Minutes from Lafarge s Stakeholder Panel Meeting November 17th 2004

Transcription

1 Minutes from Lafarge s Stakeholder Panel Meeting November 17th 2004 In the process of enlarging its stakeholder consultation, Lafarge created a permanent Stakeholder Advisory Panel in 2003, whose mission is to challenge and assist the Group s Sustainability Committee in designing their sustainability strategy. Following feedback from certain panel members as well as our own conclusions on the quality of last years round of stakeholder consultation, Lafarge has expressed the desire to reinforce it s stakeholder panel s implication in the Group s reporting process. This would furthermore allow Lafarge to keep up with the evolution of best practices in reporting worldwide. The second meeting of Lafarge s stakeholder panel was held on November 17th 2004 at Lafarge s headquarters in Paris. The topics selected for debate were chosen by Lafarge with respect to the Group s on-going issues. The topics were: I. The proposed reinforcement of the panel s involvement in the reporting process II. An update on Lafarge s sustainability practices III. Lafarge s stand and role concerning sustainable construction List of the participants from Lafarge: Bernard Kasriel / CEO Dominique Bernard / SVP Industrial Ecology, Cement Division Michel Bisiaux / SVP, Legal Affairs Christelle Bitouzet / VP Communications, Cement Division Jean-Charles Blatz / EVP Aggregates & Concrete Jean-Jacques Gauthier / EVP Finance Ulrich Glaunach / EVP Roofing Alain Guillen / VP Social Policies Philippe Hardouin / SVP Group Communications Christian Herrault / EVP Human Resources & Organization Bruno Lafont / COO & Joint President of Cement Division Denis Maître / SVP Research & Development Isidoro Miranda / EVP Gypsum Gaëlle Monteiller / SVP Public Affairs & Environment René Moretti / VP Environment & Public Affairs, Gypsum Division Sherry Peske / VP Corporate Communications, Lafarge North America Michel Picard / VP Environmental Affairs Michel Rose / COO & Joint President of Cement Division Jacques Sarrazin / SVP Group Strategy Stéphanie Tessier / VP Group External Relations

2 Members of the panel attending the meeting were the following: (The Advisory Panel members act in a personal capacity - the organisational affiliations below are listed for identification purposes only) : Marion Hellmann IFBWW & WCL Jean Paul Jeanreanaud WWF Karina Litvack F&C Asset Management Alastair McIntosh. Center for Human Ecology Patrice Ponceau Comité Européen Livia Tirone Tirone Nunes SA Simon Zadek Accountability Panel members unable to attend the meeting were the following: Philippe Lévêque (CARE France) Cornis Van der Lugt (UNEP) Pooran Desai (BioRegional) The meeting was moderated by Elisabeth Laville, Director and founder of Utopies. Stanislas Dupré (Manager at Utopies) introduced the meeting and presented the proposal for greater involvement of the panel in Lafarge s upcoming reporting cycle. Gaëlle Monteiller (Senior VP Public Affairs & Environment) presented an update on Lafarge s sustainability practices and perspectives in term of sustainable architecture. Livia Tirone made a presentation on sustainable construction. Jean Paul Jeanrenaud made a presentation on the One Planet Living project. All powerpoint presentations given at this meeting are available on-line on the following webpage :

3 Here is a summary of the ideas and opinions expressed by panel members and answers from Lafarge s top managers regarding the topics raised at Lafarge s second permanent stakeholder panel meeting. I. PANEL S FUNCTIONING (Stanislas Dupre s presentation) You may access Utopies powerpoint presentation on the following webpage : Improvement to be made for next meetings : Karina Litvack: Panel members should receive the documents at least 2 weeks in advance to have enough time to review the issues on which they are asked to react. Marion Hellmann: More time should be given to panel members to prepare the panel meeting. Concerning the new panel consultation process : Most panel members are partners of Lafarge, which raises the question of their impartiality. If we are to go forward with this process which involves assurance (when panel members make comments as to whether the report meets their expectations or not), we must either prove the absence of material interest of panel members, or make a declaration of material interest. The issue of impartiality should be dealt with in this way to avoid any future criticism of the report. To tackle this issue, Utopies suggested to include a declaration of material interest in the description of each member posted on the website II. UPDATE ON LAFARGE S SUSTAINABILITY PERFORMANCE You may access Lafarge s powerpoint presentation on the following webpage : Corporate strategy / relation between sustainability and core business strategy: Alastair McIntosh: How does Lafarge integrate sustainability in the Group s corporate strategy? The Group should explicitly mention a turn in strategy, striving to make its core business shift from extracting raw material to providing efficient and innovating materials. In doing so, the Group would make people proud and would give competitive advantage. Bernard Kasriel: Changing strategy? Not really, it is difficult to say what Lafarge s business will be in 30 or 40 years from now. Regarding reporting, publishing all the information on our corporate governance and strategy would make reports unreadable. Simon Zadek: How do the sustainability issues and practices Lafarge talks about connect with the Group s business strategy, i.e the basis on which Lafarge will create competitive advantage for the company to go forward. We need to know more about the Group s strategy: if the

4 sustainability issues mentioned are indeed material for the Group, how are they taken into account on an operational level? How are these issues integrated at board level? Is sustainability an integral part of your balanced scorecard or whatever tool you use to manage performance? Corporate strategy / relation between sustainability and investment community: Simon Zadek: There is no information on how Lafarge s sustainability commitments connect to the Group s fiduciary commitments. do the actions undertaken by Lafarge toward improving social and environmental responsibility come across to investors? How does the Group connect this with the way the investment community sees Lafarge?. A solution to this would be to train investors. If sustainability issues are material to Lafarge, are they in your 10K document 1? Bernard Kasriel: concerning investors, there is clearly a dilemma: Lafarge is a long term business. The Group needs long term reserves of gypsum and is forced to have a long view, whereas most investors only have a short to very short term perspective. It is therefore hard to convince the investment community of having long term perspectives of years. Simon Zadek: This particular dilemma is faced by many companies. If Lafarge wants to be transparent, the Group must explain how it is conciliating long term objectives with the realities of business life (investors short term perspectives) Karina Litvack : It is true that the investment community has only very short term perspectives, companies who discuss these issues with their shareholders get negative responses. However, pension funds such as Calpers are already taking decisions based on long term considerations, and even mainstream hedgefunds are slowly starting to look at these issues, having had their fingers burned in the past by being so short term oriented. The mass of investors will soon be making demands on Lafarge such as these.we have been leading investors in our direction, which has been hard. Corporate strategy / Local versus global: Simon Zadek: Lafarge is a decentralized company, so we need to know what happens in other geographic areas, this doesn t show in its reports. The Group should consider local sustainability reporting, on an area or country level. Finally, we need more tangibility, for instance in terms of Health and Safety, especially in quarrying activities. Marion Hellmann: We want to know more about your strategy in terms of outsourcing, HR management... We at IFBWW would like more involvement with a framework agreement, more commitment on both sides in our partnerships,such as that which is taking place with the WWF. panel meetings aren t enough. Bernard Kasriel: These partnerships allow us to get advice in fields in which we know nothing. We know the issues in terms of HRM as we have years of experience as opposed to public health issues. For instance WWF helps us in keeping a global perspective: We are local players (especially aggregates), still we cannot push our environmental problems from one 1 Lafarge being a foreign company listed in the NYSE, the equivalent of the 10K is the 20F

5 place to another, and WWF, which is a global organization, helps us with this, they are able to call us on such practices. Marion Hellmann: Lafarge is a multi-local player, why does the Group report only globally? We d like to know what happens in specific countries. Bernard Kasriel: The Group has nothing to hide, we have safety reports by plants, by countries, we have them, to put them all together would make 2000 pages reports. III. SUSTAINABLE CONSTRUCTION 1. Livia Tirone s presentation on sustainable construction (Powerpoint version downloadable on Simon Zadek: One thing that would accelerate the shift towards green construction is changing the incentives system for architects. Indeed the most effective changes would come by changing how much and in what terms architects are paid. 2. Gaëlle Monteiller s presentation (Powerpoint version downloadable on Corporate strategy / Local versus global: Simon Zadek: Is the issue demonstrating the superiority of what Lafarge produces in terms of sustainability or is it an objective comparison with other materials? In terms of credibility, it is important that the Group provide information that allows comparison of Lafarge products with other materials or competitors products, rather than just prove the usefulness of cement. If the Group did the same thing in terms of financial reporting, it would be illegal. You have to give objective facts to allow people to decide on their own rather than tell them what you are doing is better. The Group should apply the same frame of mind to sustainability reporting Alastair McIntosh: Lafarge should strive to anchor product development with social concern, and develop product for the poor. Livia Tirone: The focus should be on how can Lafarge material be used best rather than which material is the best. Karina Litvack: There is a misconception that eco-friendly products are expensive. We don t know that at my end of the chain. We re misinformed. Livia Tirone: Upfront costs are not the same in green buildings versus standard buildings, its the whole cost that is similar.