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Cement is a huge greenhouse gas emitter — investors want to change that

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  • A group of climate-conscious investors are calling on cement companies to reduce their carbon emissions to zero by 2050.
  • Cement accounts for 7% of human-caused carbon dioxide emissions — more than any country except China and the U.S.
  • Concrete, of which cement is an ingredient, is the world's most widely used building material, and reducing its emissions will require using different ingredients, more efficient machinery or simply less cement.

Climate-conscious investors have their sights on another greenhouse gas emitter: The cement industry. A group of investors from the Institutional Investors Group on Climate Change and Climate Action 100+ are calling on European cement companies to reduce their carbon emissions, with the goal of net zero emissions in 31 years. 

"Delaying or avoiding this challenge is not an option. This is ultimately a business-critical issue for the sector," Stephanie Pfeifer, CEO of the IIGCC, in a statement earlier this week.

Cement, a key component of concrete, accounts for 7% of human-made carbon dioxide emissions, according to the International Energy Agency. If it were a country, that would make it the third-largest carbon emitter in the world, behind the U.S. and China.

Part of the reason cement produces so much carbon dioxide that it's so widespread. Concrete is the world's most widely used building material, and demand for it is growing along with urbanization. Under a business-as-usual scenario, "The emissions of the global cement sector alone are very likely to surpass the total amount of CO2 emissions of the EU" in the next decade, the World Wildlife Fund said in a recent report.

Still, there's no "silver bullet" to reducing the industry's emissions, Chatham House, a London-based nonprofit, said last year. Small emission cuts can be made by producing cement in a more energy-efficient manner, but a large portion of its carbon dioxide comes from the chemical reactions that create the substance itself.

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Other ways to cut cement-related emissions include using alternative ingredients; investing in carbon capture and storage; and simply using less cement in favor of other building materials such as steel or brick. Getting the industry to net-zero emissions, as the IIGCC are demanding, would require companies to offset their cement-related emissions.

The investors are targeting four European construction companies: CRH, Lafarge Holcim, Heidelberg Cement and Saint-Gobain. In May, Heidelberg Cement announced it would reduce its carbon emissions in line with the Paris Agreement, which aims to keep global temperature increases below 2 degrees Celsius. Dalmia Cement, an India-based cement producer, aims to be carbon-negative by 2040 — that is, to take in more carbon out of the atmosphere than it contributes.

Other companies have a limited window of time to get in line or risk obsolescence, the investors warned. With major economies, including the U.K., France and California aiming to be carbon-neutral by the middle of the century, "The cement sector needs to get ahead of the profound transformation their sector faces …. if companies are to secure their future," Pfeifer said.

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