Corporate Sustainable Development Report 2009

Strength. Performance. Passion.

Corporate Sustainable Development Report 2009

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Corporate Sustainable Development Report 2009

Contents

Vision and strategy 6

Priorities 10

Performance data 26

Methodology and assurance 32

Chairman and CEO statement 4

Introduction 2

Sustainable development is embedded in our vision, strategy and values 6

An organization with integrity 6

Managing sustainable development 7

Our SD priorities 8

Determining material issues 8

Performance against targets 9

Awards and ratings 3

Sustainable products and sustainable construction 10

Energy and climate 14

Resources conservation 18

Social commitment 20

Economic performance 26

Environmental performance 27

Social performance 30

Methodology 32

Assurance statements 33

Holcim response 35

Communication on progress 36

CommitmentHolcim remains committed to sustainable development even in the face of global economic challenges.

80%of our product portfolio is composite cements.

Continuous improvementCO2 emissions per tonne of cement have been reduced by 21% since 1990.

70%improvement in the lost-time injury frequency rate since 2005.

See page 12.

Affordable housing project in Nicaragua

See page 17.

Check dams in Thailand

See page 21.

Community investment in Russia

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Introduction

The integration of the principles of sustainable development

into our core business strategy and our aim to create value

for all stakeholders has ensured that our commitment

remains resolute, even in the face of current global

economic challenges.

Holcim is one of the world’s leading suppliers of cement and aggregates (crushed stone, gravel and sand), as well as

further activities such as ready-mix concrete and asphalt including services. The Group has majority and minority

holdings in around 70 countries across all continents.

Covering the Group’s cement, aggregates and ready-mix concrete businesses, this fifth Holcim Corporate Sustainable

Development Report focuses on key facts and figures and highlights our most material issues: sustainable products

and sustainable construction, energy and climate, resources conservation and social commitment. It complements our

Annual Report 2009 and the more comprehensive information available on our website. www.holcim.com/sustainable

The report and complementary information is aligned with the Global Reporting Initiative’s G3 guidelines and also

forms part of our communication on progress for the UN Global Compact. The report itself has been assured against

the principles of the AA1000 Assurance Standard and our WBCSD CSI commitments, with CO2 and occupational health

and safety data separately assured. Furthermore, an External Report Review Panel was established to review the report.

A glossary defining the terms used in this report can be found on our website. www.holcim.com/sustainable

Key to symbols:

see page in this report

see our Annual Report

see graph data

visit www.holcim.com/sustainable for more information

reference to GRI indicator

Contact us at HolcimSustainable DevelopmentRuksana Mirza Phone +41 58 858 82 30 Fax +41 58 858 82 34 [email protected]

Corporate CommunicationsRoland Walker Phone +41 58 858 87 10 Fax +41 58 858 87 19 [email protected]

Investor RelationsBernhard A. Fuchs Phone +41 58 858 87 87 Fax +41 58 858 80 09 [email protected]

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Awards and ratings

The awards received by our Group companies and our continuous inclusion in the FTSE4Good and the Dow Jones

Sustainability Indexes are the best evidence of our commitment to sustainable development. The table below

highlights a sample of the many awards received at a local level. A complete list of awards received by Group

companies in 2009, as well as in previous years, is available on our website. www.holcim.com/sustainable

Ratings

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For the DJSI assessment of company performance compared with others in the sector, visit www.holcim.com/sustainable

Examples of awards received Group company

Environmental awards

Greentech Environmental Excellence Gold Award in the Cement Sector to Tikaria for environmental performance.

ACC Limited, India

Federación de Áridos awarded El Puente Gravel Pit with the First prize in Biodiversity in the category “big company” for rehabilitation work and level of biodiversity achieved.

Holcim (España), S.A., Spain

Gold Cup for Environment Protection by Ministry of Natural Resources and Environment for contributions to the environmental protection and preservation in Vietnam.

Holcim (Vietnam) Ltd, Vietnam

Special Jury Price of ALM (Aujourd’hui le Maroc) ecology trophy for engagement and environmental policy based on sustainable development.

Holcim (Maroc) S.A., Morocco

PEP – Partners for Environmental Progress award for the storm water conservation program at Theodore plant.

Holcim (US) Inc., USA

Social awards

Award from Centro Mexicano para la Filantropía for being a socially responsible company. Holcim Apasco S.A. de C.V., Mexico

Wirtschaftspreis Schleswig-Holstein for successful HR concept for employee recruiting/retention and the integration of migrants.

Holcim (Deutschland) AG, Germany

Fundación Adecco awarded Holcim España for integrating people with a disability. Holcim (España), S.A., Spain

High-prestige award from CSR Hungary as an acknowledgement of activities in order to spread sustainable construction and to set an example on CSR to create value for stakeholders.

Holcim Hungária Zrt., Hungary

The Department of Conservation award in recognition of Holcim’s contribution to the community and conservation in the Buller region.

Holcim (New Zealand) Ltd, New Zealand

OH&S awards

Special recognition for safety, occupational health and environment performance by The Colombian Safety Council.

Holcim (Colombia) S.A., Colombia

Zero lost-time injuries in South Carolina for Taylor Street, Lugoff, Simpsonville, Powderville, New Cut Road, Greer, Imo and Batesburg plants presented by Carolina Ready Mixed Concrete Association.

Aggregate Industries Management Inc., USA

Safety Award presented by Ready Mixed Concrete Association of Ontario for having no lost-time injuries.

Holcim (Canada) Inc., Canada

Golden Flag Safety Award by the Indonesian Ministry of Public Work for Occupational Safety. PT Holcim Indonesia Tbk., Indonesia

Occupational Health and Safety Excellence Award presented by the Ministry of Labor of Nicaragua for the excellence on risk management practices and full legal compliance at Nagarote cement plant.

Holcim (Nicaragua) S.A., Nicaragua

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Chairman and CEO statement

The need for companies to engage with stakeholders

and society to ensure license to operate is more

important than ever.

In the two years since our last Corporate Sustainable Development Report, the economic crisis has affected many

regions and sectors. However, as sustainable development is such a fundamental objective, we remain committed to

its principles. Our commitment to sustainability engages our people, and also allows us to operate more effi ciently –

providing us with competitive advantage throughout the entire value chain.

The most important contribution to sustainable development is through products and services. By offering value-

added solutions to customers, we ensure sustainability of profi ts and benefi ts to society. Concrete is the most

versatile, cost-effective and durable building material available; it substantially contributes to energy effi ciency in

buildings and it is – in itself – a sustainable product. Our company is continually improving the effi ciency of our

production processes and developing more “eco-friendly” products. At the end of 2009, over three-quarters

of Holcim’s product portfolio consisted of composite or lower clinker content cements. The Holcim Foundation

for Sustainable Construction continues to promote sustainable building practices and innovation in the

construction industry.

Holcim’s business depends on access to natural resources. Related responsibilities are taken very seriously. We must

– like all players – try to increase the effi ciency of the use of scarce resources and avoid material loss in production

processes wherever possible. We have, together with the International Union for Conservation of Nature (IUCN)

created an expert panel to advise us on how to manage biodiversity. The panel has already visited Holcim sites in

a number of countries and has provided invaluable guidance.

Reduction of CO2 emissions continues to be an area of focus. In 2009, we achieved the CO2 emission reduction target

earlier than planned, and are pleased to report that CO2 emissions per tonne of cement were more than 20% lower

than in the reference year of 1990. Holcim also actively participates in the policy debate on climate change and on

effective regulatory incentives to improve energy effi ciency and CO2 containment.

“Sustainability is an integral part of the Group strategy. Even in difficult times, Holcim takes its environmental and social responsibilities very seriously. Programs to strengthen the safety culture across the Group will be continued without exception. The Board of Directors and Executive Committee is doing everything in its power to achieve the objective of worldwide comprehensive workplace safety.” Rolf Soiron, Chairman of the Board of Directors.

Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assurance

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This report refl ects a number of new targets that have been set at an even higher level:

• We now aim to further reduce our specifi c net CO2 emissions by 2015 to 25% below the 1990 benchmark.

• We will be developing and rolling out a comprehensive biodiversity management system. Of sites situated

in high biodiversity value areas, 80% must have biodiversity action plans in place by 2013.

• Recognizing that building constructive and trustful relationships with communities in which we operate

is imperative; all plants are bound to have community engagement plans by 2012.

Safety of employees, subcontractors and third parties remains an area of concern and key focus. Management

continues to improve the effectiveness and impact of safety programs and directives. To change mindsets and to

embed a culture of safety can still be a challenge in some places, but we remain committed to our vision of “zero

harm to people”.

The current report describes our path toward sustainability, as we understand it for our industry. It discloses

performance data across a broad range of indicators, including those from the Global Reporting Initiative* relevant

to our specifi c businesses and has been externally assured. A panel of external stakeholders has also contributed to

this report with valuable guidance and comments.

We have been in continuous contact with stakeholders and have recently joined the Corporate Support Group of

the International Committee of the Red Cross (ICRC). We look forward to cooperating in specifi c confl ict-affected

countries where both Holcim and the ICRC operate. Humanitarian actors like the ICRC substantially contribute to

stabilizing the operating environment in such areas.

Holcim’s efforts in the area of CSR and SD have been well recognized. The best evidence is the many awards received

by Group companies. Holcim has also been confi rmed as a member in the Dow Jones Sustainability World Index for

the seventh consecutive year and the company again received the SAM Gold Class classifi cation for 2009.

We thank all those who are accompanying Holcim on its journey. We are grateful to customers, suppliers and

partners for their continued support. A very special word of thanks goes to our employees all over the world,

who have lived our values and have delivered on our commitment to build a sustainable future in these

challenging times.

Rolf Soiron Markus Akermann

Chairman of the Board of Directors Chief Executive Offi cer

May, 2010

* This report is aligned with the Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines released in October 2006, at an application level of A+.

“The development of new and sustainable products and services is of high priority. The rapid dissemination of existing expertise and new findings is heavily encouraged, while experiences gained in the market are being systematically incorporated into our research. This multiplication effect, as well as cooperation with leading universities and research institutes, has helped accelerate the pace of innovation.” Markus Akermann, Chief Executive Offi cer.


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of our business – our products and services, ongoing

communications and, most importantly, the behavior

of our people. The graphic below outlines group strategy

and our approach to value creation.

An organization with integrity

Holcim applies the highest standards of business conduct.

At a corporate level, we follow the Swiss Code of Best

Practice for Corporate Governance while the Holcim

Code of Conduct, which is applied throughout the Group,

provides a consistent framework and clear direction for

daily decision-making. In addition, the Holcim Compliance

Policy spells out the rules for compliance with laws,

regulations and Group-wide policies and directives.

For more information on corporate governance and the Code

of Conduct, please see pages 80 and 81 in our Annual Report.

“We at Holcim are proud to work for a company with such a clear and effective vision and focus with regard to sustainable development. Our global strategy and standards, applied locally according to the requirements and realities of each country in which we operate, result in sustainable and responsible operations that are noted for their high performance, multiple initiatives and enduring commitment to the communities.” Eduardo Kretschmer, CEO, Holcim Apasco, Mexico.

Visit www.holcim.com/sustainable to read more.

Vision and strategy

At Holcim, we believe that delivering value for all

stakeholders while operating with integrity is key

to our long-term success.

Working within the triple bottom line

Holcim remains a member of the DJSI World Index.

Visit www.holcim.com/sustainable for more information.

Sustainable development is embedded in our vision,

strategy and values

Holcim is committed to creating value for all its

stakeholders. We have placed sustainable development

(SD) at the heart of our business strategy for many

years because we believe it contributes in adding

value and ensuring continued success.

To meet the increasing demand for high-quality and

sustainable construction products, which are critical

for global infrastructure development and economic

growth, we have fully integrated the principles of

the triple bottom line (value creation, sustainable

environmental performance and social responsibility)

in our business strategy and into our product and

service portfolio. See strategy house in the next column.

The current, challenging economic climate has not

weakened our commitment to sustainable development.

We continue to strive to improve safety at all our

operations, and to work on identifying new, sustainable

business opportunities while minimizing the impacts

of our extraction and production activities.

Holcim’s values of strength, performance and passion

are our promise to perform, providing the foundation

for sustainable business relationships based on trust.

We aim to deliver on this promise through all aspects

Stra

tegy

Min

dset

sBa

seG

oal

Creation of Value

Product Focus

SustainableEnvironmentalPerformance

Better Cost Management

Permanent MarketingInnovation

Human ResourcesExcellence

CorporateSocialResponsibility (CSR)

GeographicDiversification

Local ManagementGlobal Standards

People


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The Code of Conduct covers all aspects of our operations,

including specific provisions on bribery and corruption.

The code is very clear – violations will not be tolerated.

Non-compliance with the code may be subject to

disciplinary sanctions, including termination of

employment, and this is explicitly stated within the code.

Group companies are responsible for ensuring

that employees and managers are aware of their

responsibilities under the code and for implementing

appropriate measures. These include training and

information sessions, integration of Code of Conduct

provisions into contracts and a requirement for

employees to sign the code. Visit www.holcim.com

Building on our existing program, in 2009 we refreshed

the Holcim Value Creation in a Competitive Environment

(VCCE) program. We rolled this out with a series of

workshops on the rules of fair competition, also as

contained in our Fair Competition Directive, which is

binding for all Holcim employees worldwide. In 2009,

10 VCCE workshops were conducted covering Group

companies in all regions. In 2010, further VCCE training

will be conducted in all the consolidated operating

companies of the Group. For more information, please see

page 25 in our Annual Report.

In addition to the Code of Conduct and Fair Competition

Directive, we require our employees to comply with all

relevant policies, including Group policies on alternative

fuels and raw materials, corporate social responsibility,

environment and occupational health and safety.

Visit www.holcim.com/sustainable to download the policies.

Managing sustainable development

Responsibility for SD ultimately rests with every

employee, and the commitment of line managers to

implement Group targets and objectives related to SD is

key to our aspiration to remain a leader in our industry.

A steering group for SD operates as a sub-committee

of the Executive Committee (Exco), and includes

the CEO, the Exco members accountable for SD and

occupational health and safety (OH&S) as well as

senior SD managers.

At Exco level, since 2010, accountability for SD and

OH&S falls under Roland Köhler, and the Sustainable

Development and Occupational Health and Safety

departments report directly to him. A graphic

illustrating our integrated approach is available at www.holcim.

com/sustainable

To assist us in managing our performance and

ensure that global standards are maintained, various

management systems are in place. The starting point

in managing our performance is ISO certification.

Holcim has also developed its own management tools.

Examples of these include the Holcim Environmental

Management System with its Plant Environmental

Profile (PEP) monitoring and reporting tool, which goes

beyond the requirements of ISO 14001, and the Holcim

OH&S management system, which goes beyond the

requirements of OHSAS 18001. See page 30.

Visit www.holcim.com/sustainable

Code of Conduct Our Code of Conduct provides the guiding principles against which to make decisions.


For further information see page 26 and visit our website www.holcim.com/sustainable

Cement, aggregates,concrete and other constructionmaterials

Payments

Goods andservices

Monetary flows

Source: Holcim, 2009 data* See page 26 for additional information on political contributions and subsidies.

Non-monetary flows

Dividends Capital Interest Capital Taxes Services Salaries Labor Goodneighbor

Licence to operate

SUPPLIERS Input costs (CHF 12.0 billion)

SHAREHOLDERS(CHF 0.8 billion)

CREDITORS(CHF 0.8 billion)

GOVERNMENTS*(CHF 0.6 billion)

EMPLOYEES(CHF 3.9 billion)

DIRECT IMPACTS

CUSTOMERS Net sales (CHF 21.1 billion)

MULTIPLIEDINDIRECTIMPACTS

MULTIPLIEDINDIRECTIMPACTS

COMMUNITIES(See page 25)

Retained in business (CHF 1.2 billion) and depreciation (CHF 1.9 billion)

Categories purchased by suppliers:Raw materialsServices including transportOperational materialEnergyPlant, equipment and infrastructure

TradersWholesalers RetailersReady-mix concrete producersConcrete products manufacturersConstruction contractorsIndividual customers

HOLCIM Sales

Economic impacts along the value chain



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Our SD priorities

We constantly re-examine our SD priorities to enable

us to focus on those issues which are the most material

to our business and where we can make a meaningful

difference. Continuity and focus are critical aspects of

this re-evaluation process. Our current priorities are:

• sustainable products and sustainable construction

• energy and climate

• resources conservation

• social engagement (including employment

practices, OH&S, community engagement and

human rights).

These priorities were confi rmed by an External Report

Review Panel, which we convened as part of our

materiality review process (see below) and to review

Holcim’s corporate SD report. The panelists’ biographies

are available on our website at www.holcim.com/

sustainable

Determining material issues

Holcim has a well-embedded business risk management

process for identifying risks at both corporate and Group

company level. For more information, please see pages 28

and 85 in our Annual Report.

Since 2007, a materiality review has been implemented

at Group level to ensure the identifi cation of SD

risks and opportunities as well as the integration of

stakeholder views. Since this process was introduced,

materiality reviews have been conducted by many

Group companies. Results reveal that the full list of

material issues is consistent with the Group-level

review, but there are differing weightings according

to local circumstances.

The results of the latest Group-level materiality review,

incorporating the results of the Group companies’

reviews as well as the views of the External Report Review

Panel at a consultation in September 2009, are shown

in the graphic below. In conjunction with our business

risk management system, the consultation confi rmed

that the issues identifi ed on the matrix remain the most

material for Holcim. The fundamental difference from the

previous review was that almost all external stakeholders

felt that water management and human rights should be

refl ected separately. The difference between the company

and stakeholder view on water is likely to narrow as the

new water management scheme is implemented.

“Holcim demonstrates a credible approach to sustainability. However, I would like to see the Group take a clearer leadership in reducing absolute fossil CO2 emissions. This is a key challenge for the entire cement industry. Efforts to increase the use of biofuels also need to be intensified over time.” Patrik Bosander, Business Development Director, Billerud AB.

Corporate governance

Customer and supplier relations

Economic impact

Low Medium High

Econ

omic

Issues

OH&S

Employment practices and human rights

Community involvementand stakeholder relations

Soci

al

CO2 and energy

Ec0-efficient products

Sustainable construction

Atmospheric emissions

Resources managementand biodiversity

Waste and transport

Water

Envi

ronm

enta

l

Holcim view – result of Holcim business risk management process.

External stakeholder view – result of interviews with 16 external stakeholders including academics, government officials, NGOs, suppliers, analysts and customers at a global level.

View from Holcim and external stakeholders coincide.

Range of external stakeholder views.

Represents a clear difference between internal and external view.Low: Low level of concern to stakeholders and low level of current

impact on Holcim.

High: High level of concern to stakeholders and high level of current

or potential impact on Holcim.

Importance of issues – global view

SD materiality review – aligning global stakeholder

feedback with current Group priorities

Review An External Report Review Panel was convened to review SD priorities, materiality and to comment on the report. Details of the panel can be found on our website.






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Performance against targets

The following table is a status report on our progress toward goals set in the past and also reflects new SD targets. Targets already

achieved are not repeated here – please refer to our website for an overview of all targets. Note that many of these are “evolving targets”

due to the continued dynamic growth of the Holcim Group. Our priority is to ensure that Group companies and new acquisitions

embrace these measures. Visit www.holcim.com/sustainable

Area Target Progress Target date Status 2009

Vision, strategy and corporate governance

Strategy Integration of SD materiality review in existing business risk management system for use by Group companies.

The SD materiality review has been integrated into the existing BRM system and piloted by 10 Group companies.

2008 Achieved

Management systems

ISO 14001 implemented by all cement plants and alternative fuels and raw materials (AFR) pre-treatment platforms.

This is a rolling target as newly acquired Group companies require time to implement the management system.

2004 Cement 92%

AFR 84%

Environmental performance

Climate and energy

Reduce global average specific net CO2 emissions (kg CO2/tonne cementitious materials) by 20%, using 1990 as reference.*

This target was reached in 2009. 2010 21%

Reduce global average specific net CO2 emissions(kg CO2/tonne cementitious materials) by 25%,using 1990 as reference.*

2015 New

Environmental impacts

Emissions monitoring and reporting standard implemented.

This figure excludes our plants in India. We anticipate that they will have continuous emissions monitoring in place by 2011.

2004 85%

Reduce global average specific nitrogen oxides, sulfur dioxide and dust emissions (g pollutant/tonne cementitious materials) by 20%, using 2004 as reference.

We have already far exceeded the reduction target in specific SO2 emissions in 2009. Due to the current economic conditions, our efforts to reduce dust and NOx emissions have focused on implementing primary reduction measures. The target date has thus been revised to 2012 for dust and 2013 for NOx.

2012 NOx -16%SO2 -59%Dust -7%

Quarry rehabilitation plans. This is a rolling target as newly acquired Group companies require time to implement plans.

2006 91%

Biodiversity: 80% of sensitive sites to have biodiversity action plans.

2013 New

PCB equipment elimination. Electrical equipment containing PCB to be eliminated from the cement sector (cement and grinding plants) by the end of 2010, and from the non-cement sector (aggregates, ready-mix and asphalt) by 2011.

2011 New

Social performance

Community involvement

CSR review completed by all Group companies. This target was not reached by the end of 2009 due to a focus on more pressing issues. Group companies will be encouraged to conduct the reviews going forward.

2009 40%

Every Group company to have a community engagement plan for its sites.

2012 New

OH&S Reduce lost-time injury frequency rate by at least 30% per annum in each operating company, using 2004 as reference, from 2006 to 2009.

Within an acceptable tolerance allowance, this target was met for the Holcim Group. Some Group companies, however, have not yet reached the target.

2009 See Progress

OH&S fatality prevention elements implemented.

Implementation of the current 11 OH&S fatality prevention elements is ongoing and the target date has been adjusted to 2010, when implementation status will be audited in all Group companies.

2010 See Progress

OH&S contractor safety management implemented.

The OH&S Contractor Safety Management Directive has been aligned with the relevant 2009 CSI Guidelines. Full and sustainable implementation will take another 2–3 years and the target date has been adjusted to 2012.

2012 See Progress

Targets included in previous reports on areas such as CO2 assurance, employment practices and supplier qualification programs have already been met and are thus not listed in the above.



* Excluding own power generation.



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Demand for construction products is increasing

Concrete is a versatile material indispensable to

infrastructure and economic development – and after

water is the most widely used product in society.

Concrete is made of aggregates, water and cement.

Cement is the “glue” that provides strength and

durability and represents 15% of concrete’s volume.

Although concrete and cement have a relatively low

embedded CO2 intensity compared to other construction

materials, high demand results in the cement industry

producing an estimated 5% of man-made CO2 emissions.

The dilemma that Holcim and other responsible players

face is how to meet the growing demand for high-quality

products while limiting emissions and decreasing our

ecological footprint.

Studies have shown that buildings account for up to 40%

of primary energy consumption. Sustainable construction

can reduce energy consumption and the CO2 emissions

of existing and new buildings signifi cantly. For example,

buildings with a Gold or Platinum Leadership in Energy

and Environmental Design (LEED) certifi cation consume

up to 50% less energy than those using less energy-

effi cient designs. Examples include IUCN’s conservation

center in Gland, Switzerland and Development

Alternatives’ headquarters in Delhi.

Visit www.holcim.com/sustainable for case studies.

Innovation in products and processes

As a major player in the industry, Holcim has a role

to contribute to sustainable products and building

techniques. We are developing new solutions through

product innovation and process innovation.

Product innovation. We are developing environmentally

friendly cementitious materials for specifi c applications.

Examples include products with minimum carbon

footprint combined with extended service life and

concretes that reduce peak temperatures through

water absorption or desorption. Additionally, we are

developing materials to increase the durability and

longevity of buildings and roads. We are also currently

conducting detailed lifecycle assessments with

government, academics and other partners.

The use of composite cements is another vital strand of

product innovation at Holcim. Our focus on substituting

(and therefore reducing) clinker in cement with slag, fl y

ash, pozzolans and other minerals is highly effective in

carbon reduction. By 2009, we had decreased the share

of Ordinary Portland Cement to 20% of our product

portfolio and increased the share of composite cements

to 80% . See chart on page 11.

“I believe that our creative imagination, by definition, is unbounded, and that the principles of sustainable design are not a limitation; rather, they provide fertile ground for engaging the imagination to nurture a vibrant architecture of the future.” Ashok B Lall (India), Visiting Professor, Guru Gobind Singh Indraprastha University (GGSIU); Principal, Ashok B Lall Architects; and Head, Holcim Awards jury Asia Pacifi c 2008.


Sustainable products and sustainable construction

Population growth, socio-economic development and

adaptation to climate change will increase the demand

for construction products.

Challenge Buildings account for up to 40% of energy consumption: Holcim has a role to play in promoting sustainable construction.


Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assuranceSustainable products and sustainable construction Energy and climate Resources conservation Social commitment



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See pages 26–31 for full data tables.


Key dataSustainable products and sustainable construction

Process innovation. Through research and development

in sustainable and energy-efficient manufacturing,

we are seeking technical solutions to the challenges

ahead including the rising cost of electrical and thermal

energy, ensuring their availability worldwide while

also improving the emissions of cement kilns. Holcim’s

program aims to transform these challenges into

opportunities for sustainable value creation across the

Group. As part of this, we leverage the diversity of our

Group companies to multiply good practice and ensure

that innovations and solutions are systematically shared

to create competitive advantage.

Responsible relationships and partnerships

Providing our diverse customers with the right product

for the right application is fundamental to a successful

and sustainable business. To ensure we are meeting

these needs, 75% of Group companies carried out a

customer survey in 2009, and of these, 88% measured

customer satisfaction levels . Product stewardship

remains an important element of our customer

relations. In 2009, 54% of Group companies reported

having a specific policy covering customer health and

safety and 50% reported having policies on product

information and labeling .

To ensure a sustainable supply chain, Holcim is

mindful that its suppliers should respect our social

and environmental policies. Our Group procurement

policy and supplier qualification programs include a

self-assessment of suppliers’ compliance with social

and environmental standards. Details of supplier

assessments are shown opposite.

Working with academic institutions is key to achieving

a sustainable future. In this regard, Holcim engages

with Clausthal University and the Swiss Federal

Institute for Technology in Zurich and Lausanne who

are both permanently represented on our process

and product innovation committees. In addition, the

Holcim Foundation for Sustainable Construction has a

network of partner and associated universities that is

representative of every continent. The foundation’s aim

is to promote sustainable responses to technological,

environmental, socio-economic and cultural issues

affecting building and construction at national, regional

and global levels.

Cement types produced by Holcim* in 2009

Supplier screening

EN3

HR1, HR2

Local suppliers screened

2008 2009

0

20

40

60

80

100 96 92

0

20

40

60

80

100

81 8177

83

67

75

38 38

29 3034

44

26 29

% Group companiesscreening local suppliers

% Group companiesscreening local suppliers

% local suppliersscreened

% local suppliersscreened

OHS standardsEMS systems

Labor standards (other than human rights)Social accountability or other human rights criteria

20% Ordinary Portland Cement

5% Masonry cement, oilwell cement, white cement, special binder

17% Multiple blend cement Fly ash cement 26%

Limestone cement 14%

Pozzolan cement 9%

Slag cement 9%

The Holcim Forum, convened by the Holcim Foundation

for Sustainable Construction, provides an academic

platform for architects, engineers, construction

professionals and other specialists to exchange

information on sustainable built environments and

sustainable development. Forums on “Basic Needs”,

“Urban Transformation” and “Re-inventing Construction”

have been convened.

The Holcim Foundation for Sustainable Construction

promotes and encourages sustainable construction practices;

for more information, visit www.holcimfoundation.org

* All but Ordinary Portland Cement are composite cements. Composite cements increased from 30% in 1990 to 80% of our product mix in 2009.


Sustainable products and sustainable construction

Best practiceA model affordable home being built at our plant in Nagarote, Nicaragua.

Sustainable affordable housing – an inclusive

business solution

Holcim Group companies are active in searching

for inclusive business solutions such as sustainable

affordable housing. The concept has spread since we

started initiatives in the 1990s: currently, 12 affordable

or social housing programs, mainly in Latin America and

Asia and three mega-cities projects in Jakarta, Manila

and Singapore are being implemented. In 2009, an

estimated 27,600 families benefi ted from the affordable

housing schemes.

The housing defi cit in Nicaragua, a country with seven

million inhabitants, amounts to more than half a

million. With 85% of the population considered as poor

or extremely poor and the number of inappropriate

houses rising steadily, shelter is one of the country’s

main challenges. In order to contribute to meeting this

challenge, Holcim Nicaragua started implementation

of Edifi cando Vidas, an affordable housing program. It

aims at offering Nicaraguan families an appropriate,

sustainable and culturally accepted housing solution

that complies with Holcim’s sustainability requirements.

In order to achieve this goal, the company – in

collaboration with its distribution channel Construmas

and the Holcim Nicaragua Foundation for Sustainable

Development – selected pilot communities and

conducted a participatory assessment of housing

needs. As a result of these community consultations,

the project team developed a technical solution that is

appropriate for local conditions and uses construction

techniques and materials that are familiar locally.

The solution was well accepted by the community

and project advisory panels were set up and are now

managing community participation. In addition to

providing the housing solution, the project integrates

a fi nancing option and supports the development of

construction-related micro-enterprises. Model houses

have been erected at the plant in Nagarote at the

beginning of 2010. There are plans to construct 30 to

40 houses for participating families in the course of

the year.

“Holcim’s efforts to provide affordable housing in Latin America and Asia are extremely commendable. To build on these first achievements, I would encourage Holcim to share the resulting learning with a wider range of companies and organizations to collaborate on a roll-out of such programs. This will help to reach not just dozens, but thousands of families.” Fernando Almeida, Executive President, Business Council for Sustainable Development, Brazil.


12 Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assuranceSustainable products and sustainable construction Energy and climate Resources conservation Social commitment


Innovation in practice

The Holcim Commercial Awards acknowledge

excellence along the Holcim Value Chain, and are judged

against criteria of customer orientation, innovation,

value creation, sustainability and transferability. Among

the projects recognized by the awards are the following:

The Integra Construction System was developed by

Holcim Costa Rica. Integra is an innovative wall system,

based on a modular concrete block and also integrates

other innovative aggregate and cement products.

The system reduces waste, increases productivity and

durability and improves safety on construction sites.

Holcim Green and Holcim Supercrete were developed

by Holcim Singapore, who was recognized for the

development of eco-friendly concrete products. Holcim

Green reduces the usage of imported materials by

replacing fine aggregates with recycled materials while

Holcim Supercrete, because of its strength, facilitates

smaller columns and more usable spaces in buildings.

Construction can be faster and can result in up to 45%

less concrete use for a structure. Both products obtained

a Green Label from the Singapore Environment Council.

Red Minetti was developed by Juan Minetti, our Group

company in Argentina. It is a national chain of outlets

for building materials where end users (normally owner-

builders) can find, in one place, all the materials needed

to build their house, personalized guidance on how to

use the materials and assistance with purchase finance.

Cirkelstad was developed by Holcim Netherlands –

a regeneration project for inner-urban areas with a

focus on recycling and re-use of “old” city demolition

materials for “new” city construction. The project also

had the goal of providing job opportunities for long-

time unemployed people from the local community.

London 2012 Olympic village

The Olympic Delivery Authority (ODA), the body

responsible for the building of the 2012 Olympic

Games venues, identified sustainable construction as

key in the procurement of materials and construction

of the games infrastructure. With this in mind, the ODA

set “green” targets for all the bidding companies. At

least 25% of the materials supplied need to be recycled

and at least 50% of materials, by weight, have to be

transported to the Olympic Park by sustainable methods.

Our Group company in the UK, Aggregate Industries,

successfully bid to supply the project with aggregates

and ready-mix concrete. It ensured that the sustainable

transport target was substantially exceeded in the

bid, with over 90% of the aggregates to be supplied by

either rail or barge. In addition, Aggregate Industries

is confident that it will well exceed the ODA’s aim of

25% for recycled aggregate materials delivered to the

project. It will achieve this through its use of secondary

aggregates from assets in Cornwall in England, as well

as recycled glass and recycled concrete derived from

demolition sites in London.

An example of a “Red Minetti” outlet in Argentina. The chain offers a “one-stop” solution for owner-builders.

Mohammed Rafati (far left) and Said Saoudi (left) are employees of Holcim Netherlands working on the “Cirkelstad” project aimed at regenerating inner-city urban areas with a focus on recycling.

13Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assuranceSustainable products and sustainable construction Energy and climate Resources conservation Social commitment

14

Energy and climate are critical factors for sustainability

Global energy demand is predicted to rise by 45% by

2030 (World Energy Outlook), accompanied by higher

energy costs, depleting energy sources and limited

discoveries of affordable new ones. The combined

challenges of energy and climate require unprecedented

investment and changes in production, consumption

and behavior.

Addressing the challenge of climate change requires

global emissions to be stabilized then reduced and all

sectors have a responsibility. We advocate differentiated

responsibilities at country level, accepting the need

for absolute CO2 emission reductions in developed

countries and increases to be limited in emerging

economies. Holcim further believes that no single

policy instrument can fi t all sectors, and that a range

of instruments is needed to incentivize the growth of

the most CO2-effi cient and energy-effi cient companies

and products.

Energy and CO2 effi ciency

Holcim is committed to further improve the effi ciency

of its production processes and products and to remain

an industry leader. In cement production, our focus

is on lowering the clinker factor, increasing the use

of alternative fuels and materials and improving

energy effi ciency.

To maximize all available emission-reduction levers,

Holcim advocates that industry benchmarks should

include the entire production process and products, and

that these should incentivize both product innovation

and consumer choice.

For further information on our positions on climate and

energy, visit www.holcim.com/sustainable

According to the McKinsey Global GHG Abatement

Cost Curve, the maximum potential to reduce specifi c

emissions in the cement industry is -23% by 2030,

excluding carbon capture and storage. The International

Energy Agency (IEA) estimates an absolute reduction

potential in 2050 of 18%, including carbon capture

and storage. A Cement Sustainability Initiative (CSI)

study, see page 16, identifi ed similar levers and

abatement potentials. Holcim has already signifi cantly

contributed to reducing emissions. In 2009, we met

our target by achieving a 21% reduction in net CO2

emissions per tonne of cement (2008: 19.6%) .

One of the main drivers has been our lowering of

the clinker factor, Holcim’s being among the lowest

in the industry with an average of 71.1% of clinker in

cement. Furthermore, by implementing best practices

and technology, Holcim increases energy effi ciency in

production, thus lowering related CO2 emissions. To

further improve our performance we have a new target

to reduce CO2 emissions per tonne of cement by 25%,

compared to 1990 levels, by 2015.

“Holcim faces a major challenge in reducing its energy usage and carbon emissions. I’d like to see more discussion of its possibilities to shift energy supply from fossil fuels to more sustainable energy sources.” Holger Walbaum, Chair in Sustainable Construction, Swiss Federal Institute of Technology (ETH Zurich).


Energy and climate

Energy security and climate change are critical risk factors

for the long-term sustainability of the company.

CO2 We achieved our CO2 emission reduction target one year ahead of schedule.

Visit www.holcim.com/sustainable for more about CO2 emissions.

To further improve our performance we have set a new CO2 emission reduction target.

See pages 9

and 15 for details.




15

Key dataEnergy and climate*

Overall, Holcim has improved its thermal energy

consumption from over 4,500 MJ per tonne of clinker in

1990 to 3,580 MJ per tonne of clinker in 2009, reflecting

efforts to upgrade technology and optimize operations.

Concurrently, the substitution of traditional fossil fuels

with biomass residues and waste-derived fuels recovers

energy from waste, thus also reducing CO2 emissions .

Despite these improvements, Holcim’s absolute

emissions from cement production are bound to rise

due to increased demand for concrete. Breakthrough

innovations are needed to achieve absolute reductions.

See page 30 in our Annual Report for examples of Holcim’s

efforts in this area.

For details of specific CO2 emissions, clinker factor and

substitution rate by alternative fuels, see charts opposite.

Data on other atmospheric emissions including SO2, NOx and

dust is reported on page 28 and at www.holcim.com/sustainable

Policy and stakeholder engagement

Holcim constructively contributes to policy debate

to develop effective regulatory incentives to improve

energy efficiency and CO2 intensity. We believe that

the most effective way to reduce society’s carbon

footprint is via mandatory government policies and

regulated market instruments that set CO2 and

energy benchmarks.

To promote our positions on energy and climate, we

support GLOBE, an organization bringing together

legislators who share an interest in developing sound

environmental legislation. This has proven to be

a positive platform through which to channel our

viewpoints to members of national parliaments and

the European Parliament alike.

Carbon capture and storage (CCS) may offer important

carbon reduction potential. Holcim, with others in the

industry, supports the ongoing work of the European

Cement Research Academy (ECRA) on CCS technologies

in the cement industry.

For details of our engagement with the WBCSD Cement

Sustainability Initiative see page 16.



* Due to ownership changes in 2009, figures for previous years have been restated.

Specific CO2 emissions

Clinker factor

Thermal substitution rate by alternative fuels

EN16

EN2

EN5

kg CO2/tonne cement % improvement

Average % of clinker in cement

% of thermal energy from alternative fuels

Specific gross CO2 emissions (excluding on-site power generation)

Specific net CO2 emissions (excluding on-site power generation)

% improvement trendline Sector average emissions

(WBCSD GNR database)

1990 2000... ... ...2005 2007 2008 2009 2015500

550

600

650

700

750

800

500

550

600

650

700

750

800

-30

-25

-20

-15

-10

-5

0

0

5

10

15

20

25

30

764756

706689

660642

640 620 628608

616

597

1990 2000... ... 2007 2008 200960

65

70

75

80

85

90

81.9

60

65

70

75

80

85

90

79.8

72.5 71.8 71.1

1990 2000... ... 2007 2008 20090

2

4

6

8

10

12

3.6

0

2

4

6

8

10

12

0

2

4

6

8

10

12

9.0

12.1

11.111.7




16

Energy and climate/Resources conservation

Best practice

“As an owner of landholdings all over the world, Holcim recognizes the principle of good land stewardship – that is, to be responsible not only for the resources below ground but also for the ecosystems, habitats and species above ground. Impacts on biodiversity will inevitably arise from the extraction of mineral resources, but these can be mitigated in many different ways through targeted management actions. Ultimately, this could sometimes even lead to biodiversity enhancements – as Holcim has already shown in places such as the El Puente aggregate quarry in Spain.” Dr Christoph Imboden, Chair of the Independent Expert Panel of the Holcim–IUCN Partnership.


Working with the Cement Sustainability Initiative (CSI)

Holcim is a founding member of the CSI,

www.cementwbcsd.org, part of the World Business

Council for Sustainable Development (WBCSD). The

CSI has developed in consultation with international

stakeholders a “sectoral approach” model which

is a framework enabling countries to fulfi ll their

commitments to the UNFCCC’s Bali Roadmap. The

model shows the same mitigation drivers as the

McKinsey Cost Curve and the IEA Technology Roadmap,

and all three models show, albeit in varying degree,

that sequestration such as carbon capture and storage

will be required to reduce absolute emissions from the

global cement industry. The approach was presented to

governments and negotiators in the lead-up to the 15th

UN Climate Change Conference (COP15) in Copenhagen

in December 2009. Work on this approach is continuing.

A key factor in enabling a sectoral approach is the

availability of robust and verifi ed global data, allowing

for fair, meaningful and effective benchmarking of the

industry’s CO2 and energy performance against which to

set improved targets. Holcim has participated with the

CSI members in developing the Getting the Numbers

Right (GNR) database as part of enabling this approach.

To facilitate a more streamlined process for the approval

of projects under the Clean Development Mechanism

(CDM), Holcim has supported the CSI in developing a

new CDM baseline and monitoring methodology based

on benchmarking. This tool, together with data from

a pilot project undertaken by Holcim Ecuador, was

presented to the UNFCCC’s CDM methodology panel

in mid-2009 and deliberations are continuing.

For a case study on working toward CO2-neutral sites,

visit www.holcim.com/sustainable

Experts help shape our management of biodiversity

Through our global agreement with the International

Union for Conservation of Nature (IUCN), signed in

2007, Holcim has forged strong links with this leading

organization. See page 17 for more about the partnership.

One of the key activities of our partnership was the

convening of an Independent Expert Panel (IEP),

consisting of fi ve well-respected biodiversity specialists

and chaired by Dr Christoph Imboden, an ecologist and

biodiversity conservation expert. Visit www.holcim.com/

sustainable for biographies of the panel members.

The IEP’s role is to advise Holcim on developing a

biodiversity management framework, including

overarching policies and practical toolkits to enable

“on the ground” management of biodiversity. The panel

has conducted visits to Group companies in Belgium,

China, Spain, Hungary, Indonesia, the UK and the USA

to learn about the company and its operations. The

visits allowed the panel to experience the diversity in

size, geography, maturity, outputs, issues and different

regulatory landscapes of Holcim operations.

16

Cement Sustainability Initiative




This interaction has led to a better understanding of

the relevance of biodiversity to our business and a set of

recommendations for Group and local operations. Some

of the panel’s initial observations are that:

• biodiversity management should cover a full scope

of operations, cement and aggregates sites

• biodiversity issues must be considered throughout

the entire lifecycle of a site, from early planning

through to closure

• sites should work with local experts and partners to

leverage their expertise

• rehabilitation can be done more cost-effectively by

providing the right conditions and structure so that

nature can re-establish itself, rather than planting

expensive flora

• progressive rehabilitation should be the preferred

option. This approach has proven to be more effective

in cost and time than an after-care program.

In addition to the global agreement with the IUCN,

Group companies and IUCN local branches have

undertaken joint projects in Costa Rica, Spain, Sri Lanka

and Vietnam. A joint workshop on capacity-building is

also being planned by our associated company in China

with the IUCN. For a case study on biodiversity action plans

in the UK and New Zealand, visit www.holcim.com/sustainable

Water conservation in Thailand

Our Group company in Thailand, Siam City Cement

has collaborated since 2007 with a local NGO to

support the construction of check dams to promote

water conservation.

Check dams retain water for use during droughts, slow

the flow of water in creeks, so reducing erosion and

other damage, and aid soil fertility. Water can also be

diverted from the dams into forest areas to limit the

build-up of dry leaves and reduce fire risk. Studies by

Chiang Mai University, supported by Siam City Cement,

have shown that check dams restore ecological balance,

revive natural resources, contribute to improved air

quality and help to raise local living standards.

The project was started following an environmental

initiative by the King of Thailand. Siam City Cement

provided funding of 27 million baht (USD 820,000) over

three years and supplied cement for construction. Over

1,000 volunteers, including Siam City Cement employees,

built 3,880 check dams in eight provinces over the

three-year period, which were handed over to the Chai

Pattana Foundation in a ceremony in December 2009.

Quarry or natural habitat? This rehabilitated quarry at El Puente in Spain has become a haven for an increasing variety of bird species.

17

Our Group company in Thailand, Siam City Cement, has been promoting water conservation with a project to construct 3,880 check dams in the country.


18

Biodiversity and water: key issues to be addressed

Growing population levels and continuing economic

development are increasing the demand for land,

food, water, energy and other resources, adding to

the pressure on ecosystems and biodiversity. Holcim

is a resource-intensive business with 154 cement and

grinding plants, 485 aggregates plants, 1,457 ready-mix

concrete plants and some 800 quarries worldwide.

We recognize that biodiversity supports essential

ecological functions and human wellbeing. It helps

to maintain ecosystem services, secure food supplies,

provide opportunities for recreation and tourism, and

safeguard sources of wood, medicines and energy.

Holcim has a long history of conducting environmental

and social impact assessments and of quarry

rehabilitation. The work we are undertaking in

partnership with the IUCN has confi rmed that

biodiversity needs to be considered throughout the

complete lifecycle of our operations from site opening

to closure. This is not just at a policy and planning level,

but also to ensure that existing tools are being adapted

and new ones integrated in an overall biodiversity

management system. More details on the partnership

with the IUCN can be found under stakeholder

engagement in this section.

We aim for effi cient water use in all our operations.

In cement production, water is used for cooling heavy

equipment and hot exhaust gases, for dust control and

for preparing slurries in wet process kilns. Water is also

used in concrete and aggregate operations. Feedback

from stakeholders has emphasized the importance

of improving our performance in managing water

resources, especially in areas where water is in short

supply. Holcim has reported among the lowest water

consumption in the sector, having reduced specifi c

water consumption signifi cantly from 430 liters per

tonne of cement in 2005 to 360 liters in 2009. Water

recycling is key to reducing process water usage in

our aggregate and ready-mix concrete operations.

Just under three-quarters (72%) of ready-mix concrete

operations have water recycling systems in place .

We have taken note of stakeholder concerns and

are developing a water management scheme for all

business units, which we intend to implement by the

end of 2013.

Eco-effi ciency is at the core of Holcim’s business –

producing more while using fewer resources and

producing less waste and pollution per tonne of

product. At Holcim, we are convinced that conserving

natural resources plays an ever-increasing role in our

long-term resource and reserve strategy and we aim

at continuously improving our performance.

“We have to find ways in which we can satisfy the housing and construction needs of the world without jeopardizing the environment with chemicals and affecting the flows of substances like water. The mining of limestone not only adversely affects the landscape, but also the hydrological cycle in the area.” Ashok Khosla, Chairman, Development Alternatives.


Resources conservation

Increasing competition for scarce land and water

resources are growing global concerns.

Target 80% of sensitive sites to have biodiversity action plans by 2013.





19

Key dataResources conservation

Stakeholder engagement

Holcim’s partnership with the IUCN to increase its

knowledge and experience in biodiversity issues and

realize operational efficiencies has been extended until

the end of 2010. The partnership is well on track to

deliver the expected objectives.

One of the first activities was to establish a baseline of

Holcim’s activities related to biodiversity management,

including the development of a biodiversity

management system. Guidelines for biodiversity-

based micro-enterprise development projects were

also developed and the IUCN is also being consulted

to ensure that greenfield projects address biodiversity

issues. Jointly, both organizations participated in a

number of events such as European Minerals Day, for

which Holcim opened 13 of its rehabilitated sites to

the public. Visit www.holcim.com/sustainable for a case

study on the European Minerals Day.

The Holcim–IUCN relationship is complemented by

Holcim’s active participation in the WBCSD (World

Business Council for Sustainable Development)

ecosystem focus area, which addresses ecosystem

and biodiversity issues. This provides an engagement

and collaboration platform with other industries to

address challenges and opportunities associated

with ecosystems and ecosystem services. For more

information, visit www.wbcsd.org

Furthermore, the WBCSD Cement Sustainability

Initiative and Cembureau (the organization that

represents the European cement industry) have

established task forces to explore and share best

biodiversity practices within the industry, in which

Holcim participates as well.



Cement Aggregates Ready-mixconcrete 2007 2008 2009 2007 2008 2009 2007 2008 2009

Number of 148 145 143 315 319 365 953 987 1,031 plants included in evaluation

Water

Water 340 320 360 647 621 643 240 230 238 consumption l/m3 l/m3 l/m3 l/t Total million 56 47 49 104 91 86 10 10 9 m3/a Water recycling n/a n/a 78%1 50% 45% 45% 72% 72% 72% systems

Quarry management and rehabilitation

% of plants 30% 28% 37% 17% 14% 28% 8% 8% 4% operating in sensitive areas2 Approved 94% 95% 97% 87% 83% 95% n/a n/a n/a mining plans by local authorities Rehabilitation 90% 91% 91% 81% 82% 95% n/a n/a n/a plans in place

Water, quarry management and rehabilitation EN10, EN11, EN13

Cement Aggregates Ready-mixconcrete 2007 2008 2009 2007 2008 2009* 2007 2008 2009

Road 73% 73% 74% 95% 95% 87% 100% 100% 100% Rail 18% 19% 17% 1% 2% 8% n/a n/a n/a Water 9% 8% 9% 2% 1% 4% n/a n/a n/a Other n/a n/a n/a 2% 2% 1% n/a n/a n/a

Transport

Cement and aggregates are heavy, low-price, bulk products, and transport choices are thus driven by cost considerations: the table below details the methods employed by Holcim to transport products.

EN22

Members of the Independent Expert Panel visiting an area neighboring our plant in Moloko, Indonesia.

1 Relates to closed circuit equipment cooling systems.2 The increase in figures reflects revised definition of sensitive area following input from

the IUCN and the expert panel.

* The difference from previous years is mainly due to a revised calculation methodology.




Social commitment

Best practice

The winner of a conservation poster competition receives her prize at a Conservation Day conducted by our Group company in the USA.

Making a difference – engaging and

motivating employees

Creating an innovation culture and promoting active

engagement of employees can help generate creative

ideas around sustainable development while saving

costs. To encourage this creativity, Holcim US is

conducting Conservation Days in plants all over the

country. The fi rst one took place in the Ada plant in

Oklahoma in December 2007.

The Conservation Days aim at raising awareness

among employees, their families and members of

local communities of how daily choices impact on the

environment. The program motivates and educates

participants on how to take personal and professional

stewardship for protecting the environment and

“to pledge to make a difference today”.

Conservation Day visitors are encouraged to visit

different interactive stations covering themes such

as energy conservation, recycling, carbon footprint

calculation and transportation. After computing their

personal carbon footprint, employees are given the

opportunity to pledge to reduce their footprint, using

recommendations learned at the various theme booths

at the event. Holcim fuels their enthusiasm with a

Conservation Fund. Employees who purchase an energy-

effi cient vehicle, an energy star-approved appliance or

complete a home energy savings project receive a

small subsidy.

The program helped to raise awareness on how to

reduce a family’s carbon footprint with simple solutions

and to change individual attitudes at home as well

as at work. Plant employees’ action had an impact on

the community. In one community, for example, the

local high school formed a Holcim Conservation Youth

Leadership group promoting the conservation concept

in many schools and the carbon footprint concept was

introduced to other organizations.

20

“Attending the Conservation Day motivated our family to make a variety of changes from purchasing a hybrid car to buying re-usable grocery bags. These small changes make all the difference.” Karen Bittner, employee of Holcim US.




Dialogue with employee representatives

In all countries of operation, we support collective

bargaining and proactively collaborate with elected

employee representatives. In addition, we engage with

employee bodies at national or international levels.

One example is the European Forum. It comprises

29 representatives of 13 countries covering the

United Kingdom as well as Western, Eastern and

Central Europe. The forum is further staffed with two

representatives of the European labor union (European

Federation of Building and Woodworkers, EFBWW), and

two observers from the Swiss operating company. All

delegates have clearly defined roles, responsibilities and

rights of involvement.

Topics and issues which have an international impact,

such as significant changes in organizational structure

and production processes are dealt with by the

forum. It further must be informed of any initiative or

project that may have a cross-border impact on social

structures, conditions of employment or employees.

Sewing shops were established in Volsk, Russia following an engagement by our Group company Alpha Cement to establish the needs of the community.

Employee representatives of the European Forum at a meeting on occupational health and safety issues held in Belgium.

Selecting the right community projects

Following an assessment of its community activities,

Alpha Cement, our Group company in Russia, began to

implement a program that is driven and ultimately owned

by community stakeholders. In April 2009, Alpha Cement

launched a project competition in Volsk, in collaboration

with local authorities. Local stakeholders had the

opportunity to suggest projects for funding and project

implementation support. The projects needed to comply

with a set of criteria and a jury composed of internal and

external experts nominated winners according to the

established selection criteria (relevance of project, urgency

of problem, probable effectiveness, innovation, number

of beneficiaries, and soundness of project planning).

Examples of successful projects include the establishment

of a sewing shop, offering employment to disabled people,

as well as affordable sewing services to low-income

citizens; the renovation and equipping of a health center

for the mainly retired citizens living on the outskirts of the

city; and the creation of a learning environment for English

studies at the local school.

Overall, 12 projects were implemented in collaboration

with local authorities between June and November

2009, reaching about 70,000 beneficiaries.

21Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assuranceSustainable products and sustainable construction Energy and climate Resources conservation Social commitment

22

Shared sustainable benefi ts

Our approach to social engagement has always been

strategic, not philanthropic. Social responsibility is

how Holcim manages its business while benefi ting

society and all its stakeholders. Employment practices,

occupational health and safety, upholding human rights

and community engagement are focus areas for Holcim.

Holcim as an employer

Holcim recognizes the crucial role employees play

in creating value. They are the basis of success. This

recognition is clearly refl ected in the Group strategy. For

Holcim to succeed, it needs competent, committed and

engaged employees. We therefore want to be attractive

in the highly competitive employment market and

approach talent proactively. Our employment practices

contribute to creating a working environment where

employees can fl ourish.

By nature of our global structure, we are a company

with a highly diverse workforce, particularly in terms of

culture and age. In our senior management team alone,

60 nationalities are represented. In what is traditionally

a heavy manufacturing environment, driving gender

diversity remains a challenge, and in 2009, 12% of the

workforce was represented by women, while 8% of our

top and senior managers were female . More than

ever, we are committed to providing equal opportunities

for all our employees and work on strengthening

a culture of mutual respect, trust and openness.

To foster this culture, we further engage with elected

employee representatives. See page 21 for a case study

on the European Forum. On average, 47% of employees

are represented by an independent labor union and in

countries where no unions exist, Holcim makes sure

that collective bargaining takes place and an employee

complaint system is implemented . In striving to be

one of the most attractive employers in our industry,

we further ensure wages that refl ect local industry

standards, and at the lowest paid entry level, our

Group companies on average pay 138% above local

minimum wage .

Professional and individual development is crucial

to maintaining the high competence level of our

employees. Despite the economic crisis, a high level

of training has been maintained. In 2009, Group

companies reported a total of 1,240,620 hours of

training for employees, 75% of which was received

by non-managerial level employees . For more

information about our corporate training activities, see our

Annual Report, page 48.

In addition to our performance management system,

which provides a framework for the evaluation of

performance and setting of objectives, all middle

Social commitment

Through its longstanding social commitment, Holcim

aims at contributing to a more sustainable society.

Diversity Our 1,957 top and senior managers represent 60 nationalities. Women constitute 12% of the workforce.


“We congratulate Holcim as a leader in the cement industry in reducing its emissions. ICEM member unions appreciate the serious efforts by Holcim in developing alternative fuels, such as biomass. In the next report we would like to see substantiation of Holcim’s commitment to global labor standards such as the ILO Conventions, the UN Global Compact and the OECD guidelines. It is our sincere hope that Holcim designates a specific resource to deal with social dialogue.” Phee Jung Sun, ICEM – International Federation of Chemical, Energy, Mine and General Workers’ Unions.






23

Key dataSocial commitment

and senior managers complete a leadership training

program. In the context of this training, direct reports, as

well as peers and internal clients, have the opportunity

to evaluate performance and leadership skills. This

enables managers to gain a better understanding of

their personal strengths as well as improvement

potential for their next career steps. Since 2007, over

550 senior and top managers have participated.

Due to the global economic recession, some

redundancies were necessary in Holcim Group

companies in 2009. These were made in accordance

with prevailing legislation and with sensitivity toward

those affected. In many cases support such as retraining

or assistance in finding other employment was offered.

Fostering a safe working environment

Occupational health and safety (OH&S) is and remains

a top priority for Holcim. The health and safety of

employees, contractors, third parties and visitors is

fundamental to our business success. We recognize that

even one incident is one incident too many. There are

significant challenges in embedding a culture of safety

not just within our plants, but also specifically among

third-party contractors and drivers transporting

our products.

Despite ongoing efforts, we deeply regret that 28 people

lost their lives in 2009 while discharging their duties

for Holcim . We remain committed to achieving our

vision of “zero harm to people” and will continue with

efforts to improve our safety performance. All accidents

and near-misses are exhaustively analyzed and

communicated internally.

A systematic approach is followed, guided by the Holcim

OH&S management system, which has 19 specific

building blocks. Clear organizational and personal

accountabilities are supported by a robust program of

training, communication, strict procedural discipline

and locally developed policies and action plans. Five

Cardinal Rules, visit www.holcim.com, have been laid

down, and there is zero tolerance for breaches. In this

context, managers are required to lead the way as role

models and make OH&S part of the daily routine of

all employees.




Female workforce

Lost-time injury frequency rate*

Fatalities – cement, aggregates and ready-mix concrete*

LA2, LA14

LA8

LA8

% of female workforce

LTIFR

Number of fatalities

Top management level Middle management level

Directly employed (2007: 89,364/2008: 86,713/2009: 81,498) Indirectly employed Other

Directly employed

Senior management level Other employees

* Numbers of fatalities are reported following the WBCSD reporting standards.

* Data for LTIFR are regrouped to reflect the CSI reporting standards. Direct employees include own and subcontracted personnel under direct Holcim supervision. The lost- time injury frequency rate (LTIFR) is calculated as:

Number of lost-time injuriesTotal number of hours worked

x 1,000,000

0

5

10

15

20

7

12

0

5

10

15

20

9

13

16

8

13

7

Female 2007 Female 2008 Female 2009

78

12 12

2007 2008 20090

5

10

15

20

25

19

0

5

10

15

20

2521

5

8

15

8

6

19

2

2007 2008 2009 20100

1

2

3

4

5

6

3.9

0

1

2

3

4

5

6

0

1

2

3

4

5

6

Threshold<2

2.7

2.1

Target


Data include all cement, aggregate and ready-mix concrete operations.

Sustainable products and sustainable construction Energy and climate Resources conservation Social commitment


24

All Group companies are required to implement a

series of fatality prevention directives by the end of

2010. Furthermore, new directives on contractor safety

management and safety in alternative fuels and

resources (AFR) platforms have been developed and are

being rolled out.

In line with our commitment to the Cement

Sustainability Initiative, our OH&S performance in 2009

has been externally assured by PricewaterhouseCoopers.

Upholding human rights

There is a growing responsibility on companies,

especially those operating in confl ict-affected

countries, to manage human rights transparently and

in accordance with universally accepted principles. Our

stakeholders encourage us to engage with this issue

beyond the traditional fi elds of labor rights and worker

safety and ask that we use our presence as a positive

contribution in these countries.

Holcim follows an integrated approach to managing

human rights based on the commitments stated in

our CSR policy and our support for the UN Global

Compact. Responsibility for managing human rights

issues rests with Group company line management.

All Group companies are required to apply global

Holcim standards and are expected to take appropriate

measures to mitigate any human rights risks present in

the country. In our global survey, eight Group companies

identifi ed a country risk of child labor, eight a country

risk of forced or compulsory labor and seven a country

risk of freedom of association . In these cases, Group

companies are encouraged to develop a related policy.

Twenty-one Group companies implement human rights

training. Thirty-two Group companies undertake human

rights assessments when taking major investment

decisions and where specifi c issues arise, our Group

companies are encouraged to conduct Human Rights

Impact Assessments (HRIAs), and take appropriate

measures based on the outcomes of the assessment.

Operating in confl ict-affected countries

Holcim has a long history in engaging with the

communities where we operate. However, in confl ict-

affected countries, a strong external partner is needed

to defi ne and implement humanitarian action. For this

reason Holcim joined the Corporate Support Group of

the International Committee of the Red Cross (ICRC)

at the beginning of 2010. The collaboration enables

Holcim to work with an organization that has earned

exceptional international credibility in protecting

the lives and dignity of victims of armed confl ict

and other situations of violence, and providing

them with assistance.

With this collaboration we would like to target specifi c

humanitarian projects in confl ict-affected countries,

where both Holcim and the ICRC operate, promoting

projects linked to our business activities.

Holcim initially supported a program to provide clean

water in Sudan in 2009. Improving access to water for

vulnerable people in rural areas of Sudan will continue

to be the focus in 2010. In addition, Holcim will support

the ICRC’s efforts to improve water supply and

sanitation systems in other confl ict-affected

communities such as Colombia.

Together with the ICRC, Holcim will defi ne, on a yearly

basis, the scope of the joint activities in selected

countries. In addition, the two organizations intend to

share their expertise and experiences in areas of mutual

interest such as crisis and risk management, provision

of water services and infrastructure development.


“It is important that Holcim recognizes human rights as an issue that applies beyond OH&S and the rights of employees. The challenge Holcim faces is in addressing it as an overarching priority and demonstrating that to external stakeholders.” Melany Grout, Director, Confl ict Risk Network.


Holcim has joined the ICRC Corporate Support Group and will target humanitarian projects in confl ict-affected countries where we operate.






25

Key dataSocial commitment



Type of engagement % of Group companies 2007 2008 2009

Needs assessment 65% 65% 46%

Stakeholder involvement in CSR planning 85% 83% 83%

CSR/SD memberships 70% 77% 79%

Stakeholder dialogues 89% 88% 83%

Community advisory panels 50% 54% 38%

Cooperations 76% 65% 67%

Stakeholder engagement at local level*

* �2007 data covered 46 Group companies and 2008 and 2009 data covered 48 Group companies.

SO1

Contributing to sustainable community development

Community engagement that results in mutual

trust and social acceptance remains a priority for

Holcim in all countries of operation. Related activities

focus on developing countries, in particular, places

where institutional capacities are not adequate.

Effective relations with our host communities and the

implementation of collaborative projects that are based

on community needs represent sound risk management,

ensure freedom to operate and lead to economic

success. Our approach is to contribute innovative

solutions to some of the most pressing development

issues in the communities where we operate.

In the context of our focus areas – education,

community development and infrastructure – we are

currently concentrating our efforts on sustainable

affordable housing initiatives, micro-enterprise

development and vocational training. In 2009,

CHF 36 million was spent on community engagement,

which is around 1.4% of net income before tax,

benefiting some 3 million people .

Given the high quality of ongoing community projects

and the expertise of our CSR staff, we were able to

attract significant amounts of external funding,

allowing for an upscaling of existing projects. In Brazil,

for example, the Interamerican Development Bank

approved an income generation project in Cantagalo,

Rio de Janeiro, and invested USD 138,600 out of a total

of USD 290,000.

To adopt an even more strategic approach to

community investment, Group companies are asked to

evaluate community initiatives to ensure that they are

adding value to both the stakeholders involved and the

company. By the end of 2009, 56% of Group companies

had assessed their most important projects using the

Social Engagement Scorecard (SES), a tool developed

by Holcim to measure the effectiveness of projects

and donations. The assessment led to a reduction of

some donations to good causes while other strategic

community projects were strengthened.

Stakeholder engagement

Community advisory panels and other community

engagement activities have proven to be an excellent

way to collaborate with community stakeholders,

share responsibilities and ensure project ownership.

To ensure that all operational sites have a community

engagement plan in place, a new target has to be

achieved by 2012.

Visit our website for a complete list of memberships

and partnerships.

Target All Group companies should have a community engagement plan in place for their sites by 2012.


Community involvement EC1Community spending (CHF million)

Donations and charity Education projects Community development projects

Infrastructure community projects CSR overhead Other

2007 2008 20090

3

6

9

12

15 15

0

3

6

9

12

15

7 7

4

9 9

12

6 6

3

67 7 7

6

2

5

7


http://www.holcim.com/sustainable


26

KPI UNGCprinciples

GRI 2007 2008 2009

Sales in CHF billionNet sales 3 EC1 27.1 25.2 21.1Input factor (cost of all goods, materials and services provided) EC1 14.0 15.0 12.0Depreciation and amortization EC1 1.9 2.0 1.9Value creation for Holcim and key stakeholders EC1

Benefit to employees 4.6 4.5 3.9Benefit to governments (taxes) 1.2 0.7 0.6Benefit to shareholders (including minorities) 1.2 1.3 0.8Benefit to creditors 0.8 0.8 0.8Benefit to communities 0.048 0.041 0.036Retained in business 3.3 0.9 1.2

Sales of cement (million tonnes) 3 149.6 143.4 131.9Sales of mineral components (million tonnes) 3 5.5 4.8 3.5Sales of aggregates (million tonnes) 3 187.9 167.7 143.4Sales of ready-mix concrete (million m3) 3 45.2 48.5 41.8Sales of asphalt (million tonnes) 3 14.8 13.5 11.0Sustainable product% of cement products containing mineral components 3 EN2 75% 78% 80%Cement types produced by HolcimSlag cement (%) 10 11 9Pozzolan cement (%) 7 8 9Fly ash cement (%) 19 23 26Limestone cement (%) 12 15 14Multiple blend cement (%) 23 17 17Masonry cement, oilwell cement, white cement special binder, MIC and other (%)

4 4 5

Ordinary Portland Cement (%) 25 22 20SuppliersGoods, services and materials purchased (CHF billion) EC1 14.0 15.0 12.0Global suppliers screened using the self-assessment questionnaire (%)

HR1 HR2

78 95 96

Group companies screening local suppliers (%) OHS standards (%) 83 96 92EMS systems (%) 44 81 81Labor standards (other than human rights) (%) 67 77 83Social accountability or other human rights criteria (%) 59 67 75

Local suppliers screened OHS standards (%) 23 38 38EMS systems (%) 19 29 30Labor standards (other than human rights) (%) 21 34 44Social accountability or other human rights criteria (%) 20 26 29

Government relationsPolitical contributions (CHF) SO6 415,468 1,018,054 279,491Number of Group companies making political donations SO6 5 9 7Average subsidies from national governments (grants, tax relief and other financial benefits) (CHF million)

EC4 4.1 4.7 3.1

Number of Group companies receiving subsidies EC4 12 12 15Customer relations% of Group companies conducting a customer survey PR5 65 79 75

% of those surveyed measuring customer satisfaction 80 71 88% of Group companies with a specific customer health and safety policy

PR1 50 52 54

% of Group companies with a specific product information and labeling policy

PR3 39 44 50

Economic performance

Performance data

Visit www.holcim.com/sustainable c0ntinued

Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assuranceEconomic performance Environmental performance Social performance




27

KPI UNGC principles

GRI 2007 2008 2009

Number of plants included in evaluationCement EN3 148 145 143Aggregates EN3 315 319 365Ready-mix concrete EN3 953 987 1,031Management systemsImplementation of ISO 14001 (% of plants)

Cement plants 93 93 92AFR pre-treatment platforms 92 84 84Aggregate plants 56 57 53Ready-mix concrete plants 37 35 39

Environmental investments and environmental complianceEnvironmental investments (CHF million) EN30 144 132 40Provisions for site restoration and other environmental liabilities (CHF million)

EN13 518 478 585

Number of plants/quarries reporting non-compliance cases EN28Cement 8 4 8Aggregates 4 2 33Ready-mix concrete 13 15 31

Non-compliance casesCement 8 4 9Aggregates 4 4 40Ready-mix concrete 18 25 41

Associated fines and penalties (CHF) EN28Cement 1,025,000 320,000 253,900Aggregates 19,500 19,875 9,400Ready-mix concrete 111,500 53,900 3,022,300*

Reducing CO2 emissions Absolute gross CO2 emissions (million tonnes) 3 EN16 108.5 105.5 96.6

Without power generation 104.6 101.2 92.2Emissions of on-site power generation 3.9 4.3 4.4

Absolute net CO2 emissions (million tonnes) 3 105.3 102.3 93.7Without power generation 101.4 98.0 89.3Emissions of on-site power generation 3.9 4.3 4.4

Specific gross CO2 emissions (kg CO2/t cementitious materials) 3 3 664 654 645Without power generation 640 628 616Emissions of on-site power generation 24 26 29

Specific net CO2 emissions (kg CO2/t cementitious materials) 3 3 644 634 626Without power generation 620 608 597Emissions of on-site power generation 24 26 29

AggregatesAbsolute gross CO2 emissions (million tonnes) 0.26 0.24 0.22Specific gross CO2 emissions (kg CO2/tonne of product) 1.6 1.6 1.7

Ready-mix concreteAbsolute gross CO2 emissions (million tonnes) 0.10 0.09 0.08Specific gross CO2 emissions (kg CO2/m3) 2.4 2.1 2.2

AsphaltAbsolute gross CO2 emissions (million tonnes) 0.22 0.16 0.18Specific gross CO2 emissions (kg CO2/tonne of product) 19.2 13.6 13.3

Indirect CO2 from purchased power (million tonnes) EN4Cement 6.6 6.6 5.9

EnergyThermal energy mix of clinker production (%) EN3

Coal 52 56 56Petcoke 20 21 19Heavy fuel 2 1 1Natural gas 12 8 8Shale and lignite 2 2 4

Environmental performance



* This increase results from a settlement of approximately CHF 3.0 million paid by a Group company in the USA to the US EPA.

Economic performance Environmental performance Social performance





28

Environmental performance (c0ntinued)

c0ntinued Visit www.holcim.com/sustainable


KPI UNGC principles

GRI 2007 2008 2009

EnergyAlternative fossil fuels EN3 9 10 10Alternative biomass fuels 2 2 2

Thermal energy efficiency (MJ/tonne clinker) 3 3 3,666 3,661 3,580Thermal substitution rate (% thermal energy from alternative fuels)

3 3 EN5 11.1 11.7 12.1

Waste types used as alternative fuels (%) EN3 EN5Waste oil 8 8 8

Tires 17 16 15Plastics 11 12 13Solvents 12 11 10Impregnated sawdust 9 8 10Industrial waste and other fossil-based wastes 27 27 27Animal meal and animal fat 4 3 3Agricultural waste/charcoal 7 9 9Wood/non-impregnated sawdust 2 3 3Other biomass 3 3 2

Clinker factor (average % of clinker in cement) 3 3 EN2 72.5 71.8 71.1Fuel consumption (specific MJ/t)* EN3

Cement 3,025 3,007 2,932Aggregates 22 22 22Ready-mix concrete (MJ/m3) 21 20 31

Fuel consumption (total MGJ/a)*Cement 461 457 439Aggregates 3.5 3.2 3.0Ready-mix concrete 0.9 0.9 1.2

Power consumption (specific) kWh/t* Cement 105 105 104Aggregates 2.5 2.5 2.8Ready-mix concrete (kWh/m3) 3 3 3.7

Power consumption (total million kWh/a)* Cement 16,942 16,779 15,454Aggregates 381 368 366Ready-mix concrete 124 126 135

Other atmospheric emissionsNOx EN20

Number of kilns reporting 141 145 133Total emissions (tonne/a) 3 199,595 171,925 152,100Average specific concentration (g/tonne cementitious materials)

3 1,220 1,160 1,120

SO2Number of kilns reporting 150 143 133Total emissions (tonne/a) 3 52,670 49,335 24,670Average specific concentration (g/tonne cementitious materials)

3 320 330 180

DustNumber of kilns reporting 160 152 137Total emissions (tonne/a) 3 17,735 14,400 12,090Average specific concentration (g/tonne cementitious materials)

3 110 100 90

MercuryNumber of kilns reporting 129 144 126Total emissions (tonne/a) 2.7 1.9 1.8Average specific concentration (g/tonne cementitious materials)

0.02 0.015 0.013

* Due to ownership changes in 2009, some figures for previous years have been restated. Fuel consumption figures for cement includes kiln and non-kiln fuels. 2009 fuel consumption figures for aggregates and ready-mix concrete includes natural gas (previously excluded).







29

Environmental performance (c0ntinued)


* This figure excludes our plants in India. † The increase in figures reflects a revised definition of “sensitive area” following input from the IUCN and the expert panel.


KPI UNGC principles

GRI 2007 2008 2009

Other atmospheric emissions (continued)Organics EN20

Number of kilns reporting 145 141 133Total emissions (tonne/a) 10,280 8,320 5,080Average specific concentration (g/tonne cementitious materials)

63 56 37

Dioxins/furansNumber of kilns reporting 129 136 127Total emissions (grams/a) 6.0 6.0 5.2Average specific concentration (micrograms TEQ/tonne cementitious materials)

0.037 0.040 0.038

Implementation rate of continuous emission monitors (%)* 83 83 85Biodiversity and resources conservation% of sites operating in environmentally sensitive areas† 3 EN13

Cement 30 28 37Aggregates 17 14 28Ready-mix concrete 8 8 4

Approved mining plans by local authoritiesCement 94 95 97Aggregates 87 83 95

% of sites with quarry rehabilitation plans in place 3

Cement 90 91 91Aggregates 81 82 95

WaterWater consumption l/t EN8

Cement 340 320 360Aggregates 647 621 643Ready-mix concrete (l/m3) 240 230 238

Water consumption (total million m3/a) EN8Cement 56 47 49Aggregates (water withdrawal) 104 91 86Ready-mix concrete 10 10 9

Water recycling systems EN10Cement n/a n/a 78%Aggregates 50% 45% 45%Ready-mix concrete 72% 72% 72%

TransportRoad (%) EN29


Rail (%)Cement 18 19 17Aggregates 1 2 8

Water (%)Cement 9 8 9Aggregates 2 1 4

Other (%)Cement n/a n/a n/aAggregates 2 2 1

Waste management and recyclingGeneral waste management system (%) EN22


Returned concrete recycling system (%)Ready-mix concrete 22 30 27


30 Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assurance

KPI UNGC principles

GRI 2007 2008 2009

CSR strategy% Group companies with a specific CSR strategy 3 80 83 94Employment practicesGroup employees by region LA1 89,364 86,713 81,498

Europe 22,905 23,557 20,800North America 11,190 9,825 8,016Latin America 13,409 13,548 12,626Africa Middle East 2,795 2,477 2,256Asia Pacific 38,133 36,196 36,858Corporate 932 1,110 942

Employee turnover (%) LA2Europe n/a 12.3 15.6North America n/a 20.1 29.5Latin America n/a 14.6 12.7Africa Middle East n/a 3.9 3.7Asia Pacific n/a 5.8 7.3Corporate n/a 8.4 23.2

Personnel expenses (CHF million) LA3 4,558 4,497 3,939Europe 1,761 1,837 1,577North America 1,265 1,103 918Latin America 543 603 471Africa Middle East 150 105 92Asia Pacific 574 598 632Corporate 265 251 249

% of female workforce LA13Top management level 3 6 7 7Senior management level 3 9 8 8Middle management level 3 16 12 13Other employees 13 12 12

Notice given for operational changes LA5 5–6 weeks

5–6 weeks

5–6weeks

% Group companies conducting employee satisfaction surveys 59 42% Group companies with employee grievance procedures 76 75 81

% where grievances can be submitted anonymously 55 48 63TrainingHours of training per employee LA10

Senior management 57 68 32Middle management 65 77 47Other organizational levels 30 25 23Average all levels n/a 31 27

Occupational health and safetyNumber of fatalities – cement, aggregates and ready-mix concrete

3 LA7

Directly employed 9 16 8Indirectly employed 11 9 15Other 28 2 5

Lost-time injury frequency rate LA7Directly employed 3 3.9 2.7 2.1

% Group companies with serious disease programs LA8 91 88 83% Group companies with joint health and safety committees LA6 100 98 98

% of workforce represented by committees LA6 83 81 74

Social performance

c0ntinued Visit www.holcim.com/sustainable

* Employee satisfaction surveys are conducted on a cyclical basis, generally every one to three years. Due to the global economic crisis, a number of Group companies cancelled or postponed surveys due to be conducted in 2009.

27*





31Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assurance

KPI UNGC principles

GRI 2007 2008 2009

Human rights% Group companies giving training on equal opportunity policies HR3 61 50 56% Group companies giving training on human rights policies HR3 30 40 44Community involvementCommunity spending (CHF million) 3 EC1 48 41 36

Donations and charity 15 12 9Education projects 7 6 5Community development projects 7 6 7Infrastructure community projects 9 7 7CSR overhead 6 7 6Other 4 3 2

Community spending breakdown (%) Donations and charity 32 29 27Education projects 14 14 15Community development projects 15 14 18Infrastructure community projects 18 18 18CSR overhead 13 18 16Other 8 7 6

Stakeholder engagementStakeholder engagement at local level (% of Group companies) SO1

Needs assessment 65 65 46Stakeholder involvement in CSR planning 85 83 83CSR/SD memberships 70 77 79Stakeholder dialogues 89 88 83Community advisory panels 3 50 54 38Cooperations 76 65 67

Social performance (c0ntinued)

Visit www.holcim.com/sustainable



32

Methodology

We continue to develop a robust framework for managing

and reporting SD performance.

Methods of data collectionWe collect information from Group companies using the following tools: Plant Environmental Profile (PEP)questionnaire; equipment data and operating statistics based on annual plant technical reports; corporate CO2 inventory according to the WBCSD/WRI Cement CO2 Protocol; corporate OH&S questionnaire; corporate social responsibility questionnaire.

Our data collection systems enable monitoring of performance at three operational levels: individual plant performance, Group company and corporate consolidation of global performance.

System boundariesThe scope of our reporting is outlined below.

Economic performance – Data included represent consolidated data from Holcim Group plants and companies covering all of the Group’s operations, and are consistent with those reported in the Holcim Annual Report 2009.

Environmental performance – CO2 and energy: the scope of data collection for CO2 and resources use includes integrated cement plants, grinding stations and terminals. Consolidation of data is consistent with the WBCSD/WRI Cement CO2 Protocol where operational control is used as a criterion.

Where Holcim owns between 20% and 50% of the Group company and does not have management control, data are proportionally consolidated; below 20%, the data are not reported; all other companies are reported 100%.

Other environmental data – The Plant Environmental Profile (PEP) self-assessment questionnaire is the source of performance information and data related to all other environmental impacts of the cement, aggregates and ready-mix concrete business segments; all data

from all principal consolidated Group companies are included in this report at 100%.

Restatement of historical data – Holcim now reports CO2 and resources use according to Version 2 of the WBCSD/WRI Cement CO2 Protocol. All historical data have been recalculated according to the updated Protocol, to enable comparison of data over time. Historical data are also restated to reflect changes in consolidation of companies and acquisitions/divestments.

Social performance – Personnel data represent consolidated data from Holcim Group plants and companies covering all of the Group’s consolidated operations. Occupational health and safety data are collected for all operations via monthly reports and an annual survey, which is then revalidated by our regular business process system. Data are segregated according to on-site and off-site (logistics-related) incidents, and cover directly and indirectly employed, third-party service providers, visitors and others. This is consistent with the WBCSD CSI Guidelines for Reporting. All other social performance data are derived from the CSR questionnaire, which covers all Group companies, and are fully consolidated.

Reporting cycleHolcim has publicly reported SD performance for the last seven years. A full report is published each second year (the last in 2008), with data and performance information updated on our website every year.

External assuranceTwo Tomorrows has undertaken external assurance of our reporting, including a stakeholder review of our materiality process and of the draft report. See page 33 for more information. PwC provided independent assurance of our CO2 data for the 2008 and 2009 reporting periods and OH&S data for the 2009 reporting period. See page 34 for more information.

Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assuranceMethodology Two Tomorrows assurance statement PricewaterhouseCoopers assurance statement Holcim response Communication on progress Methodology Two Tomorrows assurance statement PricewaterhouseCoopers assurance statement Holcim response Communication on progress


Two Tomorrows assurance statement

Independent Assurance Statement

Scope and objectivesTwo Tomorrows (Europe) Limited has undertaken independent assurance of the Holcim Corporate Sustainable Development Report (CSDR) 2009. The assurance process was conducted in accordance with AA1000AS (2008). We were engaged to provide Type 1 assurance, which covers evaluation of adherence to the AA1000APS (2008) principles of inclusivity, materiality and responsiveness (the Principles). The scope of our work also included an evaluation of Holcim’s reporting against the Cement Sustainability Initiative Commitments.

We undertook no checking of sustainability performance data and consequently offer no assurance over performance data or associated claims included in the report. Any claims relating to financial information contained within the report are excluded from the scope of this assurance process. The scope of our work did not include a review of the report against the Global Reporting Initiative (GRI) Sustainability reporting Guidelines; confirmation of the Application Level achieved by this report was made by GRI. For further information on “the responsibilities of the Executive Committee of Holcim and the assurance providers” and “the basis of our opinion”, and additional observations, please see the full version of this assurance statement available on www.holcim.com/sustainable

FindingsWe reviewed and provided feedback on drafts of the report and where necessary changes were made. The level of assurance is moderate as defined by the scope and methodology described in the full version of this assurance statement. We found that the report achieves a good level of alignment with the disclosures expected through the Cement Sustainability Initiative Commitments.

Observations Without affecting our assurance opinion we also provide the following observations.

Inclusivity concerns the participation of stakeholders in developing and achieving an accountable and strategic response to sustainability.• Holcim maintains a wide range of mechanisms for involving

stakeholders in the development of Holcim’s response to the challenges of sustainability, at both an international and national level. Holcim has introduced new ways of measuring progress toward biodiversity objectives, and in future we recommend that Holcim should report in more detail on the outcome of these activities.

• In our statement for the Holcim CSDR 2007, we recommended that future reports should seek to further illustrate how engaging with customers on Holcim’s development of products with greater eco-efficiency is being achieved. Whilst the report does include examples of products with greater eco-efficiency, it is difficult to appreciate the significance of these products in the context of sales volumes across the entire portfolio. Future reports would be enhanced through provision of a vision for the future of products with greater eco-efficiency. We also recommend that Holcim should introduce reporting on additional measures to support claims relating to reductions in embedded product carbon.

Material issues are those which are necessary for stakeholders to make informed judgments concerning Holcim and its impacts.• In our opinion the report includes information on Holcim’s

main sustainable development issues and should enable global stakeholders to make informed judgments. We consider that the level of detail and balance of information provided on the highest materiality issues is appropriate at Group level.

• For future reports, we recommend that Holcim should include additional analysis on the financial implications of its sustainability programme. Examples of relevant elements could include the net costs and savings from atmospheric emission reduction activities, and the predicted financial and operational implications for the business of emissions trading schemes, as proposed at the time. Future reports should also make clear Holcim’s involvement in any CDM projects and carbon offsets on a consolidated global basis, in terms of financial investment and carbon reductions.

• We recommend that future reports should provide an overview of which Group companies have affordable housing programmes in place, the stage of evolution of these programmes, and the numbers of people benefiting from these programmes. We recommend that information should also be provided on the status of discussions with key stakeholders associated with these programmes, on common challenges such as land ownership, local skills in construction, and availability of micro-finance.

Responsiveness concerns the extent to which an organisation responds to stakeholder issues.• From our observations we can confirm that the outputs of the

Stakeholder Report Review Panel have received full consideration, and many of the suggestions generated through this process have resulted in positive improvements to the CSDR.

• In our statement for the Holcim CSDR 2007, we recommended that Holcim should extend assurance processes to priority indicators within the CSR and environmental data sets, beyond the existing assurance of CO2 data. Assurance processes for the CSDR 2009 have been extended to include safety performance data. For the next CSDR, we recommend that key performance indicators from the CSR data sets and other specific environmental impact areas should be included in the scope of assurance activities.

• The CSDR includes new performance targets linked to the Holcim Operational Roadmap. Building on from feedback from the Stakeholder Report Review Panel, we recommend that Holcim should consider setting a new ‘impact or outcome oriented’ performance target relating to affordable housing, as part of Holcim’s vision and leadership for sustainability in its sector.

May, 2010Two Tomorrows (Europe) LimitedLondon

Jon Woodhead Thomas KrickGroup Director Senior Consultant

Methodology Two Tomorrows assurance statement PricewaterhouseCoopers assurance statement Holcim response Communication on progress

34

PricewaterhouseCoopers assurance statement

Independent Assurance Report on the carbon dioxide emissions

and occupational health and safety data disclosed in the Corporate

Sustainable Development Report 2009 of Holcim Ltd, Rapperswil-Jona.

To the Executive Committee of Holcim Ltd, Rapperswil-Jona (‘Holcim’):

We have performed assurance procedures to provide assurance on the following aspects of the carbon dioxide (‘CO2’) emissions and occupational health and safety (‘OH&S’) data disclosed in Holcim’s Corporate Sustainable Development Report 2009.

Subject matterData and information disclosed in the Corporate Sustainable Development Report of Holcim and its consolidated subsidiaries, for the period January 1, 2008 to December 31, 2009 on the following aspects:• The application of the WBCSD Cement Sustainability Initiative

(CSI) Cement CO2 Protocol, the WBCSD guidelines ‘CSI Safety in the Cement Industry: Guidelines for measuring and reporting’ and Holcim internal CO2 emissions and OH&S data reporting guidelines to the CO2 emissions and OH&S reporting;

• The internal reporting system and procedures, including the control environment, to collect and aggregate CO2 emissions and OH&S data;

• The CO2 emissions data in the tables in the section Environmental Performance on page 27 and the OH&S data (Fatalities & LTIFR) in the tables in the section Social Performance on page 30 of the Corporate Sustainable Development Report 2009.

Criteria• The WBCSD Cement Sustainability Initiative (CSI) Cement CO2

Protocol: CO2 Accounting and Reporting Standard for the Cement Industry, June 2005;

• The WBCSD guidelines ‘CSI Safety in the Cement Industry: Guidelines for measuring and reporting’, updated October 2008 (Version 3.0);

• The Holcim internal CO2 emissions and OH&S data reporting guidelines;

• The defined procedures by which the CO2 emissions and OH&S data are gathered, collated and aggregated internally as part of the data management of Holcim; and

• The principles summarized in the section “Methodology and assurance” on page 32 of the Corporate Sustainable Development Report which define the scope of the reporting.

Responsibility and MethodologyThe accuracy and completeness of CO2 emissions and OH&S data are subject to inherent limitations given their nature and methods for determining, calculating and estimating such data. Our assurance report should therefore be read in connection with Holcim’s internal guidelines, definitions and procedures on the reporting of its CO2 and OH&S performance.

The Holcim Executive Committee is responsible for both the subject matter and the criteria. Our responsibility is to provide a conclusion on the subject matter based on our assurance procedures in accordance with the International Standard on Assurance Engagements (ISAE) 3000.

Main Assurance ProceduresOur assurance procedures included the following work:• Evaluation of the application of external and internal reporting

guidelines. Reviewing and assessing the application of the external WBCSD CSI Cement CO2 Protocol, the WBCSD CSI Safety measuring and reporting guidelines and the Holcim internal CO2 emissions and OH&S data guidelines;

• Site visits. Visiting selected plants of Holcim in France, Belgium, Germany, Brazil, USA, Philippines and India. The selection was based on quantitative and qualitative criteria;

Interviewing personnel responsible for internal reporting and data collection at the plants we visited and at the country Head Office level;

• Assessment of the performance indicators. Performing tests on a sample basis of evidence supporting the CO2 emissions and OH&S related data (fuel consumption, fuel net calorific values, clinker production, calcination/emissions factor, bypass dust and CKD, clinker produced/bought/sold and clinker/cement substitutes, fatalities, injuries, direct/indirect employees, days lost, hours worked) relative to completeness, accuracy, adequacy and consistency;

• Review of the documentation. Reviewing the relevant documentation on a sample basis, including management and reporting structures and documentation;

• Assessment of the processes and data consolidation. Reviewing the appropriateness of the management and

reporting processes for CO2 and OH&S reporting; and Assessing the consolidation process of data at the group level.

ConclusionsIn our opinion• The external WBCSD CSI Cement CO2 Protocol and WBCSD CSI

Safety measuring and reporting guidelines are applied properly;• The internal CO2 emissions and OH&S data reporting guidelines

are applied properly;• The internal reporting system and procedures to collect and

aggregate CO2 emission and OH&S data are functioning as designed and provide an appropriate basis for its disclosure.

Based on our work described in this report, nothing has come to our attention that causes us to believe that the data and information mentioned in the subject matter and disclosed in the Corporate Sustainable Development Report 2009 of Holcim does not give a fair picture of Holcim’s performance in the area of CO2 emissions and OH&S.

Zurich, March 19, 2010PricewaterhouseCoopers AG

Markus Nöthiger Stephan Hirschi

Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assuranceMethodology Two Tomorrows assurance statement PricewaterhouseCoopers assurance statement Holcim response Communication on progress Methodology Two Tomorrows assurance statement PricewaterhouseCoopers assurance statement Holcim response Communication on progress


Holcim response

We have considered the contents of the independent

assurance statements from the assurance providers

and the feedback from the External Report Review Panel

received during the preparation of the report.

We are encouraged where our performance and

reporting is considered appropriate, and we have taken

note of their recommendations for improvement. Our

response to their observations against the pillars of the

AA1000 assurance standard is as follows:

Inclusivity

We are grateful to the External Report Review Panel

for their valuable inputs and their generally positive

feedback on the draft report. We have documented their

recommendations and where possible and appropriate,

adjusted the draft report to reflect these. We will take

note of the recommendations for future website updates

as well as when deciding the structure of future reports.

Following the recommendation of the assurers to in

the future provide more detail on the outcome of the

activities of the IUCN expert panel, we will ensure that

the biodiversity pages on our SD website are upgraded to

reflect the activities of the panel and the implementation

of programs resulting from their recommendations.

We take note of the recommendation to clarify the role

and economic impact of eco-efficient products and will

consider this for future reports. The information in this

SD report is complemented by further information in the

Annual Report in the innovation section on pages 30 to 33.

Materiality

We are aware of the expectation for Holcim to report an

analysis on the financial implications of its sustainability

program, including the possible financial implications

of current and future carbon trading schemes. This will

be extremely difficult to do in the current uncertain

situation where there is not yet clarity on what

mechanisms may be employed. It should also be taken

into account that Holcim is a geographically diverse

Group and it would not be representative or inclusive to

only report on, for example, the possible implications of

the European Emissions Trading Scheme. As more clarity

on global carbon trading schemes emerges, we will

address this issue in more detail.

Responsiveness

We note the recommendation to extend assurance

to further data. We will review our assurance strategy

prior to future reports, bearing in mind not only this

recommendation, but also trends in the sector, the

value it adds to stakeholders and the company and our

commitments to the Cement Sustainability Initiative.

We further undertake to systematically update and

increase the number of case studies of SD related

activities available on our website.

We note the recommendation by several members of

the External Report Review Panel that we set targets

to reduce absolute CO2 emissions. As concrete is an

indispensable building material vitally necessary

for emerging economies to develop infrastructure,

demand for the product will increase. In the absence

of technological breakthroughs in the field of carbon

sequestration and carbon capture and storage, targets

to reduce absolute emissions are not realistic at this

stage. We remain committed to operating as efficiently

as possible and have announced, in this report, a new

carbon intensity target.

Methodology Two Tomorrows assurance statement PricewaterhouseCoopers assurance statement Holcim response Communication on progress

36

Global Reporting Initiative (GRI)

This print report, with additional information on our

website, is aligned with the Global Reporting Initiative

(GRI) G3 Sustainability Reporting Guidelines, at an

application level of A+. To locate the elements and

information contained within the guidelines, including

disclosures on management approach to economic,

environmental and social aspects, use the GRI index

at www.holcim.com/sustainable

UN Global Compact (UNGC)

With our integrated approach to sustainable

development, Holcim aims at embracing the UNGC

principles. We strive to implement the 10 principles

of the Compact and to use it as a basis for advancing

responsible corporate citizenship. At the same time,

the Compact provides Holcim with the opportunity to

further push our own ongoing programs and processes

in the areas of human rights, labor standards, the

environment and anti-corruption.

Holcim, along with 580 other organizations from over

50 countries, is an Organizational Stakeholder of the GRI

and we are a member of the GRI Stakeholder Council.

To learn more about the Organizational Stakeholder role

in the GRI, go to www.globalreporting.org/OS

For a detailed explanation of the GRI indicators, visit

www.globalreporting.org

Holcim is involved in the expert group on “Responsible

Business and Investment in conflict-affected and

high-risk areas” as well as in the “supra-environmental”

stewardship strategy group.

Our annual communications on progress (COP) to the

UNGC outlines Holcim’s continued commitment to

the Compact’s philosophy, intent and principles. This

latest document highlights key actions implemented

in 2009 against the Compact’s 10 principles as well as

confirming our sustainability priorities and performance

targets. Review the COP at www.holcim.com/sustainable

Communication on progress

G3 ProfileDisclosures

G3 Management Approach

Disclosures

G3 PerformanceIndicators &

Sector SupplementPerformance Indicators

ReportApplication Level C B AC B A+ + +

Report on:1.12.1 - 2.103.1 - 3.8, 3.10 - 3.124.1 - 4.4, 4.14 - 4.15

Not Required

Report on a minimum of 10 Performance Indicators, including at least one from each of: Economic, Social and Environmental.

Report on all criteria listed for Level C plus:1.23.9, 3.134.5 - 4.13, 4.16 - 4.17

Management Approach Disclosures for eachIndicator Category

Report on a minimum of 20 Performance Indicators, at least one from each of Economic, Environmental, Human rights, Labor, Society, Product Reponsibility.

Report on each core G3 and Sector Supplement* Indicator with due regard to the Materiality Principle by either: a) reporting on the Indicator or b) explaining the reason for its omission.

Management Approach Disclosures for eachIndicator Category

*Sector supplement in final version

Same as requirement for Level B

Chairman and CEO statement Vision and strategy Priorities Performance data Methodology and assuranceMethodology Two Tomorrows assurance statement PricewaterhouseCoopers assurance statement Holcim response Communication on progress

Holcim is one of the world’s leading suppliers of cement and aggregates (crushed stone, gravel and sand), as well as further activities such as ready-mix concrete and asphalt including services. The Group has majority and minority holdings in around 70 countries across all continents.

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