Investors with $33tn urge climate change action from cement giants

CRH, Lafarge Holcim, Heidelberg Cement, and Saint-Gobain sent detailed report by IIGCC and Climate Action 100+

Cement can help cut CO2 emissions [representational image].
© ITP Media Group / Ajith Narendra
Cement can help cut CO2 emissions [representational image].

Institutional Investors Group on Climate Change (IIGCC) and participants in Climate Action 100+ – a shareholder initiative with more than 320 investors that collectively have $33tn in assets under management – has called on global cement giants including CRH, Lafarage Holcin, and Hiedelberg Cement, in addition to Saint-Gobain, to work against climate change and achieve net-zero emissions by 2050.

IIGCC said it had sent the Investor Expectations of Companies in the Construction Materials Sector report to each of the companies, in addition to letters setting out the steps most applicable for each company.

Cement contributes to 7% of global man-made CO2 emissions, IIGCC said, adding that “if the cement industry were a country, it would be the third-largest global emitter, behind only the US and China”.

IIGCC’s report includes a detailed explanation on the climate risks associated with the construction materials sector, including those related to transition and physical assets.

“While the cement industry is moving to less water-intensive production processes, water is still critical to the production process,” the report explains.

“As a result, companies may be affected by changes in weather patterns, such as increasing droughts. According to research by CDP, the main acute physical risk for cement companies come from flooding, storms, and hurricanes which may affect their output.”

Investors part of IIGCC recommend that companies set short-, medium-, and long-term targets to become net-zero CO2 emitters by 2050 with a “science-based” approach. The group also recommends greater public policy transparency and advocacy for the Paris Agreement.

In a press statement, IIGCC said: “The investors recognise the steps Heidelberg Cement in particular has taken in already having committed to meeting key aspects of the investor expectations outlined.

“CRH, Lafarge, and Saint-Gobain have been encouraged to follow suit, given the significant role they play as European-based multinationals, with investors making clear the need for the companies to set net zero emission targets, as Heidelberg Cement already have.”

Chief executive officer of Ethos Foundation, one of the investor signatories in IIGCC’s campaign, said investors were already expecting “construction materials companies to substantially increase the R&D budgets available for research into decarbonising cement production”.

He added: “Construction materials companies may ultimately risk divestment and lack of access to capital as an increasing number of investors seek to exclude highly carbon-intensive sectors from their portfolios to meet their own decarbonisation plans.”


The Investor Expectations report states that according to some research, cement production is “already relatively energy-efficient, and there are few low-hanging fruit for companies to easily reduce their carbon emissions”.

The 2018 IEA and Cement Sustainability Initiative Technology Roadmap (CSI Roadmap), according to the report, estimates that 3% of CO2 emissions reductions from today until 2050 will be achieved by thermal energy efficiency improvements, while 48% will be driven by the deployment of carbon capture and storage.

Chatham House research has further found that advancements in low-clinker and novel cement could lead to emission cuts of more than 90% compared to traditional Portland cement, with the report adding that companies “not working on developing new technologies now risk being left behind”.

For instance, the report suggests – citing IEA and CSI Roadmap – that the current global average clinker ratio of 0.65 needs to be reduced to 0.6 by 2050 to limit the rise in global temperatures to 2°C.

Lafarge Holcim’s clinker ratio of 0.5 is cited as an exception by the report, which adds that companies may “adjust the ratio of clinker in their cement to reduce emissions, or develop alternatives to clinker that have lower emissions”.

It adds: “Currently, these alternatives include the use of blast furnace slag, fly ash, or limestone.

“Cement production requires clinker to be heated to high temperatures in kilns. Most cement plants have been using conventional fossil fuels such as coal. Companies can use alternative fuels such as biomass and waste materials, or newer technologies being developed utilising hydrogen or heat electrification in cement kilns derived from renewable energy to reduce energy intensity in the cement production process.

“Companies can invest in upgrading their kilns and other production equipment to lower energy consumption and the energy intensity of cement production.

“Wet kilns have historically widely been used across the sector, in which water is evaporated as part of the heating process. They use up to 85% more energy in comparison to more modern preheater kilns with precalciners.”

IIGCC acknowledged that various cement companies around the world were, like Heidelberg Cement, working towards a carbon-neutral future.

It provided the example of India’s Dalmia Cement, which it said had “set out one of the most ambitious visions by a company in the sector – to be carbon-negative by 2040”. The Industry Expectations report explains

To achieve this goal, the company is looking to take a number of actions, including switching to alternative fuels, reducing clinker content, optimising clinker heat consumption and raw materials drying processes, developing low-carbon cements, and exploring new technologies such as carbon capture and utilisation and carbon sequestration

Its press statement added: “There is however no single route currently available to achieve deep-decarbonisation of the cement industry.

“A range of approaches will need to be pursued concurrently.”

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