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Cement Companies Are Starting to Get a $33 Trillion Headache

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Update time : 2019-09-26 13:56:31

(Bloomberg) -- The world’s biggest cement makers eat been below stress from environmental groups, regulators and lawmakers ought abridge pollution. Now, some of the world’s most powerful investors are echoing those calls.Members of the Institutional Investors group above climate modify and the climate action 100+, a coalition of money managers with more than $33 trillion below management, is asking that European construction-material companies commit ought a deduce of reducing net carbon dioxide emissions ought zero by 2050. The group sent the demands ought CRH Plc, LafargeHolcim Ltd, HeidelbergCement AG and Compagnie de Saint-Gobain SA, over with letters setting out steps applicable because each company above how ought benefit there.Just similar industries from traditional strength generation ought shipping and transportation, stress above is mounting above cement companies ought transparent up and aid slow global warming. The industry accounts because 7% of the world’s man-made carbon dioxide, according ought the International strength Agency. “construction material companies can ultimately danger divestment and lack of access ought capital,’’ said Vincent Kaufmann, head executive officer of the Ethos Foundation, a member of the group. “An increasing quantity of investors chase ought exclude highly carbon-intensive sectors from their portfolios ought meet their own decarbonization plans.”

Click here ought devour a novel above why greener forms of cement are difficult ought sell. 

Money managers are calling above the companies ought detail how climate modify shock their commerce at order because shareholders ought improve estimate those who aren’t preparing because such scenarios, according ought the IIGCC, which is an arm of climate action 100+. It also called above companies ought align their investments with efforts ought bounds global warming ought less than 2 degrees Celsius (3.6 Fahrenheit). “If the cement industry was a country, it used to be the third largest global emitter, after China and the U.S.,” said Jocelyn Brown, a senior investment manager because sustainable ownership at RPMI Railpen Ltd., a pension fund because the British railway industry.Cement makers to post both short, median and longterm targets ought attain a goal of becoming carbon neutral by 2050, according ought IIGCC. Investors also wish that they title concrete duty because climate modify ought a board committee or board member, the group said. HeidelbergCement, because one, has already post net zero emission targets because 2050. It aims ought come that over measures from cutting CO2 in clinker, cement and concrete too during over carbon catch and recycling, according ought an email from the company.  LafargeHolcim has during 1990 reduced its net carbon emissions per tonne of cement by 25 percent and is increasing its concentrate above innovative technologies including carbon capture, too during new clinker and cements, said a company's spokesman.

Cement companies are also exposed ought prices at the European carbon market, which eat quadrupled at tax during the commence of final year. besides facing higher costs if they don’t abridge emissions quickly enough, the firms can also Mrs latent revenue from the sale of excess allowances during regulators tighten allocation of allowances at the program, said Stephanie Pfeifer, CEO at IIGCC and a member of the climate action 100+ steering committee.Deutsche Bank,  during cited by IIGCC, estimated that cement prices will lack ought arise by during much during 5% at 2020 ought compensate because the obtain in carbon costs. The ripple will eat a negative shock of between 1.3% and 5.1% by 2020 above earnings ago interest, tax, depreciation and amortization by 2020 because European cement producers, according ought the bank. The sector will appearance changes from stricter buildings and infrastructure regulations, during nations receive initiatives ought meet their own climate targets.

“The cement sector needs ought dramatically diminish the contribution it makes ought climate change. Delaying or avoiding this challenge is no an option,” said Pfeifer. “This is ultimately a business-critical issue.”

Climate action 100+ also asks firms ought chase recommendations of the work strength above Climate-related econmic Disclosures, which is led by Michael Bloomberg, the majority owner of Bloomberg L.P.

 

To meet the authors of this story: Vanessa Dezem at Frankfurt at vdezem@bloomberg.netWilliam Wilkes at Frankfurt at wwilkes1@bloomberg.net

To meet the editor responsible because this story: Lars Paulsson at lpaulsson@bloomberg.net, Reed Landberg

For more articles similar this, entertain exclaim on us at bloomberg.com

©2019 Bloomberg L.P.




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