Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Efficiency
• Alternative Fuels and Raw Materials
• Pollutant Emissions
• Local Impacts (Quarries, Water, Noise)
• Occupational Health & Safety
• Management Systems

Environmental Achievements

• Increased use of alternative fuels in kiln fuel (from 7% in 2007 to 17% in 2017)
• Increased use of biomass substitution for virgin fuels in kiln fuel (from 5% in 2007 to 6% in 2017)
• Reduction in specific emissions of various pollutants (e.g., NOx, SOx, dust)
• Increased percentage of quarries with quarry rehabilitation plans (from 56% in 2007 to 72% in 2017)
• Increased percentage of quarries with high biodiversity value where biodiversity management plans are actively implemented (from 42% in 2007 to 57% in 2017)

Social Achievements

• Reduction in own professionals' fatality rate to 0 in 2017
• Reduction in own professionals' lost time incident frequency rate to below 1.46 in 2017
• Reduction in contractors' and subcontractors' fatalities to 0 in 2017
• Reduction in total number of lost time incidents (directly and indirectly employed) to below 1.46 in 2017

Governance Achievements

• Increased ISO 9001, ISO 14001, and OSHAS 18001 certifications across operating units

Climate Goals & Targets

Environmental Challenges

• Significant changes in the organization's perimeter due to acquisitions and divestures, impacting data consistency for emissions calculations
• Lack of reliable historical data for newly integrated plants prior to 2007

Mitigation Strategies

• Adoption of a 'Post-merger baseline year 2007' for CO2 emissions reporting
• Using the 'Kyoto baseline year 1990' as a reference for former plants still within the current perimeter

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: WBCSD/WRI Cement CO2 Protocol

Certifications: ISO 9001, ISO 14001, OHSAS 18001

Environmental Metrics

ESG Focus Areas

• Sustainability
• Compliance
• Social Impact

Environmental Achievements

• Progress in reducing impacts from activity and expansion of co-processing, reducing the use of fuels and fossil materials.
• Search for alternative sources of energy and raw materials.

Social Achievements

• Important developments were reached through the InterCement Institute, building initiatives that combines direct impact in the supply chain and employment generation in local communities.
• IC-TURN Program: a transformation program with hundreds of initiatives planned to allow the company to reach its full potential.

Governance Achievements

• Reinforcing Compliance Standards, InterCement continued to invest on process and tools to deliver a high level of integrity, with the commitment of all its employees.
• Formalized and presented InterCement Compliance Communication Program in all geographies.
• Launched Perception of the Integrity Environment Survey to assess the maturity and perception of professionals regarding integrity and compliance.

Climate Goals & Targets

Environmental Challenges

• Adverse scenario in Argentina and economic slowdown in Brazil.
• Negative trend in exchange rates.
• Increasing costs and operating margin pressure in Brazil.
• Demand contraction in Argentina.
• Macroeconomic scenario in Argentina and Brazil.
• General increase of energy and logistic costs.

Mitigation Strategies

• Deleveraging plan to strengthen capital structure.
• Increased efficiency in operations.
• Investment discipline.
• Monetization of non-strategic assets.
• Divestment of Portugal and Cape Verde operations.
• Assertive commercial strategy to attract and retain customer loyalty.
• Initiatives to improve productivity and control costs (optimize raw materials mix, contracts renegotiation, freight flow, energy consumption).
• Focus on cost control and continuous improvement of commercial and production processes in Argentina.
• Proactive leadership strategy in Mozambique.
• Implementing several initiatives to control costs (mainly energy costs increase) and leverage leadership position to improve margin and operational Cash Flow in Mozambique.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Third-party Assurance: Deloitte Touche Tohmatsu

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions by 12% compared to 2007 baseline through coprocessing, avoiding 308,000 tons of CO2 emissions in 2020.
• Maintained 17.4% average thermal substitution rate with waste and biomass in coprocessing despite pandemic challenges.
• 10% reduction in total thermal energy consumed while clínquer production reduced by 10% (2018-2020).

Social Achievements

• Implemented emergency plan to combat COVID-19, including humanitarian aid to over 130,000 people.
• Maintained and expanded social investments across geographies.
• Launched ReformuLAR initiative to improve employee housing conditions.
• 95% of Brazilian employees considered the company provided necessary support during the pandemic (Valor Carreira survey).

Governance Achievements

• Added two independent external members to the InterCement Participações Board of Directors.
• Established three committees: Audit, Risk and Compliance; Strategy and Finance; and Governance, People and Sustainability.
• Created a Sustainability Directorate for Operations in Brazil.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting operations and logistics.
• Supply chain disruptions due to the pandemic.
• Water scarcity in some Brazilian and Argentinian units.
• Reduced demand in some regions due to economic downturn.

Mitigation Strategies

• Implemented crisis committees in each geography to manage pandemic challenges.
• Implemented alternative sourcing strategies.
• Implemented work-from-home and alternating shifts in factories.
• Improved water management practices in Brazil and Argentina.
• Implemented cost-cutting measures and corporate restructuring.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Due diligence of suppliers based on risk assessment.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI (Global Reporting Initiative) Essential Option, IIRC (International Integrated Reporting Council)

Certifications: ISO 9001:15, ISO 14001:15 (Brazil), OHSAS 18001:07 (migrating to ISO 45001:18)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goals 3, 4, 5, 7, 8, 9, 11, 12, 13, 16, 17

Nine material topics are related to 13 of the 17 UN Sustainable Development Goals.

Sustainable Products & Innovation

• Soluxa line of concrete for industrial floors (Argentina)

Awards & Recognition

• Comenda Saúde e Segurança do Trabalho (Brazil), Fornecedor Destaque CONFIBRA (Brazil), 2nd place in Melhor Produto do Ano (Brazil), 2nd place in Prêmio Top Of Mind (Brazil), Diploma de Reconhecimento do CEADS (Argentina), NOSA awards (South Africa)