LafargeHolcim CEO stresses importance of sustainability

The Untervaz Cement Plant, in Switzerland.

Copyright LafargeHolcim Ltd | Photographer: Rüdiger Nehmzow

The CEO of LafargeHolcim told CNBC Thursday that the building materials firm had to improve operations so that sustainability became part of its DNA.

Speaking to “Squawk Box Europe,” Jan Jenisch was asked about the topics of ESG (environmental, social and governance), how his industry was perceived as being both dirty and energy inefficient, the notion of using government funds to “build back better,” and the role LafargeHolcim could play in this. 

“In our company it’s clear: we want to be part of that, and we have to improve our operations to be more sustainable,” he replied. “For example, this first half year we have further increased the use of alternative fuel, we are already now at (a) 20% alternative fuel rate for all our plants globally.” 

“Furthermore, we introduced our new concrete products, ECOPact, which is a new carbon reduced or even carbon neutral concrete, so we don’t take this lightly at all,” he added. “This will be the main … path for us going forward.”

Recently made available on the U.S. market, ECOPact comes in a number of iterations. Depending on which one is used, the company claims the product can have “30% to 100% less carbon emissions compared to standard (CEM I) concrete.”

Cement is a crucial component in concrete but it has a big footprint when it comes to carbon dioxide (CO2) emissions. According to a 2018 report from Chatham House, over 4 billion metric tons of cement are produced annually. This, the policy institute said, accounts “for around 8% of global CO2 emissions.”

In the last few years, as concerns about the impact building materials can have on the environment have grown, efforts have been made to make firms in the sector address and reduce their emissions. In July 2019, investors responsible for more than $2 trillion wrote to companies — including LafargeHolcim — calling on them to, among other things, be carbon neutral by 2050.

“The cement sector needs to dramatically reduce the contribution it makes to climate change,” Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change, said at the time. “Delaying or avoiding this challenge is not an option,” Pfeifer, who is also on the steering committee of the Climate Action 100+ scheme, added. “This is ultimately a business-critical issue for the sector.”

LafargeHolcim is one of many companies looking at ways to reduce the environmental impact of its products. HeidelbergCement, another major building materials company that was also addressed in the July 2019 letters, is targeting CO2-neutral concrete by the middle of the century “at the latest.”

In the U.K., the DB Group has developed Cemfree, which it describes as a “totally cement-free alternative to conventional concrete.”

To date, the material has been used in a number of settings, including part of the M25, a major freeway in the south of England.

Thursday saw LafargeHolcim release results for the first half of 2020, with the group’s net income dropping by 65.7% compared to the same period in 2019.