and environmental externalities related to the company s new projects, to raise awareness of how they may or may not affect 's business, and to assess their relative importance in the decision making process. In this process a list of initiatives are proposed to achieve defined targets. A Social and Environmental P&L assessment can be conducted for each of the initiatives considering a price for carbon and other externalities. This price was defined considering the Stern report, the European Commission impact assessment on the Carbon Trading Directive, as well as an assessment made by the Environmental Protection Agency. The carbon price assumed for 2015 was 29 USD/t. Based on the obtained results roadmaps are defined to achieve the goals of The 2030 Plan, giving priority to those initiatives (new products, investments or R&D activities) that matched in high integrated SEP&L value, high feasibility and high estimated net present value. According to the existing carbon pricing schemes, uses an internal price of carbon to estimate the economic impact on the production cost of the sites that are under the defined mechanisms in each country or region Regarding the efficiency of each production site and the existing and projected market demand, makes decisions based on the overall impact that the asset has and may have in the future. CC2.3 Do you engage in activities that could either directly or indirectly influence public policy on climate change through any of the following? (tick all that apply) Direct engagement with policy makers Trade associations Funding research organizations Other CC2.3a On what issues have you been engaging directly with policy makers? Focus of legislation Cap and trade Energy efficiency Mandatory carbon reporting Adaptation resiliency Corporate Position Support Support Support Support Details of engagement Advocacy activities for the definition and implementation of effective regulations to mitigate climate change in EU, Switzerland, Canada, California & New Zealand. These activities range from contributing to the political debate at public fora, to providing technical advice and data directly to policy makers as well as taking an active role in expert working groups of associations. Our support for Cap and Trade is articulated in our positions available in the public domain at : Contributing to stakeholder consultations and advocating for efficient definition and implementation of PAT system in India.We maintain permanent advocacy through position papers, in conferences, as member of working groups, and as members of national and/or European trade associations. is leading initiatives such as EEB (Energy Efficiency in Buildings), launched under the auspices of the World Business Council for Sustainable Development (WBCSD). Contributing to the definition of a standard for sectoral emission reporting. participates in 'The Concrete Initiative' that promotes the benefits of concrete as a building material: concrete can withstand major shocks, absorb sound, and regulate temperatures. The high level of thermal mass in concrete constructions means that indoor temperatures remain stable irrespective of external fluctuations. This sharply reduces the need for extra heating or cooling (as well as providing greater comfort). Concrete buildings can have a minimum service life of 50 s, but may remain serviceable for hundreds of s, if properly maintained. The durability and resilience of concrete makes it ideal for constructing buildings that demand high safety levels. For example, nuclear power plants and hydroelectric dams are constructed almost entirely of concrete. It has properties that will be mandatory as national building codes are revised to address extreme weather linked to climate change, such as rising sea levels and storms. Further information about The Concrete Initiative is available on its website: We maintain permanent advocacy through position papers, in conferences, as member of working groups, and as member of national and/or European trade associations. Proposed legislative solution We support a legally-binding, international agreement to mitigate and adapt to climate change. We advocate for a successful agreement, fulfilling following principles: a)the introduction of carbon pricing, incentivizing emission reduction. b)contributions from nations and regions which lead to comparable and coordinated efforts, establishing a level-playing field between all local producers and importers. c)the provision of a long-term, stable and reliable regulatory environment to encourage investments, support plans to reduce CO2 emissions further, and adapt to climate change. d)a reliable monitoring, reporting and verification system to follow up on nations contributions. We are in broad agreement on this principle. Building codes and norms focusing on buildings energy performance, rather than use of specific materials, would facilitate more potential for innovation and, therefore, lead to greater reductions in CO2 emissions. Sustainable construction criteria should be included in public procurement and rewarded in the terms of reference for new buildings and construction works in the public sector. Sustainable construction standards and green building codes should be adopted for public investments and retrofitting regarding waste from construction and demolition, collection and separation of waste should be encouraged, infrastructure put in place to recycle and reuse waste and measures taken to make this industry more competitive. CEN and CSI protocols should be recognized and adopted widely, so as to make sure that one tonne of carbon is measured consistently everywhere and that benchmarking carbon efficiency is possible Regarding society issues, The Concrete Initiative calls for involvement of the concrete sector in the ongoing reflection linked to the sustainable development of cities (e.g. by including sustainable construction in the Smart Cities and Communities Initiative), and for a regulatory framework that incentivises and redirects sufficient flows to boost sustainable construction practices for transport and urban infrastructure. On the economic front, The Concrete Initiative advocates for EU industrial policies and standards that look at the performance of buildings or infrastructure projects and do not favour one material over another. It also calls for further development of the Green Public Procurement Guidelines with criteria that include whole-life performance and durability. To successfully address greenhouse gas emissions in cities, we must not only find s to reduce buildings' energy consumption, but also find ways to successfully implement new technologies. To make this happen, we need stronger cooperation between the public and private sectors. We therefore need the following from the public sector: a) a stable policy environment with known frameworks and targets that are not constantly evolving, b) the right targets and objectives: they must be set to facilitate implementation of energy efficient designs. This requires good measurement systems optimizing the whole building system rather than focusing on sub-systems or components individually, c) The right incentives - there is little incentive to build energy efficient buildings if the energy savings, improved comfort and desirability of the building do not translate into an economic return on investment, d) Building up to 4 of 30 02/11/ :07

5 Climate Change 2016 Information Request - Ltd 5 of 30 02/11/ :07 Focus of legislation Climate finance Other: 2030 climate Policy and the reform of the EU-ETS Carbon tax Corporate Position Support Support Support Details of engagement We promote economic policy to incentivize the R&D necessary to achieve a carbon neutral construction sector. In 2014 both legacy companies signed the World Bank initiative Putting a Price on Carbon, a manifesto that recognizes the importance of aligning carbon pricing to incentivize reduced energy use. Direct engagement in public events (organised by the institutions such as Cembureau as well as third parties, and response to public consultations (contributions publicly available) through official channels. Contribution to the work of think tanks and trade federations, in full transparency (agendas, lists of participants and minutes). Both legacy companies officially registered support for the World Bank s Putting a Price on Carbon statement. The statement calls on governments and business leaders to support a price on carbon Proposed legislative solution innovation - prescriptive building specifications need to give way to performance specifications which will allow innovation to flourish. We believe that putting one or several prices on carbon is an effective way to coordinate various climate policies on an international scale. We recognize however that a carbon market is only a means to an end and must be supported by transition policies. To be effective, a carbon market should be implemented gradually and meet certain conditions of equity and good governance. Above all, it is essential that regional and/or national climate and energy policy take into account competitiveness issues. a) Learn from mistakes of the past and reform the EU ETS: a. make total supply of allowances to the market flexible, b. support introducing a Market Stability Reserve (MSR), allocate free allowance on the basis of actual and not on historic production. b) Industry needs a level playing field between domestic producers and importers: convergence of national approaches, inclusion of importers in EU CO2 rules in absence of 2015 international agreement. Climate change policies need to be economically efficient, environmentally effective, fair, and internationally consistent. Regardless of the specific mechanism used, putting a price on carbon is necessary to drive economically efficient actions to mitigate climate change. Well designed policies include a value on carbon, reward those companies who invest in carbon efficient operations and products, and accelerate the deployment of carbon efficient solutions. CC2.3b Are you on the Board of any trade associations or provide funding beyond membership? Yes CC2.3c Please enter the details of those trade associations that are likely to take a position on climate change legislation Trade association Cembureau IETA Zürich Carbon Markets Association WBCSD - CSI Energy Efficiency in Buildings initiative from the World Business Council for Sustainable Development (WBCSD) The European Round Table of Industrialists (ERT) Is your position on climate change consistent with theirs? Consistent Consistent Consistent Consistent Consistent Consistent Please explain the trade association's position ETS should be the single policy instrument to drive GHG reduction. The Cement Industry has a significant role in bringing solutions to climate change. The International Emission Trading Association deals with regulators, NGOs and external stakeholders to promote the use of ETS systems, to improve the way they work and ensure fungibility and comparability of different carbon systems. The ZCMA provides a network for knowledge sharing for all organisations that are interested in the evolution of sustainability focused and high quality carbon markets with the aim to mitigate greenhouse gas emissions. WBCSD - CSI (Cement Sustainability Initiative) supports the development of national industry roadmaps to define the potential to reduce carbon emissions from the cement industry. The WBCSD s Energy Efficiency in Buildings (EEB.2.0) project is the second phase of a project which aims to transform the market for energy efficiency in buildings, engaging with players from across the construction sector. To reduce CO2 emissions, binding commitments by developed countries and Nationally Appropriate Mitigation Actions (NAMAs) of developing countries along with robust measurement, reporting and verification (MRV) are necessary to underpin actions and provide clear signals for investment. All governments should be encouraged to develop national, regional and sector based greenhouse gas emission reduction plans including CO2 pricing mechanisms. ERT continues to support the development of carbon markets as the approach that can deliver CO2 reductions at the lowest cost. Industry is a source of sustainable solutions and must be involved in the decision-making and implementation of the various mechanisms and repository of tools that could be used in multilateral and bilateral agreements which may emerge from the on-going negotiations. In particular, industry input should be sought for the development of the framework on the technology mechanism and on the financing of NAMAs through the Green Climate Fund. ERT highlights that Europe is part of a global market and we need to find ways to keep Europe growing while limiting our carbon footprint and increasing energy efficiency. Climate change is foremost a global challenge and the EU should keep How have you, or are you attempting to, influence the position? We contribute to the development of Cembureau agenda on climate change through active participation. representatives lead the work on standardization for GHG reporting, and are active in 4 working bodies whose main focus is Climate Change. has an active role in the development of IETA agenda; and representatives are member of several working groups. has representation actively driving the ZCMA s program of activities. has an active role in the development of CSI s agenda and is currently the co-chair; representatives are member of several working groups. subsidiaries are participating in the Low Carbon Technologies Partnership. The use of the roadmap shall be the first step to develop climate regulations, setting targets for emissions reduction financed with national resources and reduction financed with international funds. co-chairs the WBCSD s Energy Efficiency in Buildings (EEB.2.0) project. co-chairman Bruno Lafont is Chairman of the Energy and Climate Change working group.

6 Climate Change 2016 Information Request - Ltd 6 of 30 02/11/ :07 Trade association Is your position on climate change consistent with theirs? Please explain the trade association's position convincing other regions to make similar commitments and putting in place policies such as carbon pricing to reach the objectives. Further information on the ERT's position on climate change is available online at How have you, or are you attempting to, influence the position? CC2.3d Do you publicly disclose a list of all the research organizations that you fund? Yes CC2.3e Please provide details of the other engagement activities that you undertake 's process for engagement is coordinated within the Communications, Sustainable Development and Public Affairs team, which ensures that our engagement and positions are consistent. s s of engagement include: Direct engagement with regulatory entities and policymakers, e.g. participation at the CoP/MoPs, direct engagement with the authorities that are developing or implementing ETS systems such as in the European Union, New Zealand, Australia, Canada, India (for the energy Perform Achieve Trade system), China (with the provincial authorities developing pilot ETS), Mexico (together with the US Centre for Clean Air Policy), Indonesia (together with the Agence Française de Développement) as well as engagement with the UNFCCC secretariat. Participation at public consultations Engagement with associations like the World Business Council for Sustainable Development (WBCSD), the Cement Sustainability Initiative (WBCSD/CSI), International Emissions Trading Association (IETA) and regional business federations Engagement with think tanks such as the Centre for European Policy Studies (CEPS) and the European Cement Research Academy (ECRA) and Center for Climate and Energy Solutions (C2ES) CC2.3f What processes do you have in place to ensure that all of your direct and indirect activities that influence policy are consistent with your overall climate change strategy? Updates on advocacy initiatives supporting our climate change strategy are regularly presented to our main governing bodies, mainly the Executive Committee. With the merger and the establishment of a Board Committee for Strategy and Sustainable Development, this body will also be regularly updated. (4 pillars) At regional levels, representative groups of CEOs and functional managers regularly meet and exchange on latest regulatory developments and activities influencing policy, and newsletters on the topic are distributed. Local initiatives are also circulated for potential replication within the group. Regional positions (e.g. reform of EU ETS) are developed with the involvement of all legal entities in the regions, as well as all relevant company departments (such as climate protection, carbon trading and public affairs). All positions are systematically validated by regional leadership teams and consistent with global positions. The Group Communication, Sustainable Development and Public Affairs Department, under the authority of the Executive Vice President for Communications, Public Affairs and Sustainable Development (Caroline Hempstead), is responsible for the coordination of advocacy actions within and holds direct and specific responsibility for climate change related issues. As such, it ensures that the Group s long-term interests in line with broader societal interests are taken into account by public authorities. With regard to question CC2.3d, respective references are available in the public domain and full list will be released by 2016 Q3 on our external website. Page: CC3. Targets and Initiatives CC3.1 Did you have an emissions reduction or renewable energy consumption or production target that was active (ongoing or reached completion) in the reporting? Absolute target Intensity target Renewable energy consumption and/or production target CC3.1a Please provide details of your absolute target ID Abs1 Scope Other: Scope 4 : avoided emissions from the use of our products and services % of emissions in scope % reduction from base Base Base emissions covered by target (metric tonnes CO2e) Target Is this a science-based target? 100% Don't know Comment In s s 2030 Plan we recognize that our approach to sustainability must reach beyond our own emissions and our progress is dependent on how we can contribute to making a positive contribution to society. We have taken the same approach with CO2, where we know that we must play a part in limiting the world s absolute emissions. Therefore much of our work is focused on how we affect our value chain emissions. With the 2030 Plan we have included a target that by 2030 we will help our customers avoid 10 million tonnes of CO2 released from their buildings and infrastructure every by using our innovative solutions. CC3.1b Please provide details of your intensity target ID Scope % of % Metric Base Normalized Target Is this a Comment

7 Climate Change 2016 Information Request - Ltd Int1 Int2 Int3 Scope 1 Scope 1 Scope 1 emissions in scope 95% 33% 95% 37% 95% 40% reduction from base Metric tonnes CO2e per tonne of cement* Metric tonnes CO2e per tonne of cement* Metric tonnes CO2e per tonne of cement* base emissions covered by target science-based target? Don't know Don't know Don't know Since 1990, has already reduced its emissions per tonne of cement by 26.1%, demonstrating leadership in the sector. In order to achieve our targets stipulated in the 2030 Plan, determined the needed improvement to be achieved in its operations in This target of 33% reduction in specific net kg CO2 per ton cementitious material by 2020 will require that all reduction levers (traditional and innovative) are used to their full potential and the company will be on track for the achievement of its 2030 target. We are not sure that this is a science-based target however in the CDP sector report 2015, it states that "Holcim s current emissions intensity is in line with science-based levels and its target reduction is more aggressive than the industry decarbonization trajectory. If achieved, the target would create a carbon surplus relative to the decarbonization pathway". Since 1990, has already reduced its emissions per tonne of cement by 26.1%, demonstrating leadership in the sector. In order to achieve our targets stipulated in the 2030 Plan, determined the needed improvement to be achieved in its operations in This target of 37% reduction in specific net kg CO2 per ton cementitious material by 2025 will require that all reduction levers (traditional and innovative) are used to their full potential and the company will be on track for the achievement of its 2030 target. We are not sure that this is a science-based target however in the CDP sector report 2015, it states that "Holcim s current emissions intensity is in line with science-based levels and its target reduction is more aggressive than the industry decarbonization trajectory. If achieved, the target would create a carbon surplus relative to the decarbonization pathway". Since 1990, has already reduced its emissions per tonne of cement by 26.1%, demonstrating leadership in the sector. In order to achieve our targets stipulated in the 2030 Plan, determined the needed improvement to be achieved in its operations in This target of 40% reduction in specific net kg CO2 per ton cementitious material by 2030 will require that all reduction levers (traditional and innovative) are used to their full potential. We are not sure that this is a science-based target however in the CDP sector report 2015, it states that "Holcim s current emissions intensity is in line with science-based levels and its target reduction is more aggressive than the industry decarbonization trajectory. If achieved, the target would create a carbon surplus relative to the decarbonization pathway". CC3.1c Please also indicate what change in absolute emissions this intensity target reflects ID Direction of change anticipated in absolute Scope 1+2 emissions at target completion? % change anticipated in absolute Scope 1+2 emissions Direction of change anticipated in absolute Scope 3 emissions at target completion? Int1 Increase 7 Increase 20 Int2 Increase 5 Increase 20 Int3 Increase 3 Increase 20 % change anticipated in absolute Scope 3 emissions Comment For more clarity and consistency, we used 2015 as a baseline as was formed in mid 2015 following a merger between LafargeSA and Holcim Ltd. We expect strong volume growth up to 2020 which will outpace our carbon efficiency improvement. For scope 3 emissions, we did the assumption that they grow as much as the production. The absolute emissions have been estimated assuming no volume growth versus 2020 and an increase in carbon efficiency aligned with our targets. For scope 3 emissions, we did the assumption that they grow as much as the production. The absolute emissions have been estimated assuming no volume growth versus 2020 and an increase in carbon efficiency aligned with our targets. For scope 3 emissions, we did the assumption that they grow as much as the production. CC3.1d Please provide details of your renewable energy consumption and/or production target ID Energy types Base Base energy % renewable Target % renewable Comment 7 of 30 02/11/ :07

8 Climate Change 2016 Information Request - Ltd covered by target for energy type covered (MWh) energy in base energy in target RE1 Combustion of fuels % % This target reflects our Thermal Substitution Rate - the rate at which we replace fossil energy with alternative fuel sources such as biomass or waste. CC3.1e For all of your targets, please provide details on the progress made in the reporting ID % complete (time) % complete (emissions or renewable energy) Comment Int1 83% 79% Following the merger of Lafarge SA and Holcim Ltd in mid 2015, new carbon intensity targets were set for 2020, 2025 and 2030 as part of the 2030 Plan. At the end of 2015, the Group had already achieved a reduction of 26% against the 1990 benchmark, which corresponds to 573 kg CO2/tcem material. The targets represent a significant challenge since the most viable abatement options have already been implemented, however, is on track to achieve its target in 2020 if the pace of improvements is maintained. Int2 71% 70% Following the merger of Lafarge SA and Holcim Ltd in mid 2015, new carbon intensity targets were set for 2020, 2025 and 2030 as part of the 2030 Plan. At the end of 2015, the Group had already achieved a reduction of 26% against the 1990 benchmark, which corresponds to 573 kg CO2/tcem material. The targets represent a significant challenge since the most viable abatement options have already been implemented, however, is on track to achieve its target in 2025 if the pace of improvements is maintained. Int3 63% 65% Following the merger of Lafarge SA and Holcim Ltd in mid 2015, new carbon intensity targets were set for 2020, 2025 and 2030 as part of the 2030 Plan. At the end of 2015, the Group had already achieved a reduction of 26% against the 1990 benchmark, which corresponds to 573 kg CO2/tcem material. The targets represent a significant challenge since the most viable abatement options have already been implemented, however, is on track to achieve its target in 2030 if the pace of improvements is maintained. RE1 0% 0% 2015 is the base Abs1 0% 0% 2015 is the base CC3.2 Do you classify any of your existing goods and/or services as low carbon products or do they enable a third party to avoid GHG emissions? Yes CC3.2a Please provide details of your products and/or services that you classify as low carbon products or that enable a third party to avoid GHG emissions Level of aggregation Group of products Group of products Description of product/group of products has an important range of products and brands which enable our customers to reduce their emissions : Solidia through active carbonation, ie. CO2 uptake during hardening process; Thermal inertia, ie through sandwich wall with enhanced isolation properties; Roof isolation ; lightweight blocks which will reduce the CO2 emissions for the customer during the transportation ; Ductal which will reduce the needs of binders due to its higher strengths properties ; etc. has an important range of products and brands which can be considered as low carbon products : Ductal, Chronolia, Agilia, Artevia, Thermedia 6B, Aether, and other 2030 solutions. They can be considered as low carbon products because of : - and/or lower CO2 emissions during the production of the clinker - and/ or lower clinker content in the cement - and/or lower transportation CO2 impact due to the weight. Today most of our low CO2 products are linked to a lower clinker content in the cement. Are you reporting low carbon product/s or avoided emissions? Avoided emissions Low carbon product Taxonomy, project or ology used to classify product/s as low carbon or to calculate avoided emissions Other: Internal ology Other: Internal ology under development % revenue from low carbon product/s in the reporting 1% 29% % R&D in low carbon product/s in the reporting More than 10% but less than or equal to 20% More than 10% but less than or equal to 20% Comment has developed a specific LCA software allowing our countries to calculate avoided CO2 emissions from applying products with enhanced sustainable properties compared to standard products. As part of the 2030 plan, we have developed a public group target of 10 millions tonnes avoided every, which represent 1% of total revenues. s wide range of low-carbon products (Ductal, Chronolia, Agilia, Artevia, or Thermedia 6B for example) enables to reduce both CO2 emissions generated by the production process and CO2 emissions for our clients in the building sector. Furthermore, we are developing with our fundamental research centre new products with higher CO2 savings potential (eg. Aether (30% lower in CO2) or Solidia with a potential up to 70% CO2 reduction). CC3.3 Did you have emissions reduction initiatives that were active within the reporting (this can include those in the planning and/or implementation phases) Yes CC3.3a Please identify the total number of projects at each stage of development, and for those in the implementation stages, the estimated CO2e savings Stage of development Number of projects Total estimated annual CO2e savings in metric tonnes CO2e (only for rows marked *) Under investigation 2 To be implemented* Implementation commenced* of 30 02/11/ :07

9 Climate Change 2016 Information Request - Ltd Stage of development Number of projects Total estimated annual CO2e savings in metric tonnes CO2e (only for rows marked *) Implemented* Not to be implemented CC3.3b For those initiatives implemented in the reporting, please provide details in the table below Activity type Description of activity annual CO2e savings (metric tonnes CO2e) Scope Voluntary/ Mandatory Annual monetary savings (unit currency - as specified in CC0.4) Investment required (unit currency - as specified in CC0.4) Payback period lifetime of the initiative Comment Energy efficiency: Processes Energy efficiency: Processes Synergy and cost reduction program A cost reduction and synergy program is being rolled out covering energy efficiency. As an example of an initiative included in this program we can highlight the ball mill initiative to optimize grinding efficiency. If on a mill-for-mill basis these efficiency losses were not always readily apparent, looked at in aggregate numbers, they were significant. The team realized that by routinely optimizing the ball mills, the company could increase capacity and reduce power consumption of its mills with marginal investment. Through training and best practice sharing, the company expects to continue to reap significant efficiency gains a great example of how in the new organization operational excellence can make a big difference, even with little use of resources. Please note that this project has been implemented in some countries but is still to be implemented in others. Plant upgrades in 2015 regularly upgrades its plant technology. 3 main projects enabled to increase our energy efficiency in A preheater upgrade and satellite cooler modification in Tanzania, a Kiln upgrade in Iraq and a cooler replacement in Uganda Scope 1 Scope 2 (locationbased) Scope 3 Voluntary s Ongoing Scope 1 Voluntary s s The annual monetary savings reported cover all synergies as reported in the annual report. Note that, a new reporting tool called "track it" has been developed to measure the synergies and cost reduction per topic. One of the topic covered is "operational optimization" which is mainly about energy optimization. CC3.3c What s do you use to drive investment in emissions reduction activities? Method Dedicated budget for low carbon product R&D Financial optimization calculations Compliance with regulatory requirements/standards Comment In addition to addressing industrial performance, we are also harnessing R&D to develop new lower-carbon cements. The objective of this research is not only to reduce the footprint of specific products, but also to provide solutions that can be manufactured on a large scale through potential adaptations of existing production facilities. R&D can also result in beneficial performance characteristics (in some countries, advocates for changing building codes, norms and standards to accept new low-carbon innovative products). Our teams are currently engaged in pre-industrialization work for a new generation of lower-carbon Aether cements. These cements provide similar performance to ordinary Portland cements in a range of applications, but with an overall carbon footprint reduced by 25-30%. The high dimensional stability of Aether cements makes them a particularly promising alternative in low-shrinkage applications. In 2015 Aether -based screeds were further tested at our research facilities and on client sites. The technology was subsidized within two EU H2020 projects in order to prepare industrialization of these new innovative cements. In partnership with US start-up Solidia Technologies, work is underway to industrialize a new solution that could reduce the carbon footprint of precast concrete by up to 70%. Following a trial to confirm the industrial feasibility of Solidia Cement at our Whitehall plant in the US and in Europe and a series of successful tests at precast clients in 2015 and 2016, preparations are underway for commercialization of the product. We already have a customer base in the US. Improvements across the entire range of products and solutions enable market requirements to be met. For instance, the worldwide trend of urban growth can be supported through the development of taller, more efficient tower buildings or bridges and infrastructure that are as refined as they are solid. Reducing CO2 emissions linked to electricity generation (scope 2 emissions) can be addressed through increased use of renewable energy, although as a large power consumer it has been difficult to tackle this issue at the scale required: adding renewable power to a cement plant will increase capital costs by 25 to 30% and in many emerging countries the power infrastructure is not sufficient to support the backup load requirements of a cement plant. We have some experience with successful projects, particularly at our Tetouan plant in Morocco where a wind farm capable of meeting all of the plant s power needs has been established since We also have successful wind generation activities in India. However, such projects are capital intensive in nature and our investment has been prioritized on improving production and efficiency capabilities rather than replicating this model. As a result, the focus has remained on buying energy from more sustainable sources, where it is feasible and economically viable. Our Geocycle operations focus on securing alternative fuels for our plants replacing traditional fuels. The EU ETS drives to reduce emissions generated by its operations. In order to do so, the company invests to reduce the clinker-intensity of its cement manufacturing process, clinker being the main behind greenhouse gas emissions in the cement industry. 9 of 30 02/11/ :07