For 2019 LafargeHolcim adopts an Integrated Financial Reporting approach which brings greater clarity on all our business issues and performance. In particular, we aim to provide you - besides our financial results - with an holistic information about our results and activities in the field of sustainability. The new report is intended to show you that sustainable business is a central component of our strategy and that the principles of sustainable action have a significant influence on our activities.
Given the "greater clarity on all our business issues", given the above claims on
sustainability, given that LafargeHolcim has
total CO
2 emissions more than many countries, what does
this new report tell us about the company’s largest negative impact – bearing in mind the urgent demands across the globe for action on climate change? On p44 we learn:
In 2019 our net CO2 scope 1 emissions (i.e., emissions directly under our control) decreased to 561 kilograms per ton of cementitious (kg CO2 /ton), or 1.4 percent lower than in 2018. Given this very strong progress we have revised our 2022 target to be more ambitious in the near term, from 560kg to 550kg, as we move toward our 2030 carbon targets of 520kg.*
Of course, it’s a moot point – as extreme weather grips our planet – whether 1.4% is
very strong progress. But in reality, "
the atmosphere doesn't care that we are using carbon more efficiently", it doesn't care about
kg per tonne, it only cares about
total CO
2 emissions. So what are LafargeHolcim’s
total emissions? Has "very strong progress" been made on that front too? On p143 we learn:
To keep up this momentum, the company has also revised its incentive scheme so that one-third of the Executive Committee’s performance share rewards is based on progress in carbon emissions, waste recycling and freshwater withdrawal.
Bravo. Let's get the incentives right, in case the global climate-related catastrophes we've already witnessed are not enough to focus minds. But what about total CO2 emissions? If very strong progress has been made with this number, wouldn’t LafargeHolcim be shouting it from the twittersphere, making as much greenwash capital as possible?
On p24 we learn that LafargeHolcim sold 208 million tonnes of cement in 2019, 0.5% up on a like-for-like basis compared with 2018, undoing some of that 1.4% reduction in kg of CO2 per tonne. On p47 we learn about 3 wind turbines forecast to avoid "9,000 tons of CO2 annually". Bravo again.
But what of total CO2 emissions? What about those millions of tonnes? On p103, investors learn about LafargeHolcim's "key operational risks" with respect to emissions and climate change:
The cement industry is associated with high CO2 intensity and LafargeHolcim is exposed to a variety of regulatory frameworks to reduce emissions, some of which may be under revision. These frameworks can affect the business activities of LafargeHolcim. In addition, a perception of the sector as a high emitter could impact our reputation, thus reducing our attractiveness to investors, employees and potential employees.
As the carbon debate intensifies, cement and concrete could be challenged by our customers as the building material of first choice because of perceived high embodied CO2. In the long term, should regulatory frameworks fail to incentivize consumption of low-carbon products, customers may be unwilling to pay for additional costs and the cement sector’s low-carbon roadmap might be compromised.
What is LafargeHolcim to do? One short-term action is to:
Integrate CO2 in management (e.g. include cost in production to incentivize change management and include CO2 impact in all M&A and CAPEX decisions);
In all 280 pages of this new integrated report there is not one mention of the total CO2 emissions emitted by the company. LafargeHolcim is clearly in no hurry for you to find out about some numbers.
Massive numbers, but clear for all to see. For 2019 – despite claims of "greater clarity on all our business issues" – you will need to dig deep into another report,
a far less glossy report, to find the same information, information buried in the small print:
Fortunately, these figures – highlighted in red by us – are indeed lower than 2018, in total 0.7% lower on a like-for-like basis (bearing in mind
LafargeHolcim sold its operations in Indonesia and Malaysia in 2019). Unfortunately, however – and whatever the claimed reductions in kg of CO
2 per tonne – total emissions are still 2% higher than 2017.
LafargeHolcim would rather these numbers were not broadcast – judging by where they are hidden. The company seems to have become more shy about the scale of its total emissions. It would rather talk about CO2 in terms of kilograms per ton. It would rather the world didn’t know that LafargeHolcim’s cost to society in 2019 alone was:
148,000,000 tonnes of CO2
LafargeHolcim would rather you looked at the sort of graph you’ll find on p45: a graph of
kilograms per ton, a graph with a scale that starts at 400. If we redraw that graph with a scale starting at zero, we can then decide if "very strong progress" is being made, will ever be made,
can ever be made – given that cement is produced by heating limestone to around 1000°C, given that 50% of the CO
2 released is from the chemical process, 40% from burning fuel, 10% from mining and transporting raw materials:
There's no getting away from it. LafargeHolcim – the world's largest cement producer, and parent company to Aggregate Industries – is effecting change at a glacial pace. It is not going to save us from our climate emergency –
however many wind turbines may appear on its tweets. We need to use less cement. We need to use less concrete. In just the last 3 years, on a like-for-like basis, LafargeHolcim has pumped out nearly 450 million tonnes of CO
2.
*Note: There’s nothing in LafargeHolcim's new
integrated report to say so, or why it's changed, but when the company says "ton" it doesn’t mean a US ton, it means a metric ton or –
as the company used in previous reports – tonne. Confusing? Of course.
