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May 13, 2002

BATTELLE REPORT SHOWS HOW GLOBAL CEMENT INDUSTRY CAN BECOME MORE SUSTAINABLE

Sustainable development (SD) can provide attractive business opportunities to the global cement industry and still offer progress on environmental and social issues, according to a report recently released by Battelle.

The World Business Council for Sustainable Development (WBCSD) hired Battelle to identify and recommend actions that the world's cement producers can take to become more sustainable. The WBCSD, headquartered in Geneva, is a global consortium of over 160 companies united by a shared commitment to sustainable development via the three pillars of economic growth, environmental protection and social equity.

Ten of the world's leading cement manufacturers, who operate facilities that produce almost one-third of the world's cement, provided the primary funding support for the study. This effort is believed to be the first comprehensive study of an industry sector not prompted by any crisis or visible failure, but rather by a desire to address business strategy and emerging market expectations for sustainable development.

Battelle studied operations involved in the cement production process ranging from limestone quarrying and fuel production to cement plant emissions and safety practices. The study involved detailed exploration of facilities, governance structures, regulatory issues and public interests. Battelle's work included a series of international stakeholder dialogues held in selected locations on four continents. Participants included government officials, environmental and social organizations, cement plant managers, residents who live near plants, and the media. All three areas of sustainable development-economic, environmental and social-were explored in depth. Battelle identified eight issue areas in which the industry needs to improve performance, and developed recommendations and actions for each. They include:

  • Regional Development
  • Community Well-being
  • Employee Well-being
  • Ecological Stewardship
  • Emission Reduction
  • Climate Protection
  • Resource Productivity
  • Shareholder Value
  • In addition, several recommendations were made in three cross-cutting areas-business integration of sustainable development, innovation, and cooperation between cement companies and other organizations.

    Highlights of the report include:

    Successful adoption of SD by the cement industry will occur only if there is a real synergy between sustainability and profitability. To help make the business case for SD, the Battelle team developed business analysis tools for financial managers, strategic planners, and investment analysts, and also documented numerous case studies of companies in the cement and other industries that have begun to derive benefits from SD. For example, the report demonstrates how practices such as the substitution of wastes for raw materials or fuels can contribute to reduced operating costs and improved asset utilization as well as environmental protection.
  • Climate protection is a major issue for the cement industry, which produces 3 percent of worldwide global warming emissions. The study provided an analysis of reductions in carbon dioxide emission that could be achieved across various regions of the world. Both technology and operating practices were evaluated to show how the threat of adverse financial impacts could be turned into a business advantage by companies committed to implementing SD principles.
  • Most cement companies acknowledge that historically they have had a slow pace of innovation in technologies and practices. The study investigated both the cement manufacturing process and cement products, seeking incremental changes as well as more radical innovations that could offer substantial progress toward SD. Several candidate opportunities were identified and recommended for further R&D effort.
  • Cement companies have typically not engaged in regular communications with their stakeholders at the local, national, or international level, in order to discuss their concerns and identify solutions. The study developed an understanding of the needs for stakeholder involvement, and created a guidebook to help cement plant and corporate communications staff in mounting more effective outreach efforts.
  • The concept of SD is, in many ways, unlike any past internal change initiatives that industrial organizations have undertaken. Therefore, it is essential to have a well-defined process for gaining internal alignment around SD at all levels of the organization. The project developed such a process, as well as guidance and support materials for SD alignment, based on effective models of organizational change adapted to the particular needs of SD.
  • Increased collaboration among cement companies and their stakeholders is warranted in many aspects of sustainable development. The study recommended specific actions to enhance interactions among governance bodies, suppliers, customers, academia and the local stakeholders near cement plants. One recommendation is to establish the Sustainable Development Institute of Cement and Concrete in order to conduct joint research, develop educational programs, and integrate cement industry inputs to governments in the development and assessment of SD policy options.
  • "Our goal was to produce a blueprint to illustrate what the industry could do for the next 20 years, and to clearly identify the benefits of pursuing various elements of sustainable development," said Bruce Vigon, Research Leader in Battelle's Life Cycle Management group. "Sustainability in the cement industry is not going to happen with incremental changes. It involves a much more sweeping, comprehensive, long-term approach."

    Now that the report has been released, the participating cement companies intend to address stakeholder concerns and Battelle's recommendations with their own action plans. That process is expected to take place over the next three months, resulting in an ongoing cement sustainability initiative under the initial leadership of the companies who began this work, but open to many others.

    Sustainability studies generally include identifying and addressing environmental, social, economic and governance issues that occur during product development or manufacturing cycles. Battelle has performed sustainability studies recently for some of the world's largest companies including General Motors and Monsanto. "More and more, companies are realizing that the key elements of sustainability-social and environmental responsibility-can give them a competitive advantage," said Joseph Fiksel, Battelle Vice President for Life Cycle Management.

    Battelle focuses on product development, technology development, technology commercialization and laboratory management. Headquartered in Columbus, Ohio, Battelle has annual revenues of $1 billion and more than 100 locations around the world.

    For more information, contact Media Relations Manager Katy Delaney at (614) 424-5544 or at delaneyk@battelle.org or visit at www.battelle.org.




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