The challenge of sustainable development is so huge that one single company cannot solve it alone

The challenge of sustainable development is so huge that one single company cannot solve it alone

Philippe Fonta, Managing Director, Cement Sustainability Initiative

The Cement Sustainability Initiative (CSI) is a global effort by 24 major cement producers with operations in more than a hundred countries who believe there is a strong business case for the pursuit of sustainable development. Collectively these companies account for around 30 per cent of the world's cement production and range in size from very large multinationals to smaller local producers. ICR interacted with Philippe Fonta, Managing Director, Cement Sustainability Initiative (CSI), to know more about the organisation and how the Indian cement industry can benefit from it. Excerpts from the interview.

Tell us about CSI, its objectives and its functioning.
CSI is a platform where we bring different cement manufacturers from different parts of the world to work on the best practices, share them with others and r help each other in implementing them to ensure sustainable development. In India, the plants are very modern with very efficient technology. India is probably more energy-efficient than some other parts of the world but there are some areas where we can do even better. For example, in terms of usage of alternative fuels for instance, India is a bit behind compared to other parts of the world. With CSI, we have room for discussion with other parts of the world, for co-operating and understanding how other countries have improved in this business and how we can improve as well.

How can we make the sector more sustainable?
With inputs from international energy agency, we have developed a road map which identifies the different levels in order to reduce CO2 emissions and to reduce the energy consumption in the process of cement manufacturing. And for that we have identified four levels, one is improving energy efficiency to all the technology in place, second is the use of alternative fuels, third is the limestone to cement ratio if we can reduce the limestone in the cement which we use by using all sorts of materials like fly ash in cement and the fourth one is carbon capture or carbon capture and utilisation. We are also looking at biologically transforming captured carbon into algae and then using algae as alternative fuels for all the sectors.

What are the objectives of the CSI`s communication arm?
The first objective is to make sure that our members in India are well aware of the activities of CSI in terms of sustainable development. As CSI is a CEO-led organisation, the communication happens at a corporate level on a global scale. We have to make sure that the objectives are met at an operational level and that they (CEO) know what it means in terms of requirements and commitment.

The other objective is to work on image building of the cement sector. The world over, the perception of the cement and concrete sector is a bit skewed. Cement is perceived as something which is dirty, not responsible, in the way it is produced with regards to the environment, which is not the case. So we have to re-establish the correct picture on that.

Thirdly, we want to have the leading companies in CSI, the ones who are really driving the process Our interest is not to have all the cement manufacturers worldwide, but if we can expand what we are doing, we may attract some additional companies in the country who are interested in sustainable development and who don't have the expertise, or who are already doing things and would like to share it with the group.

How do you persuade the member companies to share their knowhow openly with their competitors?
Yes, we understand that we are in a very competitive market and there are some elements which cannot be openly shared or openly exchanged between the members because of anti-trust issues, etc. But we are offering a platform where we can share the knowledge without the need to share critical business information.

For instance, we have a database which is called Getting the Numbers Right. The GNR database has numbers pertaining to CO2 emissions and energy consumption of the members at a detailed level. This helps in comparing performance of various types of technology, the volume of market, etc. Clearly, this cannot be exchanged between one member and another. So we are having a third party to facilitate this exchange, which has a confidentiality agreement with each member. They take the data, mix them together and present an aggregated form. So you cannot identify which competitor has given the information but at least you can see how your own performance compares to that of others in the sector.

The data on the website is for 2012? How frequently is this data updated?
It is updated every year but for anti-trust reasons we keep a gap of one year. So in May 2014 we will publish the data we have collected in 2013 which is basically 2012 data. In 2014, you actually get the 2012 data, in 2015 you will get 2013 data. This one- year buffer gives us more relief in terms of anti-trust issues.

How does CSI help companies to improve their compliance to sustainability index?
We have several ways of helping the companies. First, we have a series of crash courses in which every company who is a member of CSI is invited to participate. These crash courses serve as a platform to share information, discuss with their peers and understand and share best practices. I would say that the beauty of CSI is that companies are being trained by other companies. In other words, some companies are training their competitors, because in the end what is important is that the sector is improving. It's really a collaborative effort and I tend to think that the challenge of sustainable development is so huge that one single company cannot solve it alone. Even the companies in CSI cannot solve it alone. So we need collaboration and that's why we need more companies to be involved but also we need to work with trade associations. We are working with CMA, and CMA is helping to spread our message. Through the work that we are doing with the trade associations and also other stakeholders, we are trying to reach the policy- makers to tell them what we are doing and to make them understand how we need them to help us implement the solutions. Even a company who is not a part of CSI has access to its documents. Globally this collaborative approach can make the difference.

How does a company become a CSI member?
We have a charter at CSI in which we have a list of commitments that the company has to fulfill. So when a company is interested in joining, they have to follow the process in three steps. First they have to sign a letter from their CEO to express their interest in joining and to explain what they have already done in terms of sustainable development. So, it's at CEO level, it cannot be someone from the board. Then the company has to have a sustainable development report on their website which explains what they are doing in terms of sustainable development. And thirdly, we send the company a checklist with regards to all the commitments we have in the charter. It does not mean that the company has to be fully compliant at the day of joining. The aim of this check list is just to do a self- assessment or gap analysis between where the company stands in terms of developments and where the commitments are. This is done by the company and sent back to CSI. Then, CSI is governed by core members evaluate the self assessment coming from the company. If they are confident that in three years of joining, the new member will be fully compliant with the charter then the company is accepted. If the core Chair thinks it will be hard in the next three years for the company to be compliant, then we request the company to keep improving and come back next year.CSI by no means an exclusive club. It's just that we have some criteria and that the companies have to fulfill the criteria. And when the company joins, the existing members try to help the company fulfill their commitments in the next three years. We are going to start and audit process this year for the existing members and for members who have joined for more than four years in order to make sure they are compliant. And if we identify some gaps, we help them to be compliant.

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