Strategy

Strategy

Sustainability Committee

Our Purpose is “Building a Better Future” for all stakeholders, and ensuring sustainability is fully embedded in our business is one of the 4 main pillars of our strategy .

 

At CEMEX Sustainability starts at the Board of Directors and is then rolled out across the entire organization.

The Sustainability Committee is comprised of three board members and one secretary and is supported by our Corporate Sustainability function, who reports to the CEO and to a member of the Executive Committee. Moreover through the Global Sustainability Functional Network we implement our main initiatives in all of our businesses across the world.

The Sustainability Committee meets quarterly to assess and guide CEMEX in its sustainability efforts and is responsible for:

  • Ensuring sustainable development is embedded in CEMEX’s short- and long-term strategy
  • Assisting the Board in its responsibilities to shareholders relating to the policies and practices that pertain to the company’s sustainable growth
  • Endorsing CEMEX’s Sustainability Model, priorities and core KPIs
  • Assessing the effectiveness of sustainability initiatives and the progress of implementation
  • Providing guidance to the CEO and Executive Committee on key strategic sustainability decisions
     


Materiality Analysis

Understanding our key priorities allows us to align our time, resources and investment accordingly. That’s why we have put hours of time and effort into our Sustainability Materiality Matrix. Through detailed analysis, we have identified the main economic, social, environmental and governance issues that are of greatest concern to both internal and external stakeholders.

Why conducting a materiality analysis in CEMEX?

 

"A strong materiality analysis process helps a company choose the issues and indicators to report on. It can be the key to ensuring the right balance between detail and breadth in reporting." – GRI

  • To support sustainability strategic planning and:
    • Identify issues of highest importance to CEMEX and its stakeholders
    • Define risks and opportunities; help set goals and targets
    • Flag areas requiring immediate attention ("urgent" issues)
  • To guide sustainability reporting:

 

Methodology: Characteristics of the performed analysis

 

For the realization of our latest Materiality Matrix, we included a new revised list of items that reflected the most important impacts we could face as a company as well as the issues that would influence the most the assessment and decisions of our stakeholders.

These aspects were complied into a survey for which 19,000 invitations were issued to stakeholders across all of the geographical regions where CEMEX is present (62% more vs. previous survey). From these evaluation requests, we received 1,558 responses that shaped CEMEX’s new Materiality Matrix.

Surveys were answered by two different targets:

  • Key CEMEX Directors/Managers
  • Four main Stakeholders categories
    • CEMEX Employees
    • CEMEX Clients
    • CEMEX Suppliers
    • Non market stakeholders (divided in four categories):
      • Community/Communication leaders
      • Analysts /Investors/Shareholders
      • Government/Administrations
      • NGOs/Associations/Foundations/Universities
         

Stakeholders that answered the surveys by geographical location were categorized in 5 main regions.

 

Results

Results were weighted according to the 4 main stakeholder’s categories (25% each one): employee, client, supplier and community and the results were used to construct the vertical axis within the Materiality Matrix. In the other hand results of the 83 CEMEX Key Directors/Managers were analyzed as a whole and represented the horizontal axis.

This analysis enabled us to prioritize the previously identified 23 most relevant issues for CEMEX and classify them in three categories: high, higher and highest materiality.
 

 

Moreover, the top 4 material issues derived from this materiality matrix by region are:


Core KPIs and 2020 Targets

As a clear evidence of CEMEX’s commitment to shape a long-term business strategy considering sustainability as an essential foundation, we decided to establish 2020 targets for our core sustainability KPIs. They will serve as a reference to objectively track and monitor the progress to our goals.

 

NOTE: Objectives and goals described above are based on CEMEX's current business model and are subject to change as a result of different factors.

To know more about our KPI’s progress, please consult our latest Integrated Report.


Risk Management

At CEMEX, each of our business units has an Enterprise Risk Management (ERM) process in place. ERM is a structured approach to manage all important risks that could impact the company’s objectives. ERM aims to support top management across the organization in the decision making process, reducing the impact of adverse events and capitalizing on opportunities.

A multitude of risks can affect CEMEX, its assets and employees, as well as our neighbors. Accordingly, we use risk management systems and tools to gather information from a range of sources, analyze the data, identify and assess potential risks, and then respond to them. These processes include an evaluation of environmental, health, and safety risks.

We have several processes that test the robustness of our systems, evaluate compliance across all business units, and encourage continuous improvements. These processes include compliance training for employees, periodic reviews of our policies and procedures, and regular internal audits.

Our operations are subject to a broad range of environmental and health and safety laws and regulations in each of the jurisdictions in which we operate. These laws and regulations impose increasingly stringent environmental protection standards regarding, among other things, air emissions, wastewater discharges, the use and handling of hazardous waste or materials, waste disposal practices, the remediation of environmental damage or contamination and health and safety of employees and contractors. These standards expose us to the risk of substantial environmental, health and safety costs and liabilities, including liabilities associated with divested assets and past activities, even conducted by prior owners or operators and, in some jurisdictions, without regard to fault or the lawfulness of the original activity.

Efforts to address climate change through domestic federal, state and regional laws and regulations, as well as through international agreements and the laws and regulations of other countries, to reduce the emissions of greenhouse gases (GHGs) can create risks and uncertainties for our business. This is because the cement manufacturing process requires the combustion of large amounts of fuel and creates carbon dioxide (CO2) as a byproduct of the calcination process. Such risks could include costs to purchase allowances or credits to meet GHG emission caps, costs required to provide equipment to reduce emissions to comply with GHG limits or required technological standards, or decreased profits or losses arising from decreased demand for goods or higher production costs resulting directly or indirectly from the imposition of legislative or regulatory controls.

In addition to the risks identified above arising from actual or potential statutory and regulatory controls, severe weather, rising seas, higher temperatures and other effects that may be attributable to climate change may impact any manufacturing sector in terms of direct costs (e.g., property damage and disruption to operations) and indirect costs (e.g., disruption to customers and suppliers, higher insurance premiums). We do not believe that any such impacts on our operations would significantly differ from those to other sectors and the public at large.

Our operations consume significant amounts of energy and fuel, the cost of which has significantly increased worldwide in recent years. To mitigate high energy and fuel costs and volatility, we have implemented the use of alternative fuels such as tires, biomass, and household waste, which has resulted in less vulnerability to price spikes. We have also implemented technical improvements in several facilities and entered into long-term supply contracts of petcoke and electricity to mitigate price volatility. Despite these measures, our operations would be materially adversely affected in the future if energy and fuel costs increase.

Due to the nature of our business, we have a high degree of integration into the mining and sourcing of the key raw materials required in our production processes. Failure to maintain the land and mining rights in our sites could have a materially adverse effect on the continuity of our operations and potentially increase the cost of some of those raw materials.

Antitrust laws seek to prevent monopolies, collusions, and other anti-competitive behaviors, based on the principle that competition benefits consumers and promotes economic growth. Governments across the world are increasingly active in enforcing antitrust and competition laws, and are cooperating with each other to prevent anti-competitive behavior. Furthermore, local laws are converging on basic antitrust principles and concepts. CEMEX as a global company operating in many different countries is exposed to different civil and/or criminal penalties that can have a significant impact on our profitability.

Under applicable laws in the United States, Europe, and other places where CEMEX does business, it is a crime for CEMEX directly, or through an intermediary, to offer, pay, or promise to pay, a bribe or anything of value to a government official (including employees of state-owned enterprises and officers of public international organizations) for the purpose of obtaining or retaining business. The term “anything of value” includes both monetary and nonmonetary gifts and bribes, and can include favors and other types of consideration. The civil and/or criminal penalties for violating the different local and international anti-bribery laws can be severe.

The main ERM duties are:

  • Identify and clarify threats
  • Provide strategic intelligence
  • Ensure top management discussions
  • Coordinate mitigation strategies
  • Fostering a risk aware culture

The ERM function at CEMEX is structured into global, regional and local levels, and is composed of a network of more than 50 risk management professionals across the company.

An enterprise risk agenda is developed semi-annually considering a combination of a bottom-up and a top down approach. Internal and external risks are identified and classified according to a specific taxonomy that considers all types of risks that could impact the company, including but not limited to:

  • Strategic risks
  • Economic, political and social risks
  • Operational risks
  • Compliance risks
  • Financial and reporting risks

All business units are individually responsible for identifying all potential risks and creating their own risk agenda. The ERM process employs different tools and methodologies to gather information from a range of sources, analyzes data, identifies, assesses and develop strategies to mitigate potential risks.

As part of the risk management process, risk owners who have the authority to mitigate the risk and ERM representatives, continuously monitor key risk indicators that could impact the development of main risks. In case a change in the risk level is identified, the Risk Management Committee is informed to take the necessary actions.


Sustainability History

1920

CEMEX introduces a housing program for employees of the Monterrey plant.

1960

To filter dust, CEMEX introduces bag-house technology, a significant industry innovation.

1978

CEMEX's Monterrey and Mérida plants kilns' four-phase pre-heaters reduce the cost of installation and collect dust in their filters.

1990

CEMEX develops a wildlife conservation project around the recently opened Yaqui plant in Mexico.

1993

CEMEX begins publishing annual conservation books to promote the preservation of biodiversity. CEMEX develops an environmental policy.

1994

CEMEX formally establishes its eco-efficiency program, the cornerstone of its sustainable development strategy.

1995

CEMEX publishes its first environmental report. CEMEX becomes a member of The World Environment Center.

1996

CEMEX's first cement plant obtains ISO 14001 environmental certification.

1997

CEMEX develops its strategy to manage carbon dioxide emissions.

CEMEX publishes its first Environmental, Health, and Safety (EHS) report.

1998

CEMEX establishes Patrimonio Hoy, a flagship program that provides low-income families with reliable access to low-cost materials.

CEMEX's CEO and Chairman of the Board becomes Council President of the Tecnológico de Monterrey University.

1999

CEMEX supports El Carmen, a private-public conservation project in Mexico. CEMEX is one of ten leading companies working with the World Business Council for Sustainable Development (WBCSD) on the Cement Sustainability Initiative (CSI).

2000

CEMEX establishes the CEMEX+FNPI New Journalism Award together with Gabriel Garcia Márquez.

CEMEX, with nine other leading cement companies, develops the Cement Sustainability Initiative (CSI) Agenda for Action. CEMEX joins the Advisory Board of Boston College's Center for Corporate Citizenship.

2001

In Mexico, CEMEX launches Construrama, a retail building solutions network.

2002

CEMEX receives the World Environment Center’s Gold Medal for International Corporate Achievement.

2003

CEMEX publishes its first sustainability report. All of CEMEX's cement plants in Mexico, Spain, the Philippines, Venezuela, and Egypt achieve ISO 14001 certification.

2004

CEMEX signs the UN Global Compact.

CEMEX launches its integrated health program to promote employee wellness.

CEMEX launches its ConstruCard program to provide financing options for people at the base of the economic pyramid.

2005

CEMEX becomes a member of the Global Leadership Network (GLN), a network of global companies committed to achieving world-class performance in corporate citizenship.

2006

The EHS Steering Committee becomes the Sustainability Steering Committee and extends its scope to new issues.

CEMEX upgrades its EHS management system to pilot a sustainability management system (SMS).

CEMEX creates the Corporate Vice Presidency of Sustainability, replacing its former EHS department.

CEMEX publicly reports on Cement Sustainability Initiative (CSI) indicators regarding climate-change management, fuels and materials use, health and safety, emissions monitoring and reporting, and local impacts.

CEMEX publishes CSI commitments.

CEMEX receives a World Business Award for Patrimonio Hoy from the International Chamber of Commerce (ICC), the Prince of Wales International Business Leader's Forum (IBLF), and the United Nations Development Program (UNDP).

2007

For the first time, CEMEX's CO2 emissions are audited by independent consultants.

CEMEX starts following the Global Reporting Initiative (GRI) G3 guidelines to produce its 2006 Sustainable Development Report and meets an application level B.

CEMEX receives the Corporate Citizenship of the Americas Award from the Trust of the Americas for its Patrimonio Hoy program.

CEMEX signs a 10-year agreement with BirdLife International and commits to collaboration with them on habitat and biodiversity protection.

2008

The Spanish company ACCIONA Energía begins development of the Eurus Wind Farm Project, which, when fully operational, will provide 25% of CEMEX’s power needs in Mexico.

2009

CEMEX meets application level A+ from the Global Reporting Initiative (GRI).

In November 2009, CEMEX was among sixteen leading corporations to sign a memorandum of understanding for the Corporate Commitment to Wilderness (CCW) at the Ninth World Wilderness Congress. CCW is an initiative of The Wild Foundation, the only international organization dedicated entirely to international wilderness protection.

CEMEX Chairman and CEO Lorenzo H. Zambrano signed the UN Caring for Climate statement in August 2009. Caring for Climate is a voluntary global initiative, developed jointly by the UN Global Compact, the UN Environment Program, and the World Business Council for Sustainable Development, to address climate change on a global level. Caring for Climate provides an interface between global business leaders and governments to develop pragmatic business solutions to reduce climate risk and create value for companies.

2010

CEMEX introduced a carbon footprint tool—the first of its kind in the building materials industry—that allows the company to measure the greenhouse gas emissions (GHGs) of all of our cement, ready-mix concrete, and aggregates products. It measures emissions from raw-material sourcing to the release of the finished product at the factory gate.

CEMEX begins a three-year partnership with the International Union for Conservation of Nature (IUCN) to strengthen our approach to water issues. IUCN is the world’s oldest and largest global environmental network. In this partnership, we will develop a strategy to minimize CEMEX’s impacts on water availability and quality and take better advantage of our water-related opportunities by effective water policies and management systems.

CEMEX took an active role at COP 16 (the sixteenth Conference of the Parties to the United Nations Framework Convention on Climate Change) held in Cancun, Mexico November 29 through December 10, 2010.

2011

CEMEX joins the newly launched Sustainability Index of the Bolsa Mexicana de Valores (BMV) and receives a Sustainability Seal issued by BMV. Seventy Mexican companies were analyzed based on adoption of international best practices. CEMEX is one of the 23 companies selected to join the Index.

CEMEX launches new Health and Safety policies, implements our new Health and Safety Management System, and requires greater accountability for safety performance from all our managers.

CEMEX celebrates its tenth year anniversary of habitat and conservation activities in El Carmen. Our El Carmen Initiative helps protect and conserve approximately 200,000 hectares of ecologically significant land along the United States–Mexico border through a progressive partnership between CEMEX, other private landowners, governments, NGOs, and universities.

CEMEX launches a new Biodiversity Policy in biodiversity management of our quarries.

2012

CEMEX took a Materiality Analysis, distributing 11,000 surveys to stakeholders all across 6 CEMEX regions. Of these, 1500 surveys were completed to us to be able to make a Materiality Matrix with 20 issues that impact on CEMEX and are a big concern for the Stakeholders.

CEMEX launch a new Sustainability Model with three main objectives and seven priorities:

  • Enhance our Value Creation
    • 1. Lead in Sustainable Construction
    • 2. Affordable Housing & Infrastructure
  • Manage Our Footprint
    • 3. Enhance Our Carbon Strategy
    • 4. Excellence in Environmental & Biodiversity Management
  • Engage our Stakeholders
    • 5. High Priority to Health & Safety
    • 6. Strengthen Local Communities
    • 7. Partnership with Key Stakeholders

CEMEX was named by the Carbon Disclosure Project (CDP) as the best Latin American company in terms of climate change data disclosure, and one of the top ten in overall carbon emissions performance. The CDP is a UK-based independent nongovernmental organization (NGO) that possesses the world’s largest database on corporate impact on climate change.

CEMEX’s Alternative Fuels Substitution Rate was 27.1% and we are implementing a global Environmental Management System (EMS) with all country operations completing implementation roadmaps to ensure full compliance by 2015.

2013

CEMEX completed 368 infrastructure projects, representing almost 7.5 million m2 of concrete pavement for highways, mass transit projects, airport runways and city streets in 15 countries. We built 7,513 affordable and/or energy efficient houses in 19 countries and we are gradually extending our housing solutions to all markets where CEMEX operates, both in developing and developed countries.

CEMEX published the new Corporate Water Policy and rolled-out our CEMEX Water Management Methodology throughout our operations. Also, we externally pre-verified our water withdrawals KPI for the first time.

CEMEX joined the UNGC 100 Index and was the only Mexican company selected for inclusion in the United Nations Global Compact 100, a new global stock index that combines corporate sustainability and baseline financial performance. The index selects companies based on their adherence to the UN Global Compact’s ten principles and evidence of their executive leadership’s commitment and baseline profitability.

2014

During 2014, CEMEX evolved its sustainability approach to ensure its commitments are integrated in the business strategy and its daily activities around the world. The company has also created a Sustainability Committee reporting directly to the Board of Directors to guide its sustainability strategy and efforts.

CEMEX completed almost 600 infrastructure projects that required more than 8 million m2 of concrete pavement in 14 countries, including highways, mass transit projects, airport runways and city streets. It also contributed to the construction of 3,150 affordable and resource efficient units in 12 countries, representing more than 180,000 m2 of construction.

CEMEX prepared its 2014 Sustainable Development Report migrating as of this year to the GRI-G4 Guidelines, opting for the “in accordance” Comprehensive option.

In 2014 our Corporate Human Rights Policy was signed and approved by our CEO.

2015

In 2015, CEMEX enabled the installation of more than 7.32 million m2 of concrete pavement by supporting the construction of more than 430 infrastructure projects across 19 countries. It also contributed to the construction of 2,400 affordable and resource efficient buildings in 13 countries, representing approximately 147,000 m2 of livable space.

Following collaboration with UNESCO’s World Heritage Centre and IUCN, CEMEX committed to staying out of World Heritage sites and to building awareness of the need to protect them.

Birdlife International and CEMEX renewed their global partnership for a further three years to continue to promote and restore biodiversity of natural areas where mineral extraction takes place.

2016

In 2016, CEMEX enabled the installation of more than 5 million m2 of concrete pavement by supporting the construction of more than 460 infrastructure projects across 17 countries. It also contributed to the construction of more than 4,000 affordable and resource efficient buildings, representing approximately 75,000 m2 of livable space.