Climate Change Data

Environmental Metrics

ESG Focus Areas

• Health and Safety
• People Development
• Compliance and Export Control
• Community
• Responsible Sourcing
• Environmental Impact

Environmental Achievements

• Reduced CO2 emissions (Scope 1 and 2) as a direct consequence of a global efficiency program, including consolidation of companies and office buildings.
• Reduced dust emissions at the Thung Song plant in Thailand by converting an electrostatic precipitator to a fabric filter.
• Substantially reduced dust emissions at the Luossavaara-Kiirunavaara AB (LKAB) pelletizing plant in Sweden using new electrostatic precipitators.
• 90% reduction of SO2 emissions at Thai Carbon Black Public Co Ltd in Angthong, Thailand with new air pollution control equipment.
• Reduced emissions to an extremely low level (1.2 mg/Nm3) at Lafarge cement plants in Medgidia, Romania and Rezina, Moldova using DuoClean® DC2 filters.

Social Achievements

• Reached and exceeded the goal of 10% female managers (achieved 10.3%).
• Improved Health and Safety performance, resulting in a 29% drop in the Lost Time Injury Frequency Rate (LTIFR) from 3.9 to 2.7.
• Implemented a new Site Safety Handbook to establish a global standard for safety on customer sites.
• 87% reduction of injuries at the Qingdao factory in China due to investments in HSE.
• Increased utilization of raw materials in a quarry in Sumbe, Angola from less than 10% to more than 98%.

Governance Achievements

• Strengthened guidelines for internal investigations and trained key personnel.
• Established a whistleblower hotline with 12 substantiated cases in 2014.
• Published a detailed internal investigation manual.
• Published a handbook on the Code of Business Conduct in nine languages, distributed to almost all employees.
• Appointed and trained 12 regional compliance representatives.

Climate Goals & Targets

Environmental Challenges

• Restrictions and inconsistent gas supply at Ramliya cement plant in Egypt, forcing a switch to coal (increased CO2 emissions).
• Operating in high-risk countries with potential for illegal activity.
• Understanding and complying with numerous international rules and regulations.
• Managing the impact of sanctions against Russia.

Mitigation Strategies

• Switching to coal at Ramliya was deemed the least harmful solution from a socioeconomic perspective compared to importing clinker.
• Strengthened guidelines for internal investigations, implemented additional means for reporting potential fraud and corruption, and established a whistleblower hotline.
• Appointed and trained regional compliance representatives to help employees interpret rules and conduct due diligence.
• Implemented an extended export control procedure, including a new “Russia Check List”, and updated training for export control classifiers.

Supply Chain Management

Supplier Audits: 520 suppliers self-assessed based on UN Global Compact Principles in 2012

Responsible Procurement

• New FLSmidth Code of Supplier Conduct (to be initiated in 2015)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Global Compact

Sustainable Products & Innovation

• RetroClean™ fabric filter
• FLS ®-GSA gas suspension absorber
• FabriClean® fabric filter
• DuoClean® DC2 fabric filter
• Dual Truck Mobile Sizer (DTMS)

Environmental Metrics

ESG Focus Areas

• Health and Safety
• People Development
• Compliance and Export Control
• Responsible Sourcing
• Environmental Impact

Environmental Achievements

• Scope 3 emissions decreased slightly to 31,377
• Ramliya Cement Plant in Egypt uses 14% less energy per ton than the average plant

Social Achievements

• 1,024 managers completed a dedicated Leadership Transition Training programme
• 300 top managers engaged in the “Flying the Flag” leadership development programme
• 75% of all white-collar employees received in-person training in FLSmidth’s Code of Business Conduct
• Near miss reporting increased by 46%
• Lost-time injury frequency rate dropped to 1.8 with zero fatalities

Governance Achievements

• Third-party due diligence initiative completed, screening sales agents for adverse media, sanctions and litigations
• Launched a third-party portal providing key information about intermediaries
• New Code of Supplier Conduct released with explicit requirements on modern day slavery

Climate Goals & Targets

Environmental Challenges

• Maintaining safety standards across a global organization
• Ensuring compliance with regulations in diverse markets
• Managing risks in the supply chain related to labor standards and environmental impact
• Reducing environmental impact of operations and products
• Meeting increasingly stringent environmental legislation

Mitigation Strategies

• Implemented a new Health and Safety reporting system
• Appointed a ‘Chairman of Safety’ from Group Executive Management
• Launched a global safety event focusing on personal commitment to safety
• Developed a new Code of Supplier Conduct
• Initiated a Responsible Sourcing Pilot program
• Developed CataFlex catalytic filter bags to remove gaseous pollutants
• Developed JETFLEX™ burner for alternative fuels in cement production
• Developed high-quality, low-CO2 cements

Supply Chain Management

Supplier Audits: 6 supplier visits in 2015

Responsible Procurement

• New Code of Supplier Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Global Compact

Sustainable Products & Innovation

• CataFlex catalytic filter bags
• JETFLEX™ burner
• High-quality, low-CO2 cements
• QCX/BlendExpert software

Awards & Recognition

• Four awards from the Chilean National Safety Council

Environmental Metrics

ESG Focus Areas

• Safety
• Quality
• Compliance
• Environmental impact
• Social responsibility

Environmental Achievements

• Reduced absolute emissions, scope 1 & 2 (in tCO2) from 46,910 to 44,195

Social Achievements

• Improved safety performance (LTIFR decreased from 1.8 to 1.5)
• Increased training hours on safety (from 166,000 to 187,000)

Governance Achievements

• Improved DIFOT (Delivery in Full On Time) from 77% to 84%

Climate Goals & Targets

Environmental Challenges

• Lower revenue and under-absorption of costs impacting EBITA margin
• Slow moving order backlog in Minerals division
• Pricing pressure in Cement division
• Weak demand for equipment in mining and cement industries

Mitigation Strategies

• Corrective actions announced in August 2016 to strengthen cost base by DKK 500m in 2017
• Business right-sizing activities
• Focus on wear parts and productivity-enhancing solutions
• Strengthened product line management
• Leveraging 'Design-Build-Operate' business model

Supply Chain Management

Supplier Audits: 161 suppliers assessed

Responsible Procurement

• 61% local spend

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Global Compact

Sustainable Products & Innovation

• OK™ mill
• Rapid Oxidative Leach® (ROL)
• Down Draft Cyclone (DDX)
• SmartCyclone TM
• SmartwearTM
• Dry tailings technology
• Catalytic filter bag technology

Awards & Recognition

• Top100 R&D awards (ROL)

Environmental Metrics

ESG Focus Areas

• Safety
• Sustainability
• Human Rights
• Compliance
• Environmental Impact (Carbon, Water, Energy)

Environmental Achievements

• Improved internal environmental management, allowing for more granular measurement of carbon, water, and energy consumption.
• Initiated baseline compliance assessment of global human rights risks.

Social Achievements

• Acquisition of a part of Sandvik Mining Systems, adding 187 employees.
• Continued investment in people development and leadership training.
• Total training hours: 258,000 (2016: 187,000).

Governance Achievements

• Full compliance with Section 99a of the Danish Financial Statements Act and Communication on Progress to the UN Global Compact.
• Improved Board diversity: 33% female representation (2016: 14%).
• Established a Sustainability Board reporting to the Board of Directors.

Climate Goals & Targets

Environmental Challenges

• Deterioration in safety indicator (LTIFR) after consecutive improvements.
• Challenging market conditions for the capital business.
• Low order intake in the second half of 2016 impacting revenue in 2017.
• Persistent overcapacity in the global cement market.
• Subdued market for capacity additions in the cement industry.
• Low level of mining CAPEX in previous years.

Mitigation Strategies

• Corrective measures implemented to address safety concerns.
• Corrective actions program launched in late 2016 to reduce costs and optimize global footprint.
• Investments in innovation, digitalization, and growth in new businesses (wear parts, adjacent industries).
• Focus on equipment sales and upgrades in the cement industry.
• Strategic initiatives to increase production volumes and maintenance activities in the mining industry.

Supply Chain Management

Supplier Audits: 113 suppliers screened (2016: 161), 6% of total spend (2016: N/A)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Global Compact

Certifications: ISO 14001

Sustainable Products & Innovation

• Rapid Oxidative Leaching (ROL)
• Dry Stack Tailings
• Counter Current Cyclone
• OK™ raw/grinding mill
• JETFLEX® burner

Awards & Recognition

• Global top 100 R&D awards (ROL)
• Mining Magazine Editor’s Award 2017 (EcoTails™)

Environmental Metrics

ESG Focus Areas

• Sustainability
• Digitalization
• Productivity

Environmental Achievements

• FLSmidth’s annual CO2 footprint (scope 1 & 2) equals one month of operation for an average newer European cement plant (3,500 tpd)
• FLSmidth’s annual water consumption equals two weeks of operation for a copper mine (100,000 tpy)

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Mining project cost overruns
• Lower margin in mining backlog
• Cyclicality in Mining Capital business
• Fragmented project organization
• Resource availability and competence issues
• Slow and unpredictable customer decisions

Mitigation Strategies

• Consolidate project execution into HUBs
• Business improvement initiatives
• Service growth
• Streamlining project execution through Western, Central and Eastern Hubs
• Adding crucial resources for commercial, risk and claim management in Hubs
• Regional “satellites” focusing on day-to-day interaction with the customer and local suppliers
• Global pool of mobile experts for critical tasks

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Safety
• Quality
• Carbon emissions
• Water consumption
• Gender equality
• Supplier sustainability
• MissionZero (decarbonization of cement and mining industries)

Environmental Achievements

• Reduced carbon intensity of operations from 2.6 to 2.2 tonnes/DKKm revenue.
• Reduced water withdrawal from 222,000 to 197,000 m3.
• Launched innovative clay calciner system reducing CO2 emissions in cement production by up to 40%.

Social Achievements

• Increased share of women in management positions from 11% to 13%.
• Improved safety KPI for the 7th consecutive year.
• Set a new long-term target for gender equality in the workforce (30% women in white-collar workforce and 25% in people management by 2030).

Governance Achievements

• Completed Group business improvement programme with an annual EBITA improvement run-rate of DKK 150m.
• Took additional steps to improve Cement profitability.
• Divested non-core fabric filter and pneumatic conveying systems businesses.

Climate Goals & Targets

Environmental Challenges

• Operational and financial impact from the COVID-19 pandemic.
• Rapidly deteriorating business environment affecting order intake, revenue, and EBITA.
• Low Cement backlog entering the year.
• Restricted access to customer sites due to the pandemic.
• Supply chain disruptions due to global and local mobility restrictions.
• Challenging cement market with overcapacity and slow recovery.
• Uncertainty around mid- and long-term financial targets due to industry changes and the pandemic.

Mitigation Strategies

• Established crisis management teams.
• Implemented cost-cutting measures (site consolidation, improved logistics, headcount reductions).
• Increased outsourcing and simplified Cement business.
• Adjusted cost structure to improve profitability.
• Developed alternative sourcing strategies.
• Reinstatement of financial guidance.
• Strengthened two industries setup (Mining and Cement).
• Consideration of acquisitions to strengthen offerings, particularly in Mining.

Supply Chain Management

Supplier Audits: 390 suppliers assessed for sustainability

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products and solutions for decarbonization.

Reporting Standards

Frameworks Used: GRI Core, UN Global Compact

Third-party Assurance: Ernst & Young (Limited Assurance)

UN Sustainable Development Goals

• Goal 6 (Clean Water and Sanitation)
• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

MissionZero programme contributes to these goals.

Sustainable Products & Innovation

• Clay calciner system
• HOTDISC® alternative fuels solution
• Water recycling solutions
• Digitally-enabled gyratory crusher

Environmental Metrics

ESG Focus Areas

• Safety
• Compliance
• People
• Environment
• Supply Chain
• Human Rights

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainability
• MissionZero

Environmental Achievements

• Progress on MissionZero (specifics not quantified in report)

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity, Equity, and Inclusion
• Governance
• Safety
• Water Stewardship
• Responsible Supply Chain

Environmental Achievements

• Reduced scope 1 and 2 greenhouse gas emissions (market-based) to 38,022 tCO2e, a 2.7% improvement from 2022 and a 42% reduction from the 2019 base year.
• Increased renewable energy coverage from 21% to 26%.
• Reduced water withdrawal by 5.9% from 2022.
• Reduced total waste generation by 22% compared with the internal 2023 target, and landfill waste by 5%.

Social Achievements

• Increased percentage of women employed to 20.4%, reflecting improvement in inclusive hiring and development practices.
• Increased percentage of women managers to 16.3%, a 2%-point improvement.
• Launched a global DE&I Council.
• Achieved Level 1 Broad-Based Black Economic Empowerment (B-BBEE) certification in South Africa for the second year in a row.

Governance Achievements

• Improved due diligence screening processes.
• Established a new protocol for thoroughly investigating harassment.
• Increased spend with suppliers with science-based targets to 12.6%.

Climate Goals & Targets

Environmental Challenges

• Deterioration in safety performance, primarily due to increased incidents at manufacturing sites, organizational changes, and greater use of third-party contractors.
• Increased water withdrawal from water-stressed areas.
• Complex supply chain and sourcing from regions with high environmental and human rights concerns.

Mitigation Strategies

• Restructuring the safety organization in 2024 to address safety issues, including greater focus on hazard risk assessment, on-the-job training, and incident investigations.
• Launching a water conservation plan aligned with local and regional regulations in 2024.
• Implementing a global multi-site ISO certification strategy.
• Engaging with suppliers to uphold high standards and promote sustainable consumption.

Supply Chain Management

Supplier Audits: 80% of 204 selected suppliers assessed onsite in 2023

Responsible Procurement

• Supplier Code of Conduct
• Due diligence on suppliers
• Engagement with suppliers on sustainability performance

Climate-Related Risks & Opportunities

Physical Risks

• Storms and cyclones
• Drought
• Flooding

Transition Risks

• Carbon taxes and regulations
• Disclosure and regulations
• Product-specific environmental regulations
• Demand for green products
• Scarcity of raw materials
• Reputational impact
• Access to capital

Opportunities

• Development of energy-efficient products and technologies enabling decarbonization

Reporting Standards

Frameworks Used: GRI, EU Taxonomy, TCFD, UN Global Compact

Certifications: ISO 14001

Third-party Assurance: EY Godkendt Revisionspartnerselskab

UN Sustainable Development Goals

• 6.3
• 6.4
• 7.2
• 7.3
• 12.2
• 12.4
• 12.5
• 13.2
• 5.5
• 8.7
• 8.8
• 8.7
• 10.3
• 12.6
• 16.5

The report indicates alignment with various SDGs throughout the text, but does not provide a consolidated explanation.

Sustainable Products & Innovation

• FUELFLEX® Pyrolyzer technology
• HPGR Pro high-pressure grinding technology
• New flowsheets for lithium processing