For Lafarge, sustainable development is a key long-term responsibility. The aim is to create lasting value and to gradually guide all operations and involve a growing number of employees.
The second report focuses on the progress that Lafarge has made in meeting the targets it set itself and communicated in the first report, together with the establishment of ambitious new goals.
The Group's efforts are focused on four strategic areas:
- Openness, dialogue and partnership: co-operation between stakeholders is gradually taking formal shape at all levels of the organization and is beginning to be incorporated into the performance management programs of Divisions and operational units.
- Economic value creation: the ultimate goal is to create value for Lafarge's clients, employees, and shareholders. Among the various tools used, EVA, which was set up in order to associate employees with value creation, is progressively being extended to an increasing number of employees.
- Social progress: this aspect is manifested by the ever-increasing awareness of the Group's responsibilities both to its employees and to the communities in which it is present given the geographical spread of the business.
- Environmental protection: targets have been set at every level of each business line, and very significant progress has been made towards reaching the targets set in 2001.
Highlights of the 2002 report:
- The drive for dialogue and transparency, as illustrated by various contributions of the many different stakeholders.
- The presentation of several case studies, highlighting the challenges and responsibilities faced by the company.
- Detailed monitoring of progress towards social, environmental and economic targets, which Lafarge has voluntarily included in its long-term plans and which reflect the company's true commitment and responsibility.
- The report goes beyond the identification and explanation of targets, to include a review of the processes for dialogue introduced in each region and each operating unit.
- Performance measurement is constantly being enhanced.
- This second report reflects the Group's transparent, progressive and long-term approach.
Targets reached and achievements in 2002
- Presence of Lafarge in all sustainability stock indices (DJSI, DJSI Europe, Footsie4Good Europe and World, Ethibel, ASPI Europe). Only two French CAC-40 companies are listed by all those indices.
- First time publication by Lafarge of details relating to environmental and social aspects of its product transportation activity, most notably details related to CO2 emissions.
- Creation of a Sustainable development committee chaired by Bernard Kasriel, Lafarge's CEO.
Economy - EVA (Economic Value Added) extension target exceeded: this bonus plan, which was introduced to increase employee involvement in value creation, was extended to include 2,200 managers in 2002, from 700 previously.
- Review of the Group's health and safety policy, with the introduction of a continuous improvement management system and a reporting system.
- Production of a health action plan and introduction of an AIDS/HIV policy.
- Introduction of an International job market, accessible to 30,000 employees via the Group's Intranet.
- Continuation of the employee share ownership program, via a reserved rights issue for employees in 2002: 54% of the eligible employees subscribed in 50 countries. Today the 38,000 employee shareholders now own 1.7% of the Group's capital.
- Enhanced data collection on water consumption and specific performance monitoring systems for the Cement and Gypsum Divisions.
- Target for waste reduction and target for increases in use of recycled raw materials reached and exceeded by the Gypsum Division two years before the set date.
- Publication, for the first time by Lafarge, of the breakdown of atmospheric emissions at Division level, showing changes between 2001 and 2002.
- Lastly, over the course of 2002, Lafarge played a key role as sector leader, encouraging other companies to follow its lead in the following areas:
- Action plan for the WBCSD Cement Sustainable Industry project (World Business Council for Sustainable Development)
- Global Corporate Citizenship
- Global Business coalition of companies against HIV/AIDS
- United Nations' global pact.
- Repeat share ownership programs at regular intervals (2004), with a medium-term target of 3% of capital to be held by employees.
- Define health-AIDS action plan in 100% of African countries.
- Implement a health and safety management system in all Business units by 2005 (the Cement Division, which is the most exposed to health and safety issues, was the first to launch the Lafarge safety management system for implementation by the end of 2002, and to define specific tools to reach four targets for 2003: no fatal accidents during operations that take place in silos; no fatal accidents involving heights; regular safety inspections; early risk analysis at each site).
- Double the in-house training rate from one in six employees receiving training over the year to two in six by 2005.
Commenting on the publication of this report, Bernard Kasriel, CEO of Lafarge and President of the Sustainable development committee noted:
“For a company such as Lafarge, the move towards sustainable development can sometimes seem like a marathon, taking place over a long period. Our undertakings in this area focus on long-term progress and have affected every level of our company, thanks to a far-reaching process based on in-depth dialogue with all stakeholders, the setting of clear targets and the introduction of performance measurement programs that allow us to assess the effects of our efforts. This can easily be seen in our second report, which we have sought to make transparent and constructive, highlighting both those targets already reached and our goals for future years. At the same time, our position as an industry leader has led us to take our responsibilities even more seriously, and to endeavour to play a key role in driving change at other companies in the sector.”
Statements made in this press release that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions ("Factors"), which are difficult to predict. Some of the Factors that could cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: the cyclical nature of the Company's business; national and regional economic conditions in the countries in which the Group does business; currency fluctuations; seasonal nature of the Company's operations; levels of construction spending in major markets; supply/demand structure of the industry; competition from new or existing competitors; unfavorable weather conditions during peak construction periods; changes in and implementation of environmental and other governmental regulations; our ability to successfully identify, complete and efficiently integrate acquisitions; our ability to successfully penetrate new markets; and other Factors disclosed in the Company's public filings with the French Commission des Opérations de Bourse and the US Securities and Exchange Commission including its Reference Document COB number D03-0375 as updated on June 5, 2003 and annual report on Form 20-F. In general, the Company is subject to the risks and uncertainties of the construction industry and of doing business throughout the world. The forward-looking statements are made as of this date and the Company undertakes no obligation to update them, whether as a result of new information, future events or otherwise.