Asia Cement

Asia Cement has set a target to reduce its scope 1 and 2 emissions by 8% per tonne of cementitious materials by 2025 compared to 2019. This near-term target has been validated by the SBTi as consistent with the well below 2°C pathway. Additionally, it has established interim emissions reduction goals of 26.4% by 2030 and 45.7% by 2035, with the ultimate objective of achieving carbon neutrality by 2050. The company has also established a goal to reduce its scope 3 emissions by 5% by 2025 compared to 2021 levels.

Asia Cement includes detailed short- and long-term action plans in its transition strategy, spanning all its units and the value chain. The company has conducted climate scenario analysis, which guides its transition plan. Asia Cement invests in carbon capture technology, targeting 18,000 and 36,000 tonnes of annual carbon capture by 2030 and 2035 respectively.

No leading practices were identified for this company.

No leading practices were identified for this company.

Asia Cement saw only a moderate decline in its scope 1 and 2 emissions intensity. Between 2019 and 2022, the company decreased its emissions intensity by 1.4% annually. This falls short of the company’s 1.5°C pathway, which requires it to deliver emissions intensity reductions of 2.8% annually over the next five years. Moreover, Asia Cement’s future scope 1 and 2 emissions intensity is also not expected to decrease at the required rate. Given the current situation, the company’s locked-in emissions from current and planned assets are not expected to stay within its 1.5°C carbon budget for the period between 2023 to 2037.

Asia Cement’s board members do not possess significant expertise in the low-carbon transition. Further, the company’s low-carbon transition plan lacks a well-define timeframe and established processes for reviewing, updating and reporting progress. While the company evaluates climate-related risks and opportunities through scenario analysis, it should disclose the considered parameters and assumptions and report the results in qualitative, quantitative and financial terms. The company should also align its revenue disclosures for low-carbon products with the EU Taxonomy standards. The company has an opportunity to broaden its low-carbon business models, such as developing zero-clinker cement products or contributing to the low-carbon optimisation of construction practices, and should share its projected growth for these.

Asia Cement discloses that the share of alternative fuels it used in 2022 was less than 5%. Furthermore, it has not publicly disclosed its R&D expenditure for the past three years. There is potential for the company to strengthen its low-carbon alignment by increasing its share of alternative fuels and providing information on its low-carbon R&D expenditure, including a breakdown of its investments in both mature- and non-mature climate technologies.

Asia Cement provides recent examples of its supplier and client initiatives, including an engagement campaign to educate suppliers on climate change and promoting low-carbon cement products to its customers to reduce their emissions. However, the company does not support these actions with qualitative and quantitative impact metrics. Furthermore, the company should integrate these efforts into a broader engagement strategy with a defined scope, quantified emissions reduction targets and other low-carbon requirements and recommendations. Additionally, the company lacks disclosure of a strategy for its engagement with trade and industry associations. Asia Cement publicly commits to global low-carbon initiatives, such as the Paris Agreement. However, it should implement a monitoring and review process to ensure company policies align with the Paris Agreement goals.

Asia Cement pledges to decrease its scope 1 and 2 emissions by 8% per tonne of cementitious materials by 2025 compared to 2019. With the overarching aim of attaining carbon neutrality by 2050, the company has also outlined interim emissions targets for 2030 and 2035. Additionally, it has set a target to reduce its scope 3 emissions by 5% by 2025 from the 2021 baseline.

One aspect of Asia Cement’s 2050 net-zero strategy involves reducing the proportion of cement clinker, as it is a primary source of emissions in the industry. Currently, the company’s clinker-to-cement ratio stands at 92.11%. Though the company is targeting a reduction in this ratio to 82.10% by 2030, this remains significantly above the EU Taxonomy’s low-clinker cement threshold of 65%. Asia Cement lacks evidence that its low-carbon products, like Masonry and Portland-limestone cement, effectively reduce the clinker ratio.

Asia Cement reduced its emissions intensity by 4.4% from 2020 to 2022. While its scope 1 emissions have decreased due to the company promoting low-carbon cement, its scope 2 emissions have increased due to producing cement with a surface area larger than before, resulting in an increase in electricity consumption for cement grinding. To get on track with a 1.5°C pathway, the company needs to deliver 2.4% reductions in emissions intensity annually over the next five years.

In 2022, Asia Cement derived 6.2% of its revenue from products or services deemed to be low-carbon. The company utilises the Taiwanese Government’s Reference Guidelines for Sustainable Economic Activities to identify low-carbon products and services instead of aligning with the EU Taxonomy. While the company discloses approximately a quarter of its low-carbon research and R&D investment over the past three years, the full extent of its R&D expenditure remains unclear. Similarly, the percentage of its total capital expenditure that is aligned with the EU Taxonomy is not known. Nevertheless, the company has set a phase-change internal carbon pricing of roughly USD 7.25 from 2021 to 2025.

Asia Cement aims to decrease its scope 1 and 2 emissions by 8% per tonne of cementitious materials by 2025 relative to 2019, and its scope 3 emissions by 5% by 2025 from the 2021 baseline. Additionally, it aspires to achieve net-zero emissions by 2050. The company’s 2050 net-zero strategy is built on optimising the concrete production process, optimising design and construction, reducing the proportion of cement clinker, increasing raw materials and alternatives, promoting a circular economy, reducing indirect emissions from electricity and exploring the capture and reuse of carbon.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. No relevant disclosure was found of the company’s assessment of employment dislocation risks. Further, no public commitment by the company was found stating its intention to reskill and upskill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company reskills and upskills workers in a way that ensures gender balance and inclusion of vulnerable groups.

No relevant disclosure was found to show if the company identifies the impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to their social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights and the ILO fundamental rights at work. However, no evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its operations and supply chain. Moreover, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities.

The company commits to respecting the health and safety of its workers and expects the same commitment from its business relationships. Additionally, the company discloses some statistics regarding the diversity of its workforce, such as the age and gender of its workforce by employee category. However, it can strengthen its disclosure on these subjects as well as on other key decent work issues, including living wages and working hours.

The company discloses its global tax strategy, but no relevant disclosure was found of the corporate income tax it pays in each relevant jurisdiction. The company also has a supplier policy in which it prohibits bribery and corruption. However, it can strengthen its disclosure on these and other key ethical business topics, including personal data protection and lobbying and political engagement.