Commitment to the topic of "building materials"

The shareholder engagement activities of Raiffeisen Capital Management’s fund management on the topic of construction materials include dialogue with some of the largest producers of concrete, bricks, and cement. As part of these activities, roughly 20 companies around the world were questioned about their efforts to make the construction materials industry more sustainable. The following questions were sent to these companies:

How does your company contribute to sustainable building practices with the construction materials you supply, in particular with regard to the high level of carbon intensity in the construction industry? What measures and strategies have you introduced to reduce the carbon footprint of your products and to have a positive effect on environmental sustainability?

Buzzi Unicem, Italy

Cement production is one of the biggest factors behind climate change, as it accounts for 8% of global emissions. There are a number of approaches to improving the sustainability of cement production. One way is to reduce the ratio of energy-intensive clinker in the cement. Cement clinker is the component in the material that is necessary for the concrete to harden. The Italian firm Buzzi Unicem has set the goal of reducing the ratio of clinker from 75.4% in 2021 to 67.3% by 2030. This measure alone could lower the company’s total carbon emissions by up to 9%. Another possible way to reduce carbon emissions is to improve the natural carbon uptake of the concrete. In this regard, rapid carbonation is important and according to Buzzi Unicem this could cut the company’s greenhouse gas emissions by up to 8%. The company is also focusing on carbon capture, product optimisation, and the use of renewable energy. The production of sustainable construction materials is part of Buzzi Unicem’s business strategy. The company underlines the growing demand for low-carbon buildings and also identifies the regulatory requirements as a business advantage. According to Buzzi Unicem, all of this results in rising demand for its sustainable products.

How does your company integrate technologies or practices for carbon capture in its operations, and what effects do you anticipate from such in relation to offsetting the carbon emissions stemming from the manufacture and utilisation of your materials? And if your company uses technologies or practices for carbon capture, are you able to quantify the resulting reduction in carbon emissions?

Heidelberg Materials, Germany

Since a large portion of the carbon emissions are generated by the chemical processes in cement production and these are difficult to reduce, there is often a focus on later production stages when it comes to making the products more sustainable. Within the cement industry, one of the possible solutions is carbon capture and storage (CCS), which involves capturing and storing carbon emissions. Heidelberg Materials, which is headquartered in the German city of the same name, sees itself as a pioneer in the application of this technology. The company is testing the capture of high-purity carbon dioxide from the clinker production process. The captured carbon dioxide will be used by the company in the production of synthetic fuels, for the cultivation of microalgaes, and for the decarbonisation of recycling concrete. Heidelberg Materials is the first company industry-wide to operate a large-scale facility for carbon capture, which is located in the Norwegian town of Brevik and will capture 50% of the plant’s annual emissions starting from 2024. This project has been under construction since 2021, without interrupting current production, and will be completed by 2024. The unit uses amine technology, filtering out sulphur and nitrogen oxides and then storing them underground.

How does your company approach the issue of resource consumption in the manufacturing of your products, and what steps have you taken to ensure the durability and recyclability of your products in order to promote a more sustainable circular economy in the construction industry?

Holcim, Switzerland

Adding recycled materials in cement production can result in a lower consumption of resources, but also represents a risk for the quality of the cement. Holcim, the world’s largest construction materials producer, already uses 20% recycled materials in its Swiss production facilities, while maintaining the same level of product quality. In its dialogue with Raiffeisen Capital Management, the company stresses that different buildings have different quality requirements. More liberal regulations would be needed by the construction supervisory authorities, which would allow higher ad-mix levels of many structures. According to Holcim, concrete is perfectly suited for recycling and can be reused again and again, by pulverising and sorting it.

What is the significance of employee safety at your company, and what measures have you taken to reduce workplace accidents? Are you able to produce statistics or data on the frequency and severity of job-related injuries at your company in recent years?

Builders FirstSource, USA

Workplace accidents cannot be ruled out in the production of construction materials. Accordingly, it is even more important for producers to take preventive measures to protect employees and to focus on continuous staff training and instruction. Builders FirstSource, the second largest construction materials producer in the USA, has lowered its accident rate by 15% since 2020. In order to foster a lasting awareness of safety-related issues, all employees in production must participate in a daily safety briefing. For 2023, the company has set the goal of reducing the number of accidents by another 10%. The company’s most important goal is to lower this figure to 0.

Herbert Perus, Mathias Zwiefelhofer
Sustainability Office, Raiffeisen KAG

This content is only intended for institutional investors.

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