the report (pdf, 1.49 mb)
TRANSCRIPT
Building a Sustainable
World
A First Report on our Economic, Social and EnvironmentalPerformance | 2001
Why Read this Report?This first sustainability report covers economic, social and environmental issues. For Lafarge, it represents a further tool, strengthening ourapproach to dialogue, transparency and accountability.The report is designed for a large range of our different stakeholders including our share-holders, our employees, public authorities, our local communities, non-governmental organizations (NGOs), our customers, our suppliers,our partners, end users, the media and other companies. All of you are important to Lafarge in your different ways. Our intention is to launch adialogue with you about the sustainability issues Lafarge is currently facing, to inform you about our performance and strategy, but also tocommit ourselves publicly to specific objectives. The report does not attempt to set out all the answers, but rather to engage the Group’sstakeholders, to invite them to share their expectations, views and ideas about what sustainability can really mean for the Group.This is mostimportantly a learning process for us and we welcome all your comments and suggestions (a feedback form is posted on our website).
Contents Cross-reference withG.R.I.* guidelines
Message from Bertrand Collomb . . . . . . . . . . . . . . . . . . . . . . . 4–5 1 ; 5.1 ; 6.52
Economy 61. Lafarge’s Businesses around the World . . . . . . . . . . . . . . . . 8–9 2 ; 6.37 ; 6.38 ; 6.512. The “Lafarge Way” of Management . . . . . . . . . . . . . . . . . . . 10–11 5.4 ; 5.7 ; 6.633. The Business Case for Sustainability . . . . . . . . . . . . . . . . . . 124. Our Triple Bottom Line Performance . . . . . . . . . . . . . . . . . . 13-15 6 Integrated
Society 161. The Stakeholder Approach . . . . . . . . . . . . . . . . . . . . . . . . 18–19 5.11-5.14 ; 6.27 ; 6.532. Our Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20–23 6.65-6.67 ; 6.723. Local Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24–29 6.85-6.884. National and International Communities . . . . . . . . . . . . . . . . 30–31 5.6 ; 6.95
Environment 321. Closing the Loop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34–35 3 ; 6.242. Environmental Management . . . . . . . . . . . . . . . . . . . . . . . 36–37 53. Quarry Management . . . . . . . . . . . . . . . . . . . . . . . . . . . 38–40 5.10 ; 6.6 ; 6.33-6.354. Protecting Air and Water . . . . . . . . . . . . . . . . . . . . . . . . . 41–42 6.12 ; 6.21-6.235. Climate Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43–46 6.1 ; 6.3 ; 6.7 ; 6.10 ; 6.146. Waste Recovery and Elimination . . . . . . . . . . . . . . . . . . . . 47–48 6.16-6.187. Contributing to Sustainable Architecture . . . . . . . . . . . . . . . 49–51 6.28 ; 6.29
Report as a tool for dialogueHow did We Report? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 2.8 ; 2.12Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53The Way Ahead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54-57 2.6 ; 4 ; 6.27Stakeholder Perspectives on this Report . . . . . . . . . . . . . . . . . . 58 6.27Feedback Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . online
Annexes on www.lafarge.com
More information available on the internet
Performance indicator Interview with an external stakeholder**
* Part C of the Global Reporting Initiative guidelines (see p 52), whoserecommendations were used to produce the content of this report.
** This report contains quotes from a number of external stakeholderswho give their view on sustainability issues relating to Lafarge.The intention is to treat the concerns that others have about Lafarge.Lafarge of course does not necessarily endorse their views.
Legend
Contact Objective
Sustainability Challenges:Listening to our Stakeholders
“We are convinced that an industrial group like ourscan only thrive in the long run if it takes into account sustainable development.” Bertrand Collomb, Chairman and CEO of Lafarge
“People do not know what sustainable development is about. They understand environment a little bit but they do not see problems with a systemic/ holistic view.
This is not specific to the building materialsindustry and Lafarge is ahead in that respect.The idea of sustainability is also that of a renewal, that can go as far as product substitution.”Corinne Lepage, Lawyer, Former FrenchMinister for Environment, Member of the Assurance Group for the WBCSD study“Towards a Sustainable Cement Industry”
“Today, we are looking for the most progressive and visionarycompanies, in order to establish partnerships that could have aninfluence on the whole industry.This is how the partnership
between WWF and Lafarge must be seen.”Dr Claude Martin, Director General,WWF International
“The cement sector aloneaccounts for 5% of all greenhousegas emissions. This is the biggestimpact made on the climate by any single manufacturing sector.”Stephan Singer,
Head of European Climate and Energy Policy,WWF International
“Our business is increasinglyautomated and requires lessand less manpower; its ‘license to operate’ is increasinglybased on its ability to serve the public interest at both local
and international levels.”Jean-Carlos Angulo, President of SFIC(Syndicat Français de l’IndustrieCimentière), Executive Vice President of Lafarge
“Construction is one of sixfundamental human necessities,along with water, food, health,energy and work. This meansthat industry must not only avoid making a negative impact,
but must also become a driving force behinddevelopment.”Gunter Pauli, Founder and Director, ZERI Foundation
“The primary aim is to create a culture of sustainable develop-ment. Any company still justmaking quantitative adjustments,using ‘more of this and less of that’, has not genuinely
committed itself to sustainable development, for the framework within which it is acting is too restrictive.”Bruce Vigon, Director of the WBCSD study“Towards a Sustainable Cement Industry”at Battelle
“In fact, cement works todayhave a second business – wasteprocessing – which should requiremore information and training forstaff focusing on the substancesthey are being asked to burn.”
Jean-Pierre Edin, Robin des Bois,French environmental NGO
“Lafarge is our industry leader inthe social aspect of the storebrandanalysis, but our analysis indicatesroom for improvement on its follow-up of suppliers’ humanrights policies and practices.”
Sarita Bartlett, Director of Research,Storebrand Principle Funds
“Half of energy consumptionworldwide is associated withbuildings, 90% of which isenergy-in-use.”William Browning,Founder,
Green Development Services,Rocky Mountain Institute
“We must encourage diversityand fight the notion of a ‘uni-versal model’ that fits anywhere.You cannot construct the samebuilding in a Western countryand a Southern country – that
would amount to denying cultural and tradi-tional diversity and the existence of differentclimates and uses, etc.”William McDonough,Architect and designer,Founder, McDonough & partners
3
4
Message from Bertrand Collomb
In the report entitled “Our Common Future”, submitted to the UnitedNations in 1987 by the Brundtland Commission, sustainable developmentwas defined as “development that meets the needs of the present withoutcompromising the ability of future generations to meet their own needs”.
When applied to an industrial group
like ours, this concept translates into
the need to measure the value created
by the company according to a “triple
bottom line” which aims to combine
economic prosperity, environmental
quality and social responsibility. Only
if we can succeed in all three aspects
will we ensure the company’s pros-
perity and that of the world in which
it is developing.
For more than 160 years, Lafarge
has been producing construction
materials that are vital for the development of human
society, and therefore extracting non-renewable,
abundant natural resources from the Earth’s crust.
The very nature of this activity, which necessitated
the establishment of a firm local foothold, means that
Lafarge has historically worked at integrating all
three dimensions of sustainable development into its
strategy and corporate culture. For example, our
Principles of Action, published for the first time in
1977, highlight the central role of individuals, inside
and outside the company, as well as the importance
of cultural diversity, transparency and respect for the
public interest. By the same token, Lafarge’s
Environmental Policy adopted in 1995 formalized the
commitments to enable us to turn the environment
into a competitive advantage and a source of fresh
opportunities instead of a mere constraint.
Lafarge is proud of its achievements
regarding sustainability as well as
of its corporate culture that has
contributed so much in this respect.
Our progress is recognized by many,
including the financial sector - Lafarge
is for example a constituent of the
Dow Jones Sustainability Index.
Nevertheless, we want to take this
approach further; on the one hand by
pressing ahead with our analysis of
what sustainability really means to our
businesses, and on the other hand by
committing ourselves more strongly
than before to a progressive approach.
While it is key to Lafarge’s continued prosperity,
our current international development also confronts
us with fresh challenges, linked to the difficult socio-
economic situation in the countries of the developing
world and to our responsibility as a global company to
face up to world-wide problems like global warming.
These heightened responsibilities are just some of
the growing expectations of us from our stakeholders.
We must meet these expectations.
Therefore, we intend to make headway by engaging
in dialogue and exchanging ideas with all our stake-
Message from Bertrand Collomb
5
Agenda 21 was adopted by 178 countriesat the Earth Summit held in 1992in Rio de Janeiro. It is a global action plan for progressing towards long-termdevelopment wherever human activitiesimpact the environment. It is up to the respective countries to incorporatethem in the rules and regulations theyissue and up to companies to apply it in an industrial version of Agenda 21.
Other excerpts are included in this report but below is a selection ofpriorities with particular strategic implications for the building industry:
1. THE SOCIAL AND ECONOMIC DIMENSIONS
■ International cooperation to accelerate sustainable development and combat poverty in developing countries.
■ Promoting sustainable patterns and abandoning unsustainable patterns of production and consumption.
■ Protecting and promoting human health conditions.■ Promoting sustainable human settlement: Suitable housing for all,
an integrated environmental infrastructure, promoting sustainable production in industry and construction.
2. CONSERVATION AND MANAGEMENT OF RESOURCES FOR DEVELOPMENT
■ Protection of the atmosphere.■ Integrated approach to the planning and management of land
resources.■ Conservation of biological diversity.■ Protection of the quality and supply of freshwater resources.■ Environmentally sound management of toxic chemicals and waste.
3. STRENGTHENING THE ROLE OF MAJOR SOCIAL GROUPS
■ Strengthening the role of indigenous people.■ Making NGOs partners for sustainable development.■ Increased role of local authorities, workers and their trade unions.
4. MEANS OF IMPLEMENTATION
■ Transfer of environmentally sound technology and international cooperation.
■ Science for sustainable development.■ Promoting education, public awareness and training.■ Improving the information made available for decision-making.
http://www.un.org/esa/sustdev/agenda21text.htm
Agenda 21
holders. That was the backdrop to the partnership
we formed last year with the WWF, designed to help
us progress in this domain. It is also why we publish
Lafarge and the Environment, a guide drawn up to
spread examples of good practice within Lafarge.
It is the same commitment that has led Lafarge to
co-initiate the WBCSD (World Business Council for
Sustainable Development) study entitled Towards a
Sustainable Cement Industry, that will help us trace out
the approach to be taken by our industry in the future.
That, too, is the point of producing this first report on
sustainable development. We regard this report as
a way of clearly bringing home to all our stakeholders
the issues that we face in the context of our business
and of making a commitment to them today by setting
ourselves objectives that we must strive to attain.
We firmly believe that an approach based on sus-
tainability is not a luxury, but rather is a key element
in our future success. Our social and environmental
achievements complement our economic perfor-
mance. Our tradition and culture are geared to the
long-term nature of our business. It is only natural,
therefore, to have the ambition for Lafarge to be
a leader in developing a sustainable way to do
business and to be in a position to benefit from it.
Bertrand Collomb
“To be a world leader in construction materials.”“Pursue long-term strategies.”
Principles of Action
Economy
How do we perform?
World leader in construction materials■ 85,000 employees*■ 75 countries*■ 112.2 billion in annual sales in 2000**
Industry leader for most sustainability performance analysts■ Industry best score
in Dow Jones Sustainability Index World■ Industry best score in Storebrand Principle Funds■ Included in ASPI Index Eurozone■ Not included in FTSE4GOOD Index Europe
* Including Blue Circle** Excluding Blue Circle
The Normandy Bridge is built with Lafarge cement.
8
A COMPLEXCOMPETITIVE ENVIRONMENT
> Mainly local markets
and in the geographicalsense of the term is espe-cially important to the
construction materials industry.The location of a production site is closely linked to elements ofphysical and economic geography.The main reason for this is the difficulty associated with trans-porting not just the raw materialsused by the industry, but also its finished products. Being heavy,bulky and relatively low-cost com-modity products, their transporta-tion can quickly raise their price to uneconomic levels. This is why,for example, the competitive range for road deliveries from a cementworks is said to be up to roughly200 km. Aggregates and concreteare even more local than cement,though roof tiles and plasterboardoften travel further.Moreover, this fundamental linkwith the land is accentuated by thelong-term nature of the industry,especially cement, since the largeinvestments required mean thatmost activities can only pay theirway in the long term. Consequently,
Lafarge, which is present in seventy-five countries, has a clear incen-tive to ensure that the plants itoperates in its various markets are sustainable and play a construc-tive role in the fabric of their localeconomies.
> Extremely diverse industrial competitors
Within these essentially local mar-kets, the competitive environmentis undergoing major changes. Inaddition to local producers, whoare active only within a given localor regional market and who areoften highly dynamic, there arealso global companies. In the mar-ket for aggregates, for instance,depending on the country and pro-ject in question, Lafarge may becompeting against a local producerwho has always managed a partic-ular quarry or against a specializedglobal company. The Group’s long-term strategy hinges primarily on its position relative to theseglobal companies who are rivals in terms of service provision, productdevelopment and external growth.The current trend amongst thesecompanies is towards concen-tration into larger groups. Today sixcompanies account for 38% of the
1. Lafarge’s Businesses around the World
L
Lafarge is world leader in construction materials, holding top-ranking positions in each of its four Divisions: Cement, Aggregates & Concrete, Roofing and Gypsum.The Group has annual sales of 612.2 billion in 2000. Lafarge currently employs 85,000 people and operates in 75 countries.In 2000, Lafarge paid 6279 million in dividends to its shareholders, 62.3 billion in wages and benefits to its employees and an income tax bill of around 6400 million.
Download our Annual Report at www.lafarge.com
Creationof Lafarge
First quarry rehabilitation inDraveil (France) –now a protected site
Industry agreement withthe first French Minister of Environment on dust emissions
First version of thePrinciplesof Action
Group startsusing industrialwaste as fuel
Lafarge supplies lime for the Suez Canal
First operationsin North America
First Lafarge operations in Brazil
Merger with Canada Cement
Acquisition of Coppée
Acquisition of General Portland (US)
1833 1864
1930
1956 1959
1971
1972
1977
1980 1981
1982The HistoricalRoots of the Group
“To be a world leader in constructionmaterials… in an environment of vigorous and global competition.”Principles of Action
9
ECONOMY
Lafarge’s Businesses around the World
world cement market; local firmsboth large and small hold a 56%share, and multi-regional compa-nies have no more than 6%. Thisgeneral phenomenon is reflectedin all of Lafarge’s businesses, with concentration already welladvanced in both the roofing andgypsum sectors in Europe.
> Decentralized organization
Lafarge is comprised of fourDivisions, each of which is respon-sible for defining and directlyimplementing the Group’s strategyand managing performance in itssphere of activity. In keeping withthe Group’s Principles of Action,for each strategic area – Finance,Human Resources, Research &Development, Communication,Environment, Information systems,Purchasing and Marketing – theGroup lays down policies whichare subsequently adapted wherenecessary and implemented byeach Division and then eachBusiness Unit.
Lafarge co-foundsthe French association“Entreprisespourl’Environnement”
Lafarge co-founds the WBCSD
Production of the Group’sEnvironmental Policy. First internal environmental report
Introduction of “Recycling Initiative”in the roofing German market
Launch of the international employeeshare ownership program
Second phase of the employee shareownership program
Lafarge selected by Dow Jones Sustainability Index (DJSI)
Publication of Lafarge and the Environment
Launch of the WBCSD study Towards a Sustainable Cement Industry
Lafarge becomes the WWF’s “Conservation Partner”
FirstSustainabilityReport and creation of the SustainabilityCommittee
First operations in Eastern Europe
Acquisition of Redland strengthensthe Group in Aggregates & Concreteand allows it to enter the roofingbusiness
Acquisition of Blue Circle: Lafargebecomes No 1 in cement worldwide
Lafarge listed on NY Stock Exchange
1990
1992
1995 1997
1999 2000
2001
First operations in Asia
* These figures are under pro forma 2001: they include Blue Circle.The environmental data of the report concerns the year 2000 and do not include Blue Circle.
To see the list of Business Units covered by this report, see our annual report.
49% of sales*
45,100 staff, or 53% of the Group’s employees
International presence*: 157 production sites in 43 countries
Activities: Range of cements, hydraulicbinders and limes suitable for civil engi-neering applications and public works
World No 1
30% of sales*23,000 staff, or 27% of the Group’s employeesInternational presence*: 677 quarries and 1,223 concrete plants in 30 countriesActivities: Aggregates, ready-mix concrete, asphalt and road paving, prefabricated concrete constructions for roads, buildings, works of art, etcWorld No 3 in Aggregates and world No 3 in Concrete
11% of sales*
13,300 staff, or 15% of the Group’s employees
International presence*: over 200 production sites in 34 countries
Activities: Range of concrete and clayroof tiles, roofing products, accessoriessystem components and chimney systems
World No 1
8% of sales*
4,600 staff, or 5% of the Group’s employees
International presence*: 68 production sites in 23 countries
Activities: Plasterboards and associatedsystems, plasterblocks, building andindustrial gypsum plasters, self-levelingfloors, gypsum and paper
World No 4
Western Europe: 18,700North America: 15,300Asia: 10,200France: 9,350Central and Eastern Europe: 9,350Africa: 8,500 Mediterranean countries: 7,650Latin America: 5,950
5,9 Countries where Lafarge is active.
OUR PEOPLE
10
The “Lafarge Way” is based on a model of participatory management. Organization into autonomousdivisions promotes the decentralization of responsibilities, personal initiative and the involvement of all staff in the implementation of the Group’s strategic aims.This management model also reflects the Group’s desire to enable maximum participation by all those staff who know what goes on in practice, are aware of the problems that can arise and are best placed to help identify solutions.
THE BALANCE BETWEENENCOURAGEMENT AND OBLIGATION
n common with many othermanagement issues where thereis no easy solution, Lafarge is
constantly faced with the challengeof finding the right balance betweenencouraging good managementpractice and imposing compulsorystandards on sustainability issues. Obviously, some issues, such asenvironmental aspects of newcement plant design, are moreappropriate for detailed, compul-sory standards, whereas others,such as respect for cultural diver-sity, benefit from a less prescriptiveapproach.
Traditionally Lafarge has tended toimpose few prescriptive policies.This is for two main reasons:• The diverse and local nature ofour businesses and their associatedsustainability issues make detailedstandard setting at a global levelimpractical, except for a few spe-cific problems.• The capacities and initiative ofLafarge employees are key ele-ments of our business success andare also crucial for tackling sustain-ability issues properly, especiallygiven the rapid development ofthinking in the area. The Group’sexperience shows that aware-ness raising, training and sharingbest practice encourage initiativeand effort, whereas imposition ofdetailed guidelines or simplisticstandards does not.Lafarge continues, therefore, toinvest in the task of convincing itsemployees of the need to act asmuch as giving orders from the
top. This is done in the belief thatthe results will be better as long asthe necessary values are deeplyimbedded in the culture of theGroup.Lafarge is committed to strive forcontinuous improvement over timein its sustainability performance. In this report, we have set outselected objectives ( ) and, wherepractical, linked them to quantita-tive indicators ( ). These objec-tives are a global composite for allLafarge operations*. They will beused as management tools toimprove overall company perfor-mance. Lafarge commits to track itsperformance in these respects, to include these objectives in thebusiness performance indicatorswhere relevant and to report backto our stakeholders on our progressin future sustainability reports.
EVA AND THE BONUS PLAN
Lafarge’s objective is the continu-ous creation of value on a sustain-able basis. This requires constantpreparation of future sources ofvalue creation. This is why, in 1998,the Group introduced the EVA(Economic Value Added) indicatorinto its management systems. EVA measures the profit generatedby a business beyond the cost of
2. The “Lafarge Way” of Management
I“To delegate responsibility with accountability and control.”Principles of Action
The “Direction Générale”From left to right:Michel Rose, Senior Executive VicePresident, Bertrand Collomb,Chairman and Chief Executive Officer,Bernard Kasriel, Vice Chairman andChief Operating Officer
11
ECONOMY
The “Lafarge Way” of Management
capital, i.e. the minimum return weexpect to deliver investors andlenders on the capital they investin the business.To balance short term and longterm objectives, we also need togive appropriate value to invest-ments in areas such as R&D andenvironmental protection, whichare essential for us even if theirimpact in terms of EVA can notalways be quantified in the shortterm. This is done through “KeyPerformance Indicators”.This system is being progressivelyused as a factor in the calculationof managers’ bonuses.
In 2000, a new managementbonus plan based on EVA and
individual performance targets wasimplemented for 700 managers (i.e.10%).
To extend EVA to two thousandmanagers by 2002.
*Lafarge SA owns 100% of some operations,has a majority or operational majority interestin others and has an investment interest in theremainder. In the cases of majority ownership,the minority stockholders as represented by independent members of the Board ofDirectors, have significant role in assuringsound governance of the corporate identity.
SUMMARY
Since their first version in 1977, the Group’s Principles of Action havebeen designed through a process that actively engages a large cross-section of employees from all countries and Business Units. Below isthe summary of the current version of the Lafarge Principles of Action.
OUR AMBITION
To be a world leader in construction materials.■ Be recognized as an important participant and shape the future
of our businesses through our capacity to innovate.■ Be a leader in a competitive environment.■ Pursue long-term strategies.■ Adopt an international approach.
OUR RESPONSIBILITIES
To anticipate and meet our customers’ needs.■ Create a perceived difference and be the supplier of choice.■ Serve our customers better by knowing them better.■ Contribute to the development and progress of the construction
industry.To enhance the value of our shareholders’ investments and gaintheir trust.■ To provide shareholders with a competitive return on their investment.■ To provide them with clear information.■ To respect the interests of our partners and minority shareholders.To make our employees the heart of our company.■ To base legitimate authority on the ability to contribute
to the company’s success.■ To develop mutual respect and trust.■ To provide employees with equitable compensation and a fulfilling
professional environment.To gain from our increasing diversity.■ To make our cultural diversity an asset.■ To delegate responsibility with accountability and control.■ To develop an effective cross-operational management approach.■ To make use of synergies and share know-how.To respect the common interest.■ To participate in the life of the communities where we operate.■ To operate responsibly toward the environment.■ To be guided by the principles of integrity, openness and respect
in our commitments.
The full version of Lafarge’s Principles of Action on www.lafarge.com
Principles of Action
12
While the ethical case for sustainability is not in doubt, Lafarge is convinced that it is in its own businessinterest to pursue a sustainability strategy. Our experience shows that strong economic performance goestogether with environmental protection and social responsibility.
3. The Business Case for Sustainability
HOW DOES SUSTAINABILITY CREATE VALUE?
> Reducing costs
Reducing inputs of limited natural raw materials or fuels, restricting wasteproduction and using by-products from other industries already allowLafarge to cut costs.
Example: Substitution of raw materials by industrial by-products or waste (➔ see p 45) in cementproduction allows us to save more than $8 million each year.
ple> Improving product added value
By adopting a sustainability approach, Lafarge expects to be able toexpand its product lines to sell more complex and technological, but simpler-to-use products, with more value added (licenses, exclusivetechnology, etc). Our link with clients and users will become closer andbetter established in the long term, and customer loyalty will be improved.
Example: Agilia®, the first range of self-placing and self-leveling concrete and toppings avoids the use of noisy vibration equipment.
> Creating new market opportunities
The sustainability policy should facilitate Lafarge’s expansion into newcountries or regions with more sensitive and proactive methods of inte-gration and an enhanced environmental approach. New products willallow Lafarge to respond better to the emerging expectations of archi-tects, companies, authorities and individuals.
Example: Since 1998 our sales of solar tiles in Germany and the Netherlands have increased by 600%.
> Strengthening the Lafarge “management by values” approach
This policy will take place within the traditional Lafarge managementframework embodied by the Principles of Action. By doing so it shouldstrengthen our corporate culture, help Lafarge to maintain the loyalty ofits employees and attract high potential new employees.
Example: 59% of Lafarge managers feel that the Principles of Action have an influence on theGroup’s management at strategic and operational levels.
> Maintaining Lafarge’s “licence to operate”, improving reputation
A proactive strategy will help Lafarge to keep its “license to operate”,improve its corporate image in order to maintain its brand value, improveits relationship with local authorities and communities, preclude the creationof inappropriate new taxes and regulations, avoid damaging crises.
Example: Our best argument to open a new quarry is to show past quarry restoration projects.
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13
ECONOMY
Our Triple Bottom Line Performance
4. Our Triple Bottom Line Performance
Lafarge is above its industry sectoraverage on all three aspects of triple bottom line performance (economic, social and environmental),as well as on the evaluation of its ability to manage sustainability risks and opportunities.
Total score
Opportunities (max. 50%)
Risks (max. 50%)
Economic factors*
Environmental factors*
Social factors*
* Approx. 33% of total score
Lafarge Industry average
0 20 40 60 80 100%
Lafarge’ Dow Jones/SAM sustainability rating for 2000
SAM/DOW JONES
he Dow Jones SustainabilityWorld Index (DJSI World),launched in 1999, tracks the
performance of the top 10% of the companies in the Dow JonesGlobal Index that lead the field interms of sustainability. To establishDJSI World, SAM considers theallocation in “industrial groups”defined by Dow Jones and ratesthe companies. Only the top per-formers of each group are includedin the DJSI World.
Lafarge is the leader of its group(building materials), earning thetop grade in terms of its ability toanticipate risks and opportunitiesassociated with sustainable devel-opment. In 2000 it was duly includ-ed in the DJSI World.
www.sam-group.com andwww.sustainability-index.com
Updated full version of the profiles on www.lafarge.com
T
Lafarge’s sustainability performance is increasingly under the scrutiny of financial markets as investors seek to find investments with long-term value.This section includes the grades given by the main sustainability analysts and fund managers, who provide today the only independent and integrated evaluation of companies’ triple bottom line performance (economic, social and environmental).They reflect both the growing expectations of the financial community concerning corporate responsibility and the way Lafarge and its competitors are assessed.
Since 2000, Lafarge has been listed on the the New York Stock Exchangewhose building was made with Lafarge white cement.
ARESE
The French sustainability-ratingagency ARESE has given Lafargefavorable ratings for a number ofyears. The latest assessment wasdone in February 2001:
For its overall performance, Lafargehas been selected with four othercompanies of its industry group forthe ARESE Sustainable PerformanceIndex (ASPI) Eurozone. Launched in June 2001, the ASPI selects the116 best-rated companies of the DJ EURO STOXX index.
www.arese-sa.com andwww.arese-spi.com
STOREBRAND
Lafarge is one of the two compa-nies in the cement industry selectedby Storebrand, a leading Scandina-vian financial services company for its “Principle Funds”. The latestassessment was done in June 2001:
“Lafarge scores above its industryaverage on seven of the nine indicators used in the Storebrandenvironmental and social responsi-bility analysis.”
➔ For further details on our humanrights performance according toStorebrand, see page 24.
www.storebrand.comwww.amnesty.org.uk
www.wbcsd.org
14
200
150
100
50
0Lafarge
Com
bine
d ra
ting
resu
lts
50%average
Sector*champ
TRANSPARENCY AND DISCLOSURE
Lafarge has always fully cooperated with sustainability rating agencies. In particular, we try to answer the questionnaires issued by these agencies.
Tatjana Mickasch, Analyst, SAM: “Lafarge was very cooperative with us.”
Sarita Bartlett, Director of Research, Storebrand Principle Funds: “Lafarge has been veryhelpful with providing quantitative and qualitative information on its environmental impacts –more than normal on its industry.”
Please send sustainability questionnaires [email protected]
StorebrandARESE
* Building materials sector* Construction sector
300
250
200
150
100
50
0
Lafarge Max. sector* Min. sector*
Clients& Suppliers
Shareholders CivilSociety
EnvironmentHumanResources
CRITERIA RATING
Human Resources +Environment +Clients & suppliers +Shareholders +Civil Society =
(min - -; sector average =; max ++)
Environmental score: 107
based on the WBCSD’s eco-efficiency criteria
Human Right score: 135
based on the Amnesty International UK’s business guidelines
Included in
Lafarge headquarters in Paris.
OUR PERFORMANCE AGAINST OUR INDUSTRY
0 200
0 200
15
ECONOMY
Our Triple Bottom Line Performance
FTSE4GOOD
The socially responsible indexFTSE4GOOD Europe was launchedin July 2001. Its first selection,which is based on the screeningprocess of the UK-based instituteEIRIS (Ethical Investment ResearchService) according to the criteriadefined by FTSE4GOOD does notinclude Lafarge. Among the threeareas of evaluation, Lafarge haspassed the screen only on “socialissues and stakeholder relations”. In the “human rights” area, Lafargedid not provide sufficient informa-tion to EIRIS on its policies whilebeing present in sensitive countries(Chad, China, Egypt, Indonesia and Saudi Arabia). Concerning“environmental sustainability” too,our environmental managementsystem was not shown to be up tocertification standards. Lafarge willprovide the necessary documenta-tion to EIRIS in these two areas.
Latest review of the FTSE4GOODselection or details on the criteria
used on www.ftse4good.com
FORUM FOR THE FUTURE’SBENCHMARK STUDY
In 2000, Blue Circle, now part ofLafarge, commissioned the UK-based group Forum for the Futureto conduct an independent reviewof what construction and buildingmaterials companies are doing in relation to sustainable develop-ment. Eleven construction andbuilding materials companieswere assessed with informationprimarily sourced from publicannual and environmental reports.Although focused on the UK andUS activities, the report provides a useful overview of companies’performance on a wide range of issues relating to sustainablemanagement.
www.forumforthefuture.org.uk
The complete table providing asnapshot overview of the sus-
tainability performance of the elevencompanies is available on-line:www.lafarge.com
Company name Environmental ISO14001 Sustainability Environmental Social Environmental Sustainable Stakeholder Case studies Board memberpolicy EMAS policy & social targets targets development identification on sustainable responsibility
Certification reporting targets development
Lafarge Group(UK + US)
Blue Circle
Holderbank
RMC Group
Key: Very good performance Good performance Fair performance Poor performance Very poor performance
NB: The “scorings” in this table are not attempting to represent the results of any formal scoring process, but rather as an illustrative summary of the more detailed analysisthat was conducted in the benchmarking review.
Components of the main global and European sustainability indices in our sector (September 2001)
Index DJSI ASPI FTSE4GOODWorld Eurozone Europe
Sector Building materials Building materials Building & ConstructionCNS Materials (131/132)
Companies Lafarge Lafarge RMCCRH CRH
Saint-Gobain Saint-GobainAsahi Glass Co. Heidelberger Zement
Dragados & Construcciones
Lafarge annual shareholder meeting in 2000.
Extracts from Forum for the Future’s Benchmark Study
How do we perform?
“The social risk related to settlement in emergingcountries, or countries with no legal framework, is limited by a series of simple yet non-formalizedprinciples. In spite of new procedures establishedin 2000, the Group’s social reporting worldwidecan still be improved.”ARESE
“With its cultural awareness and diversity initiatives, Lafarge actively promotes culturaldiversity and alignment of employees to its core values. Lafarge implemented innovativeemployee ownership schemes already ten yearsago and is clearly ahead of other companies in this area. In the next years the integration of Blue Circle Industries will be a challenge but alsoa considerable opportunity, given the experienceof Blue Circle in the environmental field.”SAM
“Lafarge is our industry leader in the socialaspect of the Storebrand environmental andsocial responsibility analysis… but Storebrand’sanalysis indicates room for improvement on its follow-up of suppliers’ human rights policiesand practices.”STOREBRAND
Society“To respect the common interest.”“To make our employees the heart of our company.”
Principles of Action
The Lafarge development officer consults the local community in Bangladesh.
The growing ability to engage with stakeholders is a key element of Lafarge’s sustainability strategy.For Lafarge, a stakeholder is either someone who is affected by the Group’s activities, or has an effectupon its activities.
afarge has identified severalgroups of key stakeholdersupon whom the Group’s
continued success is dependent:shareholders, employees, publicauthorities, local communities,NGOs, customers, suppliers, part-ners, end users, the media, othercompanies, etc. Stakeholder dia-logue is a key element in Lafarge’sstrategy for sustainable develop-ment – an element based on therealization that in a world that hasbecome more and more compli-cated, the Group cannot come upwith all the answers by itself.Support from the public and theinvolvement of the company’s various stakeholders are essential for the smooth operation of itsactivities and the retention of itsimplicit “license to operate”. It is the Group’s responsibility toprovide information to all internaland external stakeholders in orderto increase their knowledge of envi-ronmental and sustainability issues.Their input will drive Lafarge’s per-formance, and in return their sup-port will provide the encouragementthat the company needs. Lafarge isworking at widening the scope andnature of stakeholder consultation.
The purpose is to explore whatmatters most to each group in theirrelationship with Lafarge, what arethe primary sustainability issuesassociated with its activities andwhat indicators the Group can useto measure its performance againstthese priority areas.
UNDERSTANDING STAKEHOLDERS’EXPECTATIONS ON A GLOBAL LEVEL:THE WBCSD STUDY
Toward a Sustainable CementIndustry is a two-year study,launched in February 2000 andentrusted to independent consul-tants under the auspices of theWBCSD (World Business Councilfor Sustainable Development). It is financed by ten WBCSD mem-ber cement companies, includingLafarge. The aim of the study is tohelp its sponsors identify variousoptions for companies to movetowards sustainability on the basisof consultations with a wide rangeof stakeholders in both industrial-ized and less developed countries.
www.wbcsdcement.org
USA/CANADALafarge North America’s Public and Government Affairs database (P&GA) provides a framework to organize and monitor work in thefollowing areas: community outreach activities,government affairs, trade associations, lobbyistand charitable contributions.
AGGREGATES DIVISION In order to integrate quarrying activity better in the local socio-economic context and to ensure the rehabilitation plan reflects the expectations of local stakeholders, the Aggregates Division has set up a policy to inform and engage local stakeholders: localcommunities and administrations, non-profitgroups (including in France: Friends of the Earth,WWF, France Nature Environnement, etc;in the UK: RSPB, The Wildlife Trust, etc;in the US: Wildlife Habitat Council; in Germany:BAUM, etc).
1. The Stakeholder Approach
LMarcel Demonque, 1960Lafarge’s CEO (1959-1974)
“The immediate purpose of business
is to prosper by producing and
selling goods at thebest economic
conditions… We need prosperity
for people, not only people within the company but also people outside:
customers who buy the company’s products (who should not be disap-
pointed on quality or price); employeesfrom neighbouring companies,
who should not be threatened in theircompanies by unfair competitive
practices; the State which, in order to protect the citizen, has rights
over companies… Finally, people themselves, the person in the street
is a stakeholder in a public good thatbusiness enriches with its prosperity
and legitimate successes – or impoverishes with its failures and
dishonest successes.”
Case study Examples
of Local Initiatives
18
SOCIETY
The Stakeholder Approach
FRANCE/CEMENTLafarge Ciments has developed the “Daisy”tool (see illustration opposite) which enableseach plant to draw up an exhaustive list of the relevant local stakeholders to consult and follows relations between the plant and its environment.
TURKEYLafarge Aslan has set up a CommunityRelations Assessment Program whose objectivesare to identify key groups of local stakeholders,to assess the Group’s contribution to the community at each plant for the past threeyears, to prepare annual action plans for 2002.The assessment of the project will be first carried out in the cement business and then in other businesses.
ENGAGING LOCAL COMMUNITIES
Lafarge’s business is the extrac-tion of mineral resources, their localprocessing and delivery to ourcustomers. While our products areessential for local economic andsocial development, extraction and production can have a lastingimpact on the environment andcan affect local residents in variousways. However, we can achieveacceptance from local communi-ties provided we build a construc-tive relationship with them.Creating prosperity and jobs is nolonger sufficient justification byitself for the Group’s activities in acontext of growing social and envi-ronmental awareness. More thanever before, Lafarge must listen toall its stakeholders, be more sensi-tive to their problems, and comeup with new, simpler, more pro-active solutions to them, and meetits commitments.
Reinforce and systematize stake-holder consultations and dia-
logues at the local, national andinternational level.
A FORMAL PARTNERSHIPWITH THE WWF
Another major stakeholder dialogueinitiative for Lafarge is the firstpartnership agreement ever signedby an industrial group with theWWF, the world’s largest and best-known conservation organization,under its “Conservation Partner”program. The aim is to reinforceand improve Lafarge’s environ-mental practices, with a commit-ment by Lafarge to move forwardin three areas: • To set up indicators of environ-mental performance; • To establish new and demandingstandards for quarry rehabilitation,especially on biodiversity; • To work on a program to reduceLafarge’s emissions of greenhousegases.
In addition to regular contacts at thecorporate level, local partnershipsbetween WWF and OperationalUnits are encouraged whereveruseful. Already Lafarge is workingtogether with WWF in Austria,Spain, France and China at a locallevel. Together with this Lafarge is donating 11.1m per year toWWF’s “Forests Reborn” programfor the restoration of forest ecosys-tems around the world.
Bring together at least once ayear Lafarge senior executives
and WWF or other sustainability spe-cialists to exchange views on sus-tainability issues.
www.panda.org/aboutwwf/corporate
www.lafarge.com
19
© 1986, WWF-World Wide Fund For Nature (Formerly World Wildlife Fund)® WWF Registered Trademark owner
2. Our Employees
Case studyImplementing
a Safety Action Plan in Romania
The Lafarge Romcim safety action plan startedin 1998 after Lafarge acquired three cement
plants in Romania. At that time, the safety program was mostly geared to avoiding legal
penalties. There was a monthly safety exercise,but without a real involvement of people, and
accidents (including three fatal ones that year)were considered “bad luck”. The new action plan
included audits to improve work conditions inplants, dedicated investments, specific training
with involvement of employees, reinforcement of plant safety committees, monitoring and
reporting of safety performance indicators, safety procedures and inclusion of contractors
in the programs. It was based upon the LafargeNorth America model with the assistance of
several of its health and safety professionals,showing how one country can help another
based on their level of expertise. As a result,2000 was the first year without fatalities and the
Hoghiz plant is the first one that has registered(more than) one year without lost time accidents.
ur employees are key to our sustainability strategybecause they implement it
at the operational level. We aim toinvolve them both individually andthrough their trade unions in thebroad spectrum of sustainabilityissues.
WORKING CONDITIONS AND SAFETY
Safety is our first concern regard-ing our employees. We can neverallow ourselves to be truly proud ofour industry while there are stillpeople risking their lives and beinginjured while working on our sites.Safety audits are a critical elementof the integration process for allacquisitions. All of our operationshave safety programs that includetraining, auditing, sharing bestpractices, reporting and investigat-ing the cause of an accident as wellas preventing future accidents.
Since the reorganization intoDivisions in 1999, each of Lafarge’sfour Divisions have responsibilityfor applying Lafarge’s safety policyto the specifics of its business in order to define its own safetyguidelines. These guidelines arebeing implemented in 2001. Up tonow, safety has generally beenseen as a local matter, in accor-dance with the decentralization of responsibilities stated in ourPrinciples of Action.
Although most Operating Unitshave been collecting health andsafety data for many years, Lafargeonly started in 2000 to consolidatethis data at the Group level. The data provided below thereforedo not cover all countries andDivisions but we expect the firstconsolidated statistics to be avail-able in 2001 and are confident thatthe reliability of data will grow withexperience and verification.
In the Cement Division, regrettablyten fatal accidents were reportedin 2000, of which seven concernedexternal contractors’ personnel.
Our goal, in view of recent poorperformance, is to reinforce ourefforts to ensure global implemen-tation of Divisional safety policiesand programs through monitoring,reporting and technical and admin-istrative support at the corporatelevel with the aim of becoming oneof the safest in the industry.
> Actions against HIV/AIDS
Health management, including HIV/AIDS, is a major problem that weface in some developing countries.The recent takeover of Blue Circlehas added to the significance of theissue for the Group, Blue Circlebeing very present in Africa wheresuch problems are most acute. Inthis context, the impact of Lafargeoperations can be positive by pro-viding information and medical careto our employees and to the localcommunities. But the issue is notsimple; see for example the higherrisk of HIV/AIDS when a mobileworkforce is used (in CARE’s inter-view p 27).
O
Evolution Industryof the frequency rate1 1995 1996 1997 1998 1999 2000 benchmark4
Cement - - 11.23 10.30 10.17 12.98 22Gypsum 10.45 14.91 12.21 9.81 9.44 11.15 33Roofing2 23.40 20.30 - - - 28.60 69Aggregates and Concrete3 - - - - - - 48/691 Number of accidents with at least one day off per million working hours.2 These figures only concern 70% of the staff (9,500 employees).3 Not consolidated at divisional level, see our website for data at regional level.4 Recalculated from German Insurers Assoc. figures, not strictly comparable.
Lafarge has long recognized that its employees are the heart of the company.Human resources is an area where we can not afford to fall short of excel-lence if Lafarge is to consolidate its world leadership in the constructionmaterials industry.This is not only a question of social responsibility,but is also important for our business in order to attract and retain a largediversity of talent.
20
21
SOCIETY
Our Employees
Up to now, our actions in that fieldhave been decentralized and reliedlargely on the initiatives taken byeach unit.
Develop our actions to improvehealth management including the
specific problem of HIV/AIDS in hardhit and deprived local communities.
SOCIAL STANDARDS
The application of Lafarge’sPrinciples of Action and policies ofsocial responsibility with respect to its employees is decentralized. It is up to each Business Unit to setminimum standards, based on theGroup’s Social Policy. The generalobjective is to apply a Lafargesocial standard that goes furtherthan local and minimum legal standards. Concerning wages, the Group’s policy is to set mini-mum remuneration (pay + bonus)between the median and the thirdquartile of comparable companies.Our policy is also to provide everyemployee with social protection inline with or above local practices.
This decentralized approach is wellsuited to countries in which the localsocial standards set by law or the market enable employees tomeet their needs and those of their families. However, because of itsinternational expansion, Lafarge isnow established in regions wherelocal standards are sometimes inad-equate. In view of the increasingsensitivity of the issue and the devel-opment of the Group, we recognizethat the outlines of our approachneed to be set out more clearly.
Review the Group’s social policiesand develop appropriate guide-
lines to provide Divisions andBusiness Units with further guidanceon how to interpret our principleslocally in different situations.
These guidelines will constitute atool to help our operations on vari-ous local matters such as defininglocal standards in terms of com-pensation, social protection, work-ing hours and training.
TRAINING
In line with our Principles of Action,every employee at Lafarge benefitsfrom the Group’s training programs.Since the implementation of thenew organization by Divisions in1999, training programs are devel-oped at three levels: • Corporate training is dedicatedto programs that reinforce Groupcohesion, values and strategy. • Division training develops pro-grams to support global businesschallenges. • Employee professionalism andskills are developed at a BusinessUnit level. Each level is also respon-sible for reporting on its programs.
Lafarge’s rapid external growthhas resulted in more than 50,000additional employees joining theGroup in the past four years (theintegration of Blue Circle alonerepresents 20,000 people to wel-come). In order to cope with theexpansion, Lafarge has developedintegration policies and programsdesigned to help implement itsvalues, principles and standards
“Wages, benefits and conditions of work offered by multinational enterprises should not beless favourable to the workers than those offered by comparable employers in the countryconcerned. These should be related to the economic position of the enterprise, but shouldbe at least adequate to satisfy basic needs of the workers and their families.”International Labour Organisation Tripartite Declaration of Principlesconcerning Multinational Enterprises and Social Policy
“To provide employees with equitable compensation and a fulfilling professional environment.”Principles of Action
Case study ChinaLAFARGE RECOGNIZED FOR ITS GOOD RELATIONSHIP WITH EMPLOYEES
Lafarge established its first joint venture in China in 1994 and today has over twelve hundred employees. We have gainedsubstantial experience in working with local partners and managing local employeesand have received several awards from thetrade unions as a consequence of our goodrelationship with our employees:
■ Lafarge Chinefarge Cement, our Beijingsubsidiary, was awarded the medal of thenational foreign capital-run “Dual Love”enterprise granted by the National Union of Workers in 1998. The idea was to rewardfour foreign-owned enterprises whose management is such that “the enterprise lovesworkers and the workers love the enterprise”,hence the name “Dual Love” award.Chinefarge was chosen among five thousandforeign-owned enterprises that participated in the competition.
■ In January 2001, Chinefarge was alsoawarded the “Family of Excellent Employees”award, given by the General Trade Union for its policy towards employees.
22
while respecting the culture ofeach new Unit and sharing bestpractice. Corporate tools include:• A methodological guide thathelps each Division identify actionsto be implemented in the shortterm (within the first 100 days) andlong term (three years).• “Meet the Group” seminars toallow each new manager to gain anoverview of the Group’s identityand organization through an inter-active working session.
CAREER DEVELOPMENT
Transparency on evaluation criteriaand equal opportunity are the twofundamentals of our career devel-opment policy. For each manager,career development is based onindividual interviews, associatedwith personal objectives, on anannual basis. This policy was rein-forced by the introduction of EVAinto performance objectives in1998 and a new bonus plan in 2000(➔ see p 11).
By 2002, in order to facilitateinterdivisional and international
mobility, we will implement an intranetjob market, accessible to all.
DIVERSITY
Lafarge, as set out in the Principlesof Action, considers the diversity ofits employees as an asset for theGroup. Diversity means that Lafarge
not only has access to a largerrange of talents and perspectivesbut also that it can better under-stand the expectations of the com-munities it wants to serve in mar-ketplaces throughout the world.
Lafarge recognizes the necessityto progress continuously in creat-ing a corporate culture that valuesand builds on diversity. Beingtransparent about diversity is astep toward progress, howeverprogress cannot be reduced tonumbers since we do not want tocollect personal data about ouremployees (in some cases, it iseven forbidden by law to track andreport on such issues). Thus, wehave decided to report here onlyon gender and origin diversity. For the future, Lafarge intends toevaluate internationally recognizedapproaches to diversity issues andformulate appropriate policy guide-lines for action locally in differentsituations.
EMPLOYEE SATISFACTION
Listening to our employees isessential. One important wayLafarge listens is by periodicallyconducting a major, independentsatisfaction survey of its man-agers. The purpose of the survey isfor respondents to express satis-faction but also criticism. Lafarge’sExecutive Committee is in chargeof drawing the appropriate conclu-sions in order to act upon thoseexpectations. Here are the key figures of Lafarge last manage-ment tracking study conducted by Cofremca Research Institutecovering twenty countries in 1998:• A response rate of 60%; out ofmore than 7,000 managers con-tacted, more than 4,200 replied,which is good for such surveys; • 21% are “very satisfied” and62% are “rather satisfied” with theirpresent job;• Other positive elements: “Strongattachment to the corporation,solid confidence in the Group’seconomic health, majority support
Board
Senior managers
Managers
Employees0 10 20 30 40 50 60 70 80 90 100
WomenMen
Managers involved in“Meet the Group” seminars
350
300
250
200
150
100
50
01998 1999 2000
Board
Senior managers
Managers
Employees0 10 20 30 40 50 60 70 80 90 100
North America Developing countries and othersFrance Other western Europe
Origin diversity
Gender diversity
“Meet the Group” seminar in Brazil.
SOCIETY
Our Employees
For information on Lafarge’sfinancial performance,
download our Annual Report onwww.lafarge.com
for the directions defined by topmanagement, strong acknowledge-ment of direct superiors’ profession-alism, clearly improved evaluationsof the effectiveness of managementprocesses”;• Elements of dissat isfact ionaccording to Cofremca: “Perspec-tives for professional develop-ment, rigor of career management,Group’s organization, management’scapacity to motivate employees,feeling that initiative is not ade-quately encouraged”;• Other results related to sustain-able development: “developinggreater respect for environment” isperceived as a top priority for theGroup by only 12% of respondents(vs 35% for “generating sharehold-er value”) and 52% feel that theGroup’s Principles of Action are“the values shared by all the staff”.
EMPLOYEESHARE OWNERSHIP PROGRAMS
In 1999, more than 29,000 employ-ees, from all staff categories, in 33 countries were involved in theGroup’s employee shareholdingscheme.
Some first steps were taken back in 1961, then in 1964 and again in1981 and 1987, with four employee-only share issues. But Lafarge’s firstwidely international program waslaunched in 1995, with the followingkey objectives:• To foster employee involvementin the everyday life of the companywhile giving them the opportunityto benefit from the success theyare building for the Group.• To increase the employees’ sharein the Group’s equity and helpthem create a long-term capital forthemselves and their families.
• To reinforce their understandingand support of the Group’s strategyand goals, and to give them aninterest in Lafarge’s continuousgrowth.• To stimulate entrepreneurial spirit,initiative and responsibility amongemployees.
The program, called Lafarge enAction, was implemented in twosteps:• In 1995: 15,000 employees (75%of all those entitled to participate)subscribed to the share offering, in22 different countries. Followingthe issue, employees held an aver-age of 32 shares each and a totalof 1.4% of Lafarge equity.
In 1999: 21,000 employees (60%residing outside France and 52%
of all those entitled to participate)subscribed to the share issue, leaving1.7% of Lafarge shares in the handsof employees.
This ambitious employee owner-ship program has led Lafarge to beselected for inclusion in an invest-ment fund dedicated to employeeshareholding: the SAM EmployeeOwnership Index, launched in May2001. The thirty European sharesof the index were selected among600 companies according to thefollowing criteria: employee own-ership programs, level of employeeownership, communication toemployees, commitment and poli-cies, transparency.The next step in the employeeownership program is scheduledfor 2002 in order to foster a senseof common values and goals afterBlue Circle acquisition.
To repeat share-ownership pro-grams at regular intervals, with an
objective of reaching 3% employeeownership in Lafarge.
23
24
Lafarge has always recognized its responsibility to participate in the life of the communities where it operates and is proud of its record.The increasingly international nature of Lafarge is thrusting the Group into complex socio-economic surroundings giving rise to fresh challenges and growing demands from our stakeholders.
ADAPTING THE PRINCIPLES OFACTION TO LOCAL SITUATIONS
everal times over the years,Lafarge has considered theissue of whether or not it
should do business in particularcountries due, say, to their humanrights or corruption record. Lafargebelieves that its operations wher-ever they are, run in line with itsPrinciples of Action, helping people to improve their living standards,their education and their generalawareness. Our employees benefitfrom our approach to social issues, from training opportunities, fromexchanges with people from othercountries and from general infor-mation about the world. We speakout for freedom of information,exchange of people and openinternational relations. Local com-munities experience our commit-
ment to social and environmentalstandards, which help establishbenchmarks for local companies tomatch and follow. This encouragesmore interest in social and humanrights issues, and thereby supportsdemocracy. Lafarge’s presencedoes not necessarily imply supportfor the status quo, nor does it makeLafarge responsible for the actionsof a government. However, we onlyaccept establishment of our pres-ence in countries where we canfully apply our Principles of Actionin our operations, and will notaccept participation in, or becomingan accomplice to practices con-trary to these principles.
➔ See the countries where Lafargeoperates p 9.
Therefore, Lafarge uses its influ-ence wherever it is established tosupport the generally accepted
3. Local Communities
S
Our performance according to the Storebrand’s analysis*
“The overall level of awareness of human rights issues is quite low in
the cement industry. With a HumanRights Index score of 135/200**,
Lafarge is our industry leader in the socialaspect of the Storebrand environmental
and social responsibility analysis.Lafarge has the industry’s highest scores on three of our four human rights indicators, but Storebrand’s
analysis indicates room for improvementon its follow-up of suppliers’ human
rights policies and practices.”[email protected]
www.amnesty.org.uk
➔ See page 14 for details on Storebrand
POLICY score: 180“Each member of the Group is expected to meet the obligations that are embodied inthe Lafarge Principles of Action”.PRACTICES score: 180“The company received a high score because they consult stakeholders, such as governmental organizations and local community members when performing humanrights impact assessments. These assessments are, however, not performed on a regular basis.”BUSINESS PARTNERS score: 0“They received a zero score on this indicator. At present, they do not have human rightsrelated standards governing the use of suppliers, contractors and other businesspartners. We have insufficient information regarding their use of private security forces.”SCOPE score: 180“In this indicator, they scored 180 as well, because they provide human rights policyinformation and employee training. They do not have an internal management systemthat encompasses human rights measures.”* This analysis is based on the Amnesty International UK’s business guidelines.** 0 is the absolute minimum, 100 is the average performance in the sector and 200 is the absolute maximum
0 200
0 200
0 200
0 200
25
SOCIETY
Local Communities
principles of human rights andgood governance. Our experiencehas been that, even in countrieswhere problems exist, customers,suppliers and partners will under-stand and respect this position, and deal with us according to ourprinciples. Nevertheless, given theGroup’s international expansion,Business Units, which have theoperational responsibility for imple-menting the Principles of Action,can still be faced with difficulties toensure they are not indirectly asso-ciated with undesirable practices.Issues such as child labor, forcedlabor and freedom of associationdo not seem to be raised in the con-text of our industries, but we shouldwatch and monitor any potentiallyambiguous situation.
In this context the guidelines we aimto draw up on how to apply ourprinciples in specific situations (➔see Social Standards p 21) will alsoconstitute a reference for ouractions related to such questions. Inestablishing these guidelines, wewill base our approach on the meth-ods used by our partners within theWBCSD and on International LaborOrganization (ILO) standards. Theywill be developed in an integratedapproach that will not only take intoaccount employees’ rights, but alsolocal content and community needs.
This would allow the Group to bemore explicit about the behaviorthat it expects from its suppliersand partners. The results of thiswork will be described in our nextsustainability report.
USE OF SECURITY PERSONNEL
Ensuring the safety of our employ-ees and safeguarding our invest-ments is one of our responsibilitiesthat in some countries calls for theuse of armed private security per-sonnel in our plants. In some cases,the law requires it, for example to protect the explosives used forquarrying. Our current policy is tooperate in accordance with localregulations and guidelines.
We intend to refine Group andDivisional guidelines on the use ofsecurity personnel in line with theUnited Nations Basic Principles andthe United Nations Code of Conductand set up a reporting system.
OUR APPROACH TO SUSTAINABLEDEVELOPMENT OF LOCAL COMMU-NITIES WHEN ESTABLISHING SITES
In addition to contributing to eco-nomic and social development by creating good quality jobs andpaying taxes, the Group wants to contribute to the sustainabledevelopment of local communitieswhen investing in new sites. Thiscan often be achieved through better dialogue with local commu-nities before and after establish-ment, as described in the first part of this section, in order to identifyand meet their expectations.
But in developing countries, weoften have to face complex socio-economic and political contexts thatcall for a more specific approach to
“Wherever Lafarge is present, it operates with the utmost respect forcommon interest.”Principles of Action
26
Georges Thomas,Cement sector specialist,
International Finance Corporation
“As part of the Loan Agreement of a project, IFC ensures the establishment
of a regular compliance monitoring system. We evaluate the development
impact of our projects on the local community and country in terms of:improved foreign exchange earning,
capacity, jobs creation, skills develop-ment, technology and know-how transfer
etc. We also look at the demonstrationeffect of our projects. Our Environment
and Social Specialists go through regular progress reports from our clients,
and do the necessary follow-up.”
www.ifc.org
Case study Facing Natural Disasters“When developing its activities in emerging countries, a company should prepare itself to act when natural disasters occur, especially the building
materials industry”. Philippe Lévêque, Executive Director, Care France
Many countries in which Lafarge is present are prone to natural disasters, such as earthquakes, hurricanes and floods. In the face of such events ourBusiness Units are usually the key actors in helping local communities. They generally contribute to the emergency actions by providing funds andtechnical assistance. They may also donate materials for reconstruction. Finally, Lafarge has also a role to play in the campaigning (through marketingand lobbying) for higher safety standards in buildings to help prevent future disasters.
local development. In many casesthe importance of the informaleconomic and politic structures,local practices and customs thatare out of line with national law orthe high level of poverty make theimpact of our establishment diffi-cult to evaluate.
In 2000, every major new site set upby Lafarge in a developing countrybenefited from the financial supportof the World Bank Group (specifi-cally from the International FinanceCorporation - IFC, the body dedi-cated to private investment). Thisfinancial support requires minimumstandards to ensure that the projectactually contributes to the localdevelopment, such as contributionsto education and health care oractions against child labor. The IFCspecialists monitor these guide-lines. In addition, Lafarge has, inmost cases, gone beyond thesestandards by investing more thanrequired in community develop-ment actions.
However, we are aware of the concerns of some NGOs regardingthe World Bank Group standards(with issues related to side effects of projects or to monitoring) andsupport its current efforts to improveits procedures. We also wish toguarantee a formal framework with-in Lafarge, even if a project does notinvolve the World Bank or anotherdevelopment bank.
Our intention is to work to developGroup guidelines regarding sustain-able development of local commu-nities on the establishment of newsites, in complement to the currentWorld Bank requirements, andreport on the results of this work inthe future sustainability report.
■ Nueva Guapo – VenezuelaAfter contributing to the disaster relief in December 1999,Lafarge supplied 7,650 tonnes of cement and its technicalassistance to rebuild the village of Nueva Guapo inVenezuela destroyed by a storm.
■ TurkeyIn Turkey, after the 1999 earthquake in the immediate aftermath of which Lafarge local units were active in providing assistance, Lafarge has campaigned for the adoption of higher standards in concrete and roofing.
■ HondurasAfter Honduras was ravaged by HurricaneMitch, several initiativeswere taken by Lafarge ata local level and an initialdonation made from theParis headquarters.The Group’s employeesthen individually donateda total of some 1190,000to the emergency reliefefforts.
www.lafarge.com
27
In 2000, among other projects in developing countries, Lafarge began to construct the first ever large cement plant in Bangladesh.This plant will be the major cement producer in Bangladesh and willallow the country to reduce its dependency on imports. Furthermore,several development banks including the World Bank Group supportthe project for its potential contribution to local development.This projectillustrates the multiplicity of issues that Lafarge has to face whenestablishing in developing countries. It will be used as a case studyboth in our reporting process and in the up-date of our Social Policies.
The project
The Lafarge project involves setting up three sites: a cementplant in Chhatak, a city close tothe Indian border, a quarry in theIndian state of Meghalaya and aterminal in Dhaka, the Bangladeshcapital. In addition, a 17 km longbelt conveyor will be built to trans-port the raw materials between thequarry and the plant. This projectis co-financed by the InternationalFinance Corporation, the AsianDevelopment Bank, the EuropeanBank, and must comply with anumber of standards related tolocal development and environ-mental protection.
The resettlement action plan in Chhatak
Bangladesh has a very high population density, therefore it is not surprising that there wasalready a village on the site boughtby Lafarge to build the factory.Approximately one hundred fami-lies have had to be resettled close by. This resettlement com-plied with the guidelines of theIFC. But the Resettlement ActionPlan developed by Lafarge goesbeyond the IFC requirements.• The landowners of the site andthe village were expropriated, inline with the official governmentprocedure but under better thannormal financial conditions. It tooklocal Lafarge staff more than twoyears to identify the owners, deter-mine the real size of their property,
negotiate the compensation andtake possession of the land. • Lafarge is committed to resettlethe families in a new village, in newhouses with electricity, gas andaccess to the water supply networkwhen most of them used to live inprecarious housing. The villagers,who used to rent their houses, arenow owners of their homes and apiece of land.
Furthermore, a “Community Devel-opment Center” is being built to provide medical care, trainingprograms on economic activitiessuch as cattle breeding and weav-ing and to offer basic education tothe villagers – especially womenand their children. The center isscheduled to operate for four years and be dedicated to the resettledfamilies, but Lafarge wants toextend this period of time as wellas the population reached by thisprogram. For each part of the pro-ject, Lafarge extensively consultsthe local community and collabo-rates with several local NGOs.
Case study The Bangladesh Project
Mark Edwards, photographer, was commissionedby Lafarge to take pictures of the project.Here, a meeting with the villages of Chhatak.
Bangladesh is one of the poorest countries in the world and has to facestrong demographic pressure, even inrural areas with 130 million inhabitants in145,000 km2 . It is also highly impacted by natural disasters and would be one ofthe most touched by climate change.
SOCIETY
Local communities
Philippe Lévêque,Executive Director, Care France*
“When a company like Lafarge establishes incountries such as Bangladesh, the IFC (WorldBank Group) guidelines are a good basis.They include modern housing, health care,community center and so on. But they are oftennot sufficient to tackle the highly complex localsocial issues. For example, when dealing withresettlement of people, high housing standardsare seen as a high contribution to developmentfrom a western point of view. However, an in-depth look shows that in many cases, thesehigh standards attract the interest of the localelite, who eventually take the houses for them-selves, evicting people. Another example is thecreation of a new transportation system withlarge fleets of trucks and a mobile workforcethat spends months far from their families.This frequently has negative side effects suchas prostitution and drug traffic along the roads,that contribute to spreading HIV/AIDS. To dealwith such complex issues efficiently and tofully evaluate their impact, companies shouldadopt a holistic approach based on a broadconsultation of local communities along with an accurate identification of the informal leaders. At the same time, they have to takeseriously into account two facts which are wellknown but too often out of sight in the policiesand programs: the generalized corruption inmany countries and the fact that a project canbe used by competitors, political opponents or activists to weaken the company, with verydamaging consequences.”* With a local staff of 2,650 people, Care is the largest NGO in Bangladesh. It has operated since 1955.
The quarry
The limestone and shale quarriesare located in India on the lands ofseveral tribes, so Lafarge came toan agreement with them to pay predetermined mining fees for thelong term lease of around 200 ha of land. During the quarry’s open-ing and exploitation, a communitydevelopment program will be imple-mented to provide basic medical,education and training facilities tothe local tribes. The members ofthe families affected will be givenpriority for employment with Lafargeor subcontractors and for benefitsfrom special low qualification jobtraining programs.
Socio-economic impacts
The project will provide around400 direct jobs in Bangladesh and 70 in India, with an additional2,500 jobs related to subcon-tracted activities. Transport ofcement by 35 or 40 bargesbetween Chhatak and Dhaka, will provide by itself 1,000 jobs.Lafarge employees will benefitfrom improved wages and bene-fits: for example, basic labor mayearn around $100 to $150 permonth plus benefits, compared to$30 to $50 in most local industries.
28
Construction of the Lafarge terminal in Dhaka.
“Most villagers I met thought that the project appreciably improved the community situation.” Mark Edwards, photographer
Transport of cement between Chhatak and Dhaka will provide 1,000 jobs.
“There was a delay in the building of the commu-nity center and the housing standards were not
as high as planned.” Mark Edwards, photographer
OTHER PROJECTS CO-FINANCED BY DEVELOPMENT BANKS
In 2000-2001, two other major refurbishment or greenfield projects led by Lafarge have been co-financed by development banks.
CHINA - DUJIANGYANConstruction of a new cement plant in line with the western environmental standards after the closure of a polluting plant on the same site. The projectis benefiting from a 152m loan from the IFC.
Niels Vestergaard, Social and Environmental Department, International Finance Corporation“Environmental and social management on the project uses international standards. The project necessitated the relocation of about 150 households.Lafarge fully supported this relocation, ensuring that it complied with World Bank resettlement requirements. People were fully consulted, compensated,and assisted to rebuild and relocate. The new houses and facilities, including a 12-grade school, are a great improvement over old structures, and the project and its workers bring income opportunities to the villagers. The project is also cooperating in the study and protection of 32 Song dynastypottery kilns found during site excavation.”
POLAND The European Bank for Reconstruction and Development (EBRD) is co-financing several projects in Poland for a cumulatedloan of 1122.6m. The principal loan (175m) concerns the modernization of the Kujawy cement plant in order to increaseefficiency and reduce its environmental impacts in line with the western standards.
www.ebrd.org
29
SOCIETY
Local Communities
Results of the Local Economic Development Units in France since their creation in 1994Year Jobs Satisfactory Lay-offs Local job
affected Solutions creationCement - Lexos 1994-1996 88 88 100% 0 0% 125Lafarge Paint* 1996-1997 137 115 84% 22 16% 95Cement - Cormeilles 1998-2000 93 93 100% 0 0% 117Frontignan 1996-1997 33 33 100% 0 0% -Frontignan 2000-2001 23 18 78% 5 22% 28Roofing - Dammarie 2000-2001 30 29 97% 1 3% 31Roofing - Domazan 2000-2001 31 28 90% 3 10% 32Total 435 404 93% 31 7% 428
Satisfactory solution: new job inside the Group, job outside Lafarge, early retirement, voluntary redundancy, business creation and other personal projects.Lay-off: only if no adequate solution found or solution rejected by the employee.Local job creation: creation of a small business or a job in an existing local small business.
*Many small sites were concerned by the re-organisation.Only Aubervilliers and Cergy were concerned by the local CDE.
Case study France: Employment Unit and Local Economic Development Unit In case of closure or major lay-off on a site, two measures are taken by the Group:
An Employment Unit, set up for the occasion, is dedicated to help each employee find severalcustomized solutions by providing job opportunities and follow-up advice.
A Local Economic Development Unit (“CDE Local”) brings a practical and technical contribution to the local economy to help compensate the closure. Jobs and small business creations are facilitated, through interest-free loans and grants. The overall target is to create morejobs than were lost in the site closure.
Lafarge already implements measures similar to the Local Economic Development Unit in manyother countries. Our intention is to draw a more precise overall picture of our actions at an interna-tional level, evaluate the overall experience and to share best practice.
SITE CLOSURES:PART OF THE PROCESS OF CHANGE
For Lafarge and the rest of itsindustry, competition brings theconstraint of efficiency. Thereforemobility, flexibility and constantrestructuring are absolutely essen-tial. The prosperity of the devel-oped world and its high quality jobsare built on this ability to changeand progress. New investment andclosure of old, less efficient sitesare part of that process.
When a company like Lafargedecides to invest in a given locationor when it decides it must “delocal-ize” and leave existing sites, moreoften than not it is merely reflectingthe economic and social realitiesthat make its operations more orless competitive or change the levelof market demand. In fact, industrialchange is necessary first and fore-most for companies that are in goodhealth if they want to stay that way.
For Lafarge site closures are a nor-mal part of business, particularly inthe Aggregates Division as quar-ries are exhausted. Even in otherDivisions, our customers oblige usto continually search for efficiencyas we compete with other com-panies for their business, whichsometimes leads to plant closures.While there are often understand-able pressures from some to resistplant closures and restructuring, webelieve that it is rarely in society’slong-term interest. The result wouldbe that over time capital would beinvested elsewhere. In our view,the resources sometimes devotedto propping up unsustainableoperations could be much betterinvested in efforts to reduce thedisruption to the people and familiesconcerned, by ensuring a vibrantjobs market and easing retrainingand relocation costs.
However, this does not mean thatdecisions on site closures or theprocess of their closure are some-thing that Lafarge treats lightly.Closures of sites, which are gener-ally regrettable and often painfulfor some, can have diverse conse-quences. For employees, it canmean the loss of a livelihood or atthe very least a major change intheir lives. For local communities,the negative economic conse-quences can be balanced by lessdisturbance, though people tendto be affected differently.
Lafarge therefore recognizes itsresponsibility to its employees, thelocal communities and other stake-
holders affected by such closures.Lafarge makes efforts especially in three areas, where it applies thefollowing principles:• Social: Anticipate potentialchanges by developing employees’skills and employment capacity.Never leave a person alone to faceredundancy issues.• Economic: Stimulate the localeconomy with a view to reducingthe impact of the plant’s closure.• Environment: Restore quarries,clean up and dismantle old plants,by engaging in continuous rede-velopment and using environmentalarchitecture at production sites.
➔ See Section 7 Contributing toSustainable Architecture, p 49.
30
The trend towards concentration and internationalization in the construction materials sector givesthe leading companies considerable influence over the future of the industry and the market,and in particular, the development and spread of new technologies and practices relating to sustainabledevelopment.They also give us a role to play in the shaping of fair regulatory frameworks, which cancontribute to the sustainability transition of the industry.
4. National and International Communities
Bruce Vigon,Director of the WBCSD study
“Towards a Sustainable Cement Industry”
“There is also the need to work on necessary changes in policies
and standards that slow down the transition to sustainable devel-opment. For example, in the USAthere are standards and govern-
ment specifications preventing the incorporation of additions
in Portland cement [see p 44-45].If these policies are to change,
new modes of positive dialogue with the institutions responsible
for issuing the standards and/or specifications have to be developed.
This is slightly different from lobbying, which is often deemed to
entail ways of prompting legislatorsto take decisions which they would
never have reached on their own.A good example of what this
new kind of dialogue might involve is given by Cembureau’s* approach
towards the European Commission,which entails providing information
before decisions are taken with a view to facilitating the
Commission’s appreciation of thevarious issues at stake.”
* Cembureau is the European trade association of cement makers.
LOBBYING POLICY
afarge interacts with govern-ment authorities at local,regional, national and interna-
tional levels. This takes place princi-pally through industry federations,such as the European Aggre-gates Association, the Council ofEuropean Producers of Materials for Construction, EuroGypsum andCembureau* at European level, or theVerein Deutscher Zementwerke inGermany and the American PortlandCement Alliance in the USA atnational level. However, at the localor regional level, the Business Unitor the plants tend to take the lead.
The building materials sector is notwell understood in government circles, nor is Lafarge well knownoutside France and Canada, solobbying, or “public affairs” to giveit a less negative connotation, isimportant. Its objectives are toobtain an understanding of ourproblems, forecast future develop-ments and advocate a reasonablelegislative or regulatory regime.Lafarge does not necessarily lookfor minimum regulation, but itargues for regulations that do notimpose unnecessary costs, aretechnologically reasonable and areconsistently applied. As to methods
of lobbying, Lafarge takes the viewthat the way to persuade someoneof your ideas is through rationalargument supported by sounddata. It is also an excellent way of gaining an understanding ofother views and reaching bettersolutions.
> Lafarge’s position on the greenhouse effect
Given that the world’s scientistsagree that climate change is amajor man-made problem, Lafargesupports mitigation efforts and isprepared to shoulder its fair shareof the burden. This will requireinternational agreement involvingat the outset the main industrialcountries and ultimately the wholeworld. We encourage all govern-ments to agree on an efficientinternational framework that givesbusinesses appropriate incentivesto cut emissions, reduce the carbonintensity of products and to findnew technologies to combat cli-mate change. This, we believe, isthe best way forward.
Lafarge opposes energy taxes forenergy-intensive industry becausethey will either have little effect onCO2 emissions or will drive produc-tion elsewhere for purely competi-tiveness reasons. Lafarge wouldprefer to agree with government ona fair commitment to reduce CO2
emissions (and/or reduce the car-bon intensity of our products) thatcan be transparently and indepen-dently monitored with sanctions ifit is not achieved. In short, Lafargeis prepared to make the necessaryeffort to minimize our carbon
L
31
SOCIETY
National and International Communities
impact, but is not willing to cutemissions and pay an enormoustax bill.
MOVING THE INDUSTRY AND THEMARKET TOWARDS SUSTAINABILITY
Economic growth in emergingcountries comes with more needsfor construction in terms of homes,factories, offices and infrastruc-ture. Moreover, people also expecthigher construction standards(durability of materials, insulation,earthquake protection, etc). Theseexpectations cannot be met without the building materials thatLafarge produces and the innova-tions it brings forward.
As far as global warming is con-cerned, the economic growth ofcountries such as China or Indiabecause of their size will lead to a significant increase of global carbon emissions unless patternsof production and consumptionadjust. Building materials, includ-ing cement, have to be part of thisadjustment.
> How can we reconcile the wish to develop with the need to protect the climate?
As an industry leader, Lafarge playsan important role in the process of ensuring that construction candevelop while safeguarding our climate. As described in the nextsection, Lafarge already applies the same environmental standardsworldwide for new plants, especial-ly through internal transfer of tech-nology and know-how. Thus, ourinvestments in emerging markets
radically improve the standards ofproduction compared to existingplants in the developing world. Forexample, Lafarge achieves levels ofCO2 emissions per tonne of cementof just above 0.5 tonne at our most efficient plant (in the CzechRepublic), which compares withalmost 0.9 tonne on average orhigher at the kind of vertical kilnplant that our plants are replacing in China. This means that ourinvestments have the potential toalmost halve the CO2 intensity ofcement production in China, evenbefore taking into account factorssuch as better quality and improvedbuilding standards.
In such ways, we are also using our experience and our capacity to innovate to bring new materialsand new technologies to changebuilding standards in these emerg-ing markets. To go further into theissue of unsustainable patterns ofproduction and consumption, wehave set up a special unit in ourresearch establishment to investi-gate and evaluate even the mostfar-fetched ideas to combat climatechange (➔ see To go further in cutting CO2 emissions, p 46). Wewill also intend to consider how we can contribute to the promotionof more sustainable architecturaltechniques (➔ see Contributing toSustainable Architecture, p 49).
We are confident that our capacityto improve CO2 efficiency in pro-duction and energy-in-use is thebest way to meet people’s rapidlygrowing construction needs indeveloping countries while com-bating climate change.
“All countries should strive to promote sustainableconsumption patterns […] In many instances, this will require reorientation of existing productionand consumption patterns that have developed inindustrial societies and are in turn emulated in muchof the world.”Agenda 21 – Chapter 4“To be recognized as an important participant and shape the future of our businesses through ourcapacity to innovate.”“To make our cultural diversity an asset.”Principles of Action
Dr Mostapha K. Tolba,Chair of the Assurance Group of the WBCSD study “Towards a Sustainable Cement Industry”,former Director of the UNEP*
“Lafarge is one of a very small group oftransnational corporations who do believethat they have a major responsibility in achieving sustainable development,particularly in addressing the issue ofsustainable production and consumptionpatterns. It is working to prove what itbelieves in. In the field of architecture and building, Lafarge can take a leadingrole in pushing the market towardsachieving several targets:• Architectural designs which helps minimize the use of material and energy,and hence help in reducing waste.• Rational use of local building materials.• Management of waste produced by thecement industry, especially by-pass dust.• Ensuring that the use of solid wastes as source of energy in the cement industry does not lead to any environ-mental hazards.”
* United Nations Environment Program
300
250
200
150
100
50
0Cem
ent d
eman
d pe
r cap
ita (x
1,0
00kg
)
GDP per capita (constant $)
0 200 400 600 800 1,000 1,200 1,400 1,600
China
In developing regions cement demand increaseslinearly with GDP per capita (from Battelle work forWBCSD).
Homebuiding centers in India, designed to provide consumers with the appropriate materials and advices.
How do we perform?“Lafarge’s environmental strategy shows a strong and innovative commitment in termsof leadership. So far, there is still room for improvement regarding measurement and consolidation of results.”ARESE
“Similar to other companies in the industry,Lafarge needs to continue improving environmental management and data collection systems in order to be able to monitor and report at the Group level.Lafarge’s active participation in industry-wideinitiatives and the focus on reducing green-house gas emissions are important contribu-tions to sustainability in the cement industry.”SAM
“Lafarge ranks amongst the top third of environmentally proactive companies within its sector […] Lafarge scores aboveaverage on the Global Warming, EnergyIntensity, and Quality of EnvironmentalManagement indicators. Lafarge is among the best in its industry with respect to environmental management, auditing andreporting. It is our impression that Lafarge is one of the companies that has come furthestin the implementation of global standards.”STOREBRAND
Environment “To show that we are taking a responsible attitude towards the environment.”
Principles of Action
The Bamburi quarry in Kenya was rehabilitated into a natural reserve.
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1. Closing the Loop
Quarrying and utilization of natural resourcesMost construction materials are made from natural rock chosen for their mineral content (limestone, gypsum, sand, clay, gravel, etc). Regulators, environmental groups and local communities worldwide closely examine plansfor new quarries. If not properly designed and operated, quarries can have significant impacts on landscape, wildlife,surface and ground water and the quality of life of surrounding communities. In order to minimize these impacts,Lafarge has developed with WWF’s help a set of guidelines for the operations and rehabilitation of its quarries toprotect the environment.
Slightly less than 50% of Lafarge’s quarries currently have a rehabilitation plan.
Have 80% of our quarries implementing a Lafarge-approved rehabilitation plan by 2004.
➔ See Section 3 Quarry Management, p 38-40
Raw material substitution/waste recoveryLafarge has a clear interest in substituting alternative materials for natural rawmaterials wherever possible so as to reduce the amount of natural resourcesextracted. To do this Lafarge makes the maximum use of by-products such assynthetic gypsum, fly ash from coal-fired power stations, slags from the steelindustry, etc that may otherwise become waste.
Cement Gypsum Roofing A&CRaw material substituted 8.2% 32% 1.7% for sand -in production 6.8% for cementby 2005 10% 45% set target -
➔ See Section 5 Climate Change (for cement), p 43-46
Waste minimizationThe construction sector has to deal with one of the single largest waste streams, which is divided into threecategories: production waste managed by Lafarge and our competitors (see figures below) which can often bereintegrated into production; construction waste managed by the construction company and demolition wastemanaged by the demolition company.
Cement Gypsum Roofing A&CProduction waste to landfill 1.4% 2.2% 2% -by 2005 1% 1.5% - -
➔ See Section 6 Waste Recovery and Elimination, p 47-48
Extending environmental auditsLafarge policy is to do an environmental audit at each production site every fouryears. Reports on these audits have been drawn up by the Group’s environmentalmanagement since 1995 for internal use and to alert management to environ-mental improvements that are needed.
70% of our plants have been audited within the four previous years.
Have 100% of our sites audited within the last four years by 2004.
➔ See Section 2 Environmental Management, p 36-37;Section 3 Quarry Management, p 38-40
Construction materials produced by Lafarge provide strength, durability, structure, pro-tection, insulation and also contribute to the aesthetics in residential buildings, officebuildings, individual homes, roads, railways, bridges, dams, water treatment facilities andall sorts of public works. Life cycle analysis tells us that most of the environmentalimpacts of a building happen during its useful life – not during construction. Therefore themain environmental impacts are largely conditioned by architectural choices, i.e. building
Contributing to sustainable architecture
Cement and concrete as well as other buildingmaterials are essential to development ofhuman society, but their production processeshave significant impacts on the environment.In order to optimize the processes, Lafargestrives to “close the loop” by reducing its use of non-renewable or scarce resources (fossilfuels, water, limestone, gypsum rock, etc),as well as the potentially adverse outputs of itsactivities (waste, emissions, disturbances, etc)and by maximizing the use of sustainable inputs(waste from construction or other industries,etc) – thus moving towards industrial ecology.This section presents an overview of our environmental performance indicators ( )and objectives ( ) in 2000 formulated in thecontext of our partnership with WWF.
For detailed figures on our performance indicators see www.lafarge.com
An Overview ofEnvironmental
Issues, Indicators
and Targets
ENVIRONMENT
Closing the Loop
35
Energy consumptionand substitutionTransformation of natural rocks into constructionmaterials requires substantial energy at everystep of the production process, from quarrying to transportation, processing and distribution.Cement production, which accounts for 95% ofthe Group’s energy consumption, is an energyintensive process; energy represents roughly25% of the cost of making cement. To reduce itsuse of traditional fossil fuels and offset CO2 emis-sions, the cement sector started some twentyyears ago using alternative fuels. These extendnow to fuel-like wastes such as used engine oil,used car tires, spent solvents, sewage sludgeand animal meal, which otherwise are likely to belandfilled or incinerated with lower or zero energyrecovery.
Over 6 million tonnes of oil equivalent in the form of fuel oil, electricity, petcoke,coal and other fuels were consumed in the whole Lafarge Group in 2000 which isequivalent to the electricity consumed by a city like Hamburg or Milan.
With 30% of its cement works authorized to process them, non-traditional fossil fuelsaccount for 7.7% of the fuel energy used bythe Cement Division.
Extend the measure of energy consump-tion to all Divisions in 2003 where it is signif-icant and track improvement into the future.
➔ See Section 5 Climate Change, p 43-46
Reducing CO2 emissionsThe construction materials industry is a significant contributor to man-made emissions of CO2, the principal gas responsible for climate change, especially the production of cement, which represents roughly 5% of worldwide emissions. These consist inroughly 60% for the “decarbonization” process and 40% from theburning of fossil fuels.
In 2000, Lafarge’s Cement Division emitted just over 45 million tonnes of greenhouse gases (all CO2),which is more than a country like Switzerland.
Lafarge’s CO2 emissions have fallen by 13% per tonne of cement since 1990.
Reduce Lafarge’s global CO2 emissions by 20% per tonneof cement over the period 1990-2010, including for industrializedcountries a 15% reduction in total CO2 tonnes emitted.
➔ See Section 5 Climate Change, p 43-46
Water conservation and protection In each Division, production of construction mate-rials consumes water, for example to cool heavyequipment or products, to wash aggregates, or tomake products. These various activities, as wellas quarrying, can affect water quality. Lafargeconserves water and implements recycling when-ever feasible.
In 2000, Cement and Gypsum Divisionstogether consumed 32.4 million m3 of water.
Improve data collection on water usageby 2002.
➔ See Section 4 Protecting Air and Water,p 41-42
layout and design, better use of natural light, reduced consumption ofwater and lower reliance on traditional energy sources for heating andcooling. Therefore we could play an important role in this choice throughour product communication and the range of products we supply.➔ See Section 7 Contributing to Sustainable Architecture, p 49-51
Reducing the impacts of transportConstruction materials are heavy, bulky and a low costcommodity products. Their transportation from the pro-duction to the construction site generally accounts for 10to 30% of the costs of delivered products. Even if Lafargewould generally prefer waterways or rail transport for envi-ronmental reasons, road remains the most commonlyused mode of transport and often the only possible.In order to help reduce the impacts of transport, Lafargeintends to re-examine its transport practices by 2003 in order to come forward with additional options to beevaluated and applied locally.
Air emissions and local impactsQuarries, traffic and production facilities are allpotential sources of noise, dust and vibrationsand various pollutant emissions to air, such asnitrogen oxides (NOx) or sulfur oxides (SOx)which can affect peoples’ health. Visual impactcan also be an issue, both in rural and urbanenvironments. This situation is especially true forolder quarries and older production facilities.
Achieve a maximum level of stack dustemissions of 50 mg/Nm3 at all our cementplants in the long term.
➔ See Section 4 Protecting Air and Water,p 41-42
36
Since the early 1990s, Lafarge has systematically integrated environmental considerations into its generalbusiness strategy, appointing environmental coordinators to define and help implement the Group’s environmental policy in each Business Unit. In 1995, Lafarge went further by including an environmentalcommitment in its Principles of Action and by producing the Group Environmental Policy, which includesthe creation of Group-wide environmental standards and the implementation of a reporting system.
mplementation of environmentalmanagement systems in each ofour sites is an essential element
of our environmental policy, ensur-ing that environmental aspects areproperly managed. Each BusinessUnit is responsible for implementingall the processes that contribute togood environmental stewardship,such as audits, training and report-ing. Each year, the Group investsroughly 150 million on environmen-tal improvement of its facilities, andin addition about 20% of invest-ment in new production units con-cerns the environment.Environmental audits should becarried out at least every four years. Theyinvolve a system-atic review of aplant’s regulatorycompliance, envi-ronmental perfor-mance and risks,quality of stake-holder relat ionsand organizationalaspects. They arebased on a structured approachaddressing key identified environ-mental issues. To take environmental manage-ment even further, some sites haveopted for ISO 14001 or EMAS*certification. So far more than thirtysites within Lafarge have been cer-tified. The Group’s managementpromotes certification. However, it is not yet compulsory in the envi-ronmental policy of the Group.Lafarge has taken the view thatother approaches, such as theestablishment of environmentalstandards, systematic auditing orthe implementation of the program
aimed at systematically redevel-oping quarries have producedmore direct results. Nevertheless,Lafarge is now actively consider-ing whether to prioritize a certifi-cation or equivalent approach to environmental management inthe Cement Division in the con-text of our acquisition of BlueCircle Industries, which had anISO14001 certification programand developed correspondingexpertise.
REPORTING ON PERFORMANCE
The measurement of performance and monitoring of progress through
indicators is neces-sary, not only for internal man-agement purposes, but also to helpt r a n s p a r e n c y .Within the contextof our partnershipwith WWF, severalenvironmental per-formance indica-
tors (indicated by a ) have beenidentified. These indicators will be extended to all Divisions whererelevant over the next years. Thiswill contribute to better environ-mental awareness and manage-ment. Other indicators may needto be defined and monitored in theyears to come, however we believeit is important at present to keeppriorities clear and simple at theoutset to achieve maximum effect.The three main indicators that wehave concentrated on this year aregreenhouse gas emissions (CO2),global energy efficiency and the eco-nomical use of natural resources.
2. Environmental Management
I
In 2000, about 70% of Lafarge plants have been
audited within the four previous years (up from 65%
in 1999 and 45% in 1997). This performance is affected by the rapid external growth
of the Group, since almost 90% of the plants that Lafarge
has owned since 1998 have been audited.
Have 100% of our sites audited within the
last four years by 2004.
Thierry Raes,Head of the Sustainable
Development Department,PriceWaterhouseCoopers
“PwC assessed Lafarge’s environ-mental audit plan on the basis
of the policies and procedures, the organization of the audit centers
(six centers covering 500 facilitiesaround the world), the audit program,
the number of audits performed and the follow-up on audit findings in environmental action plans. On
the basis of our work, we observedseveral components of the organiza-tion, which clearly demonstrate thatLafarge has undertaken significant
actions to implement an environ-mental audit system in accordance
with these criteria. However, four of the six visited Audit Centers wereonly able to cover 70 to 90 % of theaudit program as requested by theLafarge environmental procedures.
In a significant number of cases, a lack of clear separation between
the operational duties and the auditfunction may jeopardize the results.”
Full version of the PwC state-ments on www.lafarge.com
* Environmental Management and Audit System
ENVIRONMENT
Environmental Management
37
Principles of Action■ To participate in the life of the communities where we operate.■ To operate responsibly toward the environment.
Group level
Division level
Unit level
LISTENING TOSTAKEHOLDERSEXPECTATIONS AND WATCHINGEMERGINGISSUES & REGULATIONS
LOBBYING & PROMOTION OF LAFARGE
IMAGE
Environmental Management Framework
Lafarge Standards
■ Our standards meet or go beyond thoserequired by national regulations.
■ They are applied globally to any major newconstruction.
■ Existing plants must meet national regulatorystandards and will evolve towards Lafargestandards as fast as economically feasible.
■ Modernisation takes place integrating eco-nomics and the environment.
Environmental Policy
■ Sparing use of natural resources, including a policy of reuse of by-products and residualwastes as substitutes for natural raw materialsand fossil fuels, as well as energy-efficientproduction processes.
■ Environmental know-how and expertiseat every phase of the product life cycle(extraction, processing, distribution, use anddisposal or reuse).
■ Demanding “Lafarge Standards” ahead of local regulations and at least as stringentas international regulations.
■ Innovative products: innovative and durableconstruction materials designed to enhanceour daily lives by bringing improvements in comfort, environmental impact, health and safety and aesthetic appeal.
■ Environmental integration and risk pre-vention on each facility and site.
■ Training and evaluation of environmentalperformance.
Each Division is responsible fordeveloping its ownbest practices andenforcing them.Our network of environmental coordinators helps tospread them through-out the Business Units.
Plan for the Environment
■ Establishment of objectives.■ Measurement of performance.■ Audit of conformity with standards every four years.
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REPORTING ONPERFORMANCE &
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INCENTIVES & OBLIGATIONS SHARING BEST PRACTICES
Best practices guide
Lafarge and the Environment:a catalogue of 92 showcases from each Division, updated periodically
38
Most of the construction materials produced by Lafarge are derived from quarried natural mineralresources: limestone, gypsum rock, aggregates, etc.While most of these non-renewable raw materialsare globally available for years to come, their local availability is subject to competition and regulatorycontrols. Moreover, quarries are often seen as a local nuisance. In addition, quarries can pose land-related socio-economic problems, which makes ongoing dialogue with local stakeholders a key aspectof Lafarge’s quarrying projects.
BIODIVERSITY
afarge operates more than800 quarries located aroundthe world, in a variety of bio-
geographical regions. Upgradingtheir ecological value is one ofLafarge’s ongoing programs. TheGroup views a quarry as but onestage in the life of a site and the definition of a biodiversity strategyfor quarry restoration, a field whereLafarge has already gained consid-erable experience and expertise, isan important part of the partnershipwith WWF.
One element in the enhancement of biodiversity at our operations iscreating wildlife habitats consistentwith the indigenous species aroundour sites. This focus is applicable toexisting quarries, operations areas,buffer areas, and entrances and toquarries/sites undergoing rehabili-tation. Another element of this bio-diversity strategy is incorporated inthe “Strategic Quarry RehabilitationProject” (SQRP). Lafarge’s SQRPtask-force was created in 1999 inorder to develop the exchange andsharing of quarry restoration expe-rience and know-how within theGroup, and to ensure that informa-
tion about all techniques is madeavailable to all Business Units. Tomeet these objectives, the SQRPtask force has developed the fol-lowing tools:• A quarry rehabilitation policy,approved by Lafarge’s ExecutiveCommittee in September 2000,• A Best Practices guide and a cat-alogue of exemplary achievements(both to be available by end-2001),• A database containing a list ofthe Group’s experts in the variousspecialties of quarry rehabilitation.
QUARRY SITE SELECTION
Before opening a new quarry, wenow systematically carry out anenvironmental impact assessment.This has become a legal obligationin most developed countries, butwe conduct such assessment of environmental impact on all oursignificant projects. Recent exam-ples of this can be found inMorocco (Tetouan project), in India(new quarry in Meghalaya) or inChina (Dujiangyan Quarry). Biodiversity is taken into accountin the site selection. When theestablishment or extension of aquarry threatens a valuable naturearea, or a protected or rare species,
3. Quarry Management
LAFARGE QUARRIED PRODUCT CONSUMPTION
Year 2000Resource use
‘000 tonnes %
Cement 87,500 30.6Gypsum 4,200 1.5Aggregates and Concrete 187,300 65.5Roofing 6,900 2.4
Group Total 285,900 100
Liliane Elsen, Director,France Nature Environnement
(French environmental NGO)
“For the quarry that Lafarge wanted to extend near Angoulême, they initiateda very long dialogue process with a local
environmental group, Charente Nature.It turned out to be a success because
everybody was very constructive, even the NGO that originally opposedthe project because it was a classified
ecological site. Eventually, only one partof the site was included in the quarrying
zone – Lafarge bought another part and had it classified as a natural reserve
that is managed by Charente Nature.”
L
Coordinated rehabilitation
ENVIRONMENT
Quarry Management
39
Case study Rodel Coastal Quarry: a Controversial Project in ScotlandThis quarry site was identified at Lingarabay, Rodel on the Isle of Harris as a potential long-term replacement for Lafarge’s biggest and most significant hard rock quarry, located in Leicestershire.
CONCERNS ABOUT THE PROJECTThe Link Quarry Group, representing over twenty NGOs, opposesthis project vigorously. They put forward the following arguments.■ The site is located in the largest National Scenic Area of Scotland.■ The site is a coastal one near people’s homes, which would therefore be seen from the sea and from the air.■ The site would increase the risk of marine pollution that woulddestroy fishing interests or may affect the image of Harris as an unspoiled and unpolluted area.■ While acknowledging that “no modern society can thrive without aggregates”, the existence elsewhere of substantial reservesof aggregate makes such a superquarry unnecessary.
WWF is an active member of the Link Quarry Group and the issue of Rodel has proved a point of major disagreement in the context ofthe partnership with Lafarge.
For further details on the Link Quarry Group’s position, visit :
www.foe-scotland.org.uk/nation/superquarry1.html
special measures are taken thatcan go as far as closing part of thesite and classifying it as a voluntarynature reserve, which happened in La Couronne, near Angoulême(France) or transferring the threat-ened species to a safe location, as took place for the Alvar habitatat the Dundas quarry near Toronto(Canada) and for the Hoppegartenplant in Germany.
When environmental impact stud-ies demonstrate the extreme sensi-tivity and biological richness of a site and if it proves to be impos-sible to restore it after exploitationthen Lafarge will not develop thesite. Nevertheless, there will alwaysbe controversial cases (see casestudy on Rodel below).
MINIMIZINGTHE IMPACTS OF QUARRYING
Quarries pose different types ofproblems that are tackled byLafarge right from the outset.Lafarge endeavors to minimize aquarry's impact on the landscape.Thus, the investments required for this purpose are included inoperating costs so that they areproperly treated financially. Lafarge has extensive experience in mitigating the impacts of dust,noise and vibrations. Also quarryingneeds to take care of the archeo-logical or geological interest of thesite. It is not easy to establish global indicators in this contextbecause the problems that arisecan be highly site-specific and solu-tions are developed locally in con-junction with the relevant parties.
WHAT IS LAFARGE’S POSITION?Lafarge does not accept the arguments of the NGOs.■ The choice of site was in accordance with Government mineral planningpolicy guidance supporting the development of large coastal quarries,“superquarries”, to complement traditional hard rock quarry sites whose contribution will diminish progressively over the next ten years or so.This potential shortfall in supply cannot be met either by demand management,or by increasing the use of recycled wastes, which is close to maximumcapacity, or by the increased use of secondary aggregates. Consequentlynew and large sources of supply need to be identified.■ The site has a history of planning permissions being granted for quarrying notwithstanding its location within the National Scenic Area.■ The site is remotely located in a sparsely populated area and is unlikelyto create significant visual impact.■ Any potential marine pollution has been fully addressed as part of theenvironmental assessment, and is capable of mitigation as part of Lafarge’sproposed method of operation.■ The quarry once developed will make a significant contribution to the local economy of Harris and it is considered unlikely to have a negativeimpact upon existing local industries and activities.Consequently Lafarge believes that the case for the quarry remains asstrong as ever.
Ongoing rehabilitation of the Tavernola quarry in the north Italian Alps.
40
QUARRY REHABILITATIONAND LAND PLANNING
The Lafarge Group views quarryrehabilitation/restoration as a pri-ority at all sites, generally going wellbeyond regulatory requirements. In2001, Lafarge adopted a formalQuarry Rehabilitation Policy with theparticipation of WWF to spread bestpractice in term of quarrying workand relations with local stakehold-ers. The most important elements ofthis policy are to plan restorationfrom the outset and coordinaterestoration with quarrying activities.In addition to biodiversity issues,land planning considerations arealso taken into account when defin-ing a rehabilitation project in orderboth to preserve the environmentand to generate income for the local communities. In this frame-work quarry rehabilitation oftenleads to the creation of wetlandsand natural reserves or leisure areas(see case studies below).
Almost 50% of Lafarge’s quarriescurrently have a rehabilitation
plan.
Have 80% of our quarries imple-menting a Lafarge-approved reha-
bilitation plan by 2004.
RESEARCH PARTNERSHIPSIN QUARRYING
In order to benefit from up-to-datescientific knowledge on quarryingenvironmental impacts and con-tribute to research, Lafarge part-ners with experts in various fields.Concerning natural areas, in par-ticular, Lafarge supports perma-nent research programs on “quar-rying and wetlands” with UNPG1,on “floods and biodiversity” withCNRS2 and France’s Muséumd’Histoire Naturelle, and on “theimpacts of undersea aggregatesquarrying on marine biodiversity”with IFREMER3.
1 French Association of Aggregates Producers2 National Center for Scientific Research3 French Research Institute for Ocean Farming
■ Weissenegg – AustriaThe exploitation of the “Weissenegg” limestone quarry had beeninterrupted since the 1960s, but in 1990 Lafarge Perlmooser (Austria) decided to use the limestone of the Weissenegg quarry and the sandy layers of the overburden as raw material components in the Retznei cement plant. This allowed the Retznei and Rosenberg quarries’ lifetime to be extended.In order to get the approval for restarting of mining operations in theWeissenegg quarry, Lafarge designed a new mining development planincluding a special quarry rehabilitation plan called “landscape plan”.It specified Lafarge’s thinking on the shaping of the mining slopes after exploitation, the location and shaping of the overburdened dump, the structuring of the mined areas by sectors with different subsequentuse (forest, meadow, reserve for special endangered species of animalsand plants, wetlands, etc) and the re-greening and replanting methods.This rehabilitation plan, which focused on biodiversity, was worked out in intensive cooperation with the nature protection experts, withUniversity of Bodenkultur in Vienna and with the experts of WWF Austria.
■ Bamburi Cement Mombasa – KenyaThe disused limestone quarries inBamburi have been rehabilitatedover the last 30 years and transformed into an ecologically and economicallyself-sustaining ecosystem and the project has received worldwide acclaimfor its best practices. Forest ecosystems have been created (and are stillbeing created and expanded) with more than 350 species of indigenous forestplants, 30 species of mammals, 180 species of birds and more than 30 speciesof butterflies.The most widely known and appreciated outcome of the rehabil-itation is the world famous “Haller Park” where visitors can walk through lushforests, grasslands and wetlands watching hippos, giant tortoises, crocodiles,buffaloes, oryx, elands, giraffes, snakes and reptiles etc. The park now paysfor itself, providing more than 460 jobs. Baobab Trust, an offshoot of this pro-ject is working as a charitable conservation trust devoted to carrying out non-commercial activities in the field of conservation and conservation education.
For further details visit: www.baobabfarm.com
Case study Quarry Rehabilitation
Jean-Pierre Edin, Director,Robin des Bois
(French environmental NGO)
“Quarries are the most visible impact of cement works, mainly posing a problem
at the end of their working life. Nowadays their rehabilitation is subject to certain rules
and regulations in countries like France.But groups like Lafarge are active worldwide,
and we expect them to apply the same standards in countries where the legislation
on the matter is very weak. Consequently, inthe case of Lafarge, we heard about problemsassociated with some quarries in Cameroon.
At the same time, however, they are generally fairly responsive. Another problemfrequently raised is the large size of somequarries, leading to significant changes in
the landscape. Ideally, before a quarry is established, these groups should conduct
full-blown environmental impact studies,including a detailed list of the fauna and flora
affected. In practice the major industrialgroups have never done this, and I do not
just mean those active in the cement sector.”
ENVIRONMENT
Protecting Air and Water
41
DUST EMISSIONS
ust or particulate matter canbe an issue at every step ofthe manufacturing process:
quarrying, transportation, storage,handling, processing, etc. Dustreleased at the plant chimney stackis only one aspect of dust emis-sions, but this is the most easilymeasured and thus commonly regulated. Still, the other sources of dust (fugitive dust) can be quitesignificant and affect our neighbor-hood more directly. These are moredifficult to measure but they con-tribute to ambient air dust levels.
Dust is generally of a mineral natureand can in some instances be anaggravating factor of respiratoryproblems. In our existing cementplants, Lafarge has achieved amore than one hundred-fold reduc-tion in stack dust emissions in thelast thirty years through the use offilter equipment making the dust-covered landscape around cementplants a thing of the past. In newlyacquired plants, we add suchequipment as part of the modern-ization process. Lafarge also fightsfugitive dust, by applying variousmitigation techniques (sprayingroads and stored materials withwater, enclosing storage sites, etc),although progress is still necessaryin this area.
Lafarge has cut stack dust emis-sions of its cement plants from
2% of production in the 1960s to wellbelow 0.02% now.
Achieve a maximum level of stackdust emissions of 50 mg/Nm3 at
all our cement plants in the longterm. Monitoring of progress is tak-ing place. Figures will be published inour next report.
NOX EMISSIONS
Nitrogen oxides (NOx) are pro-duced as a result of fuel combus-tion at high temperatures and areone contributor to the formation ofacid rain and photo-chemical oxi-dant smog. Cement plants areknown emitters of NOx, which isprogressively subject to more andmore stringent regulations. GivenLafarge’s extensive testing on var-ious solutions, we are able to com-ply with the latest regulatory limits.
SO2 EMISSIONS
Sulfur oxides are normally not anissue in a well-run cement plant,even when the fuel burnt has avery high sulfur content. But incertain instances, when naturalraw materials contain sulfur inmineral form (like iron sulfide alsocalled pyrite) SO2 can be releasedat the stack. This is why sulfuroxides are regulated and mea-sured at cement plants. Again, allLafarge plants respect the limitsand at most plants SO2 emissionsdo not significantly impact theambient environment.
MICRO-POLLUTANTS
Micro-pollutants such as heavymetals, volatile organic compounds(VOCs) or persistent organic pollu-tants (POPs) are potentially danger-ous pollutants that are the subjectof much regulatory activity at present as their effects are becom-ing better understood. These aresometimes found in the emissionsfrom Lafarge cement plants, butthey are emitted in very small quan-tities, well under regulatory limits.
Fresh air and clean water have over the past decades become increasingly precious resources that need protection. New Lafarge plants respect emissions standards wherever they are built and employ latest technologies to control emissions.
4. Protecting Air and Water
D■ Retznei – Austria: Reduction of SO2 emissionsfrom 400 mg/Nm3 to 200 mg/Nm3.
■ Hoghiz – Romania: Reduction of dust emissions from 600-1200 mg/Nm3 to 20 mg/Nm3.
More case studies in Lafarge and the Environment on
www.lafarge.com
Non-volatile heavy metals are captured in the chemical structureof the cement and do not leach(➔ see p 45). In order to limit the riskpresented by naturally occurringmicro-pollutants, we have system-atically included in geological surveys of our quarries the searchfor natural, yet undesirable impuri-ties in the raw material that canadd to polluting emissions espe-cially when heated in cement kilns.
IMPACT ON WATER
Production of construction materi-als in general consumes water tocool down kilns and other heavyequipment, to wash aggregates, tomake concrete, to prepare slurryfor wet process cement produc-tion, for gypsum boards and blocksand in the manufacture of roof tiles.In the Cement Division, the pro-gressive phasing out of the wetproduction process has substan-tially reduced water usage, from1000 to 2000 l/tonne of cement for a wet plant to around 100 to 200 l/tonne for a dry kiln. In 2000,Lafarge had an average consump-tion of 435 l/tonne cement and thisnumber will continue to decreaseas we modify or close more wetprocess plants.
Water quality can be affected byvarious activities like cooling,washing and cleaning. Closed cir-cuit operation is the best solutionto reduce water consumption andavoid pollution. It is implementedwhenever feasible.
PROTECTIONAND RESTORATION OF WETLANDS
The choice of opening a hard rockquarry or a sand and gravel quarrydepends on local conditions likegeology (quality of materials), econ-omy (market demand) and ecology(natural environment and availablemeans of transportation).
Quarrying in river valleys has totake account of the presence ofprecious wetlands that must beprotected. Lafarge therefore takescare to protect ground water, soilsand the local natural environment.
Lafarge is deeply involved in scientific studies being undertakento evaluate the impacts of quarry-ing on floods, water resources,biodiversity and on the whole environment. At the same time,quarry rehabilitation programmesare established in partnership withlandowners and local authorities,and must provide for local require-ments. As a result, old quarries are not only converted into wet-lands, but also into water reser-voirs and flood storage basins.Various examples throughout theworld illustrate Lafarge’s expertiseon such projects.
42
Cement Gypsum Roofing A&CWater consumption 30 million m3 2.4 million m3 (1) - -
Consumption per product 435 L/tonne 5.4 L/m2 -
of board
By 2002 Improve data collection
(1) For the production of plasterboard
■ Darica – Turkey: Treated wastewater is recycled, thus saving a yearly 27,000 m3 of water.
■ Bègles – France: Biological treatment of wastewater from paper manufacturing.
■ Shalersville – USA:Former quarry rehabilitated into a wetland.
What is climate change?
The latest work from the UN-sponsored InternationalPanel on Climate Change suggests that the Earth’saverage surface temperature will rise between 1.4 °Cto 5.8 °C by the year 2100 under present trends of greenhouse gas emission.The causes and conse-quences of global warming are still disputed bysome, although the overwhelming majority of scien-tists agree that human activity is the main cause.
Global warming is caused by the atmospheric concentrations of greenhouse gases, which haveincreased because of human activities, primarilydue to the combustion of fossil fuels (coal, oil andgas), deforestation and agricultural practices.Since the beginning of the pre-industrial era around1750, concentrations of carbon dioxide (CO2), themain greenhouse gase, have risen by nearly 30%.Cement manufacture is a significant industrial source of CO2 emissions, hence the interest for Lafarge.
The principal method put forward to counter climate change is to stabilize atmospheric concen-trations of greenhouse gases by the end of the century, which effectively means cutting the use of fossil fuels. Given the economic growth that is tobe expected in the meantime, it is obvious that thekind of improvements in energy efficiency requiredto mitigate global warming will need substantialinvestment in new technology and equipment.
Faced with this situation, over the past decade, the United Nations have pledged to set up a systemfor controlling these emissions. The agreementsnegociated in Kyoto would lead to a 5% reductionof global CO2 emissions over the period 1990-2010.This would require the establishment of flexiblemechanisms, including a system of “emission credits”enabling countries that exceed their objectives tosell such permits to countries emitting more thantheir objectives.
(➔ See page 30 for Lafarge’s position on climatechange).
ENVIRONMENT
Climate Change
Climate change is a truly global problem. It has come to the forefront in recent years, as scientists’ fearsabout global warming have increasingly been supported by evidence of rising temperatures and morefrequent extreme weather events.
5. Climate Change
OUR CO2 EMISSIONS 1
limate change is probablyone of the major environ-mental issues our industry
and our Group are facing. Each yearLafarge globally emits more than 45million tonnes of carbon dioxide(CO2), mainly from cement produc-tion. Actions taken by Lafarge havealready cut these emissions by 13% per tonne of cement from
1990 to 2000 (corrected for invest-ments and divestitures). In order tofurther contribute to addressing thethreat of climate change, Lafargehas committed itself, after detaileddiscussions with WWF, to furtherreducing its CO2 emissions by2010. Adopting this public commi-tment is an important step thatunderlines Lafarge’s pro-activestance on an issue of strategicimportance for our cement business.
43
(1) This section deals mainly with the carbon emissions of the Cement Division.
Lafarge CO2 emissions 1990 1999 2000 % to 2010 % to 1990 commitment 1990
World-wide totalCement million tonnes/year 61 71 70 14 %CO2 million tonnes/year 45 45 45 0 %CO2 kg/tonne cement 746 639 651 -13 % 590 -20 %
Industrialized countriesCement million tonnes/year 46 47 45 -2 % 50 10 %CO2 million tonnes/year 34 30 29 -15 % 29 -15 %CO2 kg/tonne cement 738 637 644 -13 % 570 -23 %
Developing countriesCement million tonnes/year 15 24 25 63 %CO2 million tonnes/year 12 16 17 41 %CO2 kg/tonne cement 769 642 665 -13 % 620 -20 %
C
> How do we calculate our CO2emissions?
These figures present direct emis-sions (excluding indirect emissionsfrom transport and electricity con-sumption) of the Cement Division,which represents over 95% ofLafarge’s total CO2 emissions.Statistics for the other Divisionsare to be calculated for 2001.
Status of alternative fuels: ouremissions data (see table above)have been calculated taking alter-native fuels as CO2 neutral, in linewith European government prac-tice. The reason for this is that thesefuels are mostly industrial wastesthat would otherwise be incineratedwithout energy recovery, whereasused as fuel in a cement kiln, they
replace primary fossil fuels, thushelping combating climatechange*. However, WWF does notdiscount the CO2 emitted from fossil based waste fuels. Accordingto this accounting method Lafarge’sCO2 reduction commitment corre-sponds to a 10% reduction forindustrialized countries in totaltonnes of CO2 emitted, and this isendorsed by WWF in the context ofour partnership.
Reduce Lafarge’s global CO2
emissions by 20% per tonne ofcement over the period 1990-2010,including for industrialized countriesa 15% reduction in total CO2 tonnesemitted.
* In 2000, CO2 emissions from using wastefuels were 1.3 million tonnes, i.e. 20 kg pertonne of cement.
44
To reduce energy consumption,Lafarge invests not only in plantefficiency (wet to dry process, pre-heaters, etc), but also in usingclinker substitutes, which alreadyhave cementitious properties andtherefore reduce the energy neededto produce a tonne of cement.
WWF is pressing Lafarge strongly toshift to “green” fuels, especially gas,which has a lower carbon contentthan coal or petcoke, or towardsusing biomass, green electricity and other renewable energies. Butenergy accounts for such a high proportion, between 20% and 30%,of the cost of cement that this shiftwould only be possible if the cost of such fuels were competitive. Atpresent this would probably requiresome kind of government subsidy.Therefore, although we would defi-nitely favor “green” fuels if their costwere similar, Lafarge believes that a substantial shift to “green” energycan only be developed in the frame-work of a program involving thewhole industry.
Extend the measure of energy con-sumption to all Divisions in 2003
where it is significant and track impro-vement into the future (indicator: quan-tity of product made with one toe).
> Energy substitution
Lafarge gears its energy substitu-tion policy towards using industrialand other waste – used engine oil,solvents, used tires, animal meal,and so forth – as fuels, providedsafety regarding handling andemissions can be guaranteed. This policy not only reduces theGroup’s energy bill (Lafarge is evenpaid to dispose of some types ofwaste), it also enables the Group to provide a service for industrialcompanies and local authorities by recovering the energy from such waste. Furthermore it helpsLafarge to reduce its CO2 emissionsin line with European governmentguidelines. Our aim is to extend the capacity of Lafarge’s cementplants to process alternative fuelswherever this can be done safelyand economically.
7.7% of the fuel energy used byLafarge is alternative fuel, derived
from various wastes.
Today, about 30% of Lafarge’scement works are authorized to
process alternative fuels.
> Material substitution
For the past twenty years or so,Lafarge has been committed to apolicy of finding substitute materialsfor producing cement. This enablesthe use of by-products from otherindustries for their cementitiousproperties, while reducing theamount of quarried and processednatural raw materials used and CO2
emitted to make cement. Differenttypes of by-products can be usedeither to replace raw materials in
The plant is generally located close to the quarry.
After extraction,the limestone rocks
are crushed.
Other mineral raw elements are added to the limestonerocks to form the raw-mix.
HOW DO WE REDUCEOUR CO2 EMISSIONS?
Three principal methods to cutCO2 emissions from productionare implemented by Lafarge: • Energy efficiency through invest-ment in modernization or processchange.• Energy substitution by using alter-native fuels.• Materials substitution by usingindustrial by-products as raw mate-rials or as substitutes for clinker.
> Energy efficiency
In 2000, an average of 0.084 toewas required to produce one
tonne of cement.
Energy consumption by Lafarge’sCement Division is about 5.8 mil-lion toe/year (tonnes of oil equiva-lent per year). Most of Lafarge’senergy use takes place in theCement Division since cement pro-duction requires intense heat toprocess limestone into cementclinker. The main fuels used in thekilns are coal (35%) and petcoke(35%). Petcoke or “petroleum coke”is a fossil fuel by-product from theoil refining industry.
One tonne of raw-mix pro-duces around 650 kg of clinkerand releases 350 kg of CO2.
In addition, cement productiongenerally involves the combustion
of fossil fuels to heat the kiln and togenerate the electricity for grinding.
The production of one tonne ofPortland cement by traditional
method generates about700 kg of CO2.
ENVIRONMENT
Climate Change
45
cement raw mix, as an addition toclinker in blended cement, or ascement replacement:• Blast furnace slag is a waste by-product of the steel industry. It is estimated that slag productionamounts to 10% of world-widecement production, with a substi-tution potential of up to 70% incement.• Fly ash is a waste by-productfrom coal-fired power stations,which is usually either stored ordumped with potential pollutingeffects. The worldwide productionof fly ash is estimated at about30% of total cement production,with a substitution potential up to30% in cement.
Lafarge is also involved inresearch, funded by the UScement industry as well as the EU,into using other forms of cementi-tious by-products.
In 2000 mineral substitutesamounted to 8.2% of the total
raw materials used to produce cement.
Achieve 10% of recycled materialsused by the Cement Division and
target 45% for the Gypsum Divisionby 2005 and extend the indicator asappropriate to the other Divisionsover time.
Then the raw-mix is heated to 1,450 degrees Celsius in the kiln.After a first step (decarbonization) during which the raw mix losesits CO2 content, the heated mixture is transformed into “clinker”by way of a chemical process called clinkerisation.
After storage, clinker is mixed with gypsum and other mineral elementsand ground to a fine powder forming cement.
Finally, the cement is shippedby truck, boat or train to beused as a binder in concrete.
Case study Health and Safety Concerns relating to Alternative FuelsCompared with conventional incineration of alternative fuels, combustion in a cement kiln is more efficient and generally does not result in residual solid waste, since the elements become integrated intothe crystalline structure of the cement in such small amounts that it does not affect its quality. Moreover,given the extremely high temperatures and the presence of the raw-mix in a cement kiln, the organicelements of the waste are fully destroyed. Emissions into the atmosphere are not significantly differentfrom when conventional fuels are used. Naturally, Lafarge tests the waste it uses and excludes certainwaste, such as nuclear waste, medical waste, PCBs, etc.
However, the use of waste fuels is still sometimes a cause for concern for some of our stakeholders in relation to the safety of the process, the related emissions and the quality of the cement (see thestakeholder quotes below). This is the case for WWF in the framework of our partnership, even if theyapplaud the reduction of the use of fossil fuels. Lafarge, while systematically applying high safety standards, recognizes that transparency and the acceptance from its stakeholders are key successfactors in its fuel substitution strategy. Therefore, we are ready to contribute to the development andpublication of independent studies on the issue.
As far as the quality of concrete is concerned, extensive tests have shown that, whatever raw materialsand fuel are used to make cement, heavy metals and organics do not leak from hardened concrete.This means cement can be safely used to make concrete for any potential end usage, including drinkingwater storage tanks and supply pipes.
www.lafarge.com
Jean-Pierre Edin, Robin des Bois (French environmental NGO)“Modern cement plants primarily work with waste, which is fundamentally changing the nature of thecement industry by involving it in a second activity, namely waste processing.Yet this new activity shouldrequire more staff information and training focusing on the substances they are being asked to burn.”
William McDonough, Architect and designer, Founder, McDonough & partners“A growing issue for architects interested in sustainability is products’ traceability. Some of the industrialwaste now used in cement plants instead of fossil fuels might contain mercury or heavy metals andthere might be a risk of contamination in the product. Also, there is more and more chemistry in the concrete industry – with new additives that extend the time concrete can stay plastic, or that keep it fromfreezing in the winter. Some of these additives are added for the comfort of the industry and the buildingsector, but not for the health of human beings. The problem we have, as architects, is that when we buycement or concrete it is undefined, we do not know where it came from, how it was made, we do nothave a real idea of the chemistry inside. Development towards a more sustainable form of architecturewill also depend on the producers’ capability to provide full information on the efficiency and environ-mental design of their construction materials. We would need traceability similar to that found in the foodindustry. That would really be ‘green concrete’”.
William Browning,Founder, Green
Development Services,Rocky Mountain Institute
“Companies in the sector should show an interest in certain natural
models from which they could drawinspiration to reduce the temperature
required for combustion and henceenergy consumption. Here are two
examples: coral reefs produce underwater a material very similar to
cement at a temperature of roughly 21 °C, and chickens produce another
material similar to cement, namelyeggshell, at a temperature barely
higher than that of the human body… If we could only understand how such
feats are possible, it would open upincredible new vistas for the industry.”
Stephan Singer,Head of European Climate and
Energy Policy,WWF International
“Lafarge has a research departmentworking on material efficiency-factorfour or ten. This is good for the time
being, but tomorrow we will need a real change of paradigm in the way
the industry works and may be to open up to new materials with less
environmental impact than cement.”
Gunter Pauli,Founder and Director,
ZERI Foundation
“Dropping the core business approach can give way to innovative solutions
that can prove extremely attractive economically: for instance, mixing
bamboo fibres with cement in buildingmaterials could help reach a dynamic
balance between CO2 emissions and sequestration, bamboo acting
as a carbon sink.”
Ductal ®
Ductal ® is the fruit of a partnership between construction group Bouygues, chemicals group Rhodia (then part of Rhône-Poulenc) and Lafarge. Ductal ® is five times stronger and is so flexible that it marks a step change from traditional concrete. It is said to be the first construction material with a strength toweight ratio that allows the eggshell to be bettered. Ductal® is also more durable than traditional concreteand enables architects, for example, to create narrower supports and thinner structures for bridges.Thus Ductal® is also a way to better integrate future buildings into their environment.
46
The eggshell provides a good exampleof a natural model the industry could
draw inspiration from : it has a uniquestrength to weight ratio and is produced
at body temperature.
TO GO FURTHERIN CUTTING CO2 EMISSIONS…
Lafarge takes the climate changeproblem seriously and is committedto playing its role in searching forinnovative climate-friendly solutionsthat could involve new approachesto our business. One way is to focusnot only on producing buildingmaterials, but also on the servicesthat they provide for users, espe-cially related to energy used to heatand cool buildings where the mainclimate change impact takes place.One focus, for instance, relates todesigning products more efficientthan traditional concrete but usingless cement.
Ductal® (see below) is a pioneeringproduct in that respect. By provid-ing a greater quality with up to7O% less cement, enhanced per-formance and greater durability, itis a technological showcase of thesolutions we work to develop.
To go further and adopt a proactiveapproach, we want to ensure thatwe remain open to other climatechange solutions, even if theyappear unconventional. Our CentralResearch Laboratory has thereforerecently established a researchteam with the mandate to identifyand evaluate climate-friendly ideasand materials, however far-fetchedthey may seem. The objective is to ensure that Lafarge can benefitfrom any good idea. We are only atthe first stages of this program andthe assessment of such solutions is complex. We hope to report ondevelopments in this area in ournext sustainability report.
➔ How can concrete help reducebuilding-related CO2 emissions? p 50.
PRODUCTION WASTE
aste and residues gener-ated at the productionsite is the only type that
is fully under our control, which iswhy we focus our performanceindicator on this category.
This goal will be achieved by reducing drastically the generation of waste and recycling the rest whatever the product: cement, con-crete, plasterboard or roof tiles.Where it is technically feasible,every plant may have to be modi-fied in order to re-use its own wasteas raw material. In the other cases,industrial ecology solutions will besought with other industries.
CONSTRUCTION WASTE
Construction waste, such asunused cement and concrete, leftover plasterboard and so on,are not under our direct controlsince builders generally manage it.Nevertheless, we recognize ourrole in reducing and recycling thistype of waste in order to lessen theenvironmental cost of our activityand to deliver value to our clientsby reducing their cost and offeringthem recycling services.
In this field, the key elements ofsuccess are the technical capacityof our plants to recycle the prod-ucts and, above all, the capacity ofthe industry to implement logisticsolutions at a low cost for ourclients.
DEMOLITION WASTE
Demolition or rehabilitation wastefrom old buildings represents alarge part of the total production of waste in the world. In Europe,the average demolition waste per person is approximately 500 kgper year, more than domesticwaste – 200 to 500 kg. Most of thiswaste, which is under the respon-sibility of the demolition compa-nies, goes into landfills or is evendumped in the environment in theworst cases.
> Providing recycling solutions
Due to the cost of transportation,the lack of efficient logistic struc-tures and the difficulty of separatingthe different types of demolitionwaste, the demolition waste man-agement industry is not well devel-oped compared with the potentialmarket. In France alone, demolitionwaste from building and public
ENVIRONMENT
Waste Recovery and Elimination
47
In our search for sustainability, we must also take a close look at the management of waste arising in our own industry.
6. Waste Recovery and Elimination
Many other examples of our achievements in each Division are
available in Lafarge and the Environmentand on www.lafarge.com
Amount of waste disposed as a percent of total production.
An objective will be formulated for the Roofing Division in 2002.
In Europe 65,000 tonnes of plaster-board residue are recycled in the production process, while another20,000 tonnes are recycled externally.
Mobile recycling plant used to grind oldand reject tiles.
In the United Kingdom, rail ballast is crushed and recycled as aggregates in concrete.
Frankfurter Recycling Pfanne is entirelymade from recycled materials.
WCement Gypsum
Production waste to landfill 1.4% 2.2%
By 2005 1% 1.5%
Roofing A&C
Production wasteto landfill 2% -
By 2005 - -
48
works represents roughly 140 mil-lion tonnes per year. Lafarge hasimplemented several demolitionwaste recycling programs in eachDivision: • In the Aggregates & ConcreteDivision, we use demolition con-crete as aggregates for road con-struction, aggregates from usedrailroad ballast as aggregates forconcrete or both as embankmentin quarries.• In the Roofing Division, we use ourposition as suppliers of the new roofto recycle old tiles in our process,which means less logistic costs andincreased customer loyalty.
> Designing recyclable products
In our industry, the effective recy-cling of a product involves thewhole supply chain, even if it is thedemolition firm that deals with the waste. Little can be done interms of recycling if the construc-tion material producer does notprovide recyclable products. To berecyclable, the waste materialsshould be easily separable, at a low cost, in order to becomepure raw materials or non-pollutantwaste to be disposed of.
This is not easy to achieve for con-struction materials in general butprogress is being made:• Concrete can be recycled after it has been separated from rein-forcement steel bars.• Roof tiles and roof system com-ponents are easy to separate fromthe rest of the roof construction, so they are essentially recyclable.Old clay roof tiles cannot be con-verted back into new clay tilesalthough they can be crushed andrecycled in other applications suchas gardening substrates, noiseprotection walls, or tennis courts.• In the Gypsum Division, recyclingdemolition waste faces problemseven if sorting is done correctlydue to decoration applied to theproducts (print, wall paper…).
A program has started in theDelfzijl plant (NL) in order to learnand get experience for furtherdevelopment.
> Minimizing the amount of waste
Delivering the same value to thebuilder with less material allowsLafarge to reduce its raw materialconsumption, its energy and logis-tic costs and its indirect wastegeneration in the same time.
> Maximizing the lifetime of buildings
There are two ways to maximizethe lifetime of a building: extend itslifetime or give it a second life byreusing it. Lafarge is in position tomake both easier.• Concrete is already one of themost durable materials. Somebuildings like the Roman Pantheonwere built thousands of years ago with a concrete-like material.Lafarge works every day to improvethe durability in its products.• Used as mobile walls, plaster-board partitions can be used torefurbish and give a new life to abuilding.
In order to progress, Lafarge is com-mitted to raising awareness among its clients and in the whole industryabout a sustainable use of its prod-ucts (➔ see the next section).
ENVIRONMENT
Contributing to Sustainable Architecture
4949
The transition towards more sustainable architecture will be a demanding but rewarding process.The environmental impact of buildings can be reduced through a systemic approach that involvesselecting “green” materials, extending the lifetime of buildings and, above all, reducing their energy-in-use consumption. But this approach is in most respects new to the construction industry and the principles of sustainable architecture are not yet integrated to its practices.The whole chain ofindustry actors has just started its journey and is still in a learning process. Nevertheless, we havealready identified several ways we can learn and progress within our activity.
KNOWINGOUR CUSTOMERS’ EXPECTATIONS
eing a leader in sustainabledevelopment is a critical partof how Lafarge relates to its
customers and define its success as a company. And because Lafargeis a global company with local markets and activities, knowing our customers and their expectationsrelated to buildings is essential. In relation to sustainability, our cus-tomers usually express three kindsof expectations:
> Cultural expectations
Not all countries use the samebuilding materials. For example, in the USA more wood and steel are used, whereas in the UK morebricks are used. It depends on theirarchitectural history, their naturalresources and so on. In particular,cement and concrete consumption
varies a lot according to the localculture and level of development.Lafarge must address this culturaldiversity and use local raw materi-als to provide its customers withproducts that respect the localbuilding culture, including its aes-thetic criteria, but also innovate.
> Financial expectations
In mature markets, the main costassociated with construction islabor. Thus, Lafarge’s customersexpect the Group to come up withnew, more efficient and simpler-to-use materials that help reduceconstruction costs. In developingmarkets, customers are looking forbasic, simple, cost effective solu-tions. Four good examples of suchproducts are:• Agilia®, the first range of self-placing and self-leveling concreteand toppings, which guaranteesfast and easy application and thuscontributes to the overall reductionof construction costs.• Pre-fabricated roof elements,first offered by the Dutch company“Isodek” to significantly reduceconstruction costs.• Plasterboard systems offer sig-nificant advantages in terms ofcost-effectiveness and productivity.
7. Contributing to Sustainable Architecture
The steps towardsa sustainabledesign of buildings“What’s the use of a house if I don’t have a tolerable planet to put it on?”This quote by Henry David Thoreauexplains that sustainable architecture is about trying to make buildings lighter on the earth according to threeprinciples:PRINCIPLE 1: ECONOMY OF NON-RENEWABLE RESOURCES
Conserve energy, water and materials –starting with the production of buildingmaterials and continuing with all kinds ofresource flows throughout the building’slifespan, whether inputs or outputs.Around 50% of energy consumptionin industrialized economies is associatedwith buildings (only 25% with industry)and 90% of this consumption is energy-in-use (heating and cooling for example).PRINCIPLE 2: LIFE CYCLE DESIGN
Recognize the environmental consequences of the entire life cycle of a building throughout its four majorphases: design, construction, operationand maintenance, and demolition.That includes environmental issuesrelated to the procurement and manu-facturing of building materials, as well as waste management (reuse and recycling).PRINCIPLE 3: HUMAN DESIGN
Provide buildings that sustain occupants’ safety, health, physiologicalcomfort, psychological well being, and productivity. In modern society, more than 70% of a person’s lifespan is spent indoors.
B
GDP Human Cementper capita Development Consumption(PPP $)* Index* per capita in kg**
India 2,248 0.571 97China 3,617 0.718 448Korea 15,712 0.875 954UK 22,093 0.923 217France 22,897 0.924 345USA 31,872 0.934 401* Purchasing Power Parity in $/Human Development Report 2001, UNDP (data for 1999)**Cembureau (data for 1999)
50
“Deco” plasterboard, the firstindustrial, pre-coated board on themarket, allows for quicker paintingand an overall saving.• Marulelo Roofing System, whichis a practical, modular system featuring high quality roof materialat extremely low cost, specificallydeveloped for the South Africanmarket. This unique roofing sys-tem aims to contribute to commu-nity upliftment as a whole, byenabling people to own a homeand not just a shelter.
> Environmental expectations
These considerations include prod-uct stewardship and productionprocesses, health and safety issuesfor workers and end users, visualand noise aspects of the buildingactivity, recyclability of productswhen old buildings are dismantled,etc. Some good examples of suchproducts are:• The “Bat tile” in Germany, whichwas developed together with the“Naturschutzbund Deutschland”to enable the endangered speciesto shelter under roofs.
• The PV700 and PV1800 solarpanels in several European coun-tries (used in conjunction withstandard tiles for energy manage-ment purposes).• Plasterboard, which has environ-mental advantages at every stage ofits life cycle, from production (it canbe produced with 100% recycledmaterials), to transport (it is a lightproduct), construction (little waste ifthe right quantities are delivered),
use (reduces energy consumptionfor heating) and demolition (fullyrecyclable if properly installed to beseparable from other materials andadapted to the reuse of buildings in the case of mobile plasterboardpartitions).
RAISING AWARENESS ABOUTSUSTAINABLE ARCHITECTUREIN THE INDUSTRY
As a leader in its industry, althoughupstream in the chain, Lafarge considers that it is part of its own responsibility to promote theemerging idea of sustainable archi-tecture within the sector. We wantto share our knowledge of sustain-able architecture with other indus-try actors (distributors, customers,architects, owners of buildings,etc). While there is little indicationthat the construction market is yet enthusiastic about “green”solutions, we are convinced that inthe long run sustainability is notoptional but essential. Thereforewe must be ready to team up withothers to increase knowledgeabout sustainable buildings.
Lafarge is looking closely at theconcept of sustainable architecture,what it can mean for our activityand how we can better contributeto its promotion. Our work indi-cates that our products have muchto contribute in terms of insulationand thus reduction of emissionsfrom energy-in-use. But we arealso learning by doing and sharing,and in 2000, three projects werestarted or completed in that respect:• In October 2000, a one-daymeeting to share thoughts andideas about environmental issuesrelated to products and serviceswas organized with Lafarge R&Dand environment departments, apanel of customers and partners(including Bouygues and Vinci),and WWF.
How can concrete help reduce buiding-related CO2 emissions?
Designing with energy efficiencyin mind can reduce in-use energy costs
by up to 75%. The thermal mass of concrete enables a building to absorb,store and later radiate heat. Using the
thermal mass actively by ducting airthrough a concrete slab can reduce CO2
emissions by 50 percent compared to air conditioning. Concrete homes can achieve airtightness rates three
to ten times better than typical rates forsteel and timber buildings. One measure
of the energy efficiency of buildings is the embodied energy, which includes
energy used in extraction, manufacture,transport, building, maintenance
and re-use. The embodied energy of a range of typical reinforced concrete
structures averages from 1.5 to 2.5 GJ/m2, significantly better than
for structural steel alternatives rangingfrom 2.6 to 2.9 GJ/m2.
In addition concrete can help reduceCO2 emissions associated with the transport. Studies of rolling
resistance in Canada and the UK haveshown heavy truck traffic on concrete
roads to be 5% to 11% more fuel-efficient than on asphalt surfaces.Moreover concrete requires 45%
less illumination because it reflects light better than dark surfaces.
• Lafarge’s roofing subsidiary inthe UK, Redland Roofing Systemshas committed itself to reducing theenvironmental impact of its prod-ucts and to fostering the publicdebate on environmental architec-ture by publishing a guide called“Sustainable Roofing Systems”.Roofing is a key element in anyenvironmental building, serving asan interface with the environmentoutside and regulating the temper-ature and light in the building’sinterior.
To download the guide: www.redland.co.uk/sustain_pdfs/
sustainableroofing.pdf
• In 2001, Lafarge launched inFrance “Place des Métiers”, aninnovative set of services for customers and architects, in orderto provide full information on theconstruction materials and onconstruction solutions more gen-erally (in partnership with otherfirms providing windows, etc). It should in the long run serve asan educational tool to build aware-ness about sustainable architec-ture and building solutions.
ENVIRONMENT
Contributing to Sustainable Architecture
51
The “three-litre-house”: a significant step towards low-energy, environmentally-friendlyand cost-effective housingSchiedel, Lafarge Roofing’s German subsidiary specialized in chimneys, has developed an innovativeheating and cooling solution (along with Lafarge DachSysteme, which provided the solar panels) for the “three-litre-house”, a pioneering low-fuel-consumption housing project. Energy use is cut to three litres of petroleum equivalent per square meter of living space per year – up to 70 percent lessthan in a conventional house, which explains the name.
William McDonough,Architect and designer,Founder, McDonough & partners
“Cement and concrete are an important partof the sustainable agenda. To start with, thepositive aspects of those building materialshave to do with their physical properties.In terms of production processes for example,cement and concrete essentially use local raw materials. Which is a good thing from an environmental perspective. Also, concrete hasinsulation properties that are very valuable forsustainable architecture. Concrete can act asthermal mass for buildings, a physical batterythat keeps the building cool at night and warmduring the day.This is very interesting becauseit helps reduce energy consumption related to heating or cooling, but it has not been usedthat way in traditional architecture, althoughthe ancients used to do this. However, thereare also issues, including a growing oneabout products’ traceability which is related to raw materials and fuels substitution in thecement production process.” (➔ see p 45)
Gunter Pauli,Founder and Director,ZERI Foundation
“The first key aim of sustainable developmentfor the construction materials sector, from my point of view, is to make buildings whichare, on balance, neutral in terms of CO2 over their life cycle. At present, up to ten percent of the emissions associated with a house are linked with its construction; the remainderis linked with its use (heating, for instance).Simple, inexpensive solutions have beendeveloped to reduce this energy-in-use consumption, but what is lacking most of all today is someone who ‘integrates’the various functions of buildings to create totally ecological constructions.I believe that the suppliers of constructionmaterials are in a position to play this role –architects cannot do so because they are not familiar with all the technologies involved;their main concern is to comply with normsand standards. This development could enable them to compensate for the emissionsassociated with production and take credit for non-emissions associated with buildings’use in a more efficient way than a system of tradable permits.”
52
Our approach to reporting
Lafarge asked Utopies* to help the Group in itsapproach to sustainability reporting. Utopies taskstarted in the end of 2000 and it first consisted inidentifying the main issues, impacts and assets ofLafarge in relation to sustainable development, basedon numerous interviews with managers, externalstakeholders and experts. Utopies then formulatedrecommendations of targets for progress in order tofurther integrate the results of the sustainability issuesanalysis in the overall strategy of the Group.
This process was synthesized in the present reportwhose content is inspired by and adapted from theGlobal Reporting Initiative (GRI) guidelines**.
This first Lafarge report covers all the companies andactivities in the Group (see Lafarge’s Annual Report),and performance indicators are based on Lafarge’sown performance in 2000. Data for the Aggregatesand Concrete Division are not abundant due to thedecentralized nature of the activity. Data incorpo-rating the operations of Blue Circle Industries, the UKcement producer recently acquired by Lafarge, willbe included in the next report.
About independent verification
A number of performance indicators recommendedin the GRI guidelines were not included in this report,since consolidated data is not yet available at Grouplevel. When possible and relevant, Lafarge has givendetails about country or Division performance butsuch numbers do not necessarily give a global picture of the Group’s performance. In particular, thereport’s coverage is most complete for the CementDivision and for the activities in France, which are the roots of the Group. Lafarge intends to expand thecoverage of the indicators chosen to the wholeGroup in time for the next report.
Another important aspect is that quantitative datahas not been submitted to external verification. The main reason for this is the decentralized natureof the Lafarge model of participatory management inseventy-five countries. This promotes the decentral-ization of responsibilities (including for setting therelevant targets for progress) to all those staff who
know what goes on in practice, are aware of theproblems that can arise and are best placed to helpidentify solutions. This considerably complicates thecollection and verification of performance data atGroup level, making external verification of little value.
In order to provide an independent view of the sustainability issues faced by Lafarge and thus of the Group’s performance, Lafarge has devoted animportant part of the report to the outside perspec-tive of various stakeholders. Lafarge has also chosento disclose in the report the independent evaluationof its sustainability performance produced by fourmajor sustainability analysis organisms worldwide:SAM, Storebrand internal research team, ARESE andEIRIS. Lafarge welcome your comments and recom-mendations concerning this report.
Developing a more sophisticated, accurate andcomprehensive system for collecting Group perfor-mance data and sustainability reporting, whilerespecting Lafarge decentralized culture, remainsanother challenge for the Group on its path towardssustainable development. Lafarge is confident thatthe reliability of data will grow with experience and we support external verification once adaptedmethods have been developed.
How did We Report?
Complementary documents
■ Lafarge and the Environment details outstanding examplesfrom the Group in each area in order to spread best practice.■ Lafarge and Society will do the same in the social area and is due to be published by 2002.■ Other publications exist on more specific issues such as quarryrehabilitation, raw materials substitution, etc.■ Environmental reports from certain sites.
www.lafarge.com
Information on sustainability reporting
■ The GRI is a multi-stakeholder initiative initiated in 1997 as anNGO whose mission is to define a global standard for sustainabilityreporting.
www.globalreporting.org
*Utopies is an independent consultancy created in 1993 to promote sustainability and corporate responsibility.
www.utopies.com
** See the cross-reference table between GRI recommended content and our report on page 2.
53
Acknowledgements
Lafarge wishes to thank all the various stakeholders who have kindly provided their time, thoughtful views andadvice during the reporting process. Once again, we hope that this is just the start of a dialogue. Their personalcommitment to sustainability and their expectations are very valuable and will definitely help us maintain a highlevel for our own commitments.
■ Geneviève Ferone, Director and Gregory Schneider-Maunoury, Analyst, ARESE, arese-sa.com
■ Phillipe Lévêque, Executive Director and François Jung-Rozenfarb, Development manager,
Care France, carefrance.org ■ Mark Edwards, Photographer ■ Ruth Coward, Analyst, EIRIS, eiris.org
■ Liliane Elsen, Director, France Nature Environnement ■ Niels Vestergaard, Social and Environmental
Department and Georges Thomas, Cement sector specialist, International Finance Corporation, ifc.org ■
William McDonough, Architect and designer, Founder, McDonough & partners, mcdonough.com ■
André Heinz, Director of International Affairs, The Natural Step, thenaturalstep.co.uk ■ Jean-Pierre Edin,
Robin des Bois ■ William Browning, Founder, Green Development Services, Rocky Mountain Institute,
rmi.org ■ Tatjana Mickasch, Analyst, SAM, sam-group.com ■ Sarita Bartlett, Director of Research and
Marianne Stoltenberg, Analyst, Storebrand Principle Funds, storebrand.com ■ Daniel Dommel,
Director, Transparency International France, transparency.org ■ Bruce Vigon, Director of the WBCSD
study “Towards a Sustainable Cement Industry”, Battelle, battelle.org ■ Dr Mostapha K. Tolba, Chair of
the Assurance Group and Corinne Lepage, member of this group, wbcsdcement.org ■ Dr Claude Martin,
Director General and Stephan Singer, Head of European Climate and Energy Policy, WWF International,
panda.org ■ Gunter Pauli, Founder and Director, ZERI Foundation, zeri.org ■ And everyone
at Lafarge involved in the reporting process…
REPORT AS A TOOL FOR DIALOGUE
How did we report? – Acknowledgements
54
External views on the future of the industry
“The cement industry will have to change its vision.”
“The initial findings of the WBSCDstudy on the cement industry showthat the main issue is to create a genuine culture of sustainabledevelopment in the industry. Thiswill entail appreciating the extent towhich sustainable development isan essential strategic element, with
very specific implications in management systems, inthe choice of R&D projects, and so on. From my pointof view, that is the major challenge facing companieslike Lafarge today, even though the Group is one of themost advanced in the sector. Its current strategy is still colored by the traditionalthinking within its sector, whereby companies wereproducers of raw materials for construction, ratherthan as suppliers of industrial ‘glue’, waste manage-ment services, or other views of its business. I believeit is important for the sector to totally rethink itsapproach and the value-added it represents. To dothis it will have to think beyond operational aspectssuch as energy substitution or the development ofeco-efficient forms of energy. Any company still justmaking quantitative adjustments, using ‘more of thisand less of that’, has not genuinely committed itself tosustainable development, for the framework withinwhich it is acting is too restrictive. A genuine commit-ment requires the adoption of a new vision, the recon-sideration of the criteria for its success and the rede-finition of objectives. The cement sector is not highlyinnovative with respect to its processes or practices.”Bruce Vigon, Director of the WBCSD Study“Toward a Sustainable Cement Industry” at Battelle
“In the future, we will need a change of paradigm in the way the industry works.”
“Building materials companies suchas Lafarge are shaping cities, land-scapes and our future. In thatrespect, working on material effi-ciency – factor 4 or 10 – is good fortoday, but tomorrow we will need areal change of paradigm in the waythe industry works and may be to
open up to new materials with less environmentalimpact than cement.”Stephan Singer, Head of European ClimateChange program, WWF International
“Lafarge’s ultimate objectives should complywith the four principles that are necessary forsocio-ecological sustainability.”
“The scientifically valid principlesof The Natural Step* state thatsociety can not endure a systemat-ic increase in substances from thelithosphere (earth’s crust) and fromthe sociosphere (synthesized bysociety) nor the systematic physi-cal degradation of eco-systems
and their services – and that in order to meet theseconditions, humans needs must be met worldwide.Those companies that violate these fundamentalconditions are seeing their market advantage, posi-tioning and prosperity jeopardized, whereas thosethat use them as tools for making progress are shift-ing towards sustainable development. In order tolead the transition to a sustainable society, Lafargeshould create objectives for the company, uponwhich future strategies and targets may be based.According to the framework developed by theNatural Step, such ultimate objectives would have tocomply with the four conditions for sustainability:
The Way Ahead
55
REPORT AS A TOOL FOR DIALOGUE
The Way Ahead
➀ Eliminate the company’s contribution to systematicincreases in concentrations of substances extractedfrom the Earth’s crust. For the construction materialsindustry, this means substituting certain minerals that are scarce in nature with others that are moreabundant, using all mined materials efficiently, andsystematically reducing dependence on fossil fuels.
➁ Eliminate the company’s contribution to systematicincreases in concentrations of substances producedby society. For the construction materials industry, thismeans making efficient use of all the substances produced by human activities (including waste fromother industries) and occasionally substituting certainpersistent and unnatural compounds with ones thatare normally abundant or break down more easily in nature.
➂ Eliminate the company’s contribution to systematicphysical degradation of nature through physicalmeans. For the construction materials industry, thismeans drawing resources only from well-managedeco-systems, systematically pursuing the most pro-ductive and efficient use both of those resources andland, and exercising caution in all kinds of alterationof nature or activities impacting on the natural environment.
➃ Contribute as much as possible to meetinghuman needs worldwide, over and above all thesubstitution and dematerialization measures takenin meeting the first three objectives. For the con-struction materials industry, this means using allresources efficiently, fairly and responsibly so thatthe needs of all those affected by the activity, andthe future needs of people who are not yet born,stand the best chance of being met.”André Heinz, Director of International Affairs, The Natural Step
* The Natural Step is a non-profit organization devoted to the sustainabilitytransition by acting as a bridge between science and decision makers. It wasset up in Sweden in 1989 by Dr Karl-Henrik Robert and since then put downroots in a large number of countries, including the UK and the USA.
Lafarge sustainability managers’ views on the future of the industry
Utopies: Bruce Vigon, Stephan Singer or AndréHeinz speak of sustainable development as achange of paradigm for the industry. What couldthis mean for Lafarge in the years to come?
Michel Picard: “I do not knowwhether one can talk of achange of paradigm, but ratherof a continuous evolution thathas by the way already started.At present Lafarge supplies fivetypes of construction material:cement, gypsum products,
roofing, concrete and aggregates. In the case ofcement, Lafarge is supplying a hydraulic binder, aglue for making solid concrete. Our ambition is tosupply that binder and to make it evolve accordingto the economic and environmental objectives of our customers. On all the points mentioned by André Heinz we have made progress, but things arecontinuously evolving. The same could be said of concrete, in which organic elements could replaceaggregates (bamboo is mentioned by Bill Browning in the report) allowing carbon to be stored and thusmoving towards carbon neutrality. On a different note,our roofing and gypsum businesses evolve in line withtheir products’ functionality: the tile that protects, thewallboard that insulates, etc. In this respect, we mustthink not only about our materials, but also about the building they contribute to producing and the wayit is used. Our job is neither architect, nor builder, normanager of the building, but we must join our thinkingwith theirs on how to provide better solutions, not onlybetter products. Foresee and organise in advancerecycling, use the thermal mass of concrete, integratephotovoltaic tiles, develop new materials or insulationsystems are all examples that could be developed. As described in this report, in each Division, numerousinitiatives in this direction are today emerging.”
The Way Ahead
56
Utopies: What is missing for this change ofparadigm?
Chris Boyd: “In my opinion anychange of paradigm will begradual, but deep. It will occurby way of a change of mentalityin the company towards moredialogue with the exterior, moretransparency and even towardspartnerships with other stake-
holders. I think this will open Lafarge to new ideas anda better understanding of the outside world and toextended capabilities. Even if it is above all internallythat we have work to do, this vision of the future issubject to a good number of developments that arearound us. To help fight climate change we need, forexample, an efficient CO2 trading system, as well as alegal framework allowing emissions reductions indeveloping countries and the development of greentechnologies to be taken into account. This alsorequires a sizeable cultural change not only by gov-ernments, but also by our customers, investors andpartners. However, numerous examples in the energyor auto sectors show that such a change is possible.”
Utopies: What can Lafarge do to move in thisdirection?
Chris Boyd: “This report, as a learning tool and in viewof the objectives it fixes, is a step in this direction.It will contribute to strengthening the culturalchange, both internally and externally. We havemuch work ahead of us to try to reach these objec-tives. The second stage that awaits us in 2003 (pub-lication of the next report) will see a deeper integra-tion of the vision of the future in our overall strategy.”
Creation of a Sustainability Committee, a sub-committee to the Lafarge Executive Committee,
to oversee sustainability issues.
Make one person, reporting directly to the Group’sCEO, responsible for coordinating sustainability
issues.
Utopies: You have been nominated Vice PresidentSocial Policies in 2001, what are your main areasof work regarding social responsibility over thenext months and years?
Alain Guillen: “In many areas,the Group’s social responsibilitytoday rests on the strong com-pany culture and the applicationof the spirit of the Principles ofAction by our employees. In thisframework, my contribution willconsist of making more explicit
the way in which our Principles of Action should beinterpreted and in reinforcing their application. Thisapproach will in particular be based on a review ofpresent practices within the Group and outside, fromwhich we will distill a set of examples to follow andmethods in different areas. On this basis, it will then bepossible to finalise the Group’s social policies and toput in place a more precise and more global reportingsystem. This formalisation should become increas-ingly important in our strategy in the years to comegiven the geographic expansion of the Group on theone hand and the increasing expectations of investorsand the public in terms of information.”
Contacts
Christopher Boyd, Senior Vice PresidentEnvironment and Public [email protected]
Michel Picard, Vice President [email protected]
Alain Guillen, Vice President Social [email protected]
The Way Ahead
57
REPORT AS A TOOL FOR DIALOGUE
The Way Ahead
The Way Ahead
Executive Summary of our Corporate ObjectivesLafarge is committed to strive for continuous improvement in its sustainability performance. In this report we have set out selectedobjectives and, where practical, linked them to quantitative indicators. These objectives are a global composite for all Lafarge operations.They will be used as management tools to improve overall company performance. Lafarge commits to track its performancein these respects, to include these objectives in the business performance indicators where relevant and to report back to our stakeholders on our progress in future sustainability reports.
ECONOMIC AND INTEGRATED OBJECTIVES
■ Management– Creation of a Sustainability Committee,
a sub-committee to the LafargeExecutive Committee, to oversee sustainability issues (p 56)
– Make one person, reporting directly to the Group’s CEO, responsible forcoordinating sustainability issues (p 56)
– To extend EVA to two thousand managers in 2002 (p 11)
■ Stakeholder dialogue– Reinforce and systematize stakeholder
consultations and dialogues at thelocal, national and international level(p 19)
– Bring together, at least once a year,Lafarge senior executives and WWFor other sustainability specialists to exchange views on sustainabilityissues (p 19)
SOCIAL OBJECTIVES
■ Management– Review the Group’s social policies
and develop appropriate guidelines to provide Divisions and BusinessUnits with further guidance on how to interpret our principles locally in different situations (p 21)
■ Action– Develop our actions to improve health
management including the specificproblem of HIV/AIDS in hard hit anddeprived local communities (p 21)
– By 2002, in order to facilitate inter-divisional and international mobility,we will implement an intranet job market, accessible to all (p 22)
– To repeat share-ownership programsat regular intervals, with an objectiveof reaching 3% employee ownershipin Lafarge (p 23)
ENVIRONMENTAL OBJECTIVES
■ Performance– Have 100% of our sites audited
within the last four years by 2004(p 36)
– Have 80% of our quarries implementing a Lafarge-approvedrehabilitation plan by 2004 (p 40)
– Achieve a maximum level of stackdust emissions of 50 mg/Nm3 at allour cement plants in the long termReport on performance in our nextreport (p 41)
– Improve data collection on waterusage by 2002 (p 42)
– Reduce Lafarge’s global CO2emissions by 20% per tonne ofcement over the period 1990-2010,including for industrialized countries a 15% reduction in total CO2 tonnesemitted (p 43)
– Extend the mesure of energy consumption to all Divisions in 2003where it is significant and trackimprovement into the future (p 44)
– Achieve 10% of recycled materialsused by the Cement Division, target45% for the Gypsum Division by 2005and extend the indicator as appropriateto the other Divisions over time (p 45)
– Reduce production waste going to disposal to 1% for the CementDivision and 1.5% for the GypsumDivision by 2005 (p 47)
Objectives Group Cement Gypsum Roofing A&C DateQuarries with a Lafarge rehabilitation plan 80% 2004
Sites audited withinlast four years 100% 2004
Raw material substituted 10% 45% Set target 2005
Production waste disposed 1% 1.5% Set target 2005
Main stack dust emissions 50mg/Nm3 Long term
CO2/tonne cement -20% 1990-2010
58
MARK GOYDER, DIRECTOR, THE CENTRE FOR TOMORROW'S COMPANY*“In Tomorrow’s Company, we are interested in finding businesses that are both durable and sustainable. By durable,we mean that Companies which will still be around and creating shareholder values ten or twenty years from now.That – and not fashion-driven moves in the share price – is what shareholder value is really about. By sustainable,we mean businesses that are doing business in increasing harmony with the needs of the planet.Lafarge has done enough, in this first sustainability report – to convince me that it is serious about sustainability asa precondition for durability.I also respect the decentralisation and autonomy that has made it difficult to provide or verify measurements for allthe company’s impacts. I would encourage the company to worry more about setting out its own values andreporting against these, than complying with potentially contradictory international standards! In the end sustainability reporting is as much about values and trust as about ticking the right boxes!So Lafarge has made a start. What I would look for next year would be:■ A clearer integration of its shareholder reporting and stakeholder reporting – showing shareholders what Lafargeis doing about sustainability and showing stakeholders what Lafarge is doing about shareholder value.■ More rigorous and public targets, consistently pursued over several years: for example we are told that 52% of Lafarge managers think that the company’s values are shared by the staff. These figures are shown this year asan example. In the future I would recommend that regular measurement of employee, customer, and communityatttitudes become systematic be used to drive the business. It is consistency of measurement and reporting thatearns trust.■ Clearer statement of the key values that drive Lafarge, and evidence that the board are serious enough aboutthese to review performance and reward behaviours using these values as part of the measurement criteria.”
*The Centre for Tomorrow’s Company is a UK based not-for-profit think-thank, which explores with business, the fundamentals of long-term success.
www.tomorrowscompany.com
DR CLAUDE MARTIN, DIRECTOR GENERAL, WWF INTERNATIONAL“Lafarge has been a Conservation Partner of WWF since the beginning of 2000. We have already made progressin many aspects, and this is just the beginning. In this report, Lafarge demonstrates its commitment to transparency,as well as its progress on the environmental indicators we have jointly established. It is important that Lafarge hastaken the lead in its sector in combating climate change by committing itself to reduce its C02 emissions by -10%from 1990 to 2010, which is a substantial effort that we have endorsed in the framework of our partnership.The commitment to the process of partnership, for example, the rules of engagement in areas where we disagree,provides an important model for industry today to take responsibility for its impacts, and for its role in shaping a sustainable future. At WWF, we hope to see Lafarge become the reference in their sector for environmental andsocial standards, and we will continue to support them towards the achievement of these goals.”
RICARDO MENDOZA, WAREHOUSE SUPERVISOR, FR PLANT, LAFARGE CEMENT PHILIPPINES“In this more competitive world, where my impression of transnational corporations is purely “profit-oriented” andwithout due regard to the environmental impact of their operation, this report is an eye-opener. I believe that it willcreate a domino effect, elevating the consciousness on Sustainable Development to its highest level. And I’ve neverbeen prouder to be a part of this organisation. Definitely, I’ve learned a lot from this. Some of my expectations forthe future are:■ that Lafarge improves the social protection of its employees in our local Business Units which suffers from a greatdisparity compared whith Units in highly developed countries.■ that we invest more in R&D to find green alternatives to Portland cement and other construction materials.■ that we empower the stakeholder approach of the company in order to progress towards a collective perspectiveon a sustainability strategy.”
Ricardo Mendoza is a member of the FR Supervisory Employees Union.
Stakeholder Perspectives on this Report
■ Design: Utopies ■ Photography: photothèque Lafarge, Mark Edwards, WWF-Canon, Philippe Couette,Philippe Giraud/Terres du Sud, WWF-Canon/Susan A. Mainka, Liu Zhan, Narendra Chhikara/Vu, Ziegler,Guillaume Atger/Editing Corp, Jean-Marie Monthiers, Anne-Sophie Gomez/Ecostudio ■ This report was printedon a Mega Matt paper made of 50% chlorine-free pulp and of 50% recycled fibers. ■ After reading this report,please do not throw it away (there is no “away”): please pass it on to someone who might be interested. Thank you.
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