Construction Week Middle East – August 03, 2019

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COMMENT

22 CONSTRUCTION WEEK 3 - 30 AUGUST, 2019

A

multitrillion-dollar

community has called on the

global cement industry to

decarbonise its operations,

effectively bringing the spotlight on the

role that the construction sector can play

in combating climate change.

Institutional Investors Group

on Climate Change (IIGCC) and

participants in Climate Action 100+ – a

shareholder initiative with more than

320 investors that collectively have

$33tn in assets under management –

told global cement heavyweights CRH,

Lafarge Holcim, and Hiedelberg Cement,

this July that they must work against

climate change and achieve net-zero

emissions by 2050.

Cement makes up 7% of global man-

made CO 2 emissions, IIGCC said in its

Investor Expectations report, adding that

“if the cement industry were a country, it

would be the third-largest global emitter,

behind only the US and China”.

Elsewhere, the steel sector is also being

pushed to go green. In July, a CDP report

named Melting Pot found that the steel

sector was failing to reduce emissions at

a rate that would limit the rise in global

temperatures to 2°C by 2050.

CDP’s analysis of the environmental

practices followed by the world’s 20

largest steel companies ranked India’s

Tata Steel fourth on the list of firms

exhibiting business-readiness for the low-

carbon transition, with JSW ranked 10th.

India’s decarbonisation efforts are also

visible in the cement sector, with IIGCC’s

Investor Expectations report citing the

example of India’s Dalmia Cement, which

has “set out one of the most ambitious

visions by a company in the sector – to be

carbon-negative by 2040”.

Decarbonisation is a clear priority

for business giants around the world,

and as chief executive officer of Ethos

Foundation – one of the investor

signatories in IIGCC’s campaign

• explained, investors are already
  expecting “construction materials
  companies to substantially increase the
  R&D budgets available for research into
  decarbonising cement production”.
  He added: “Construction materials
  companies may ultimately risk
  divestment and lack of access to capital
  as an increasing number of investors
  seek to exclude highly carbon-intensive
  sectors from their portfolios to meet
  their own decarbonisation plans.”
  The construction industry’s
  internationalism means the global
  building materials sector shares
  similar challenges – be they related to
  cash flow, supply chain operations, or
  environmental standards – regardless
  of geography. Investor requirements
  for carbon-neutrality look set to drive
  a change in the construction industry’s
  practices – the Middle East’s building
  sector must ensure its decarbonisation
  strategies are equipped for the future.

Strategise to decarbonise

Global investors with trillions of dollars in assets are calling on the global cement

sector to decarbonise its operations – is the industry equipped to respond?

EDITOR’S LETTER

NEHA BHATIA

Neha Bhatia is editor of Construction Week.

“Investor requirements

for carbon-neutrality look

set to drive a change in the

construction industry’s

practices – the Middle East’s

building sector must ensure its

decarbonisation strategies are

equipped for the future.”