Two cement CEOs discuss CO2 reduction

Two cement CEOs discuss CO2 reduction
09 October 2020

This week the Global Cement and Concrete Association (GCCA) held a plenary session with invited guests Jan Jenisch, LafargeHolcim CEO, Mahendra Singhi, CEO of Dalmia Cement (Bharat) Ltd, and Daniel Balthasar, Norges Bank’s senior portfolio manager and head of Basic Industries & Utilities. Moderated by journalist and broadcaster Gavin Esler, their discussion centred on how cement companies were responding to climate change and how they had managed to engage their staff, stakeholders and customers on their commitments to reduce CO2 emissions.

Jan Jenisch admitted that it was a challenge for himself and LafargeHolcim to get the focus right initially, in terms of agreeing a new way forward on carbon reduction. He explained that, until three years ago, the company hadn’t done enough on sustainability. However the context changed due to the CO2 movement and new scientific evidence, and it became obvious that new priorities had to be set and the agenda had to be accelerated. "It was important to make things happen and I put sustainability at the top of my agenda," said Mr Jenisch.

LafargeHolcim needed to educate itself on the facts, agree a way forward and energise the company to get on board with the new targets. "Communication was missing, and acceleration, which is needed in this situation," he added.

It was important for LafargeHolcim to make people part of the programme. The group's decision to target zero emissions was not an idea generated in the CEO's office. "It was the result of many people around the globe wanting to go on this journey," said Mr Jenisch. The move towards a circular economy was something to get excited about. LafargeHolcim has 72,000 employees, and together with their families, they have a biggest interest to make a sustainable future.

Dalmia Cement (Bharat) has set itself the target of being carbon neutral by 2040 and CEO Mahendra Singhi argued passionately that there is a larger purpose than profitability, and that is society. For the last decade the company has been working on the philosophy that clean and green is profitable and sustainable. Mahendra Singhi said he did not want to be ‘just’ carbon neutral, he wanted to be carbon negative. The company has levers to help it reach this target by 2040, such as using 100 per cent renewable energy by 2030, eliminating fossil fuels by 2025, and introducing new carbon capture and storage technology.

But there had to be a change in mindset to encourage people to come on board and push climate change to the top of the agenda. "This was the only thing preventing us from going clean and green, which is the purpose of business and life," said Mahendra Singhi. 

Investors are driving ESG commitments
The progress being made by cement companies in reaching their climate change targets is being closely monitored by investors. Institutions such as Norges Bank – which manages Norway’s sovereign wealth fund – carefully scrutinises the carbon reduction strategies of the companies they invest in, not only in the long term but also in the short term, explained Daniel Balthasar. Investors are no longer just focussed on words but are also looking at hard numbers and climate-based metrics.

Moreover, CEOs are no longer being judged every three months by the market. "Environmental, social and corporate governance is becoming more important and has become centre-stage and is going to become a brighter spotlight… Everyday CEOs need to do the right thing," added Jan Jenisch.

For cement companies it is possible there will be some bumps along the road in achieving their emission reduction targets, but if they do not take action, it will certainly impact their business. "It is important for Dalmia Cement (Bharat) Ltd to sell cement, but it is also important for it to cooperate and bring down CO2," said Mahendra Singhi.

Demand for green products
The demand for greener cement already exits. Jan Jenisch explained that "European cities and government projects demand sustainable solutions. We need that demand to lead to innovation going forward."


In India the idea of green cement has still not fully matured yet," according to Mahendra Singhi. While Dalmia Cement (Bharat) Ltd is the largest blended cement producer in India, Mahendra Singhi stressed that work needs to be carried out to label the product clearly as being energy efficient and low on CO2 emissions to create a demand for green products.

Call to governments
Jan Jenisch called for a clarity from governments on policy, with well-defined roadmaps for companies to respond to and integrate into their own planning. He also asked for better and greener building standards to allow more recycled materials to be used in cement. For instance, many localities do not permit the use of products that have recycled materials making up more than a third of the final product, he added.

In India there needs to be more support from government in helping to replace fossil fuels and setting up demonstration projects for CO2 capture, according to Mahandra Singhi. He stressed that Dalmia Cement (Bharat) Ltd had taken risks by going ahead on its own and not waiting for government policy to catch up.

A green recovery?
The importance of climate change has been reinforced by the impact of COVID-19 and many are calling for the green recovery, but for Jan Jenisch the two issues are separate. "I am not a big fan of saying we are in a big problem now with COVID-19, as we have many drastic situations in many countries around the world. In some countries people have problems with health or in how to pay for food for the next day. So, I don’t think the crisis [pandemic] should be linked directly to the green recovery," he said. "To link these two things together to me does not make a lot of sense."

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