HeidelbergCement : Sustainability Report 2020

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Portrait	Management	Compliance	Innovation	Supply Chain	Employment	Responsibility

Taking responsibility.

Securing opportunities.

Sustainability Report 2020

Company	Strategy &	Business &	Product &	Production &	Employees &	Society & Corporate	Targets Appendix
Portrait	Management	Compliance	Innovation	Supply Chain	Employment	Responsibility

Dr. Dominik von Achten

Chairman of the Managing Board

Introduction

Ladies and Gentlemen,

For all of us, 2020 was marked by the COVID-19 pandemic. We stopped all travel early on, switched to mobile working wherever possible, and took all necessary measures to minimise the impact of the pandemic. Above all, the extensive exchange of our occupational health and safety expertise across all Group areas has enabled us to ensure the best possible protection of HeidelbergCement's employees, customers, and service providers. With training and information campaigns on the importance of hygiene measures in the workplace, more than half of all our company's training activities in 2020 were devoted to the topic of occupational safety.

Despite the challenging situation regarding COVID-19, the dynamism of the debate on climate protection and corporate sustainability reached new heights in 2020: as a company in the energy- intensive cement industry, a large proportion of the emissions from our production processes have been unavoidable to date. We held extensive, open and sometimes controversial discussions in 2020 with our own employees and also with you, our stake- holders, on how HeidelbergCement will address this challenge.

We are continuously enhancing our sustainability reporting in order to further increase transparency towards our stakeholders: Since September 2020, we are an official supporter of the Task

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Company	Strategy &	Business &	Product &	Production &	Employees &	Society & Corporate	Targets Appendix
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Force on Climate-related Financial Disclosures (TCFD) and have for the first time integrated a TCFD report into this Sustainability Report in accordance with the recommendations on climate- related reporting.

CO2 savings targets significantly tightened

We have placed a high priority on addressing the issue of sustainability as part of our Group strategy "Beyond 2020". We signifi- cantly tightened our CO2 reduction targets in 2020: by 2025, we aim to reduce specific net CO2 emissions to below 525 kg per tonne of cementitious material. This corresponds to a reduction of 30% compared with 1990. Our intention is to reduce this figure to below 500 kg of CO2 per tonne of cementitious material by 2030.

In order to achieve carbon neutrality by 2050 at the latest, we are focusing on the intelligent combination of existing reduction measures and research into new technologies. Our industrial scaling of CO2 reduction and capture technologies in particular is making great strides. Several carbon capture and utilisation/ storage (CCU/S) projects are currently entering the next phase. Our project in Brevik, Norway, the world's first industrial-scale CCS project in the cement industry, is scheduled to start regular operation by 2024. In Slite, Sweden, we are going one step further: by 2030, we intend to operate the world's first carbon- neutral cement plant there. The LEILAC 2 pilot project aims to implement LEILAC technology on an industrial scale at our cement plant in Hanover, Germany, by 2025.

"After having gained valuable experience with CCU/S technologies in Norway and other countries, we are taking the next step with a completely carbon-neutral cement plant in Sweden. This will be a game changer for our industry."

Dr. Dominik von Achten

Chairman of the Managing Board

Sustainability performance enshrined in remuneration

We have consistently enshrined our CO2 reduction targets in our global bonus system. The full variable remuneration can only be achieved if both the financial targets and the sustainability target are met. This regulation has applied to all members of the Managing Board and to every bonus-eligible employee worldwide since the start of the 2021 financial year. We believe that this sends a strong message to the outside world. We see this as a strong message to our internal and external audiences that we take our sustainability goals very seriously.

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Company	Strategy &	Business &	Product &	Production &	Employees &	Society & Corporate	Targets Appendix
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"We have anchored our CO2 reduction targets in the remuneration systems across the Group. The full bonus can only be achieved if both the financial targets and the sustainability target are met."

Dr. Dominik von Achten

Chairman of the Managing Board

As a partner of the United Nations Global Compact (UN GC), we have declared our express commitment to its ten principles in the areas of environmental protection, corruption prevention, labour standards, and human rights, and will take these into account and promote them within our corporate strategy as well as in all our business activities. In this context, we revised our Code of Business Conduct in 2020 and published a new version in January 2021 that makes the importance of human rights and sustainability aspects in particular even clearer.

offensive across all business lines and Group areas, since as one of the world's leading building materials producers we have the ambition and the innovative strength to become the first industrial technology group in the building materials sector.

It is our declared goal to shape the path to CO2 neutrality in a pioneering role. To further drive the essential transformation of the company, we are creating two new Managing Board positions for the topics of sustainability and digitalisation.

We are pursuing this path of change with great commitment and openness, and in close dialogue with our stakeholders. I look forward to your continued support on this journey in 2021, as our shareholders, customers, employees, suppliers, and business partners or representatives of local communities and society.

Yours sincerely,

Dr. Dominik von Achten

Chairman of the Managing Board

Leading the way to climate neutrality

With i.tech® 3D, we delivered an innovative concrete for the first printed residential buildings in Germany in 2020 - just one example of the many ways in which we are demonstrating our commitment to sustainable construction. Within the framework of our "Beyond 2020" strategy, we have launched a digitalisation

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Contents

Cover Image:

View from the Brevik cement plant, Norway.

Company	Strategy &	Business &	Product &	Production &	Employees &	Society & Corporate	Targets Appendix
Portrait	Management	Compliance	Innovation	Supply Chain	Employment	Responsibility

How to find your way through the report

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Table of contents

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	Company		Strategy &		Business &		Product &		Production &
	Portrait		Management		Compliance		Innovation		Supply Chain
08	Organisational structure	13	Vision & mission	35	Legal compliance	42	Focus on customers	52	Environmental management
09	Value chain	13	Sustainability Commitments 2030	35	Business performance	43	Research & technology	52	Energy & climate protection
10	Vertical integration	15	Significant reduction in emissions	37	Compliance management	47	Sustainable construction	59	Alternative fuels
			by 2030	39	Risk and opportunity			60	Land use & biodiversity
		16	Our path to carbon neutrality		management			62	Local environmental impact
			by 2050					66	Management of supplier
		17	Responsibility & organisation						relations
		18	Challenges & strategy
		19	Stakeholder engagement
		23	Materiality analysis
		25	TCFD report

	Employees &		Society & Corporate		Targets		Appendix
	Employment		Responsibility
69	Principles	82	Social responsibility	86	Strategy & Management	92	Key figures
70	Employment &	83	Social engagement at our	86	Business & Compliance	102	About this report
	co-determination		locations	87	Product & Innovation	103	GRI content index
70	Remuneration policy &			87	Production & Supply Chain	109	Imprint
	working time regulation			89	Employees & Employment
71	Occupational health & safety			90	Society & Corporate Responsibility
74	Human resources development
77	Diversity management

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