Sustainable Performance & Growth CSR Report 2006

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SustainablePerformance&Growth-TheCRHCorporateSocialResponsibilityReport2006 www.crh.comSustainable Performance & Growth

CSR Report 2006

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39

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48

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49

56

Policy

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Systems

Performance

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Organisation

Performance & Growth

Balance & Culture

Policy

20

Systems

Performance

Policy

Systems

Performance

CRH at a Glance

Corporate Governance

Environment

Health & Safety

Social

Policy

38

47

Systems

Performance

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32�32Introduction

3232Assurance Statements & Appendices 62

Communications

Report Map

Welcometoour2006CorporateSocialResponsibility(“CSR”)report“SustainablePerformanceandGrowth”whichrecordstheCSRaspectsofourbusinessesforthecalendaryear2006.ItwaspublishedinJuly2007,andthisisourfourthannualCSRReport.

ThestructureofthisreporthasbeendesignedtoreflecthowweconductCSRaspectsofouractivitiesthroughouttheCRHGroup.WehaveendeavouredtofollowbestpracticeinCSRreporting.Wehopeyoufinditinformativeandwewelcomequestionsorfeedback–ourcontactdetailsmaybefoundonourwebsiteoratthebackofthisreport.

Front Cover

Calduranproduceshighqualityandinnovativesand-limeblocksandelements,shownabove,atitsthreeDutchlocations.ItsKloosterhaarsand-limebrickandblockplant,seeninthebackgroundonthefrontcoverphoto,islocatedbetweentwonaturereserves,oneintheNetherlands,theotheracrossthenearbyborderinGermany.Theextractionofrawmaterialhasmadepossiblethecreationofalakewhichwill,intime,formathirduniqueecosystemconnectingthetwoexistingreserves.Calduranworkedwiththelocalcommunity,carryingoutdiscussionsregardingtheenhancementofthenaturearea,reflectingitscommitmenttothelocalcommunity–italsosponsorsthelocalsoccerclub.ThepicturedepictsfishingenthusiastsRoelSchoemakerwithZwenandIanNijeboer.Calduran’sdedicationtotheenvironmentisalsoreflectedinitsproducts.Forexample,itsnewHet Renovatie-Element7product,whichincorporatesinsulation,allowsforefficientconstructionofawellinsulatedstructure.

32� Introduction

SustainablePerformance&Growth-TheCRHCorporateSocialResponsibilityReport2006 www.crh.com

“CRH’sstrategicvisionistobearesponsibleinternationalleaderinbuildingmaterials,deliveringsuperiorperformanceandgrowth.OurcontinueddedicationtoCorporateSocialResponsibilityinallwedoensuresthatweachievethisvisionresponsibly.”

Welcome WelcometoourfourthannualCorporateSocialResponsibility(CSR)Report,describingourcontinuedprogressincorporategovernance,environmental,health,safetyandsocialperformanceduring2006.Itsummarisesourconsiderableendeavourstowardsbeinganindustryleaderinalltheseareas,recognisingthattherestillremainsmuchmoretobeachievedtofulfilincreasinglystringentstakeholderexpectations.

Scope of this Report TheReportscopecoversallofoursubsidiaries,whichin2006includedover80,000employeesat3,300locationsin26countries.Datafromourjointventuresandassociatesisalsoincludedatappropriatepointsinthereport.

Corporate Governance CRHlaysstrongemphasisoncorporategovernanceinallitsactivities.AtBoardlevel,wecomplyfullywiththerequirementsofIFRSreporting,aswellasthoseoftheCombinedCodeonCorporateGovernanceandalsowiththeprovisionsoftheSarbanes-OxleyActinsofarastheyapplytoCRH.Atanoperationallevel,ourCodeofConductandEmployeeHotlinehavenowbeensubstantiallyimplementedGroup-wide,andcontinuetoberolledouttonewacquisitions.

Climate Change CRHrecognisesthatClimateChangeisamajorchallengefacinghumanityandiscommittedtoplayingitspartindevelopingpracticalsolutions.

WeareacorememberoftheCementSustainabilityInitiative(CSI)withintheWorldBusinessCouncilforSustainableDevelopment(WBCSD).WestronglysupportitspioneeringworktowardsEuropeanandfutureglobalindustryCO2commitments.

Forourpart,wehavecommittedtoa15%reductioninourcementplantspecificCO2emissionsby2015comparedtothespecificemissionsfromthesameportfolioofcementplantsin1990. This solid commitment will be underpinned by over €400m ofmajorinvestmentsinourcementplantsinthenext3years.

Werecentlyachievedtheworld’sfirstJointImplementation(JI)ProjectundertheKyotoProtocolforthemodernisationofourPodilskyCementPlantinUkraine.

Wealsocontinuetomakesignificantupgradinginvestmentsinourotheractivities,particularlyinourlimeandclaybrickplants,bringingthemtowardsstate-of-the-artefficiencylevels.

LiamO’Mahony,ChiefExecutive

A Word from the Chief Executive

322 Introduction

www.crh.com SustainablePerformance&Growth-TheCRHCorporateSocialResponsibilityReport2006

EnvironmentOnthebroaderenvironmentalside,atGrouplevelwecontinuetomakeprogressinoptimisingenergyusage,reducingairemissions,reducingwaste,recyclingmoresecondarymaterialsandfuels,andmanagingrestorationandbiodiversity.Aswellasbeingenvironmentally-positive,theseinitiativesarealsobusiness-positive,theenvironmentbeinganincreasinglyimportantdriverofproductandprocessinnovation.

Health & Safety Onhealth&safety,ourcontinuedmanagementfocuswasrewardedbya20%reductioninaccidentfrequencyandseverityratesin2006versus2005.Infact,wehaveachieveda50%improvementinbothratesoverthelast9years,forwhichwehaveGroup-widedata,despitehavingtrebledinsizesincethen.Ontheotherhand,fortheyear2006,wedeeplyregretthattherewerefouremployeeandtwocontractorfatalitiesinoursubsidiaries,withtwofurthercontractorfatalitiesinajointventure.Thoughbelowsectoraverage,everyfatalityisatragedytoomanyandwecontinuetodoourutmosttoavoidrecurrence.

ThroughouttheGroup,safetyisthefirstagendaitematmeetings,reflectingourdailycommitmenttocontinuousimprovement.Allthesafetymanagementindicators-safetytraining,safetymeetings,monitoringofnearmisses-aremovingintherightdirection,whileinparalleloursafetymanagementofcontractorscontinuestobemademorerigorousandsystematic.Ouremployeehealthindicatorsalsocontinuetobegood.

Social Inthesocialarea,ourobjectiveistobeanemployerofchoiceinallouroperatingcompanies.Ourdecentralisedstructurefosterslocalentrepreneurship,andgivesourmanagersandemployeesaliketheopportunitytodevelopandexcelintheircareers.Theproxyindicatorsofgoodindustrialrelationsandlowabsenteeismindicatepositiveemployeeengagement.InourGroup,rapidgrowthcreatesregularopportunitiesforadvancementforthosewhoarekeentogrowtheirCRHcareer.

Customers & Suppliers Wecontinuetovalueourrelationshipswithourmultitudeofdiversifiedcustomers,andalwaysseektobetheirsupplierofchoice.Inhighlycompetitivemarkets,excellenceincustomerserviceisalwaysourpriority.Likewise,wecontinuetovaluerelationshipswithourwidesupplierbase,andarereviewingourpurchasingpoliciesinthecontextofthesmallbutgrowingnumberofitemssourcedfromdevelopingregions.

Communications ForafederalgrouplikeCRH,relationsandcommunicationswiththelocalcommunitycontinuetobeofparamountimportance.CRHisalsocharacterisedbytheopennessofitsInvestorRelations,andthisisourmantraforCSRactivities.OurpreviousCSRreportreceivedover50,000“hits”onourwebsite,andwehaverespondedtomanyqueriesandrequestsforfurtherinformation.

External Recognitions WemaintainanopendialoguewiththekeySociallyResponsibleInvestmentratingagencies,andaredelightedthatwecontinueto be ranked among the sector leaders by the DJSI, FTSE4Good, InnovestandVigeo.Wewerealsoverypleasedtohavebeenrecentlydesignated“BestinClass”inCSRperformancebyStorebrandInvestments.

Verification LikethetwopriorCSRreports,thisreporthasbeenexternallyverifiedinitsentiretybyDetNorskeVeritas(DNV),whichwebelievetobealeadinginitiativeinoursector.Thisyear,DNVhasalsospecificallyverifiedourCO2emissionsdata,reflectingtheimportanceweassigntoourClimateChangecommitment.

ConclusionInsummary,muchCSRprogresswasachievedin2006,andwearecommittedtocontinuousimprovementinallourCSRchallengesintheyearsahead.

A Word from the Chief Executive continued

323 Introduction


How we implement CSR

Set Policies

Implement Policy Objectives


Environment SocialHealth

& Safety

WemanagetheCSRaspectsofourbusinessinthesefour

areasbyapplyingthisprocess

Monitor Performance

Communicate coherently and consistently with our stakeholders

Stakeholder Feedback

Stakeholder Feedback

CRH’s strategic vision is to be a responsible international leader in building materials delivering superior and sustainable

performance and growth. The values of CRH are embodied in our commitment to CSR

WeinterpretourcommitmenttoCSRasimpactingfour

specificaspectsofourbusiness

WehaveincludedthisflowcharttoexplainhowweapplyCSRconceptsinthedailymanagementofourCorporateGovernance,

Environment,Health&SafetyandSocialactivities.

324 Introduction


Section Key Area Progress to 2006 Future Objectives

Our CSR Progress & Objectives


CompliancewithStatutoryRequirements

Reportingrequirementsmet(IFRS,CombinedCode,Sarbanes-Oxley,USGAAP)

Ensureongoingcompliance

RiskManagement Ourriskmanagementproceduresareimplemented&arereviewedannuallybytheBoard

Wewillcontinuetomanageallidentifiablerisks

CodeofConduct&EmployeeHotline

BothsubstantiallyimplementedGroup-wide,legislativeissuesinafewcountriesstillbeingaddressed

Monitorimplementation&feedback:extendtonewacquisitionssystematically

Environment PolicyImplementation Policyfirstformulatedin1991,withannualreviewsGroup-widesince1996

Continuetorefine&rollouttoacquisitionsassoonaspracticable

ReviewProcess Covers100%ofallsubsidiaries&mostjointventures&associates: ISO14001 certification is being extended

Continue & refine process: aim to get ISO14001 certification or equivalentforallcement,lime&clayactivitiesby2009

Compliance Anynon-compliancesareresolvedaspromptlyaspracticable Aimforzeronon-compliances

ClimateChange CementdatareportedinaccordancewithWBCSD/CSIrequirements

ReducespecificcementCO2emissionsby15%by2015comparedtosameportfolioofplantsin1990

Energy,Dust,Water,Waste

Datanowmonitored&reportedGroup-wide Continuetoreducespecificenergyconsumption&specificemissions

Quarry&PitReinstatementorAfter-Use&Biodiversity

Over85%nowhavereinstatementplans&biodiversityplanscontinuetobedevelopedwhereappropriate

Legacyquarries&pitstohavereinstatementplanswithinafewyears,withappropriatebiodiversityplans

Recycling Continuetopromoteasbeingbothenvironmentally-positive&business-positive

Continuetoincreaseuseofavailablerecycledmaterialsuptotechnicallimits

EnvironmentalInnovations&Awards

Wereceivedarecordnumberofawardsin2006,withmanyopendays&communityinitiatives

Continuetopromote,furtherincreaseopendays&communityinitiatives

Health & Safety

PolicyImplementation Policyfirstformulated,basedonadoptionofGroup-widesafetydefinitions,in1996

Continuetorefine&rollouttoacquisitionsassoonaspracticable

ReviewProcess Annualreviewscarriedoutforallsubsidiariesandmostjointventures&associatessince1997

Continue&refineprocess,ideallyincludingalljointventures&associates

SafetyManagement Achieved20%reductioninAccidentRatioscomparedto2005 Aimforzeroaccidents&zerofatalities:continuetoimproveyear-on-year

SafetyInnovations&Awards

Verystrongsuccessesalready Continuetopromote,tomakeforsaferworkplaces&betterjobs

Social PolicyImplementation Policyfirstformulatedin2000,butalreadyexistedinformally,nowimplementedinallsubsidiaries

Ensurethatpolicyisrefined&extendedasCRHmovesintonewregions&activities

ReviewProcess AnnualreviewscarriedoutforallGroupcompaniessince1997 Continue&refineprocess,includingbroadersocialdata

EmployeeDevelopment&Communications

ProgrammesexistthroughouttheGroup,atregional&locallevels

Ensuretheseprogrammescontinuetobeextended&developed,toensuretheGrouphasahighlydeveloped&motivatedworkforce

ManagementDevelopment

Extensivemanagementdevelopmentprogrammesarealreadyinplacetoprovidefutureworld-classleaders

Extendthedevelopmentprogrammestocontinuetosupplythedepth&breadthofskillsforarapidlygrowingorganisation

KnowledgeTransfer Extensivebestpracticeactivitiesarealreadyinplaceinallkeyactivities

Continuetodrivethehorizontalknowledgesharing,sothatallactivitiesareoperatedatworld-classefficiencies

Suppliers&Customers Extensivesupplier&customermanagementisalreadycarriedoutatregional&locallevel

Continueextendingthis:implementacodeofpurchasingcoveringethicalissuesformajoritemssourcedfromdevelopingcountries

Stakeholder Dialogue

StakeholderCommunications

Extensivecommunicationprogrammesalreadyexist Ensurethatwecommunicateopenlywithallourstakeholders&implementtheirfeedback

CommunityLiaison Extensiveprogrammesalreadyexistatlocal&communitylevels

Ensurethesecontinue&growinallregionsofoperation

SRIRatingAgencies MostleadingagencieshavepositiveviewsonCRH Aimforsectorleadership

GRIreportingguidelines

AdoptedtheG3GRIguidelines Achieve“A+”applicationlevelin2007

ExternalVerification 2004, 2005 & 2006 CSR performance verified by DNV MaintainfullCSR&CO2verification

325 Introduction


About this ReportOur reporting history

CRHhasbeencommittedtoCSRconceptssincetheGroup’sinceptionin1970. We produced our first CSR report in October 2004. We expanded the contentandlevelsoftransparencywithoursecondreportinAugust2005,followingstakeholderconsultation.OurthirdCSRReport,whichsawfurtheradvancesincontentandtransparency,waspublishedinAugust2006andwaswidelycomplementedforitscontentandclarityofpresentation.Hencewehaveadoptedasimilarformatandcontentforthis,ourfourthCSRReport,publishedinJuly2007,coveringthecalendaryear2006.

WewereamongthefirstcompaniesinoursectortoachievefullindependentverificationofourCSRReportinAugust2005,repeatedinAugust2006.ThisreporthasalsobeenverifiedbyDetNorskeVeritas(DNV):thedetailedverificationstatementisincludedattheendofthereport.

Scope of CSR reporting

AllCRHsubsidiariesaremanagement-controlledandtheCSRdatafrom100%ofthesecompaniesformsthebasisofthisreport.Detailsofourprincipalsubsidiariesarerecordedonpages128to131ofour2006AnnualReport.Comparedto2005,the2006CSRreportincludesdatafromthe69acquisitionsmadeinthatyear,principallyAPAC,MMIandHalfen-Deha.

Incommonwithotherlargecompanies,CRHalsoownsshareholdingsinseveraljointventuresandassociates,withalistingoftheprincipalinvestmentsprovidedonpage132ofour2006AnnualReport.MostofthesecompaniesalsosupplyCSRdatatotheGroup,andactivelyparticipateinourCSRactivities,andtheirkeydataisincludedonanappropriate%shareholdingbasisatappropriatepointsinthereport.WhileitisouraspirationthatalljointventuresandassociatesshouldadoptourCSRpolicies(ortheirownequivalentpolicies),thisisclearlynotalwayspossiblewherewedonothavemanagementcontrol.

Structure of the report

ThisreportfollowsasimilarstructuretoourAugust2006report.ItopenswithanintroductionbytheCEO,followedbyasectionoutliningsomebackgroundinformationaboutCRH.ThenextsectionsdetailwhatweperceivetobeourmainCSRfocusareasgroupedunderfourheadings;corporategovernance,environment,health&safety,andsocial.Eachsectionrecordsourassociatedpolicy,systemsandperformance.ThefinalsectiondetailsourstakeholdercommunicationsandcommunityactivitiesandthevariousratingsthathavebeenawardedtotheGroup’sperformanceinCSR.Theappendicescross-referencethecontentofthereporttotherequirementsoftheGRIguidelinesandincludeaglossaryofterms.

Intended audiences

Manycategoriesofourstakeholderswillbeinterestedinthecontentofthisreport.Ourkeyaudiencesincludecurrentandpotentialinvestors,ratingandassessmentagencies,governmentandregulatorybodies,localnon-governmentalorganisations(NGOs)aswellasneighboursandlocalcommunities.Wehopethatthisreportfulfilstheexpectationsofallourstakeholdersandwewelcomeallfeedback.

Adoption of the Global Reporting Initiative (GRI)

Thistimewehavevoluntarilyadoptedthe“G3”SustainabilityReportingGuidelinesdevelopedbytheGRI,includingtheguidanceondefiningreportcontentandmateriality.Asmanystakeholderswillbeaware,GRIisanindependentinstitutionwhosemissionistoprovideatrustedandcredible

frameworkforsustainabilityreporting.Wedeclarethatour2006reportingqualifiesfortheGRIscope“A+”applicationlevelrequirements,inaccordancewiththecriteriatablebelow,andthisalsohasbeenverifiedbyDNV.MoreinformationabouttheGRIguidelinesisavailableatwww.globalreporting.org.

Data accuracy

Everyefforthasbeenmadetoprovideconsistentphysicaldatainthisreport,asignificantchallengewhencollatingthe2006datafromadiverserangeofactivitiesfromover3,300locationsin26countries.Itisourexperiencethatthedataaccuracyandqualityimproveseachyear,enablingmoreconfidenttrendingofresultsandsettingoffutureobjectives.Metricunitsareusedthroughout.

Forthemostpart,dataisbasedonmeasuredormeteredphysicalquantities,orbestestimatesbasedonindustryknowledgeandestablishedcalculationfactorsandrepresentativesamples,ifactualdataisnotavailable.CO2emissionsarecalculatedaccordingtotheWorldBusinessCouncilforSustainableDevelopment(WBCSD)GHG(GreenHouseGas)protocolforourcementandlimeplants,whilethosefromotheractivitiesareestimatedfromestablishedfuelandactivityairemissionfactors.

DuetothecontinuedhighgrowthoftheGroup,theabsolutequantitiesofemissionparametersgrowsignificantlyyear-on-year,anditisnecessarytocorrelatethesewiththeincreasedGroupoutputs.Therefore,eco-efficienciesforrelevantparametersareestimatedbyrelatingtotalGroupvaluestothetotalannualisedtonnageofGroupproducts.PleasenotethatbecauseoftheparticularmixofCRHactivities,theseratioswillnotbedirectlycomparablewithpeers,butwillindicateyear-on-yeartrendsforourGroup.

CRH at a Glance Organisation Performance & Growth Balance & Culture326


About this Section

TheaimofthissectionistoprovidecontexttothereaderbyconciselyoutliningtheGroup’shistory,itsbackground,rangeofactivities,uniquegeographic,segmentalandmarketbalance,distinctivecultureanditsunrivalledrecordofperformanceandgrowth.

AmorecomprehensiverecordoftheGroup’sactivitiesmaybefoundwithinour2006AnnualReport,AnnualReportonForm20-Fandonourwebsite.Thesereportsareavailableonourwebsiteorhardcopiesmaybeobtainedbycontactingus.Ourcontactdetailsaregivenatthebackofthisreport.

ItshouldbenotedthatthissectionfollowsthefinancialreportingconventionsofourAnnualReportandincludesdatafromourjointventuresandassociatesasappropriate.

CRH at a Glance

PrestonquarryinFortSmith,Arkansas,operatedbytheArkholaDivisionofAPAC,isoneof the largest stone quarries in northwest Arkansas supplying 1.4 million tonnes of stone tothelocalmarket.Alsolocatedonthesiteisa500tonne-per-hourasphaltplant,arecentwinneroftheNationalAsphaltandPavingAssociation(NAPA)ecologicalawardforthebestenvironmentalandaestheticperformance.TheArkholaDivisionoperatesfivequarries,twosanddredgingoperations,fourasphaltplantsandelevenreadymixedconcreteplantsinwesternArkansasandeasternOklahoma.

Item Page

Our Profile 7

Geographical Footprint 7

Three Core Businesses 8

Our Organisation Structure 9

Locations, Tonnages & Employees 9

CRH in Europe �0

CRH in the Americas ��

Our Performance & Growth �2

Recent Development Activity �3

Our Strategic Balance �4

Our Corporate Culture �4

CRH at a Glance Organisation Performance & Growth Balance & Culture 327


Our ProfileCRHplc,theinternationalbuildingmaterialsgroup(“theGroup”),wasfoundedin1970followingthemergeroftwoleadingIrishcompanies,CementLtd.andRoadstoneLtd.TheGroupwasoriginallycalled“CementRoadstoneHoldings”,laterabbreviatedtoCRH.Today,CRHisoneofthesixlargestinternationalgroupsinitssectorandisheadquarteredatBelgardCastleinDublin,Ireland.

Sinceitsfounding,theCRHstrategyhascentredonresponsibleperformanceandgrowth.Inperformance,CRHhasachievedanenviablerecordofcreatingshareholdervaluewith19.7%compoundannualgrowthinTotalShareholderReturnfrom1970to2006.Thedevelopmentfocusremainsonseekingnewgeographicplatformsinourcorebusinessesandtakingadvantageofcomplementaryproductopportunities.Indeliveringthisstrategy,CRHhasestablishedmultipleplatformsfromwhichtoreplicateitstwinimperativesofperformanceandgrowth.WeareachievingthisresponsiblythroughourCSRactivities.

CRHnowranksamongstthetop6inthebuildingmaterialssectorglobally.ItssharesarelistedontheDublin(CRH.I),London(CRH.L),andNewYork(CRH)StockExchanges.TheGroup’smarketcapitalisationatend-2006was€17.1 billion.

Geographical FootprintIn2006,CRHhadoperationsatover3,300locationsin26countriesinNorth and South America (52% of 2006 sales) and across Europe (48% of 2006sales).Inearly2007,itmadeitsfirstacquisitionsinChinaandTurkey,

meaningthatCRHnowhasapresencein28countrieson3continents,asillustratedinthemapbelow.

SOUTH AMERICA

CHINA

Finnsementtirecentlycommissionedanewstate-of-the-artkilnatitsLappeenrantaCementPlantineasternFinland.Thisreplacestwolessefficientkilns,reducingspecificCO2emissionsby20%.

CRH at a Glance Organisation Performance & Growth Balance & Culture328


Atend-2006,CRHbusinessesweregeneratingannualisedsalesofover€20bn, in three core business areas, as illustrated below. Many of our businesses extract and manufacture Primary Materials (41% sales in 2006). OtherbusinessesmanufactureValue-addedBuildingProducts(36%salesin2006).Inaddition,CRHhasmanyBuildingMaterialsDistributionlocationsvaryingfromDIYstorestoBuilders’Merchants(23%salesin2006).

Three Core Businesses

Primary Materials - �,790 operations

2006AnnualisedproductionvolumesCement* �3.9m tonnesAggregates 262.0m tonnesAsphalt&Surfacing 65.4m tonnesReadymixedConcrete 2�.8m cubic metresAgricultural&ChemicalLime �.7m tonnes

Value-added Building Products - 798 operations

2006Annualisedproductionvolumes

PrecastConcreteProducts 9.5m tonnesOtherConcreteProducts* 34.3m tonnesClayBricks,Pavers,Tiles 4.5m tonnesInsulationProducts 6.3m cubic metresSecurityGates&Fencing �9.3m lineal metresGlassFabrication,Rooflights �4.5m sq. metres

Building Materials Distribution - 7�7 operations

End-2006

DIY 206 storesBuilders’Merchants 5�� stores

*includes block, masonry, patio products, pavers, prepackaged concrete mixes, rooftiles, sand-lime elements and bricks

*excludes associates

CRH at a Glance Organisation Performance & Growth Balance & Culture 329


Our Organisation StructureCRHplcistheholdingcompanyforaninternationalgroupofbusinesseswhichareorganisedintosixreportingsegments;EuropeMaterials,EuropeProducts,EuropeDistribution,AmericasMaterials,AmericasProductsandAmericasDistribution,asillustratedintheorganisationchartbelow.

CSRpoliciesaredefinedatGrouplevelandimplementedsystematicallyineachofthesixsegmentsbylinemanagement,assistedbysafetyofficers,environmentalliaisonofficersandhumanresourcemanagersintheoperatingcompanies.GroupCSRperformanceismonitoredandreportedcentrallybytheGroupTechnicalAdvisorandasmallsupportteam.

ThesegraphsillustratethecontinuedgrowthofCRHintermsofnumbersemployed,productiontonnagesandnumberoflocationsoverthelast5years.ThisdataprovidesthecontextfortheCSRdataandtrendsreportedinthesectionsthatfollow.Theproductiontonnagesrepresentthesumtotaloftonnagesofallproductsinall our activities. Also shown is a breakdown of our locations by activity: the 2006 figure was 438m tonnes, used as the denominator in all per tonne calculations.

Note. In all graphs by activity:

“Materials”meansAggregates,Asphalt,andReadymixedConcrete.“Concrete”meansPrecastConcreteandArchitecturalConcreteProducts.“Clay”meansClayBricks,Blocks,Pavers,RooftilesandCeramicTiles.“BuildingProducts”meansGlass,Insulation,Fencing&Security,Daylight&VentilationandConstructionAccessories.“OtherProcess”meansLime,MagnesiaandLightweightAggregates.

Locations, Tonnages & Employees

Europe

Americas Materials

Europe Materials

Americas Products

Americas Distribution

Europe Products

Europe Distribution

Americas

Chief Executive

Group Functions Finance, Development, Human Resources, Environment, Health & Safety

Locations by activity 2006

OtherProcess0.2%

Cement0.3%

Clay1.5%

BuildingProducts11%

Concrete13%

Distribution17%

Materials57%

Numbers employed

thousands100

75

50

25

0‘02 ‘03 ‘04 ‘05 ‘06

Employees

Contractors

Production tonnages

milliontonnes400

300

200

100

0‘02 ‘03 ‘04 ‘05 ‘06

Number of locations

3,000

2,000

1,000

0‘02 ‘03 ‘04 ‘05 ‘06

CRH at a Glance Organisation Performance & Growth Balance & Culture32�0


CRH in Europe

Europe Products - leadership positions at end-2006

ConcreteProducts No.1AcrossEurope

Precast No.1Benelux,Denmark

Paving No.1Benelux,France,Germany,Slovakia

ClayBricks,pavers, No.1facingbrickintheUK

rooftiles&blocks No.2facingbrick,pavers&blocksinEurope

BuildingProducts:Insulation(EPS) No.1Ireland,Netherlands,Nordics,Poland

Fencing&Security No.1acrossEurope

Daylight&Ventilation No.1inEuropeinglassstructures,plastic rooflights,naturalventilationandsmoke exhaustsystems

ConstructionAccessories No.1inwesternEurope

2006 Sales: €3.2 bn Employees: 18,000 Locations: 660+

Europe Distribution - leadership positions at end-2006

BuildersMerchanting No.1Netherlands

No.1Switzerland(GermanSpeaking)

No.1NorthwestGermany,Austria

No.1Burgundy,RhoneAlps,F.Comté

No.2IledeFrance

DIY LeadingDutchfranchise

No.2Portugal(50:50Jointventure)


Europe Materials - leadership positions at end-2006

Aggregates No.1Finland,Ireland

Asphalt No.1Ireland

Cement No.1Finland,Ireland,Ukraine

No.2Portugal,Switzerland

No.3Poland

ReadymixedConcrete No.1Finland,Ireland

No.2Portugal,Switzerland

Lime No.1Ireland, No 2. Poland


CRH at a Glance Organisation Performance & Growth Balance & Culture 32��


CRH in the AmericasAmericas Materials - leadership positions at end-2006

Aggregates No.3nationalproducer

Asphalt No.1nationalproducer

ReadymixedConcrete Intop10inUS

Leadingmarketpositionsthroughoutoperations

Strongregionalaggregatereserves

2006 Sales: €4.8 bn Employees: 19,000 Locations: 1,100+

Americas Products - leadership positions at end-2006

ConcreteProducts No.1USmasonry/paving/patio

No.1Canadapaving/patio

ConcreteMixes No.2US

PrecastProducts No.1US

ClayBricks No.1NortheastUS

Glass No.1Architecturalfabricator


Americas Distribution - leadership positions at end-2006

USRoofing&Siding No.3

USInteriorProducts No.3

180branchesprimarilyinmetro-regionsonbothcoasts&northern-tierStates

2006 Sales: €1.4 bn Employees: 3,000 Locations: 180



Our Performance & GrowthCRH’sconsistentperformancecultureandgrowthstrategyhavedeliveredunbroken profit growth since 1993 with 24% compound annual growth in ProfitbeforeTax,19%compoundannualgrowthinEarningsperShareand15%compoundannualgrowthinDividendperShare.2006markedanotheryearofstrongperformanceforCRH,onceagainproducingnewrecordsalesandprofits;acombinationofstrongunderlyingorganicgrowthandgoodcontributionsfromacquisitions.

Ourorganicgrowthstrategyisfocusedoninvestingtoimprovecapacity,productqualityandenergyefficiency,constantlydevelopingnewandinnovativeproductsandservices,expandingourcustomerbasethroughnewchannelsandleveragingourbrandslocallyandregionally.CSRisanaturalelementofthisstrategy,andindeedisinitselfadrivingforceforproductandprocessinnovation.

CRHhasdevelopedarecognisedcompetenceinsourcing,negotiatingandintegratingvalue-creatingacquisitionopportunities,traditionallytargetingmid-sizedcompaniesaugmentedfromtimetotimebylargertransactions.Since 1999, CRH has averaged a development spend of €1.4 billion (bottom chart) on circa 50 deals per annum. In 2006, there was a record spend of €2.1 billionnetforatotalof69deals.AlloftheseacquisitionshavealreadybeenintegratedintoourCSRprogramme,andinparticularareashavestimulatedevenhigherperformancestandards,benefitingbothnewandlegacycompanies.

Animportantelementofouracquisitionstrategyisourduediligenceprocess.AllpotentialacquisitionsareexaminedcarefullybyourstaffandadvisorsformaterialCSRissuesandmattersthatmayaffectboththevalueofthepurchaseandthereputationoftheGroup.WedonotproceedwithpotentialcompanypurchaseswherewebelievethattheremaybeCSRissuesrelatingtothebusinessthatwouldnotsatisfyourstringentcriteria,andwewillcontinuetoadoptthisapproach.

OncecompaniesjointheGroupassubsidiarieswherewehavemanagementcontrol,theyarerequiredtoadopttheCRHgovernancesystems(CodeofConductandHotline)andourenvironmental,health&safetyandsocialreportingsystems,assoonaspracticable.Insituationswherewedonothavemanagementcontrol(whereour%ownershipislessthan50%),weencouragethecompaniestosimilarlycomply,andinmostcases,theydoactivelyembraceandreporttotheCRHrequirements,realisingtheassociatedCSRandeconomicbenefits.ItisouraspirationthatalljointventuresandassociatesadoptCRH’sCSRprogrammes,ifsimilarsystemsdonotalreadyexistintheirorganisations.

Profit before tax

€ billion1.6

1.2

0.8

0.4

0

IFRS

‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06

Earnings per share

Dividend per share

Development activity

€ cent250

200

150

100

50

0

IFRS

‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06

€ cent60

50

40

30

20

10

0‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05

€ billion2.5

2.0

1.5

1.0

0.5

0‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05

‘06

‘06

CRH at a Glance Organisation Performance & Growth Balance & Culture 32�3


Recent Development Activity

Denizli Cement

DenizliCement,anintegratedcementandreadymixedconcretebusinessbasedinthecityofDenizliintheAegeanregionofsouth-westernTurkey,isCRH’sfirstinvestmentinTurkey.Withitsmoderncementfacility(1.8milliontonnesofcementin2006),excellentreservesandastrongmanagementteam,Denizliisthemarketleaderinitsregion.Thecompanyalsooperatesanetworkof13readymixedconcreteplants.With50%ofthecompanyacquiredinApril2007,itrepresentsafurtherstepintheexpansionofCRH’sEuropeMaterialspresenceintheMediterraneanBasin.

Ashland Paving & Construction, Inc. (APAC)

APAC,acquiredinAugust2006,wasCRH’slargestdealto-date.ItisaleadingUSaggregatesandheavyhighwayconstructioncompanywithover2billiontonsofaggregatereservesandextensiveoperationsacross11mid-westernandsouthernstates.APACsignificantlyincreasesourGroup’saggregatesandasphaltpositions,consolidatingCRH’spositionasamarketleaderinUSasphaltandasnumber3inUSaggregates,increasingourexposuretopositiveUSinfrastructurespendingtrendsandprovidingagoodplatformforfurthergrowth.

MMI

MMIestablishedCRHinnewplatformsinconstructionaccessories,weldedwirereinforcementandfencingintheUSfollowingitsacquisitioninApril2006.MMIoperatesin30states,with19manufacturingplantsincludinganewfacilityinMexicoand62distributioncentres.Itoperatesinthreemaindivisions:MerchantMetals,amanufacturerofchainlinkfencing;IvySteel&Wire,amanufacturerofweldedwirereinforcementproducts;andMeadowBurke,aconstructionaccessoriesmanufacturer&distributor.

Harbin Sanling Cement Company

HarbinSanlingisCRH’sfirstacquisitioninChina,completedinFebruary2007.ItisanimportantmilestoneintheestablishmentofanewplatforminAsia.HarbinSanlingisamoderncementplantlocatedinHeilongjiangprovince,northeastChinawithtwomodernclinkerproductionlinesandtotalcementcapacityof650,000tonnesperannum.ItprovidestheopportunityforCRHtoparticipateinthelargeandgrowingChinesebuildingmaterialsmarket.

Gétaz Romang

GétazRomangwasacquiredbyPublicTenderOfferwhichendedinMay2007.GétazRomangistheleadingdistributorofbuildingmaterialsintheFrench-speakingpartofSwitzerlandwithanetwork of 43 branches, 7 of which are in the German-speaking part of Switzerland. It employs over1,300peopleandrepresentsanexcellentgeographicalandbusinessfitwithexistingCRHDistributionlocations.Followingthisacquisition,CRHDistributionistheclearmarketleaderinallofSwitzerland.

Halfen-Deha

Halfen-DehawasamajoradditiontotheconstructionaccessoriesplatformwithintheEuropeanBuildingProductsGroupinMay2006.ThecompanyhasprincipalmanufacturingsitesinGermany,theNetherlands,PolandandSweden.ItsproductsaresoldthroughoutEuropeandtheFarEastbyits16subsidiarycompaniesandaredistributedintheUSbyMMI,providingopportunitiestodeepenco-operationacrosstheAtlantic.AnetworkofdistributorsserveHalfen’scustomersinafurther26countries,makingitatrulyinternationalbusiness.



Our Strategic BalanceTheGroup’swidegeographicspreadanddiversityacrossitsthreecorebusinessesprovidesCRHwithauniquebalance,smoothingouttherisksofvaryingeconomiccycles,alsoreducingtherisksofvaryingdemandpatternsacrossbuildingandconstructionend-usesectors,andprovidinggreateropportunitiesforgrowth.

The graphs below show that in 2006, CRH revenues were derived 52:48 from the Americas and Europe, and 41:59 from our Materials businesses versus our ProductsandDistributionbusinesses.

End-use demand was derived 40:30:30 from Residential, Non-Residential and Infrastructural demand, and 55:45 from New-Build activity versus Repair, Maintenance&Improvement(RMI)demand.

Thiscombinationofstrategicbalances,uniquetoCRH,greatlyreducesfinancial,performanceandCSRrisks.Inparallel,thisuniquebalancealsocreatesmultipleplatformsfromwhichtocreateopportunitiesforgrowth.

Local autonomy

Experiencedoperationalmanagementaregivenahighdegreeofindividualautonomyandresponsibilitytoaccommodatenationalandculturalneedsandtoleveragelocalmarketknowledge,allinaccordancewithkeycentrallydefinedgovernance,financialandCSRoperatingrequirements.

Global yet local

ThereisstrongmanagementcommitmenttoboththelocalcompanyandtotheCRHGroup,supportedbybestpracticeteamsthatshareexperienceandknow-howacrossproductsandregions.Thisdualcitizenshipmotivateslocalentrepreneurship,whilemaintainingandbenefitingfromGroupsynergies.Ourmanagementphilosophycouldbedescribedasglobalyetlocal.

Mix of skills

CRH’smarket-drivenapproachattracts,retainsandmotivatesexceptionalmanagementincludinginternallydevelopedoperationalmanagers,highlyqualifiedbusinessprofessionalsandowner-entrepreneurswhojoinonacquisition.Thisprovidesahealthymixanddepthofskillswithmanymanagershavingexperienceofpreviouseconomiccycles.Oursuccession

planningfocusesonsharingthiswealthofexperiencewiththenextgenerationofCRHmanagement.

Lean Group centre

Guidance,support,functionalexpertiseandcontrol,asappropriate,areprovidedbyourleanGroupheadquartersintheareasofgovernance,performancemeasurement,financialreporting,cashmanagement,strategicplanning,businessdevelopment,humanresources,environmentandhealth&safety.

Perpetuating our CRH culture

AstheGroupgrows,wemakeconsiderableeffortstoensurethatouruniqueCRHcultureispropagatedintoournewacquisitions,whilesimultaneouslypreservingtheiridentity,andthattheGroupculturethrivesfromgenerationtogeneration.Theseeffortsincludetrainingprogrammes,seminars,newsletters,ourCSRReportandmanyotheractivitiesthatspancountry,regional,international,culturalandlanguageboundaries,especiallyaswenowgrowintodevelopingregions.

Our Corporate Culture

Product end-use balance 2006 sales

Product end-use balance 2006 sales

Infrastructure30%

Non-residential30%

Residential 40%

Geographic balance, 2006 sales

Europe 48%

Americas52%

RMI 45%

New-Build55%

Product balance, 2006 sales

Distribution23%

Products36%

Materials 41%

Corporate Governance Policy Systems Performance 32�5


About this Section

CRHaimsforthehighestinternationalstandardsofcorporategovernance.ThissectionrecordstheGroup’sgovernancestructuresatBoardandatoperatinglevels,andhowweensurethattheseareimplementedinapropermanner.Italsorecordsourcompliancewiththerelevantstatutoryandregulatoryguidelinesconcerningcorporategovernancematters.

Wehavesuppliedthisinformationtoaidthereader’sunderstandingofthegovernanceaspectsofourGroup.Furtherdetailedinformationmaybefoundinour2006AnnualReportandonourwebsite.


Item Page

Board of Directors �6

Board Committees �7

Risk Management �8

Code of Business Conduct �9

Employee Hotline �9

CRHBoardofDirectors,picturedhereduringavisittoEuropeProducts&Distribution’sErgonplantinJune2006.Picturedlefttoright:TerryNeill(Non-Executive),JanMaartendeJong(Non-Executive),DeclanDoyle(MDEuropeMaterials),JoyceO’Connor(Non-Executive),MylesLee(FinanceDirector),LiamO’Mahony(ChiefExecutive),KieranMcGowan(Non-Executive;nowChairman),TomHill(CEOOldcastle,Inc.),DavidKennedy(Non-Executive),NickyHartery(Non-Executive),PatMolloy(thenNon-ExecutiveChairman),Inset:BillEgan(Non-Executive),DanO’Connor(Non-Executive).

Corporate Governance Policy Systems Performance32�6


Board of Directors

TheBoardisresponsiblefortheleadershipandcontroloftheCompany.There

isaformalscheduleofmattersreservedtotheBoardforconsiderationand

decision.ThisincludesBoardappointments,approvalofstrategicplansforthe

Group,approvaloffinancialstatements,theannualbudget,majoracquisitions,

significantcapitalexpenditure,andreviewoftheGroup’ssystemofinternal

controls.TherewereeightfullmeetingsoftheBoardduring2006.Thenon-

executiveDirectorsmetthreetimesduring2006withoutexecutivesbeingpresent.

TheBoardhasdelegatedresponsibilityforthemanagementoftheGroup,through

theChiefExecutive,toexecutivemanagement.TherolesofChairmanand

ChiefExecutivearenotcombinedandthereisacleardivisionofresponsibilities

betweenthem,whichissetoutinwritingandhasbeenapprovedbytheBoard.

TheChiefExecutiveisaccountabletotheBoardforallauthoritydelegatedto

executivemanagement.

Board Membership and Remuneration

ItisthepracticeofCRHthatamajorityoftheBoardcomprisesnon-executive

Directors.Attheendof2006,therewerefourexecutiveandninenon-executive

Directors.Directorsareappointedforspecifiedtermsandsubjecttothe

MemorandumandArticlesofAssociationoftheCompany.AlloftheDirectors

bringindependentjudgmenttobearonissuesofstrategy,performance,

resources,keyappointmentsandstandards.Furtherdetailsareavailableinthe

2006 Annual Report, pages 42-49, and full details of the Directors’ remuneration

aregiveninthe2006AnnualReport,pages50-57.

Chairman

Mr.PatMolloy,ChairmansinceMay2000,retiredattheAnnualGeneralMeeting

inMay2007.HewassucceededbyMr.KieranMcGowan,whohasbeena

memberoftheBoardsince1998.TheChairmanisresponsiblefortheefficient

andeffectiveworkingoftheBoard.HeensuresthatBoardagendascoverthe

keystrategicissuesconfrontingtheGroup;thattheBoardreviewsandapproves

management’splansfortheGroup;andthatDirectorsreceiveaccurate,timely,

clearandrelevantinformation.

Senior Independent Director

TheBoardhasappointedMr.DavidKennedyastheSeniorIndependentDirector.

Mr.Kennedyisavailabletoshareholderswhohaveanyconcernsthatcannotbe

addressedthroughtheChairman,ChiefExecutiveorFinanceDirector.

Company Secretary

TheappointmentandremovaloftheCompanySecretaryisamatterfortheBoard.AllDirectorshaveaccesstotheadviceandservicesoftheCompanySecretary,whoisresponsibletotheBoardforensuringthatBoardproceduresarecompliedwith.

Induction and Development

NewDirectorsareprovidedwithextensivebriefingmaterialsontheGroupanditsoperations.Directorsmeetwithkeyexecutivesand,inthecourse

oftwice-yearlyvisitsbytheBoardtoGrouplocations,seethebusinessesatfirsthandandmeetwithlocalmanagementteams.

Performance Appraisal

TheSeniorIndependentDirectorconductsanannualreviewofcorporate

governance,theoperationandperformanceoftheBoardanditsCommittees

andtheperformanceoftheChairman.Thisisachievedthroughdiscussionwith

eachDirector.AreviewofindividualDirectors’performanceisconductedby

theChairmanandeachDirectorisprovidedwithfeedbackgatheredfromother

membersoftheBoard.

Compliance

TheDirectorsarecommittedtomaintainingthehigheststandardsofcorporate

governance.In2006,CRHcompliedwiththeprovisionssetoutinsection1ofthe

2003CombinedCodeonCorporateGovernanceand,wherepossible,withthe

amendmentstothatCodewhichwereeffectiveforaccountingperiodsbeginning

onorafter1stNovember2006.TheCompanyalsocompliedwiththerulesissued

bytheUnitedStatesSecuritiesandExchangeCommissiontoimplementthe

Sarbanes-OxleyAct2002,insofarastheyapplytotheGroup.

CSR Governance

CSRmattersareconsideredtobeaninherentaspectofalltheGroup’sbusiness

activitiesandthereforeofallexecutivemanagementroleswithinCRH.

ConsequentlywedonotassignseparateBoardorseniormanagement

responsibilityforCSR.Therelevantconceptsareembeddedwithinthe

governance,philosophyandcultureofGroupexecutivemanagement,uptoand

includingBoardlevel.

“TheBoardofDirectorsiscommittedtomaintainingthehigheststandardsofcorporategovernance”

KieranMcGowan,Chairman PatMolloy,formerChairman



Board CommitteesTheBoardhasalsodelegatedsomeofitsresponsibilitiestoCommitteesoftheBoard.IthasestablishedfivepermanentCommitteestoassistintheexecutionofitsresponsibilities.ThesearetheAcquisitionsCommittee,theAuditCommittee,theFinanceCommittee,theNominationCommitteeandtheRemunerationCommittee.AdhocCommitteesareformedfromtimetotimetodealwithspecificmatters.

ThemembershipofeachCommitteeissetoutinthe2006AnnualReportonpage 43, and attendance at meetings held in 2006 is set out in the table on page 47. Chairmen of the Committees attend the Annual General Meeting andareavailabletoanswerquestionsfromshareholders.DuringtheyeareachoftherelevantCommitteesrevieweditsperformanceandtermsofreference.

Acquisitions Committee

TheroleoftheAcquisitionsCommitteeistoapproveacquisitionsandcapitalexpenditureprojectswithinlimitsagreedbytheBoard.ItconsistsoftwoexecutiveDirectorsandthreenon-executiveDirectors.

Audit Committee

TheAuditCommitteeconsistsoffournon-executiveDirectors,consideredbytheBoardtobeindependent.TheFinanceDirectorandtheHeadofInternalAuditnormallyattendmeetingsoftheCommittee,whiletheChiefExecutiveandotherexecutiveDirectorsattendwhennecessary.TheexternalauditorsattendasrequiredandhavedirectaccesstotheCommitteeChairmanatalltimes.

ThemainroleandresponsibilitiesincludemonitoringtheintegrityoftheGroup’sfinancialstatementsandreviewingsignificantfinancialreportingissuesandjudgmentscontainedtherein,reviewingtheeffectivenessoftheGroup’sinternalfinancialcontrolsandinternalauditors,andmonitoringandreviewingtheexternalauditors’independence,objectivityandeffectiveness.

TheGroupauditengagementpartnerrotateseveryfiveyears.Detailsoftheamountspaidtotheexternalauditorsduringtheyearforauditandotherservicesaresetoutinthenotestothefinancialstatementsonpage75.

Finance Committee

TheFinanceCommitteeadvisestheBoardonthefinancialrequirementsoftheGroupandonappropriatefundingarrangements.Itconsistsoftwoexecutiveandtwonon-executiveDirectors.

Nomination Committee

TheNominationCommitteeassiststheBoardinensuringthatthecompositionoftheBoardanditsCommitteesisappropriatetotheneedsoftheGroupbyassessingtheskills,knowledge,experienceanddiversityrequiredontheBoardandtheextenttowhicheacharerepresented,establishingprocessesfortheidentificationofsuitablecandidatesforappointmenttotheBoard,andoverseeingsuccessionplanningfortheBoardandseniormanagement.Itconsistsoffournon-executiveDirectorsandtheChiefExecutive.

Remuneration Committee

TheRemunerationCommittee,whichconsistssolelyofnon-executiveDirectors,determinestheGroup’spolicyonexecutiveremuneration,theremunerationoftheexecutiveDirectors,monitorsthelevelandstructureofremunerationforseniormanagement,andreviewsandapprovesthedesignofallshareincentiveplans.

FurtherdetailsonalltheseCommittees,includingtheirdetailedtermsofreference, may be seen in the 2006 Annual Report, pages 44-47 and on our website.

Acquisitions Committee

Audit Committee

Finance Committee

Nomination Committee

Remuneration Committee

Board of Directors

Group CEO

Line Management

Corporate Governance Policy Systems Performance32�8


Risk ManagementTheDirectorshaveoverallresponsibilityfortheGroup’ssystemofinternalcontrolandforreviewingitseffectiveness.Thissystemisdesignedtomanageratherthaneliminatetheriskoffailuretoachievebusinessobjectivesandcanprovideonlyreasonableandnotabsoluteassuranceagainstmaterialmisstatementorloss.

TheDirectorsconfirmedintheAnnualReportthattheGroup’songoingprocessforidentifying,evaluatingandmanagingitssignificantrisksisinaccordancewiththeupdatedTurnbullguidance(InternalControl:RevisedGuidanceforDirectorsontheCombinedCode)publishedinOctober2005.

Groupmanagementhasresponsibilityformajorstrategicdevelopmentandfinancingdecisions.Responsibilityforoperationalissuesisdevolved,subjecttolimitsofauthority,toproductgroupandoperatingcompanymanagement.Managementatalllevelsisresponsibleforinternalcontrolovertherespectivebusinessfunctionsthathavebeendelegated.ThisembeddingofthesystemofinternalcontrolthroughouttheGroup’soperationsensuresthattheorganisationiscapableofrespondingquicklytoevolvingbusinessrisks,andthatsignificantinternalcontrolissues,shouldtheyarise,arereportedpromptlytoappropriatelevelsofmanagement.

TheBoardreceives,onaregularbasis,reportsonthekeyriskstothebusinessandthestepsbeingtakentomanagesuchrisks.ItconsiderswhetherthesignificantrisksfacedbytheGrouparebeingidentified,evaluatedandappropriatelymanaged,havingregardtothebalanceofrisk,costandopportunity.Inaddition,theAuditCommitteemeetswithinternalauditorsonaregularbasisandsatisfiesitselfastotheadequacyoftheGroup’sinternalcontrolsystem.TheAuditCommitteealsomeetswithandreceivesreportsfromtheexternalauditors.TheChairmanoftheAuditCommitteereportstotheBoardonallsignificantissuesconsideredbytheCommitteeandtheminutesofitsmeetingsarecirculatedtoallDirectors.

TheDirectorsconfirmedintheAnnualReportthattheyhaveconductedanannualreviewoftheeffectivenessofthesystemofinternalcontrol.ThishadregardtothematerialrisksthatcouldaffecttheGroup’sbusiness(asoutlined

in the Directors’ Report in the Annual Report, page 48), the methods of managingthoserisks,thecontrolsthatareinplacetocontainthemandtheprocedurestomonitorthem.

Possible Risk Potential Impact & Severity How Risk is Managed

ReducedeconomicgrowthinthecountriesinwhichCRHhassignificantoperations

CRHoperatesincyclicalindustrieswhichareaffectedbyfactorsbeyondourcontrol,suchasthelevelofconstructionactivity,fuelandrawmaterialprices,whichareinturnaffectedbytheperformanceofnationaleconomies,politicaldevelopments,andgovernmentaleconomicpolicies

Ouruniqueregionalandproductbalancemitigatesthepotentialeffectsofvaryingeconomicconditions,andourdecentralisedmanagementstructureensurespromptlocalresponses

Riskofnotdeliveringacquisitiontransactionsoracquiredbusinessesnotmeetingprofitabilityexpectations

CRHmaynotbeabletocontinuetogrowascontemplatedinitsbusinessplanifitisunabletoidentifyattractivetargets,completetheacquisitiontransactionsandintegratetheoperationsoftheacquiredbusinesses

Ourfocusonidentifyinganddeliveringastreamofacquisitionscomprisingmanysmalldealscomplementedbyafewlargeronesminimisesthisrisk;allacquisitionsaresubjecttoduediligencereviewsandsubsequentlycheckedtoensuregoalsarebeingmet

CRHfacesstrongcompetitioninitsvariousmarkets

IfCRHfailstocompetesuccessfully,marketsharemaydecline Wefocusonbeingthecompetitivelowcostproducerinallourmarketsandactivities

ExistingproductsmaybereplacedbysubstituteproductswhichCRHdoesnotproduce

CRHmaylosemarketshareinthemarketsfortheseproducts Groupcompaniescontinuouslyfocusoninnovationandcustomerexpectationsthroughsharingofbestpracticeinallourproductsectors

ClimateChangeorsevereweathercanreduceconstructionactivity

ThismayleadtoadecreaseindemandforGroupproductsinareasaffectedbyadverseweatheractivities

Ourregionalandproductbalancemitigatestheeffectsofvaryingeconomicconditionsthatcouldarisefromadverseweather;continuedplantupgradesensurewearethemostefficientproducer

CRHissubjecttostringentEnvironmentalandHealth&Safetylaws,regulationsandstandards

ThiscouldresultincostsrelatedtocomplianceandremediationthatmayadverselyaffectGroupoperationsandfinancialperformance

Ongoingcommitmenttofullcompliancewithallregulationsandstandards,andcommunicatingbestpracticeacrosstheGroup,ensuresproactivemanagementinalltheseareas

Governmentregulations,internationalprotocols

CRHmaybeadverselyaffectedbygovernmentalregulationsorinternationalprotocols(e.g.Kyoto)

Ourdiversityofoperationsandactivities,continuousupgradinginvestmentandflexibilityininnovatingminimisesthisrisk

Currencyrisk ManyofCRH’ssubsidiariesoperateincurrenciesotherthantheEuro,andadversechangesinforeignexchangeratesrelativetotheEurocouldadverselyaffecttheGroup’sreportedearningsandcashflow

Ouruniquebalanceoftrading,predominantlyintheEuroandDollar,hasproventobeagoodbalanceoverrecentyears

The table below demonstrates how the principal risks are assessed and managed



Code of Business ConductTheCRHCodeofBusinessConductisapplicabletoallrelevantGroupemployeesandissupplementedbylocalcodesthroughouttheGroup’soperations.TheCodeisavailableonourwebsite.

ThecurrentversionwasapprovedbytheBoardinDecember2003,andhassincebeenrolled-outacrossGroupcompanies.IthasbeentranslatedintoelevenGrouplanguagestofacilitateitsfullimplementation.Insomecountries(forexampleintheUS),theoperatingcompanieshaveamplifiedtheCodetoincludeextraprovisionsarisingfromadditionalspecificrequirementsinthosecountries.

TheCodelaysoutindetailGrouppolicyandrequirementsinrespectof:

Compliancewithlocallegalrequirementsgoverningtheconductofbusiness,suchasthoseondiscrimination,harassmentorsubstanceabuseintheworkplace,health&safetyandenvironmentalprotection,politicalcontributions,restrictionoftradingandunfaircompetition

CompliancewithGrouppoliciesonenvironment,health&safety,humanresources,ITsecurityanddocumentretention

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#

Prohibitionofuseofconfidentialorinsideinformation,bothintermsoftradingincompanysharesandallotherfinancialdeals

Dealingwithanysituationswherethereareconflictsofinterest

Provisionoracceptanceofgiftsorgratuities

Prohibitionofbriberyandcorruption

Prohibitionoffraud

ThereareadditionalrequirementsforDirectorsandsenioremployeesinaccordancewiththeSarbanes-OxleyAct2002.

ComplianceismonitoredbyGroupInternalAudit.AnybreachescanalsobereportedbyemployeesthroughahotlinefacilitymadeavailableundertheprovisionsoftheSarbanes-OxleyAct2002andtheUKCombinedCode.During2006,therewerenoseriousmatterstobereportedtotheAuditCommitteethroughanyoftheseroutes.

The2003Codeisbeingreviewedinthecontextofincreasinglystringentlegislationandstakeholderexpectationsandourrecentgrowthintodevelopingregions.

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Employee HotlineTheSarbanes-Oxleylegislation,paralleledbyaprovisionintheUKCombinedCode,requirestheGrouptoputproceduresinplacewhichfacilitateemployeecomplaintsorconfidentialoranonymoussubmissionofinformationortoraise,inconfidence,concernsregardinggovernance,personnel,accountingorauditingmatters.

OurCodeofBusinessConductalsoreferstotheGroup’sinternalgrievanceproceduresandindicatesthemethodsbywhichemployeesmayinternallycommunicateanyconcernsthattheymayhave.

TheGrouphasbeenrolling-outconfidentialtelephoneHotlines in the Americas and in Europe since 2004. Theroll-outinsomeEuropeancountries,particularlyinFranceandGermany,hasbeendelayedduetolegislativedifficultieswhicharebeingresolved.

During2006,therewere155Hotlinecalls.InternalAuditmonitoredthesecallstoensuresystematicinvestigationandresolutionbylinemanagement.Nonerevealedanysignificantmalpractice,norrequiredreportingtotheAuditCommittee.

Oldcastle,oursubsidiaryintheUS,producedabilingualflyertocommunicatethedetailsandpurposeoftheemployeehotline:ongoingcommunicationwithemployeeshasbeenkeyforitseffectiveimplementation.

Hotline calls by type 2006

Health&Safety7%

Accounting8%

Legal/regulatory10%

HR/personnel75%

Environment Policy Systems Performance3220


About this Section

CRHiscommittedtothehigheststandardsofenvironmentalresponsibility.ThissectiondetailsthepolicyandmanagementsystemsthatwehaveputinplaceconcerningtheenvironmentalaspectsofCRH’sactivities.Italsoillustrateshowweimplementourpolicyanddescribesourenvironmentalperformanceapplyingpertinentkeyperformanceindicators.

Ourenvironmentalreportingsystemsarewellestablishedandareregularlyreviewedtakingintoaccountindustrybestpractice.Weseektocontinuouslyimprove,andsharingofbestpracticeandknowledgearoundtheGroupisakeypartofthisprocess.

Productandprocessinnovationisakeyaspectofourenvironmentalpolicy.Alsodescribedwithinthissectionareexamplesofenvironmentally-drivenproducts,andourrecyclingandre-useactivitiesthathavepositiveenvironmentalimpacts.ThisisanareaofsignificantcommercialopportunityformanyofCRH’sbusinesses.

Environment

ThedepletedSelahGravelPitinWashingtonState,intheUS,wasrestoredtocreatelakeswhereavarietyofwildlifenowthrive.In2006itwasnominatedfora“BestReclamation”awardfromtheStateDepartmentofNaturalResources.

Item Page

Policy 2�

Delivery 2�

Annual Review Process 22

Climate Change - Cement 23

Alternative Fuels & Materials 24

Optimising Transport 25

Our Climate Change Indicators 26

Improving Air Quality 27

Recycled Materials 28

Managing Waste 29

Minimising Water Usage 30

Reinstating Quarries & Pits 3�

Fostering Biodiversity 32

Environmental Expenditure 33

Innovation 34

Environmentally-Driven Products 35

Towards a Lower Carbon Future 36

Awards 37

Environment Policy Systems Performance 322�


PolicyOurEnvironmentalpolicy,appliedacrossallGroupCompanies,isto:

Comply,ataminimum,withallapplicableenvironmentallegislationandcontinually improveourenvironmentalstewardshiptowardsindustrybestpractice

Ensurethatouremployeesandcontractorsrespecttheirenvironmentalresponsibilities

ProactivelyaddressthechallengesandopportunitiesofClimateChange

Optimiseouruseofenergyandresourcesthroughefficiencygainsandrecycling

Promoteenvironmentally-drivenproductinnovationandnewbusinessopportunities

Begoodneighboursinthemanycommunitiesinwhichweoperate

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DeliveryAchievingourenvironmentalpolicyobjectivesatallourlocationsisamanagementimperative;thislineresponsibilitycontinuesrightuptoCRHBoardlevel.DailyresponsibilityforensuringthattheGroup’senvironmentalpolicyiseffectivelyimplementedlieswithindividuallocationmanagers,assistedbyanetworkofEnvironmentalLiaisonOfficers(ELOs).WithmajoracquisitionsincludingHalfen,MMIandAPACduring2006,theELOnetworkgrew,andenvironmentalmanagementandreportingsystemsofnewacquisitionswererapidlyintegrated.

Ateachyear-end,theELOsassisttheGroupTechnicalAdvisorincarryingoutadetailedassessmentofGroupenvironmentalperformance,whichisreviewedbytheCRHBoard.Theresultsaresharedinbestpracticemeetingsthroughtheyear,ensuringacontinuousimprovementprocess.

EnvironmentalLiaisonOfficersfromtheEuropeMaterialsPolandDivisionmetinLublininSeptember2006toshareexperiencesandenvironmentalbestpractice.

AttendeesatthePortugalHSEBestPracticemeetinginMay2007heldinOutãoCementPlant,nearLisbon.

Number of ELOs in Group

250

200

150

100

50

0‘02 ‘03 ‘04 ‘05 ‘06

Number of locations with ISO �400�

400

300

200

100

0‘02 ‘03 ‘04 ‘05 ‘06



Annual Review ProcessAteachyear-end,theELOsassisttheGroupTechnicalAdvisorincarryingoutadetailedassessmentofenvironmentalperformanceinallGroupcompanies.AreportispreparedaspartofthisexercisewhichissubmittedtoandreviewedbytheCRHBoard.Thissourceinformationhasbeenusedtoprovidetheenvironmentalperformanceinformationwithinthisdocument.Thepagesthatfollowsummarisethekey2006data,andcompareperformancetoprioryears.

Theyear-endreviewsencompassthefollowingkeyareas:

CompliancewithGrouppolicy,localregulationsandnationallegislation.

Environmentaltraining,auditsandcertification.

Environmentalupgradesandimprovements.

Climatechangeimpacts,energyandfuelusage,airquality.

WaterandWastemanagement.

Recyclingactivities.

Localstakeholderengagement.

Biodiversitydataandquarryreinstatementactivities.

Environmentally-drivenproductdevelopmentandopportunities.

Aspartofthisprocess,itisrequiredthatanycompliancedeficienciesarerectifiedassoonasispracticable.Totalfinesfromregulatoryauthoritiesin2006 amounted to just under €124,000: all these issues have been or are beingrectified.

Weseeourenvironmentalreviewprocessaskeyinmanagingenvironmentalrisks.Wearemonitoringpotentialrisksfrombulkfuelstorage;andin2006therewerenosignificantfuelspills.Locationswithpossiblenon-processenvironmentalissuessuchaspotentialforelectricalequipmenttocontainpolychlorinatedbiphenyls(PCBs),potentialforlegionnaire’sdiseaseandpresenceofanyasbestos-containingmaterialsarereviewedanditischeckedthatpotentialrisksaresystematicallymanagedandeliminated.

Theperformanceofthisreviewexercisehasbeendevelopedovertimeandappliesourownknowledgeofourbusinessesandindustrybestpractice.WeviewthedevelopmentofthisprocessascontinuousandwestrivetoensurethatitencompassesallofthematerialenvironmentalaspectsoftheGroup’sbusinessactivities,asshownbelow.TheGroupbelievesthattheconductofthisexercisealsomotivatescontinuousimprovementinallourheritage

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companies,andensurestherapidintegrationofrecentacquisitionsintotheELOnetworkandreportingsystem.Duringtheyear,environmentalbestpracticemeetingsareheldinthevariousregions,providingongoingsupport.ThisentireprocessishallmarkedbypositiveenvironmentalawarenessanddedicationthroughouttheGroup.

Allcompaniesarestronglyencouragedtohaveanappropriateenvironmentalmanagement system. The number of higher impact locations with ISO 14001 certificationoftheirenvironmentalmanagementsystemscontinuestoincreaseeachyear,representingthepositivecommitmenttoachievingourenvironmentalpolicyobjectives.

Environmental Impacts by Activity:

Climate Change/CO2

Other Air Emissions Water Waste Reinstatement Biodiversity Transport

Cement P P P P P P P

Other Process P P P P P P P

Materials P P P P P P P

Concrete Products P P P

Clay Products P P P P P P P

Building Products P P

Distribution P P

EnvironmentalLiaisonOfficersfromIrelandandNorthernIrelandmetinApril2007inDublintoshareexperiencesandenvironmentalbestpractice.

EnvironmentalLiaisonOfficersfromtheAmericasMaterialsDivisionattheannualHSEreviewmeetinginBaltimore,MarylandinJune2006.

Environment Policy Systems Performance 3223


CRHrecognisesthatclimatechangeisamajorchallengefacinghumanity,and

wearecommittedtoplayingourpartindevelopingpracticalsolutions.

Wehavecommittedtoa15%reductioninspecificCO2cementplantemissions

by2015comparedwiththe1990specificemissionsforthesameportfolio

ofplants.ThiscommitmentcoversourplantsinIreland,Finland,Poland,

SwitzerlandandUkraine,andthoseofourjointventurepartnerinPortugaland

Tunisia.

Fundamentaltothiscommitmentisamajorcapitalinvestmentprogramme

including:

Replacementoftwoold-technologydrykilnsinLappeenrantaCementPlant

inFinlandwithanewkiln,nowjustcommissioned.

Replacementofanold-technologydrykilnatPlatinCementPlantinIreland

withanewkiln,worknowcommencingforcommissioningin2008.

ReplacementoffiveoldwetprocesskilnsatPodilskyCementPlant

inUkrainewithasingledryprocessline,forcommissioningin2009.

Thisprojectisparticularlynoteworthyasitistheworld’sfirstJoint

Implementation(JI)ProjectregisteredbytheUNFCCCundertheflexible

mechanismsoftheMarrakeshandKyotoProtocols.

Theseinvestmentscomplementmajorinvestmentsmadeinrecentyearsat

manyofourothercementplants,mostnotablebeingtheupgradeofOzarow

CementPlantinPolandtooneofthehighestefficiencyandthroughputplants

inEurope.Theseinvestmentsnotonlyincreaseprocessefficiency,butalso

enableincreasingusageofsecondaryfuelsandmaterials,alltheseoperational

parametershelpingtoreducetheCO2pertonneofcement.

Inaddition,withourassociateMashav,wehavesecuredaCleanDevelopment

Mechanism(CDM)Projectthroughanewhigh-efficiencycementmilling

installationatNesher’sRamlaCementPlantinIsrael:thisprojectinvolved

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#

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breakthroughtechnologyintheformoftheworld’slargestverticalcement

mill(replacingtraditionalballmilltechnology),achievingtherequiredcement

particlefinenessatmuchlowerenergyinputs.

WithintheEuropeanUnion,CRHisoperatingoverallwithintheNational

AllocationPlansundertheEuropeanEmissionsTradingSchemefortheperiod

2005-2007,andweareinactivediscussionfortheperiod2008-2012.For

plantsoutsidetheEuropeanUnion,CRHwillseekfurtherprojectsintheflexible

CO2tradingmechanismsundertheKyotoProtocol,whichhelpjustifyplant

upgradinginvestmentsthatwouldotherwisebeuneconomic.

Cement Sustainability Initiative (CSI)

CRHhasbeenacorememberoftheCSIsince2005.TheCSIisavoluntary

initiativethatisconductedby18oftheworld’smajorcementproducers.Itaims

topromotegreatersustainabilityinthecementindustryundertheauspicesofthe

WorldBusinessCouncilforSustainableDevelopment(WBCSD)andindependent

stakeholders.WeareactivelyinvolvedinalloftheCSITaskForcesandreport

tothekeyperformanceindicators(KPIs)as

shownintheappendicestothisreport.

TheCSIisnowlookingatthepost-Kyoto

period,andisassessinglonger-term,

industry-wideclimatechangeoptions,

includingaglobalsectoralapproach

strategy.Thisisbeinghailedasaleading

initiativebyGovernmentsandNon-

GovernmentalOrganisations(NGOs).

Climate Change - Cement

OurprojecttoconvertourcementplantatKamieniets-PodilskyinWesternUkrainefromwettodryprocesswasthefirstJIProject(JI0001)toberegisteredbyTheUnitedNationsJointImplementationSupervisoryCommittee(JISC).UndertheJIproject,theexisting1970’swetprocessplantwillbelargelyreplacedwithanewstate-of-the-artdryprocesscementplant.

ThenewCementMill12atNesher’sRamlaplantinIsraelisaCDMinitiativeundertheKyotoProtocol.ThisverticalLöschemill,thelargestofitskind,achievessignificantenergysavingscomparedwithconventionalballmillgrindingtechnology,earningERUcredits.

Climate change commitment

kgofCO2pertonnecement

1990

800

600

400

200

02006 2015

projected



Alternative Fuels & MaterialsTheGroupisconstantlylookingforopportunitiestousealternativefuelandmaterialsinouractivities.Thisformspartofourpolicycommitmentstoproactivelyaddressclimatechangeandoptimiseouruseofenergyandresourcesthroughefficiencygainsandrecycling.Additionally,useofalternativefuelscanleadtosignificantcostsavings.

Forexample,keyinitiativesadoptedinsomeofourcementplantsfollowtherecommendationsdevelopedbytheCSITaskForce2andinclude:

Useofbiomassalternativefuels(suchasforestresidues,sewagesludge,meatandbonemeal),whicharecarbonneutral.

Useofnon-biomassalternativefuels(suchasplastics,tyresandsolvents),whichachieveareductionofglobalemissionsbyreducingtotalincinerationloads,aswellasreducinglandfillvolumes.

Useofalternativematerials(suchasgroundlimestone,fly-ashandslag),thusreducingtheamountofclinkerthatisusedincement(therebyproportionatelyreducingtheCO2pertonneofcement).

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Examplesinotheractivitiesincludeanumberofourclaybrickplants,whichhavebeguntouselandfillgasasafuel,andmanyofourasphaltmixingplantswhichusesignificantquantitiesofrecycledoil.

ThetotalquantityofalternativefuelsusedthroughouttheGrouphasbeenincreasinginrecentyears.ThediagramdemonstratesthebreakdownofalternativefuelsalreadybeingusedinGroupcementkilns,wherethesealternativefuelsarecommerciallyavailable,andtheiruseisfullypermitted.

JuraCementinSwitzerlandwasalsoabletousepiratedDVDsthathadbeenconfiscatedbytheSwissAuthoritiesasaninnovativealternativefuelinitscementplant.

WastetyresareusedbyJuraCementinSwitzerlandasanalternativefuel,divertingwastefromlandfill.

OzarowCementinPolanduseswasteplasticasanalternativefuelinitscementkilns.

FinnsementtiinFinlandburnswasteproductsfromthelocalpaperindustryinitskilns.

Alternative fuels used in Groupcement plants 2006Paints<1%

Sawdust3%

Biomass 4%

RefuseDerivedFuel6%

Meat&BoneMeal6%

Solvents6%

UsedOil6%

Tyres9%

Plastics28%

PFA31%



Optimising TransportCRHisfocusingonoptimisingtransporttoreduceenergyuseandairemissions.Transportbytruckisourmostcommonmode,drivenbytheimperativesoftimelydeliverytoadiverselocalcustomerbase.TheGroupfleet is estimated at 40,000 vehicles travelling around 1 billion km a year. A majorityofGroupcompanieshasinitiativestoimprovetransportoptimisationthrough,forexample,useofGPSinrouteplanning,ensuringfullloadsandmaximisingback-loading.Theseinitiativesalsocontributetowardsimprovedcustomerservices.

Wherepossible,ourcompaniesusefuel-efficienttrainorseatransportbecausethesemodesareidealforlargerconsignmentsoverlongerdistancestofixeddestinations.ThecasestudyexamplesonthispageillustratetheapproachthattheGroupadoptsinthisarea.

TheGroupisalsopilotingbiofuelprojectswithsomeofitstruckfleetinIreland,SwitzerlandandtheUS,andwillincreasetheuseofbiofuelsifsuccessful.

TilconConnecticutintheUSusesrailtransportformovementofaggregatesfromthequarryclosertocustomersforonwardtransportbybargeandroad.

AtStradalinFrance,precastconcreteproductsareefficientlytransportedbybargeontheRiverSeinetotheirdestination.

SupremeConcrete,basedintheUnitedKingdom,utilisesthelatesttechnologiesinGPSandfleetmanagementtominimisetheamountofwaitingtimeanddrivingtime.



Our Climate Change Indicators WhenreportingourCO2emissions,weusetheGreenhouseGasProtocolpublishedinconjunctionwiththeWorldBusinessCouncilforSustainableDevelopment(WBCSD)andtheWorldResourcesInstitute(WRI).Forthebuildingmaterialssector,CO2istheonlygreenhousegasthatisrelevant.

ThetotaldirectCO2emissions(Scope1undertheGreenhouseGasProtocol)fromallwholly-ownedGroupactivitiesin2006was12.1mtonnes.Thisrepresentsanaverageofapproximately28kgCO2pertonneacrosstherangeofGroupproducts.WhilstoverallCO2emissionshaverisenwithincreasingproduction,theaverageCO2pertonneofproducthasdecreasedincomparisonwith2005figures.Ascement-relatedandotherprojectscontinuetobeimplemented,furtherreductionsareanticipatedinfutureyears.ThetotalCO2emissionsin2006,inclusiveofCRHshareholdingsinjointventuresandassociates, amounted to 14.9m tonnes.

WhenconsideringScope2emissionsundertheGreenhouseGasProtocol(from off-site electricity generation), an estimated total of 1.4m tonnes arises fromthe3,200GWhofpurchasedelectricityusedbyGroupsubsidiariesin2006.Scope3emissions(contracttransport)areestimatedat0.6mtonnes.

ThereisanongoingmajorfocusonenergyreductionacrossallGroupactivities,drivenbycostaswellasenvironmentalconsiderations.Totalenergyusage(includingfuels)inallwhollyownedactivitiesin2006was31.7TWh,equivalentto72kWhpertonneacrossallGroupproducts.Theaverageenergyusepertonneofproductisdecliningslightly.Thetotalenergyusagein2006,includingpercentagesproportionaltoshareholdingsinjointventuresandassociates,was35.9TWh.

CO2 emissions

milliontonnes12

9

6

3

0‘02 ‘03 ‘04 ‘05

CO2 per tonne of product

kgpertonne32

24

16

8

0‘02 ‘03 ‘04 ‘06

Energy usage

TWh30

25

20

15

10

5

0‘02 ‘03 ‘04 ‘05

Energy per tonne of product

kWh

‘02 ‘03 ‘04 ‘05

100

80

60

40

20

0‘06 ‘05 ‘06 ‘06

CO2 emissions by activity 2006

Distribution<1%

BuildingProducts2%

Concrete2%

Clay7%

Transport7%

Materials9%

Other

Process10%

Cement62%

Total: �2.�m tonnes

CO2 emissions by source 2006

Used Oils 4%

Alternative Fuels 4%

Diesel6%

Transport7%

Oils8%

Petcoke10%

Coal13%

NaturalGas15%

Decalcination33%

Total: �2.�m tonnes

Energy usage by fuel type 2006

LPG1%

Biomass1%

Alternative Fuels 4%

UsedOils6%

Petcoke9%

Diesel9%

Electricity10%

Oils11%

Coal17%

NaturalGas32%

Total: 3�.7 TWh

ClogrennaneLime’sstate-of-the-artMaerzkilninCo.Clare,Ireland,tobecommissionedin2007willsupplylocalcustomerswithlimeforpurposessuchasdesulphurisationofairemissions.



Improving Air QualityTheGroupcontinuallyfocusesonreducingotherairemissions,particularlySulphurOxides(SOx),NitrogenOxides(NOx),andparticulates(dust).Thegraphillustratesthetrendintotalemissionsofeachcomparedtoprioryears.

Comparing2006withprioryears,totalSOxemissionsincreased,asdidSOxpertonneofproduct,thelattermainlyduetofuelchanges.Bothabsoluteandspecificemissionsarelowcomparedtopeers,thankstorawmaterialsgenerallylowinsulphurcontent.TotalNOxemissionsincreased,thoughdecreasedonapertonnebasisandwilldecreasefurtherasmoreofourcementplantsinstallSelectiveNon-CatalyticReduction(SNCR)systems.Totalstackdustemissionsdecreasedslightlyandalsodecreasedpertonneofproduct.Dustemissionswillfurtherdecreasesignificantlyintheyearsaheadasmajorplantupgradesarecompleted.

Baselinestudiesofourcementplantemissionsindicateallothertraceemissionstobewithinpermittedlimits.

NOx emissions by activity 2006

BuildingProducts<1%

Clay3%

Concrete 4%

OtherProcess15%

Materials17%

Cement60%

Total: 25,500 tonnes

SOx emissions by activity 2006

BuildingProducts1%

Concrete3%

OtherProcess17%

Clay22%

Cement25%

Materials32%

Total: 7,200 tonnes

Air emissions over time

thousandtonnes35

30

25

20

15

10

5

02002 2003 2004 2005 2006

DustNOxSOx

ExtensionrecentlyfittedtotheKiln2ElectrofilteratIrishCement’sPlatinWorksaspartoftheitsongoingprogrammetomeetincomingBATemissionstandards.

Dust emissions by activity 2006

BuildingProducts<1%

Concrete3%

Clay6%

OtherProcess8%

Materials 24%

Cement58%

Total: 9,800 tonnes

ShellyCompany,basedinOhiointheUS,isrecognisedintheindustryforhavingstate-of-the-artstacktestingequipment.ItsnewmobiletestinglabwillbeutilisedtotestHotMixAsphaltplantsforenvironmentalcomplianceandforgatheringin-houseemissiondata.

Glen-Gery,whichmanufacturesclaybricksatits10plantsintheUS,isinvestinginscrubberssuchasthisone,toensurethatallplantsareincompliancewiththelatestUSStructuralClayProductsMaximumAchievableControlTechnology(MACT)emissionlimits.



Recycled Materials Ourenvironmentalpolicyincludesoptimisingouruseofresourcesandpromotingenvironmentally-drivenproductinnovation.Animportantaspectofthisisourapplicationofrecycledmaterials.Wherepractical,weapplycleanusedinertmaterialsinourproductionprocesses,usingmaterialsproducedbyotherindustriesthatwouldotherwisegotolandfill.

Ourbusinessesmaximisetheuseofrecycledmaterialswheretechnicallyandcommerciallypossible.Thequantitiesusedvaryfromyeartoyearaccordingtolocalmarketavailability,andin2006arecord19mtonnesofthismaterialwasused.

Thecomponentsofthe19mtonnesofrecycledmaterialsreusedbyGroupcompaniesin2006were:

9mtonnesofConstruction&Demolition(C&D)materials:thesearisefromconstructionanddemolitionactivitiesandcanreplacevirginaggregatesormaybereusedasarawmaterialforfillapplications,suchasinroadconstruction.

6mtonnesofRecycledAsphaltPavement(RAP)materials:thesearisewhenexistingroadorrunwaysurfacesaremilled,crushedandreusedasarawmaterialfornewasphaltmixes.

4m tonnes of fly-ash, slag and other cementitious materials which are by-product materials sourcedfromexternalpowergenerationandsteelproductionrespectively.Theseareusedasrawmaterialsforcement,orasreplacementsforcementinconcreteproducts.

Thepercentageofrecycledmaterialsusedinourfinishedproductsdependsontheproductandprocess,andcanvaryfromlessthan1%to100%.Forexample,crushedC&Dmaterialforuseasaroadbasecanconsistof100%recycledmaterial.

Wehavesuppliedexamplecasestudiesonthispagethathighlightsomeofourmanyactivitiesinthisarea.Theserecyclingactivitieshavesignificantcommercialaswellasenvironmentalbenefits,andarethereforeastrategicfocusgoingforward.

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IconMaterialsheadquarteredinWashingtonStateintheUS,producedandplaced85,000tonnesofhotmixasphalt during a 460-hour milling, recycling and paving window at the King County International Airport in Seattle,Washington.

JuraAggregatesandConcreteinSwitzerlandrecyclesconstructionanddemolitionmaterialsfrombuildingsites.

Secondary materials

milliontonnes

Other

RAP

C&D

20

18

16

14

12

10

8

6

4

2

02002 2003 2004 2005 2006

LohjaRudusinFinlandoperatesanetworkofrecyclingcentreswhereconstructionanddemolitionmaterialsarereusedinroadconstruction.



Managing WasteOurenvironmentalpolicyistominimiseandrecyclewastebyallpracticablemeans.Thismeansthatourbusinessesoperateasfollows:

Inmostofourproductionprocesses,anyby-productisinternallyrecycledbackintotheprocesswherepossible,therebyreducingrawmaterialusageandenhancingprocessefficiency.

Allwastesareminimisedandrecycledexternallywherepossible:anaverage of approximately 4kg of materials are recycled per tonne of productacrossallouractivities,indicatingaverylowlevelofwastegeneration.

Onlywhereitisnotpossibletoexternallyrecyclewaste,isitsentforfinaldisposal:thiscomprisesanaverageofjust0.8kgpertonneofproduct,ofwhichonly6gishazardouswaste.

Whilethetotalquantityofwastegeneratedincreasedin2006comparedtotheprioryear,itdecreasedonapertonneofproductbasis.Furthermore,theportionofwastebeingrecycledhasincreasedoverthelastnumberofyears,reflectingthefocusondiversionofwastefromlandfill.

Atotalof73GroupcompaniesbelongtoEuropeannationalpackagingrecyclingschemes,reflectingagrowingcommitmentinthatarea.UnfortunatelysuchschemesdonotyetexistintheUS.

AverysmallnumberofGroupcompaniesarepermittedtolandfillwasteon-site,andinthesecasesitiscarriedoutstrictlytothepermitrequirements.Followinganincidentofunauthoriseddumpingofwastebythird-partiesatoneofourlocationsinIreland(remediationisnowalmostcomplete),allGroupcompaniesarenowtakingextensiveprecautionstopreventanysimilarincidents.

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% of waste recycled

100%

75%

50%

25%

0

Companies recycling packaging

80

60

40

20

0‘03 ‘04 ‘05‘03 ‘04 ‘05

TyroneBrickinNorthernIrelandinvestedinequipmenttocrushoff-specclaybrickssothattheycanbereusedintheprocess,reducingthequantitiesofwastesentoff-site.

AlthoughonlysmallquantitiesofwastebatteriesariseatJuraCementinSwitzerland,thesearesortedandsentforexternalrecycling.

‘06 ‘06

Waste by activity 2006

Cement1%

Distribution1%

Clay2%

BuildingProds.3%

Concrete 45%

Materials 48%

Waste generation

milliontonnes

‘05 ‘06

2.0

1.8

1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0

Waste per tonne of product

kg

‘05 ‘06

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1

0.5

0

Hazardous disposed

Non-hazardous disposed

Externally recycled



Minimising Water UsageWaterisanimportantresource,andanimportantaspectofourpolicytominimiseouruseofnaturalresources.Processwatercanoftenbeabstractedfromseveralsources,allofwhichmaynotbemetered:henceprecisedeterminationofintakequantitiesissometimesdifficult,thoughthisisourobjective.

Our best estimate is that Group process water usage in 2006 was 43m cubic metres.ThiscorrespondstoanaverageusageacrossallGroupactivitiesofapproximately98litrespertonneofproduct,averyslightdecreaseincomparisonto2005figures.

Welayemphasisonreductioninprocesswaterusagethroughwaterrecycling,andtherehasbeenasteadyincreaseinthenumberofGrouplocationsrecycling water each year, with 824 Group locations now carrying out at least some recycling. Additionally, 418 locations use rainwater in their operations.

Aswithourwaterintake,waterdischargecanbedifficulttoquantify,notonlybecauseitisnotoftenmeteredbutalsobecauseofthecontributionofstormwaterandincidentalquarrydewatering.

Asaresultofthenatureofouractivities,waterdischargescancontainsuspendedsolidsorbehigherinpH.Ourlocationsemploysettlingpondsandothersolutionstoreducesuspendedsolids,whilepHcanbetreatedifthenaturalneutralisationisinsufficient.

Water intake by activity 2006

Distribution<1%

Clay2%

Building

Products2%

Cement9%

Concrete11%

Other Process 14%

Materials61%

Total: 43 million m3

Locations recycling water

800

600

400

200

0‘02 ‘03 ‘04 ‘05 ‘06

CerroNegrohasinstalledanewstate-of-the-artwaterrecyclingsystematitsOlavarriaceramictileplantintheProvinceofBuenosAires,Argentina.

InIreland,anewwaterrecyclingplantwasinstalledatJohnAWoodLtd.’sKillarneylocationinNovember2006.Ithasresultedindecreasedwateruseanddischarge,andhelpedimprovewatermanagementatthesite.

Water usage

millionm3

‘04 ‘05

50

40

30

20

10

0‘06

Water usage per tonne of product

litrespertonne

‘04 ‘05

100

80

60

40

20

0‘06

Environment Policy Systems Performance 323�


Reinstating Quarries and PitsMuchoftherawmaterialsweuseisextractedfromquarries,sand&gravelpitsandclaypits,typicallyoveralongoperatinglifetime.Thereforewhentheserawmaterialsarefullyextracted,goodenvironmentalstewardshipdemandsthatwereinstatetheseareas,orfindanotherappropriateafter-use,inconsultationwiththelocalpermittingauthoritiesandstakeholders.

Year-on-year,wecontinuetoreinstateandlandscapeworked-outquarriesand pits. In 2006, a further 591 hectares (1,460 acres) were reinstated. The reinstatedareasaverageoutatabout1.5%perannumoftotalquarryandpitarea,correspondingtoa60-yearworkinglife.

Over85%ofallourquarriesandpitsnowhaveformalreinstatementplans;therestareexpectedtohaveplanswithinafewyears.

Theactualamountofreinstatementachievedinanyoneyeardependsontheclosureofspecificquarriesorpits,asreinstatementandlandscapingcantypicallyonlybecarriedoutoncompletionofexcavationactivities.

Reinstatement includes tree planting and a further 147,000 trees were planted in2006,bringingthetotalnumberoftreesplantedinthelastsevenyearsupto1.5million.

FinnsementtiteamedupwithstudentsofarchitecturefromtheHelsinkiUniversityofTechnologytodevelopplansforthesiteofitsclosedVirkkalaCementPlantinFinland.

AconveyorbeltcarryingsandandgravelfromtheactivepartofOKSM’sBrzeznolocationinPolandpassesthroughanareaalreadyrestoredandplantedwithtrees.

Tilcon’sEmpiresandandgravelpitinNewYorkState,intheUS,shownin2001whileitwasstillactive,andrecentlyfollowingreclamation.Thesitehasnowbeensoldtoadeveloperforuseforhousing.Reclamationinvolvedregradingslopes,providingfornaturaldrainage,anderosioncontrol.

Area reinstated

hectares

600

500

400

300

200

100

0‘02 ‘03 ‘04 ‘05 ‘06

Trees planted

thousands250

200

150

100

50

0‘02 ‘03 ‘04 ‘05 ‘06



Fostering BiodiversityManyofourquarriesandpits,evenduringnormaloperations,arefavouredbywildlifeasasafeandnaturalhabitat,oftenbecomingevenmoreenrichedafterfinalreinstatementtakesplace.

Someofourquarriesandpitsarenotedforspecificbiodiversity,suchasparticularspeciesoffloraandfauna.Allenvironmentalimpactassessmentsassociatedwithpermitapplicationsrequireinvestigationofsitebiodiversity,andthatappropriatemanagementplansareputinplace.

Thepicturesillustratesomecasestudiesfromthe57locationswherespecificbiodiversityiscarefullymanagedinIreland,theUK,theNetherlands,Finland,Switzerland,andtheUS.Withinourjointventuresandassociatecompanies,thereareafurther3locationsinPortugalandIsraelnotedforbiodiversity.

AtRamlaquarryinIsrael,operatedbyourassociateNesherCement,eightspeciesofpreviouslyunknowninvertebratesandbacteria,includingthiseyelessscorpion,werediscoveredinanisolatedcave.

NorthstoneinNorthernIrelandisencouragingbiodiversitywithitsprojecttoprovidenestingplacesfortreesparrows.

AtJura’sGroupeFribourgsandandgravelquarryinSwitzerland,thisamphibianthrives.

Staker&Parson’sSouthWeberpitinUtah,theUS,providestheidealhabitatforthisherdofdeer.

TheemployeesatSecil’sOutãoCementPlantinPortugal,situatedontheArribidanationalpark,havebeenpropagatinglocalspeciesofplantlifeforreplantingintheenvironsofthecementplant.

Roadstone’sDenhamstownquarry,inCo.Meath,Ireland,ishometoarichvarietyofwildlife,includingtheseducks.

Locations noted for biodiversity

60

50

40

30

20

10

0‘02 ‘03 ‘04 ‘05 ‘06



Environmental Expenditure Aspartofourcontinuousmanagementoftheenvironmentalimpactsofouractivities,weregularlyinvestinprocesseswhichimproveourperformanceorthatofferinnovationopportunities.

In 2006, we invested €55m in a wide range of related projectsthatencompassedalltheGroup’sactivitiesandcountriesofoperation.Thisfigureincludesbothenvironmentaloperationalexpenditureandaportionofcapitalexpenditurewithenvironmentalbenefits.

Significantareasofexpenditurein2006included:

Processoptimisation.

Energyreduction.

Increasedrecyclingofalternativematerials.

Increaseduseofalternativefuels.

Reductionofnoiseandwaste.

Reductioninairanddustemissions.

Reductionofwaterusageanddischarges.

Thislevelofexpenditurehasbeensustainedoverrecentyearsandwillcontinueinthefuture,tokeepaheadofincreasinglychallenginglegislativerequirementsandtomaintainindustrybestpractice.Withinthissection,wehavesuppliedcasestudiesasexamplesofsomeofournumerousprojectsinthisareaduring2006.

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Environmental expenditure

€ millions60

50

40

30

20

10

0‘02 ‘03 ‘04 ‘05 ‘06

FollowingthecommissioningofanewplantIbstockhasreducedtheenergyconsumedatitsThrockleyBrickFactoryinNorthEastEnglandbyathird,andachievedacomparablereductionincarbonemissionstotheatmosphere.

CimentsdeGabesinTunisiahasinvestedextensivelyinenvironmentalimprovements,includingthiskilndustfilter.

MasfaltinPolandhasinvestedextensivelyinmodern,energyefficientasphaltplantsthatproducelessemissions.

During2006,anewcoalmillatPodilskyCementPlantinUkrainewascommissionedprovidinggreaterflexibilityasregardsfuelselection.



Innovation

Product Environmental Opportunities Product Environmental Opportunities

Cement ReductionofGHGandenergyusageUseofsecondaryfuelsandmaterialsBlendedcements

Pavers PorousandimpermeablepavingD-NOxpaving(airpurifying)Silentiopaving(noisereducing)

Lime StabilisationofeffluentsWaterneutralisationFluegasdesulphurisationUseinsoilstabilisationprojects

Masonry ThermalandacousticinsulatingblocksUseofrecycled/secondarymaterialsRetainingwalluseinlanderosioncontrolInsulatedpreformedwallingpanels

Aggregates RecyclingofdemolitionmaterialsUseofsettlingpondfinesasfillmaterialsProductionofmanufacturedsand

Precast PrecastvaultandtanksystemsHighperformancepanelsystemsWasteandstormwatertreatmentsystems

Asphalt RecyclingofasphaltmaterialsUseofrecycledoilsasfuelDevelopmentofWarmMixAsphalttechnologyUseofotherrecycledmaterials

Glass High-performanceglazingsystems(e.g.UVblocking,highsecurity,stormresistant,self-cleaning)LowenergyglassHurricane-proofandexplosion-proofglass

Lightweight Aggregates

Lightweightconcretes Rooftiles Lightweightquick-installsolutions

Readymixed Concrete

UseofsecondarymaterialsUseofreturnedconcretetomakeecologyblocksSelf-compactingconcrete

Insulation BigpotentialforCO2savingsinbuildingsRecyclingofusedmaterials

Periclase PurificationofwastewaterfromotherprocessesProductionofcausticsodareplacement

Fencing and Security

FencingforfaunaUseofsustainablebuildingproducts

Clay LandfillgasinelectricitygenerationUseofcrushedbrickinEco-ProductsUseofwasteadditivesinbricksManufactureofunfiredclaybricksforinterioruse

Construction Accessories

Productstoreduceheatlossacrossthermalbarriers

Daylight and Ventilation

BetterbuildingdaylightingAutomaticSmokeExhaustSystems

Distribution Distributionofeco-efficientproductsRecyclingofpackagingmaterialsDrop-offpointforwastessuchaspaintforcustomers

Intandemwithourcommitmenttoactasasociallyresponsiblecorporatecitizen,theGroupviewsthedevelopmentofproductsthatspecificallybenefittheenvironmentasasignificantbusinessopportunity.Someofthemanyexamplesaregiveninthetablebelow,andinthecasestudyexamplessuppliedoverthenexttwopages.Theyallillustratereal-lifewin-winsituations,withsignificantcommercialaswellasenvironmentalbenefits.

Inaddition,severalGroupinnovationsandproductsprovideopportunitiesforreducingglobalCO2emissions.Forexample,wearethelargestproduceroffoamthermalinsulationmaterialsinEurope,andweestimatethatapplicationofourannualoutputofthesematerialsinbuildingswillleadtoCO2savingsofabout1.2mtonnescumulatively.

InSwitzerland,HastagSt.Gallenoffersanewserviceforcustomersinstallinggeothermalheatpumps.Boreholesupto200mbelowgroundlevelaredrilled,andaheatcollectorinstalled.

AbetoniOy,partofLohjaRudusinFinland,hasdevelopedasewagetreatmentplantfordairyfarms.AfterpassingthroughtheMILKILOpackagetreatmentplant,thetreatedwatercanbedischargedtotheenvironmentwhilethetreatedsolidsportioncanbeusedasasoilfertiliser.



Environmentally-Driven Products

Uni-PlanPlusself-supportinginsulationsandwichroofingelementsaremanufacturedintheNetherlandsbyUnidek.Fitteddirectlyonroofbeams,theseinnovativeelementsremovetheneedforthetraditionalrooftilesupportsystemusedinconventionalpitchedroofconstruction,reducingbuildingtime,andprovidingahighlyenergy-efficientroof.

RemacleinBelgiumproducestheseenvironmentalunitswhichcleanrainwaterrun-offpriortobeingdischargedtotheenvironment.

“Evergreen”,theseprecastretainingwallstructuresproducedbyMarmorithinBelgium,aredesignedsothattheycanbeplantedwithvegetation.Thefinishedproductcutsdownonroadnoiseanddust,andinaddition,theplantsabsorbCO2astheygrow.

OldcastleGlasssuppliedtheirenergyefficientglasstotheMuttartConservatoryinEdmonton,Canada.Thisglassproductsignificantlyreducestheenergyrequirementsofbuildings.

StruykVerwointheNetherlandshasdevelopedtheSilentiopavingblockwhichsignificantlydecreasesthenoisecreatedbycarsinareasthataresensitivetonoise.

AbetoniinFinlandrecyclesconcretetocasttheendpiecesfortheseparkbenches,avoidingtheneedtolandfilltheconcrete.

Aschwanden,ourSwissConstructionAccessoriescompany,hasdevelopedtheARBOcantileverslabreinforcementconnectorswithexcellentthermalinsulationforconcreteslabs.

IbstockBrickhasnowlaunched“Ecoterre”,arangeofunfiredbrickssuitableforindoornon-structuralapplications,suchasinthispilotprojectatNealsYardintheUK.ThesebrickshaveamuchreducedCO2footprintaswellasporoussurfacepropertiesthatcanimproveairqualityforasthmasufferers.



Towards a Lower Carbon FutureCRHisactivelyengagedinseveralgovernment-fundedresearchprojectsthataretargetedatreducingthecarbonemissionsassociatedwithmakingconcreteproducts.Theseinitiativesincluderesearchintomagnesia-basedcements,sulphoaluminatecements,andthealkaliactivationofwasteproductssuchaslow-gradeflyash.Thesearealllong-terminitiativesthataresupportedbyconcreteproducingcompanies,cementcompanies,researchinstitutesanduniversities.

VapourEnergygeneratorsarenowwidelyusedwithinCRHandhaveprovensuccessfulinachievingtypically10%cementreductionduetothecarbonationofthelimegeneratedinthecementhydrationprocess.WherecompanieshaveVapourEnergycuringithasenabledsignificantcementreductionsbyreplacementwithflyashandslag.

OurUSPrecastGrouphaspioneeredtheuseofcarbonfibrereinforcementinsteadoftraditionalsteelreinforcement.Thisallowshigherstrengthpanelstobeproducedinthinnerprofilesusingmuchlessconcrete,oftenwithinbuiltinsulationtogiveenhancedthermalperformance.

OurclaybrickcompaniesarepioneeringtheuseofEmmisshieldtocoattheinsideofclaybricktunnelkilnstoreduceheatloss.Emmisshieldderivesfromspaceshuttletechnologyandcanproduceenergysavingsof5-10%inthekilnfiring.

Emisshieldwasdevelopedbythespaceindustrytocoatthesurfaceofspaceshuttlestohelppreventthemburningupwhentheyre-entertheearth’satmospherebyreflectingtheheat.Ithasasecondinnovativeapplicationinimprovingtheenergyefficiencyinourkilnsby‘reflecting’theheatbacktothebricks.Ibstockhasappliedthecoatingatsixfactoriesandtheinitialfindingsindicateanenergysavingof5-10%andanimprovementinproductqualitywhichreduceswaste.

Eco-friendlylowdensityconcretemasonryproducedbyForticreteatitsBootleplantintheUK,usesablendofreclaimedashastheonlyaggregateandupto50%ofthecementbinderhasbeenreplacedbylow-gradeflyashandwastelime.

Theeco-friendlylowdensityconcretemasonryiscuredathightemperatureinenergyefficientchamberssuchasthisone,whichcausesupto90%ofthecarbondioxideproducedbythegasfueltobeabsorbedintotheproduct.

Concretesandwichpanelsmadeusingthecarbon-casttechnologydevelopedandnowlicensedbyOldcastlePrecastintheUS,requirelessconcrete,thussavingCO2emissions,whilealsoenhancingstrength.Thepanelsenableincreasedinsulationwithinthesamevolumeastraditionalpanels,andarelighter,thusrequiringlessCO2intheirtransportandusage.ItisintendedtointroducethistechnologytoEurope.



AwardsAtotalof228high-rankingenvironmentalaccoladesandawardswereachievedbyCRHcompaniesin2006,repeatingtheexcellentperformanceofprioryears.Thisillustratesthesolidongoingcommitmenttoenvironmentalexcellence.

Awards won by our European companies include:

InNorthernIreland,Northstone’sNorthDownlocationwashonouredwiththe‘Energy,Environmental&WasteManagementAward’by‘SustainableIreland’magazine,Northstone’sCroaghanlocationreceivedthe‘EnvironmentalAward’(PollutionPreventionBestPracticecategory),fromtheQuarryProductsAssociationofNorthernIreland,FarransConstructionreceivedan“Excellent”AwardfromtheCivilEngineeringEnvironmentalQualityAssessmentandAwardScheme.

InGreatBritain,ForticretewaspresentedbyWilsonHomeswithaGroupEnvironmentalAwardformostenvironmentalimprovementsbyasupplier,andIbstockwonanInnovationinNaturalResourceManagementawardfromtheConstructionProductsAssociation.

InBelgium,StraduswonanInnovationPathawardforitsporouspipesatIFEST2006,theinternationaltradefairfortheenvironment,energyandsafetyatwork,andStruykVerwoAquawasawardedtheDUBOKEUR®certificatefromtheDutchInstituteforBuildingBiologyandEcology(NIBE),foritsproduct“Aquawayconcretepipe”.

InPoland,CementowniaOzarowandCementowniaRejowiecwerebothagainrecognisedinthePolishMovementofCleanerProductionawards.

InSwitzerland,Jura’sAggregatesandConcretedivisionreceivedaccoladesfor6locationsfromtheSwissNatureandEconomyFoundationforprojectsinvolvingbiodiversityenhancementandnatureprotection.

In North America, our companies received many accolades, including:

TheMaterialsGroupwon20awardsfromtheNationalStone,SandandGravelAssociation,aswellas159DiamondAchievementandotherawardsfromtheNationalAsphaltandPavementAssociation.ThewinningcompaniesincludedthePikeGroup,TilconConnecticutandNewYork,theNewYorkStateGroup,theShellyGroup,MichiganPavingandMaterials,theNorthWestGroup,Staker&Parson,theRockyMountainGroup,theIowaGroupandAPAC.

ThePrecastGroupwashonouredforitscontributiontotheDelawareArtificialReefProject.

In South America, our companies also gained distinctions:

InArgentina,CanterasCerroNegroandCormelasuccessfullyachieved“CertificadosdeAptitudAmbiental”forenvironmentalexcellence.

InChile,DellOrtoreceivedanexcellentratinginthenational“EmpresaCompetitiva”programme.

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KerrConcretePipeintheUSwaspresentedwithanawardbytheAmericanConcretePipeAssociationandalsoreceivedspecialrecognitionfromtheDelawareEnvironmentDepartment.

TheFencingandSecurityGroupinEuropereceivedanawardwhentheyprovidedfencingsystemstoenhancethewildlifeparksoftheAfricanParksFoundation.

Stradus,basedinBelgium,wonanawardintheInnovationPathcategoryatIFEST2006,theinternationaltradefairfortheenvironment,energyandsafetyatwork,foritsporouspipes.Thisproductisusedforbufferingandinfiltratingrainwaterinsoilsaspartofsustainabledrainageprojects.

Health & Safety Policy Systems Performance3238


About this Section

CRHiscommittedtoachievingindustrybestpracticeinhealth&safetystandardsatallitsoperations.Thissectiondescribesourpolicyandmanagementsystemsconcerningthehealth&safetyaspectsofCRH’sactivities.Italsodetailsourhealth&safetyperformanceapplyingthekeyperformanceindicatorsthatarenowagreedwithinourindustrysector.

Ourhealth&safetyreportingsystemsarenowwell-establishedandareregularlyreviewedtakingintoaccountourexperiencesandindustrybestpractice.Knowledge-sharingaroundtheGroupplaysanimportantpartinthisprocess.Wehavealsodetailedwithinthissectionexamplesofhealth&safetyinnovationsthathavebeenpioneeredbyGroupcompanies.

Health & Safety

About this

Item Page

Policy 39

Delivery 39

Our Annual Review Process 40

Managing Safety 4�

Our Safety Record 42

Improving Our Safety Performance 43

Employee Health 44

Product Safety 44

Innovation 45

Awards 46

TheemployeesofOldcastleLawn&Garden’sBostwicklocationinFloridacelebrateachievingafullcalendaryearwithzeroaccidentsandzeroinjuries.

Health & Safety Policy Systems Performance 3239


OurHealth&Safetypolicy,appliedacrossallGroupcompanies,isto:

Comply,ataminimum,withallapplicablelegislationandcontinuallyimproveourhealth &safetystewardshiptowardsindustrybestpractice

EnsurethatouremployeesandcontractorsrespecttheGroup’shealth&safetyimperatives

Ensurethatourcompaniesprovideahealthyandsafeworkplaceforouremployeesand contractors,andtakeduecareofcustomersandvisitorsatourlocations

Requireallouremployeesandcontractorstoworkinasafemannerasmandatedbylaw andindustrybestpractice

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Policy

DeliveryHealth&safetymanagementisadailypriorityoflinemanagementsupportedatoperatingcompanylevelbyanetworkofsafetyofficers.SafetyresultsfortheentireGrouparecloselymonitoredbyseniormanagement.SafetyperformanceisreportedtotheBoardonamonthlybasis.

Linemanagementisresponsibleforensuringthatthecompanyhealth&safetypolicyisadheredto,andthatsitemanagersandemployeesaretrainedinhealth&safetyriskanalysisandprevention.Whereaccidentsoccur,theseareinvestigatedandcorrectiveactionistakentoavoidarecurrence.Lessonslearnedareactivelysharedviasafetybestpracticegroups.

Contractortrainingalsoreceiveshighpriority.Ourresearchindicatesthatcontractorshaveahigherriskoffatalitiesthanemployees.Contractorsafetyinductionsandformalisedevaluationanddisciplinaryproceduresarebeingsteadilyincreased.

Ourgoaliszerofatalitiesandzeroaccidents.Duetothenatureandsizeofourbusinesses,gettingthereisanextremelychallengingtask.Wecontinuetodevotesubstantialmanagementandemployeetimeandalltheappropriateresourcestothisarea,inordertoprogresstheGroup’ssafetyperformancetowardsthesegoals.

StruykVerwoInfra,intheNetherlands,hasinstalledanoticeboardateverylocationshowingthenumberofdayswithoutalosttimeaccident.TheVlaardingenlocationachievedthe1,000daysmilestonein2006andManagingDirectorMarcSt.Nicolaasofficiallyupdatedtheirnoticeboardtocelebratethisachievement.

TheCRHSwissNationalSafetyBestPracticeGroupmetatJuraCement’sWildeggCementPlantinJune2007.AttendeesincludedsafetyofficersfromEuropeMaterialsandEuropeProducts&DistributioncompaniesinSwitzerland,Austria,SlovakiaandHungary.



Our Annual Review ProcessAteachyear-end,thesafetyofficersassisttheGroupTechnicalAdvisorincarryingoutadetailedassessmentofhealth&safetyperformanceinallGroupcompanies.AreportispreparedaspartofthisexercisewhichissubmittedtoandreviewedbytheCRHBoard.Thisinformationhasbeenusedtosupplythehealth&safetyinformationwithinthisdocument.Thepagesthatfollowsummarisethekey2006data.

Theyear-endreviewaddressesthefollowingkeyareas:

Coverageofsafetypolicyandsafetyofficernetwork

Comprehensiveanalysisofeverysituationwhichresultedinafatalityorseriousinjury

Analysisofalllosttimeinjuriesfocusingontrendsinrootcause,injurytypeandemployedperson’sprofile

Improvementsinsafetymanagementincludinguseofpersonalprotectiveequipment,recordingofnearmisses,frequencyofsafetymeetings,hoursofsafetytraining,useofdisciplinarymeasuresandincentivestoreduceinjuries

Numberandresultsofsafetyauditscarriedout

Workplacehygieneandemployeehealthmanagement

Reviewofanyoccupationalillnessclaims

ThereviewprocesscoversalloftheGroupsubsidiariesandmostofourjointventuresandassociates.Theperformanceofthisexercisehasbeendevelopedovertimeandappliesourownknowledgeofourbusinessesandindustrybestpractice.WeviewthedevelopmentofthisprocessascontinuousandwestrivetoensurethatitencompassesallofthesafetyaspectsoftheGroup’sbusinessactivities.

Resultsofthehealth&safetyreviewareanalysedindetailandstatisticalinformationiscorrelatedtoidentifyanyhigherriskaspectsofouractivities.Thisdataisthenusedtobetterfocuspreventivetrainingprogrammes.Thisinformationisfedbacktooperatingcompaniesthroughournetworkofsafetyofficersandsafetybestpracticegroupsthroughouttheyear.

Safetybestpracticeisalsosharedonanindustry-widebasisthroughtheCSIHealth&SafetyTaskForce,currentlychairedbyCRH.

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TheCementSustainabilityInitiativeTaskForce3SafetyMeeting,chairedbyCRH,lastmetinDublin,IrelandinMarch2007.

LohjaRudus,Finland,oftenfacessevereweatherandshortperiodsofdaylightduringthewinter.IthasdevelopedspecificPersonalProtectiveEquipmenttokeepitsemployeesclearlyvisibleandprotectedfromtheelements.

BrakelAtmos,partoftheDaylight&VentilationGroup,havedevelopedthissafetymaintenancesystemforemployeesduringroof&façadeinspection.

BashkimAsllaniatJuraCement’sWildeggplantusesapressurisedlancetoremovebuild-upinthekilnpreheater.Bashkimusesheat-resistantPPEtomitigatetheriskofthehotrawmeal.

Health & Safety Policy Systems Performance 324�


Managing SafetyOurannualreviewprocessalsogatherssafetymanagementdatafromalltheGroupcompanies,includingrecentacquisitions.Thisensuresthatcompaniesputasafetypolicyinplace,andappointadesignatedsafetyofficer(full-orpart-time,dependingoncompanysize).Dataisalsosoughtonwhethereachcompanyhassafetyinductionprogrammesfornewemployees,holdssafetymeetings,followsuponanyaccidents,circulatessafetyalertsandmonitors“nearmisses”.Thenumberofhoursspentonsafetytraininghasbeenfoundtobeakeyparameterinreducingtheaccidentfrequencyrate.

Contractortrainingalsoreceiveshighpriority.Manyofourcompanieshavealreadymovedaheadinrequiring“passport”schemes,whichensuresthatcontractorshaveappropriatesafetytrainingbeforetheycomeon-site.Contractorsafetyinductionsandformalisedevaluationanddisciplinaryproceduresarebeingsteadilyincreased.

In 2006, we incurred several minor fines totalling €178,000, mostly resulting fromOSHA/MSHAinspectionsintheUS:alldeficiencieshavesincebeenrectified.Onthepositiveside,andunderliningourdedicationtosafetyimprovement, we spent over €18m on upgrading the safety aspects of our facilities.AsignificantpartofthiswasdedicatedtocomplyingwithCE-markingrequirementsatplantsinMainlandEurope.

TilconNewYorkhassetupatrainingfacilitytoreconstructcommonaccidents,suchasavehicleturnover,whichisanexcellentmethodforensuringmemoryretentioninsafetytraining.

RemacleinBelgiumdisplaysinformationonthenumbersofaccidentsandaccident-freedays,providingaconstantreminderforemployeesoftheimportanceofsafety.

AnexampleofaLock-Out/Tag-OutsystematGlen-GeryBrickinPennsylvania,US.Eachelectricalswitchhasapersonalisedlockandtagwhichcanonlyberemovedbyeachindividualoncetheyhaveexitedthelocked-outarea.

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Our Safety RecordAccidents

TherecentreviewdemonstratedfurtherimprovementinsafetyacrosstheGroup.The2006AccidentFrequencyRate(combiningbothemployeesandcontractors)was9.2losttimeaccidentspermillionmanhours,whiletheAccidentSeverityRatewas170lostworkingdayspermillionmanhours.Bothwereover20%improvedonthe2005figures,reflectingthecontinuedhugededicationtosafetyimprovement.

TheAccidentFrequencyandSeverityRatesvarybyactivity.Foroursubsidiarycementactivitiesonly,the2006FrequencyRatewas3.6andSeverityRatewas76,forcomparisonpurposeswithpeerswhoquotecement-onlydata.Allthesestatisticsincludecontractordata:fewothersinoursectoryetreportcontractordata.

Overthelastnineyears,ourGroupAccidentFrequencyandSeverityRateshavebeenreducedbynearly50%,significantinthecontextofcontinuedorganicandacquisition-ledgrowth,whichalmosttrebledourworkforceoverthesametimescale.ThereisaparticularfocusonbringingacquisitionsuptoGroupsafetystandards,andmostofthe2006acquisitionsalreadyhavegoodsafetyperformance.

Some79%ofourlocationswereaccident-freein2006:wecontinuouslystrivetoimprovethisfigurethroughongoingintensivesafetymanagement,trainingandsharingofsafetybestpracticeacrossallour3,300locations.Locationswithpoorersafetyperformancesaresubjecttointensemanagementfocusforimprovement.

Forourjointventuresandassociates(ifcountedona100%basis),theirAccident Frequency Rate was 27.7, and Severity Rate was 493, reflecting a generallypoorerperformancethanforsubsidiaries,thoughallourpartnersarenowstronglycommittedtosafetyimprovement.CombiningtheseresultswiththesubsidiaryfigureswouldresultinanoverallGroupFrequencyRateof10.2andSeverityRateof185.

Note:AllFrequencyandSeverityRatesquotedhereareonamillionmanhourbasis,in

accordancewithCSIdefinitions.Internally,wecontinuetousea100,000manhourbasis,

thecorrespondingratesbeingoflowermagnitudebyafactoroften.

Severity rate by activity 2006Numberoflostworkingdayspermillionmanhours

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Fatalities by activity 2006

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Despitealltheveryconsiderablefocusonsafety,wedeeplyregretthattherewerefouremployeeandtwocontractorfatalitiesin2006acrossoursubsidiariesinUkraine,Poland,NorthernIrelandandtheUS.ThereweretwocontractorfatalitiesinourSeciljointventureinTunisia.Everyfatalityisatragedytoomany,andwecontinuetodoourutmosttoavoidrecurrences.

ThesefatalitiescorrespondtoFatalityRates(numberofFatalitiesper10,000employed) of 0.47 for employees and 2.03 for contractors. The higher Fatality Rateforcontractorsisunfortunatelytypicalfortheindustrybutisreceivingintensiveongoingfocusinourtrainingprogrammes.Therewerealsotwothird-partyfatalitiesinroadaccidentsinIrelandandtheUS.

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Frequency rate by activity 2006Numberoflosttimeaccidentspermillionmanhours

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Improving Our Safety PerformanceEachyear,weintensivelyanalyseallaccidentsbydirectcause,rootcause,typeofinjury,ageandprofileofthoseinjured,inordertobetterpinpointtrainingandaccidentavoidanceprogrammes.

Thechartsindicatethatthethreemainaccidentcausesareslips,trips&falls,falling&movingobjectsandliftingoroverload.Themostfrequentinjuriesaretothearms,hands,legsandfeet.Thisknowledgeleadstospecificprogrammesforaccidentprevention.

Seriousinjuriesandfatalitiesareverythoroughlyreviewed.Thethreemaincausesofseriousinjuriesandfatalitieshavebeenidentifiedasmobileplantmovements,fallsfromheightandfailuresbyindividualstoabidebyestablishedplantisolation(lock-out/tag-out)procedures.Theseobservationsarestronglyreinforcedinspecificprogrammesforfatalityavoidanceandinallsafetytrainingprogrammes.

During2006,ourdedicatedGroupsafetywebsitewasfurtherenhancedinordertocontinuerapiddisseminationofalerts,goodsafetyproceduresandpractices,anincreasingnumberofwhicharenowavailableinmanylanguages.

Accidents by cause 2006

Burnsfromheat/chemicals1%

Power tools/electric equipment 4%

Caughtbyfixedmachinery5%

Fallsfromheight6%

Caughtbyvehicles/movingplant7%

Lifting,overload/overextension15%

Othermultiplecauses19%

Falling/movingobjects19%

Slips, trips, falls 24%

Fatalities by cause �988-2006

Other2%

Electrocutionduringplantmaint.2%

Explosionoftank/tankers,fires3%

Drowninginquarry/pond3%

Caughtinmoving/startingequip.21%

Falls from height, items falling 24%

Traffic/mobile plant 45%

DuringsafetytraininginWorkingatHeightsatJetGruppeinGermany,theeffectivenessoffallarrestsystemswasdemonstrated.

ThispostercampaignwasimplementedthroughouttheÎledeFrancedistributionlocationstoimprovesafetyawareness.

TheconcreteroadslabcrewatCallananIndustries,celebratingcompletionoftheroadslaboperationfortheNewYorkStateDepartmentofTransportationinSchenectady,NewYork.ThisprojectwasoneofthefirstintheUStoutilisetheprecastconcreteslabtechnologyina4-leg skewed super-elevated transition intersection.

Accidents by injury type 2006

Eye3%

Multiplebodyparts3%

Unspecific/unknown3%

Otherhead,neck7%

Upperbody,shoulder7%

Back12%

Legs,feet32%

Arms,hands33%



Employee HealthTheannualreviewprocessalsocapturesextensivedataonemployeehealthandwell-being,vitaltoboththeemployeesthemselvesandtotheGroup.

Inthe2006review,mostcompaniesconfirmedthattheywerealreadycompliantwithcurrentnationalregulationsonworkplacehygienemonitoring,theremainderhavingprogrammestocompletethisduring2007.Wherenecessary,wearealsoactivelyplanningupgradestocomplywithincomingtighterlegislativerequirements.

Mostofourcompaniesconfirmedthatemployeehealthmonitoringwascarriedout,dependingonjobfunctions,accordingtonationalrequirements;theremainingcompaniescompletingtheirprogrammesasappropriate.Therewasanincreaseagainstprioryearsinthenumbersofgeneralhealth,hearingandlungfunctionchecks,whererelevanttojobfunctions.

TherewasaverylowincidenceofoccupationalillnessclaimsinGroupcompanies.

Product SafetyTheproductsdeliveredbyCRHcompanies,whenproperlyused,presentnegligiblehealthrisks,andwhereappropriateareaccompaniedbyMaterialSafetyDataSheetsadvisingonoptimalapplicationprocedures.

TheGroupTechnicalAdvisorandinternalhealth&safetyspecialistsregularlyliaisewiththerelevantindustryassociationsandregulatorybodiestoensurethatallGroupcompaniesareawareofandcomplywiththeirobligationsinthisarea.

EmployeesoftheWildeggCementPlantinSwitzerlandtakeabreakfromnordicwalking.TheactivitywasorganisedbyJuratoencourageemployeehealthandwellbeing,anexperiencedguideleadingthewalkersacrosstheSwisscountryside.

ZekeZakotnik,EquipmentManagerforStaker&ParsonCompaniesgetsabloodpressurecheckatthefirstannualwellnessfair.Thewellnessfairwasthefinaleventinaweekdedicatedtoeducatingemployeesonthebenefitsoflivingahealthylifestyle.

AtOldcastlePrecastintheUS,productsafetydatasheetsareprominentlydisplayedforusebycustomersandemployees.

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InnovationAkeyfeatureofthewayweactionourhealth&safetypolicyisprocessinnovation.Thedrivetowardsincreasedsafetyhasledtothedevelopmentofaremarkablenumberofinnovations.Wehavesuppliedsomecasestudyexampleshere.Manyofthesewerecreatedthroughideasfromouremployees,whichreflecttheirpositiveattitudeanddedicationtowardcontinuouslyimprovingsafetyintheworkplace.

OldcastlePrecasthasdevelopedanewguardingsystemtopreventfallsfromtheirconcretemoulds.Thesystemshavebeenengineeredin-housebyOldcastlePrecastcombiningtechnicalexpertisewithemployeeexperience.

TomasGarciaofAPACenteredanumberofhissafetyimprovementideasintotheOSHAConstructionSafetyFairandExpoinMiami.Heispicturedwithhismechanicalliftingdevicefittedwithamagnettoraisemanholecovers.ThispreventsbackinjuriesfrommanualliftingandhasbeenimplementedatAPACconstructionlocations.

MikeWorthington,maintenancemanageratWesternRockProductsinArizona,theUS,designedanddevelopedaninnovativewaytohandlethefinesfromtheasphaltfinessystem,removingthepotentialsafetyhazard:hissystemhasnowbeenimplementedatmanyotherlocations.

DaveRoeandCliveSpurleofIbstockdisplaythistransfercarwhichwasdesignedbythemundertheTotalProductiveManufactureprogramme.Thenewtransfercarincorporatestheemployees’knowledgeandsafetybestpractices.



AwardsAsignificant217health&safetyexternalawardsandrecognitionswereachievedbyGroupcompaniesin2006.

Awards won by the European companies included:

InIreland,JohnAWoodwastheICFSafetyAwardwinnerintheBestLargePitcategory,RoadstoneDublinreceivedICFHealth&SafetyAwardsforthreelocations,RoadstoneProvinceswonthreeICFHealth&SafetyAwardsincludingtheoverallawardwonbyitsBallyknockaneQuarry

InGreatBritain,AirventwashonouredbytheInstituteofOccupationalHealth&SafetyandinadditionreneweditsNationalBritannia“SafeContractor”Accreditation,ForticretereceivedanawardfromtheBritishPrecastConcreteFederationandwontheBritishPrecastAnnualaward, while Ibstock won 14 awards under Ceramic Industry H&S Pledge

InSwitzerland,AggregatreceivedaCertificateforSafetyWorkManagementSystem

InUkraine,OJSC‘Bekhyquarry’receivedaGratitudeoftheAdministrationofKorostenforactiveparticipationinorganisingholidaysforchildrenofthisdistrictinSummer2006

Awards won by the American companies included:

TilconConnecticutwonsafetyawardsforSouthingtonPit(30yearswithoutanaccident),Manchester(16years)andGranbyNotch(7years)

CallananIndustrieswonGoldandSilversafetyawardsfromtheAmericanGeneralContractors,andseveralawardsfromJosephAHomesSafetyAssociationandMSHASentinelsofSafety

TilconNewYorkwontheUTCAHeavyHighwayConstructionAward,theAGCofNewJerseyconstructionaward,andwashonouredbytheNewJerseyStateGovernors

MichiganPavingandMaterialswonJosephAHolmesSafetyAssociationawardsatfiveaggregateslocations

Shellyreceived10miningindustryawardsfornolosttimeaccidents

TheNorthwestGroupwon8NSSGAsafetyawards

PikewonanAssociatedGeneralContractorsawardforitslowaccidentrate

RockyMountainGroupwashonouredbytheOSHA,ColoradoReadyMixedConcreteAssociation,DakotaSafetyCouncil,theBureauofMinesandMSHA,andinaddition,wontheWyomingContractorsAssociationNumber1inSafetyaward

SRMreceived7JosephHomesAssociationAwardsand3awardsfromGeorgiaCrushedStoneAssociationAwards

MichiganPavingandMaterialswashonouredbytheMichiganAggregatesAssociation,HolmesSafetyAssociation,NSSGAandNationalSentinelsofSafety

InIowa,31safetyawardswerereceived,includingIowaReadyMixedConcretePlantSafetyAwards

Staker&Parsonwon32awards,includingtheAmericanGeneralContractorsawardforsafetyperformanceabovethenationalaverage,andtheUtahSafetyCouncilAwardforsafetyexcellence

APAC’saccoladesincludedanawardfromtheArkansasDepartmentof

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Precast USA won 24 safety Awards from ACPA (American Concrete Pipe Association),NPCA(NationalPrecastConcreteAssociation)andPCI(Precast/PrestressConcreteInstitute)

WithinAPG,safetyawardhighlightsincludedtheSentinelsofSafetyawardwonbyOldcastleStoneLilesvillelocation,safetyawardsfromtheNorthCarolinaDepartmentofLabourwonbyBonsalAmerican,theESCSI(ExpandedShale,ClayandSlateInstitute)awardfornolostworkdaysatthe3BigRiverplants,andCarolinaConcreteMasonrysafetyawardswonbyAPGSouth

InSouthAmerica,DellOrtoreceivedaMutualSecurityPrizeforsafety.

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MarkLawrence,plantmanageratMattStoneinFlorida,USreceivedtheSt.LucieCountySheriff’sOfficeLifeSavingAwardfollowinganincidentwhereheperformedCPRonacolleaguewhohadsufferedaheartattack.

RoadstonereceivedanumberofawardsattheIrishConcreteFederationAnnualHealth&SafetyAwards.TheBallyknockaneplantwasoneofthosehonouredandDickCorrigan,plantmanager,ispicturedherereceivingtheaward.

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Social Policy Systems Performance 3247


About this Section

CRH’ssocialobjectivesaretobetheemployerofchoiceforour80,000employees,toexceedtheexpectationsofourhundredsofthousandsofcustomersbigandsmall,andtoensurequalityperformanceofourthousandsofsuppliers,bigandsmall.Thissectiondetailsourpolicy,systemsandperformancerelatingtoouremployees,customersandsuppliers.

OurguidelinepolicyandessentialrequirementsinthisareaaresetoutcentrallybytheGroup.ImplementationandperformancemonitoringiscarriedoutbylinemanagementintheDivisionsandindividualcompanies,withregularreportingtoandauditingbythecentre.

Social

Denizli,ourrecentjointventureinTurkey,regularlyarrangessocialactivitiesforitsemployees,withanannualvisittoplacesofinterestsuchastheancientcityofAphrodisiasshownhere.

Item Page

Policy 48

Delivery 48

Employment Features 49

Employee Welfare 50

Employee Satisfaction 5�

Best Practice Groups 52

Management Development 53

Serving Our Customers 54

Dealing With Our Suppliers 55

Social Policy Systems Performance3248


OurSocialpolicy,appliedacrossGroupcompanies,isto:

Comply,ataminimum,withallapplicablelegislationandtoensurethatoursocial stewardshipmovestowardsindustrybestpractice

Manageourbusinessesinafairandequitablemanner,meetingalloursocial responsibilitiesasbothadirectandindirectemployer

Applytheprincipleofequalopportunity,valuingdiversityregardlessofage,gender, disability,creed,ethnicoriginorsexualorientation,whileinsistingthatmeritisthe ultimatebasisforrecruitmentandselectiondecisions

Ensurethatwedealresponsiblywithoursuppliersandcustomersinaccordancewith ourCodeofBusinessConductandproperbusinesspractice

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Achievingoursocialpolicyatallourlocationsisadailyimperativeoflinemanagement.TheGroupbelievesthatbusinesssuccessisrootedingoodemployee,customerandsupplierrelations.Thisisparticularlytrueinourdecentralisedorganisation,wheremanagementresponsibilityisdelegatedasfaraspossibletothelocallevel,whileatthesametime,requiredtobeconsistentwithoverallGrouppolicy,guidelinesandobjectives.

DailyresponsibilityforemploymentpolicyimplementationlieswithHumanResources(HR)ineachcompany,part-orfull-time,dependingoncompanysize.TheseHRpeoplelinkregularlywithothersintheirregionandproductgroup,andinturnwiththeGroupDirectorofHumanResources.Inthisway,thereisclosefunctionalHRlinkagethroughouttheGroup.TheHRpeopleineachcompanyalsoprovidesocialdatafortheannualsafety/socialreviewprocess.

Dailyresponsibilityforcustomerandsuppliermanagementlieswithlinemanagementintheoperatingcompanies,exceptforthelargerpurchasingcontractswhicharecentralisedatDivisionalorGrouplevel.

DeliveryIntheUS,TilconNYranaseriesofadvertisementsinFebruaryandMarch2007featuringmanyemployeesofitsWestNyackQuarry,includingthisone.Theaimofthecampaignwastoraiseawarenessofitscommitmenttothelocalcommunity,thepositiveapplicationsofitsproductsandtodriverecruitment.



Employment FeaturesAttheendof2006,theGroupemployedover80,000employeesandover5,000contractors.Employeenumbershavegrowninrecentyearsthroughacombinationofacquisitionandorganicgrowth,typicallydoublingevery5years.Thispagesummarisesthebreakdownofouremployeesbygender,category,activity,region,ageandlengthofservice.

Certainindustrycharacteristicsneedtobenotedwhenthisdataisanalysed:

Ourjobsoftenrequirephysicallydemandingwork,inmanycasesoutdoors

Asourbusinessescontinuetodevelop,thereisanincreasingneedfornewskillsforoperatingmorespecialisedcomplexequipmenttomorestringentquality,safetyandenvironmentalregulations

#

#

Wearebynatureaseasonalbusiness,particularlyincolderclimates,requiringpersistentinductiontrainingofnewemployeesandcontractors

Therefore,Groupcompaniescontinuallyfocuson:

Improvingemployeewelfare

Increasinglevelsoftraininganddevelopment

Improvedergonomicsintheworkplace,withautomationofprocessestoeliminaterepetitivemanualoperationsandreducingriskofinjury

UpskillingemployeestoenabletheGrouptodelivermorerewardingwork

In 2006, 68 Group companies employed over 342 disabled or disadvantaged people,anincreaseonprioryears.

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#

#

#

#

Employees by activity 2006 Employees by category 2006

Length of service 2006

Management10%

Clerical/admin19%

Operations71%

Employees by age 2006

Under 19 4%

20-2918%

30-3925%

40-49 28%

50-5920%

Over605%

OtherProcess1%

Cement3%

ClayProducts5%

Distribution15%

BuildingProds.17%

ConcreteProducts22%

Materials37%

Under1yr16%

1-4 yrs 29%

5-9yrs21%

10-14 yrs 11%

15-19yrs8%

20-24 yrs 6%

Over25yrs9%

Employees by gender & category 2006

Overall

Management

Clerical/admin

Operations

0 25% 50% 75% 100%femalemale

Number of employees by country at end-2006

thousands

hundreds

US

Netherlands

Poland

Germany

UK

IrelandFranceBelgiumSwitzerlandCanadaFinlandUkraineArgentinaAustriaDenmarkSpainPortugalSlovakiaEstoniaItalyChileLatviaRussiaSwedenCzechRepublic

0 5 10 15 20 25 30 35 40



Employee WelfareWecommitsignificantresourcestotraininganddevelopingouremployeesthroughouttheorganisation.In2006,therewasanaverageofalmost19hoursoftrainingperemployee.Thistrainingfocusedmainlyonsafetybutalsoincludedenvironmental,technical,leadershipandotherskills.

Wealsoruneducationalsupportprogrammesforemployeeswhowishtopursuefurtherstudiesoutsideofworkinghours:in2006,wesupported3,292employeesinthisway.Wealsocontributedtowardsemployeehealthinsurancein57%ofourcompanies,andarrangedwell-beingprogrammesforouremployeesin67%ofcompanies.

Excludingseasonalemployees,ourGroupemployeeturnoverrateisabout13%,andthisistypicallyhigherinthefirstfewyearsofemployment.Mostemployeesenjoylong-termcareerswithCRH,andthatisadistinctivefeatureofourGroup.CRHisregardedbymanyinthewiderindustryasahighlydesirableemployer,andwereceivemanyjobapplicationseachyear.ThesustainedGroupexpansionregularlycreatesopportunitiesfortalented,ambitiouspeople.

TheGroupofferscompetitivepayandbenefitsatleastinlinewithindustryandlocalpractice,oftenwithbonuseslinkedtocompanyandpersonalperformancetargets.Insomecases,equity(share)participationandpensionprogrammesarealsoprovided,dependingontaxregimesandindustrypracticesintheindividualcountriesofoperation.

Fairandflexiblehiringandlay-offpracticesapply,particularlyinseasonalbusinesses:inthoseseasonalsituations,someemployeesreturnyearafteryear,initselfagoodindicatorofemployeesatisfaction.

SafetytrainingattheJETGruppeinGermany,particularlyimportantbecausetheinstallationandmaintenanceofitsdaylightandventilationproductsofteninvolvesworkingatheights.

IreneMonnettofNorthfieldBlock’sJolietfacilitytossesbeanbagsatthecompanypicnic.ManyoftheArchitecturalGroupcompanieshostsimilareventsfortheiremployeesthroughouttheyear.

Manycompanieshostregularsocialeventsfortheirformeremployees.PicturedareretiredemployeesvisitingJura’sWildeggCementPlantinSwitzerland.

Training hours per employee

20

18

16

14

12

10

8

6

4

2

02004 2005 2006

Safety

Quality

Management

Environmental

Social Policy Systems Performance 325�


Absenteeism by type 2006

Accidental injury 4%

Med.uncertified5%

Other12%

Med.certified79%

Ibstockhasbeenconductingemployeesatisfactionsurveysfortenyears.Whilethe2006resultshowedaslightdiponthepreviousyear,theemployeesatisfactionremainsatagenerallyhighlevelandhasshownapositivetrendoverthisperiod.

Employee SatisfactionAlmostone-thirdofGroupcompaniescarryoutformalisedemployeesatisfactionreviews;othercompaniesdothisinformally.Ourflatorganisationalstructure,togetherwithsmalllocally-managedoperatingunits,ensuresthatthereisalwayscloselinkagebetweenmanagementandemployees.

Itisnoteworthythatin2006(asinprioryears),theoverallemployeeabsenteeismlevelwasreportedatunder3%,whichisverylowbyindustrynorms,andthereforecanberegardedasagoodoverallindicatorofemployeesatisfaction.

TheGroupisalsodistinguishedbyaverylownumberofdayslostduetoindustrialdisputes:in2006,only1,150mandayswerelostinthewholeGroup,equivalenttoonly0.01%ofallmandays,anotherpositiveindicatorofgoodemployeerelations.

Tradeunionmembershipvariesbycountry.In2006,overalltradeunionmembershipwas23%.Wagenegotiationiscarriedoutatavarietyoflevels,dependingonlocalindustrypractice:somearenegotiatedatapersonallevel,withothersataplant,industryornationallevel.

MaxMat,adistributionjointventureinPortugal,celebratedtheanniversaryoftheirPortimãostorewiththeiremployeesandcustomers.

PresidentofPodilskyCement,SemenDarchuk,receivedtheUkraineGovernment’sBestEmployerAward2006onbehalfofthecompany.

CimentsdeGabesinTunisiasupportsmanylocalinitiatives,includingregularsupportforlocalschoolchildren,manyofwhomarethechildrenofemployees.



Best Practice GroupsTheGroupishighlydiversifiedgeographically,culturallyandbyactivity.Therefore,itisessentialtohaveahighlyeffectiveandrapidmeansofhorizontallysharingknowledgeineachbusinessactivityacrossbordersandcultures.Thisisachievedthroughourbestpracticegroupswhicharecentrallyco-ordinatedbytheGroupTechnicalAdvisor:thegroupsproduceverysignificantoperationalimprovementsandsavingsyear-on-year,aswellasfosteringandenhancingintellectualcapitalthroughouttheGroup.

Thebestpracticegroupsmeetregularlyasnational,andoccasionally,asinternationalgroupingsofexpertsinthefollowingtwelveproductsectors:

Primary Materials

AggregatesReadymixedConcreteAsphaltCement&LimePurchasingTransport&Energy

Products & Distribution

Clay&CeramicProductsArchitecturalProductsPrecast&PipeProductsWallPanelSystemsInsulation&BuildingProductsDistribution

ThesebestpracticegroupsalsofocusonCSRissues,particularlysafety,andthebestpracticeactivitiesarethereforeinthemselvesapowerfulconduitforcontinuousimprovementinCSRperformance.

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#

#

#

#

#

#

#

#

#

#

ParticipantsintheEuropeanConcretePipeBestPracticeMeetingattheStradalChâteauneufduRhonefactoryinFrance,heldinJune2006.

InJune2007,theClayBestPracticeGroup,withrepresentativesfromtwocontinents,gatheredforameetingatThrockleyinNorthwestEngland,hostedbyIbstock.

ParticipantsattheCementBestPracticeGroupmeetinginKamieniets-Podilsky,Ukraine,inOctober2006.

ParticipantsfromCRHcompaniesinFinland,Germany,Denmark,Belgium,USA,Canada,Ireland,Portugal,France,UK,theNetherlandsandItalyatthePavingBestPracticemeetingheldatPaverSystems,Orlando,Floridain2007.



Management DevelopmentBecauseofitsuniquelysuccessfulfocusonperformanceandgrowth,CRHmanagementcomprisesapowerfulblendofpeoplefromthreedistinctstreams:

Grass-rootsemployees,whosecareeropportunitiesgrowasCRHgrows

Highlyskilledfinance&developmentprofessionalswho,onprovingthemselves,canthenmoveintoseniormanagementroles

Owner-entrepreneurs,whochoosetostayonpost-acquisition,bringastrong“cando”attitudetothebusinessestheyrunandgrow

Ourdecentralisedstructuregiveslocal,butdisciplined,autonomy,whichbalancesentrepreneurialdrivewithprudentoperatingpracticesconsistentwithGroupguidelines.Thiscontinuallyfuelsourperformanceandgrowthimperatives.Wecommitsignificantresourcestotraininganddevelopinghigh-potentialemployeesthroughouttheorganisationtomeettheleadershipchallengesofperformanceandgrowth.

AllofourDivisionsrunLeadershipDevelopmentProgrammes(LDP)inconjunctionwithGroupHumanResources,complementingtheinitiativesatcompany,regionalandproductgrouplevels.TheseprogrammescombineinputsfromfacultymembersofleadinginternationalbusinessschoolswithcontributionsfromseniorCRHmanagement.

Wemakewideuseofsuccessionplanningtools,on-the-jobdevelopment,coachingandmentoringtoensureaplentifulavailabilityofleadershiptalenttomeettheGroup’sstrategicobjectives.

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#

#

SelectedseniormanagersfromaroundtheGroupareregularlybroughttogethertofocusoncorporateandbusinessstrategy,organisationalcultureandthelatestdevelopmentsinmanagementscience.OurannualGroupManagementSeminarisahighlightofthatprocess.

Theseseniormanagementprogrammesdrawonhigh-calibreinternationalcontributorsandincludeinputsfromtheGroupChiefExecutiveandhisDivisionalcolleagues.TheyareparticularlyvaluableinensuringthattheCRHcultureandapproachtobusinessisunderstoodandappliedthroughouttheorganisation.

Staker&Parson,headquarteredinUtahintheUS,ranaLeaderDevelopmentprogramme,deliveredovereightweekstoapproximately120companymanagers,coachingmanagersinfurtherdevelopmentofemployeeskills.

ParticipantsattheMarch2007ManagementSeminar,heldinIreland;selectedseniormanagersfromaroundtheGrouparebroughttogetherannuallytofocusonrefiningourcorporateandbusinessstrategy,enhancingouruniquecultureandfurthergrowingourmanagementskills.



Serving our CustomersTheGrouphasaverywideandfragmentedcustomerbaseduetoitsproductand geographical diversity. In 2006, Group sales amounted to €18.7 billion, witheachindividualcompanytypicallyhavingahighlydiversifiedcustomerbase,rightdowntoprivateindividualsinourDIYstores.Fewifanycustomerswouldaccountformorethan1%ofGroupsales.

TheCRHCodeofBusinessConduct,whichaddressesourcustomerrelationships,hasbeendistributedtocompanyandsalesmanagers,andtheyarerequiredtoadherestrictlytoitsrules.Complianceisregularlymonitoredthroughcompanyinternalaudits,andanycomplaintsorissuesarereferredtotheHeadofInternalAudit,andifappropriate,totheAuditCommittee.

Ourproductsaresoldinhighlycompetitivemarkets,thereforeexcellenceincustomerservice,productqualityandback-upreputationarehigh-focusprioritiesthatdistinguishGroupcompaniesfrommanyofourcompetitors.

CustomersatisfactionismonitoredthroughouttheGroupusingformalandinformalmetrics.Almosttwo-thirdsofcompaniesrunformalcustomersatisfactionreviewsatregularintervals,whilethesmallercompaniesmonitorcustomerrelationsonapersonal,dailybasis.AllGroupcompaniesoperateonthebasisthattheonlywaytoguaranteecontinuedsuccessisthroughexceedingcustomerexpectations.

Meetingcustomers’needsisalwaysouraim:hereStaker&Parson,intheUS,deliversreadymixedconcretebyroadandhelicopterfortheconstructionofanotherwiseinaccessibleskilift.

Springvale,inconjunctionwithEcoTherm,Ibstock,Forticreteandanexternalpartner,EcoHomes,ishelpingcustomersunderstandtheUKGovernmentStandardAssessmentProcedure(SAP)forassessingtheenergyperformanceofdwellingsthroughthewww.sapsonline.comwebsite.

Thisexampleshowstheresultsofcustomersatisfactionsurveys,carriedoutbyIbstockintheUK,illustratingacontinuedhighlevelofcustomersatisfactionwithmuchimprovedresultsonproductdelivery.



Dealing With Our SuppliersTotalGrouppurchasesincludebothinternalandexternalsourcing.Internalsourcingfollowsfromourverticalintegration,whereforexamplecementoraggregatesaresuppliedtoourreadymixedconcreteproducers,butonlyifinternalsourcingisascompetitiveandflexibletoneedsasexternalsourcing.

Mostexternalpurchasingcontractsaredecidedbyindividualcompanies,whilelargerdealsarenegotiatedonaproductgroup,nationalorregionalbasis,wherethismakescommercialsense.Theselargerdealscanencompassrawmaterialscommontomanycompaniesinaregion,suchascement,bitumenorfloatglass,fuelssuchascoal,pet-cokeornaturalgas,andmajorconsumablessuchasgrindingmediaandpapersacks.

TheCRHCodeofBusinessConductcontainsseveralprovisionsaimedatensuringthattheGroupconductsitsbusinessactivitieswithitssupplychaininaresponsiblemanner.Theserelatetocompliancewithlocallegalrequirements,useofconfidentialorinsideinformation,conflictsofinterest,provisionoracceptanceofgiftsandprohibitionofanyformofbribeorsimilarinducement.

Externalpurchasingcontractsareawardedonarigorouscompetitivetenderingbasis.Decisionsaremadenotonlyonprice,butalsoqualityandreputation,wherereputationincludesCSRperformance.Greatemphasisislaidonthemostcost-effectiveprocurement,whilesimultaneouslyensuringthatpurchasesaresourcedinaresponsiblemanner.Purchasescomefromaverydiversifiedandcompetitivesupplierportfolio,allofgoodreputation,whovaluedoingbusinesswithCRH.Nosinglesupplierexceeds5%oftotalGrouppurchases.mostbeingwellbelow1%.

Duetothelocalnatureofourbusiness,mostofthesesuppliersarebasedinEuropeorNorthAmerica.CurrentlyonlyaverysmallpercentageofourpurchasesaresourcedfromdevelopingcountriessuchasChina,IndiaorLatinAmerica,andquality/ethicalsourcingaspectsarecheckedoutwhere

appropriate.

Gamma,ourDistributionfranchiseinBelgium,workscloselywithorganisationsincludingWNF,NOVIB,FriendsoftheEarthandtheEnvironmentalProtectionAgencytoensuretimbersoldisfromsustainablesources.

IrishCementusesTinSulphateasachromiumcorrectiveinitscementmillingprocess,sourcedfromsuppliersinChina.Beforecommencementofsupply,IrishCementcheckedoutthequalityandCSRaspectsofitsproduction.

TheCRHcompaniesinIrelandhavedevelopedthisguidancedocumentonthepurchaseofPlantandMachinerytoensurethatallnewpurchasesincorporateallaspectsofhealth&safetybestpractice.

3256


Communications

About this Section

CRH,atbothGrouplevelandwithinitsDivisionsandcompanies,laysstrongemphasisoneffectivecommunicationandinteractionwithallofitskeystakeholdergroups,mostimportantlyitsemployees.Asadecentralisedgroup,whichcouldbecomparedtoaglobalclusteroflocalbusinesses,ourneighboursareparticularlyimportantstakeholders.Afewofthemanycommunicationexamplesarerecordedwithinthissection.Wealsoattachgreatimportancetoopennesswithallotherstakeholders,includingratingagenciesandindividualswishingtolearnmoreaboutCRH.

Furtherinformationconcerningthisaspectofwhatwedoisavailableonourwebsite,onindividualcompanywebsites,orcanbeobtainedbycontactinguseitherlocallyoratGrouplevel.

Communications

Item Page

Employee Communications 57

Other Stakeholders 58

Community Events 59

Community Support 6�

IntheUS,Glen-GeryBrickprovided$25,000worthofbrickfortheconstructionofGordonHoodakStadiuminPennsylvania,ayouthbaseballstadiumwhichwillprovidesafeandstructuredoutdoorrecreationforchildreninalow-incomeneighbourhood.

3257


Communications

Employee CommunicationsInternalcommunicationsmakeavaluablecontributiontooursuccessinthecompetitiveenvironmentofourindustry.OurDivisions,regionsandproductgroupshavestrongtraditionsofregularandopencommunication.

TheemployeevoicewithinCRHishearddirectlythroughavarietyofrepresentativestructuresdependingonthebusinessorcountryconcerned.MechanismsexistthroughouttheGroupforinformingandconsultingemployeesonmattersimpactingonthemandthebusinessesinwhichtheywork.

IntheEuropeanUnion,theCRHEuroforum(incompliancewiththeEuropeanWorksCouncilDirective)providesaregularopportunityforemployeerepresentativestodiscussawiderangeofbusinessandsocialissueswithcompanymanagement.

Ourrecentreviewshowedthatin2006,approximately82%ofallGroupcompaniesheldregularemployeebriefings,thesmallercompaniestendingtodothisonamoreinformalbasis.

Over 40% of our subsidiaries and product groups publish regular newsletters, keepingemployeesinformedaboutthebusiness.TheCRHinternalnewsletter“Contact”isproducedannuallyinninelanguagesfromarticlessubmittedbyindividualsandcompaniesthroughouttheorganisation.

ParticipantsattheCRHEuroForum2007,heldinHelsinki,Finland.ThisannualeventprovidesanopportunityforemployeerepresentativesfromtheEuropeanUniontodiscussawiderangeofbusinessandsocialissueswithcompanymanagement.

3258


Communications

Other StakeholdersCRHcommunicatesregularlywithotherkeystakeholdergroupsregardingourCSRcredentialsandcommitments.Thesestakeholdersincludeourshareholders,theinvestmentcommunity,ratingagencies,legislativeandregulatoryauthorities,contractors,customersandsuppliers,aswellasneighbours,localNGOsandcommunitygroups.

AtGrouplevel,wediscussourperformancewithourshareholdersandtheinvestmentcommunity,third-partysurveyandassessmentorganisationsandothertop-levelinterestedparties.

CommunicationswithourshareholdersandtheinvestmentcommunityarepromotedthroughourInvestorRelations(IR)group,basedatGroupheadquartersatBelgardCastle.ThequalityandopennessofourIRactivitieshasoftenbeenhighlyacclaimed.AllIRdataisdownloadablefromourwebsite,whichalsooffersanautomaticalertfacilityonIRcommunications.

Atcompanylevel,weareinregulardialoguewithcontractors,neighboursandlocalcommunities.Mostcommunicationswithlegislativeandregulatoryauthorities,aswellassuppliersandcustomers,areeitherhandledatcompanylevel,oratproductgrouporregionallevelasismostappropriate.

FortyparticipantsintheInternationalEngineeringConferenceheldinFloridaintheUSduring2006,fromcountriesincludingKuwait,MexicoandRussia,visitedAPAC’sTampaInternationalAirportmillingandpavingoperationtolearnaboutasphaltplacement.

TheDNVverifiersvisitedCRHDistributionLocationsinNijmegen,theNetherlandsinJuly2006,aspartoftheextensiveverificationprocess.

CRHwelcomedanalystsfromInnovestinOctober2006toIrishCementinPlatin,Ireland,todemonstratefirst-handourcommitmenttoCSR.

CerroNegrowashighlyhonouredbyaprivatevisitbyMr.JohnBruton,EUAmbassadortotheUS,inMay2007.PicturedattheentrancetotheOlavarriaPlant,fromlefttoright:JuanCarlosGirotti,hiswifeMariaRosa,Finola,wifeofAmbassadorBruton,AmbassadorBrutonandMs.PhilomenaMurnaghan,IrishAmbassadortoArgentina.

InvestorsandsectoranalystsvisitedanumberofCRH’sSwissMaterialsandDistributionlocationsinMay2007wherethemanagementgavepresentationsoneachoftheoperations.

3259


Communications

CRHcompaniesformanintegralpartofthecommunitiesinwhichtheyoperate.Wearecommittedtoensuringthatthegenuineneeds,viewsandinterestsofthelocalcommunityaretakenintoconsiderationandwearesensitivetotheimpactouroperationsmayhaveonourneighbours,particularlythoseintheimmediatevicinityofourbusinesses.

In 2006, our companies hosted over 430 Open Days and community events, a fewofwhicharefeaturedhere.Students,authorities,employeesandavarietyoflocalcommunitieswerehostedintheseopendays.Thiswasaconsiderablyhighernumberthanprioryears,andreflectsourcommitmenttoincreasingopennesswithneighboursandlocalstakeholders.

Community Events

AjoviallocalcubscouttroopvisitedAPAC’sLouisburgquarryintheUSinAutumn2006.

AlexGodsonandChristianO’DowdNolanattherecentlaunchoftheCRH-SimonSafetyChallenge.ForeachCRHlocationinIrelandthatachievesanaccidentfreequarter,adonationwillbemadetotheSimonCommuntiesfortheirworkinendinghomelessness.

Touch-a-TruckisapopularcommunityeventsponsoredbyTilconinConnecticut,theUS,wherekidsandadultscanlookatandsitinvariouskindsofvehicles.TilcondisplaysamixerandadumptruckattheFarmingtonTouch-a-Truckevent.

ArchitecturalstudentsfromKentStateUniversity,OhioontheannualvisittoAPG’sAkronBrickandBlockinOhio,US.Inadditiontotheplanttour,theyreceive‘hands-on’instructionoutliningthebenefitsofBelgardpavers,segmentalretainingwallsandguidelinesonmasonryinstallation.

Open days

500

400

300

200

100

0‘04 ‘05 ‘06

3260


Communications

Community Events continued

EmployeesandthelocalcommunitywereinvitedtojoininthecelebrationsattheofficialceremonyfortheHarbinSanlingCementCompanyinXiaolingTownship,China.

ParticipantsfromNorthBrookfieldFireDepartmentatarecentConfinedSpaceRescuetrainingprogrammeheldatOldcastle’sChasePrecastlocationintheUS–inoneexercisetraineesrescuedamannequinfromanaggregatebinandinanothertheyrescueda“victim”frominsidealarge12,000gallonemptyseptictank.

InMontana,theUS,anewHelenaSandandGravelmixertruckdisplaysathletesfromthelocalCarrollCollegeteamacrossitsdrum,demonstratingthecompany’sgoodneighbourpolicies.

FiremenparticipatinginadrillatGefinex’sinsulationplantatSteffenhageninGermany,testingfirefightingprocedures,anexcellentexampleofriskmanagementinaction.

Tilcon’sQualityControlSuperintendenttalkstoU.S.CoastGuardAcademystudentsaboutthevarioustypesofasphaltmixes,mixdesignusesandtestingequipmentattheGrotonfacility.

ChildrenfromtheMt.ZionChristianSchoolenjoyingtheirnewplaygroundwhichwasconstructedusingadonationfromthelocalUtilityVaultcompany,apartofOldcastlePrecastintheUS.

326�


Communications

Community SupportCRHiscommittedtosupportingworthycharitableinitiativesbothatacentraland local level. In 2006, we contributed over €5m to such causes, spread overawidevarietyofcausesandorganisations.SuchdonationsfollowstrictinternalguidelineslaidoutinourCodeofConduct.

In2006,some25%ofourcompaniesalsosupportedcommunityinitiatives:thisfigureincreaseseachyear,reflectingtheircommunityfocus.

Inmanycompanies,individualemployeesalsocontributegenerouslyoftheirowntimeinsupportinggoodlocalcauses;theircontributionsareoftenmatchedbytheircompany.Afewexamplesaredepictedhere.

TilconConnecticutintheUSparticipatedintheHomeBuildersBlitzinJune2006,anationwideinitiativewhichsawthecompletionofhousingformorethan1,000families,andwashonouredas“PartneroftheYear”bytheHartfordAreaHabitatforHumanity.

InJune2006,theCRHEuropeanDistributionteamagainsuccessfullycompletedtheRopaRun, the world’s longest relay race from Paris to Rotterdam, raising €52,000 for charity intheprocess.

Raboni,MatériauxServiceandBuscaglia,theCRHDistributioncompaniesinFrance,haveestablishedthe“ChasseNuages”associationtohelpchildreninneed.As“ChassesNuages”implies,itspurposeistochasethecloudsoflonelinessexperiencedbysomechildren.

InIreland,Roadstoneco-sponsoredfivesecondaryschoolpupilsastheywalkedover200kmfromDublintoGalwaytoraisemoneyforcharity.

Donations by type 2006

Arts & culture 4%

Communitydevelopment

&environment13%

Education&research17%

Othercauses30%

Civic&community36%

Number of companies with community initiatives

70

60

50

40

20

10

0‘05 ‘06‘04

3262


DNV Assurance Statement

DNV Assurance Statement CRH plc 2006 CSR report

Introduction

DNV(DetNorskeVeritas)hasbeencommissionedbythemanagementofCRHplctocarryouttheverificationoftheCRHCorporateSocialResponsibility(CSR)Report2006(‘theReport’).

OurresponsibilityinperformingthisworkistothemanagementofCRHonly,inaccordancewithtermsofreferenceagreed.DNVdisclaimsanyliabilityorresponsibilitytoathird-partyfordecisions,whetherinvestmentorotherwise,baseduponthisassurancestatement.

Scope of assurance

Ourscopeofworkhasincludedtheverificationof:

CSRrelatedactivitiescorrespondingtocalendar2006asstatedintheReport

Social,Environmental,HealthandSafetyindicatorsasstatedintheReport

CO2emissionsinlocationsnotincludedwithintheEuropeanEmissionsTradingScheme,i.e.UkraineandTunisia.CRHusestheWBCSD GHG Protocol for Reporting GHG emissions (see page 64 for a separate assurance statement on CO2emissions)

VisitstotheCRH’shead-officeinIrelandandtoselectedCRHoperatingbusinessesinsixcountries

CRH’sreportingboundariescoverallCRHsubsidiariesthataremanagement-controlledandselectedjoint-venturesandassociates.

Verification approach

TheverificationwasconductedduringApriltoJune2007.TheengagementwasplannedandperformedinaccordancewithDNV´sVerificationProtocolforSustainabilityReporting.TheReporthasbeenevaluatedagainstthefollowingcriteria:

WBCSDCementSustainabilityInitiative(CSI)Reportingprinciples

AdherencetotheprinciplesofMateriality,Completeness,Accuracy,NeutralityandComparabilityassetoutintheAA1000AssuranceStandard;and

TheGlobalReportingInitiative2006SustainabilityReportingGuidelines(G3).

Inreachingourconclusions,wehaveconductedthefollowingwork:

InterviewedaselectionofCRHexecutives,seniormanagersandmembersoftheCSRteaminordertoobtainanoverviewofdevelopmentsandprogresscomparedtothepreviousyear;

AnalysedthecentralisedEH&Sdatagatheringsystemtoassesstheconsistency,completeness,qualityandaccuracyofthereporteddata;

ChallengedtheCSRrelatedstatementsandclaimsmadeintheReport;

Reviewedspecificdocuments,dataandinformationmadeavailablebyCRH,e.g.codeofconduct,hotlinereviewbyinternalaudit,etc.

ReviewedaselectionofinternalcommunicationandexternalmediareportsrelatingtoCRH´sadherencetoitspolicies;

Interviewedstaffresponsibleforreportinginordertoverifythegoodunderstandingandproperimplementationoftheproceduresandpolicies.AspartofthisweperformedsitevisitstoselectedCRHoperatingbusinessescoveringthethreecorebusinessesinEurope.ThesiteselectionwasperformedindiscussionwithCRHbasedonkeymaterialissuesandrisksidentifiedthroughourinitialgapanalysis.Operationalentitiesvisitedcomprised:VanNeerbos,Gammastores,Marmorith,Schelfhout,andRemacleinBelgium;OKSM,ErgonPoland,Faelbud,Halfen,andKlinkierinPoland;SocietedesCimentsdeGabesandSudbetoninTunisia;CRHIDFandStradalinFrance;Finnsementti,Abetoni,ThermisolandLohjaRudusinFinland;andJSCPodilskyCementinUkraine.

Conclusions

Inouropinion,CRH’sCSRReport2006meetsthecontentandqualityrequirementsoftheGlobalReportingInitiative2006SustainabilityReportingGuidelines(Version3.0).AmongthedifferentlevelsdefinedbytheGRI,bothCRHandDNVconfirmthattheGRI“A+applicationlevel”hasbeenmet.

OurreviewconfirmsthatCRH’spoliciesaresetatgrouplevelviatheEnvironmental,H&SandHRGroupfunctions,andimplementedateachofthedivisions(Materials,ProductsandDistribution)inbothEuropeandtheAmericas.EnvironmentalandH&Sresponsibilitieshavebeenallocatedateachdivision.Implementationmechanismsdifferacrossdivisions,e.g.whereasCRHMaterialsEuropefollowacountrybasedapproachcoveringthedifferentcompanieswithinagivencountry;CRHProductsandDistributionEuropefollowaproductbasedapproachcoveringdifferentregions.Ourreviewhasrevealedthatlevelsofawarenessandeffectivenessofpoliciestendtobehigherinthecountriesthatalreadyhavefocusedbestpracticemeetings.

ThemajorityofoperatingcompanieshaveallocatedenvironmentalandH&Sresponsibilitiesintheformofhumanresources,safetyandenvironmentalliaisonofficers.GroupCSRperformanceismonitoredandreportedcentrallybytheGroupTechnicalAdvisorandasmallsupportteam.TheCSRteamproducesinternalenvironmentalandH&Sreviewsforthewholegroupallowingthemtobenchmarkandmonitorperformanceagainsttargets.ThedataisgatheredviaannualenvironmentalandH&Squestionnaires.

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3263



DNV Assurance Statement CRH plc 2006 CSR report continued

OurreviewrevealedthatH&SawarenessandcommitmentlevelshavesignificantlyincreasedcomparedtothepreviousyearandthisisreflectedintheGroup’sH&Sperformance.However,thefullimplementationofthetarget-settingandcontinuousimprovementimperativesofCRH’senvironmentalpolicythroughouttheGroupremainsincomplete,withsomecompaniesstilllimitingthemselvesonlytolegislativecompliance.

Frombothageographicalanddivisionalperspective,differentlevelsofawarenessandimplementationremainachallengetoCRH.

Materiality

WeconsiderthattheCRHCSRReport2006providesabalancedrepresentationofmaterialaspectswhicharemainlybasedontheGRIGuidelines;

Datagatheringeffortsareevenlydistributedacrossallcompanies;and

AtacentrallevelCRHhasengagedwithkeystakeholderssuchasSRIratingagencies,CSIandbestpracticegroupsalthoughmoreeffortsshouldbemadeinengagementwithlocalstakeholders

Completeness

TheReportdoesnotomitrelevantinformationthatwouldinfluenceorinformstakeholderassessmentsordecisions,orthatwouldreflectsignificanteconomic,environmentalandsocialimpacts;

TheinformationintheReportincludesallsignificantactionsoreventsinthereportingperiod;

TheReportincludesallentitiesthatmeetthecriteriaofbeingsubjecttocontrolorsignificantinfluenceoftheReportingorganisation;and

TheReportcoversandprioritisesallinformationthatshouldreasonablybeconsideredmaterialonthebasisoftheprinciplesofmateriality,sustainabilitycontext,andstakeholderinclusiveness.

Accuracy

Wehavenotfoundanymaterialinaccuraciesthatmayaffectsignificantlythecomparabilityofselectedkeyperformanceindicators;and

ThedatameasurementtechniquesandbasesforcalculationshavebeenadequatelydescribedtoDNV,andcanbereplicatedwithsimilarresults.

Neutrality

WeconcludethattheinformationcontainedintheReportisunbiased;and

TheemphasisonthevarioustopicsintheReportisproportionatetotheirrelativemateriality.

Comparability

TheinformationintheReportispresentedinaformatthatallowsuserstoseepositiveandnegativetrendsinperformanceonayear-to-yearbasis;and

WerecognisethatCRHdrivestoimprovethequalityofitsenvironmentaldatawhichmayhaveaneffectontheyear-by-yearcomparability.

Recommendations

Inconductingourwork,weidentifiedthefollowingrecommendations:

developmentofaplan,specificgoalsandSMARTtargetsforeachofthecompanies;

strengthenthecollectionofenvironmentalrelateddatathroughappropriatetrainingandmorestringentqualityreviewmechanisms;

concentratedatagatheringeffortsoncompaniesthatposeamajorrisktotheGroup;

adoptariskapproachtoenablestrategicfocuson‘high/medium’riskcompanieswithintheGroup;

expandtheimplementationoftheCRHenvironmentalpolicyandmanagementsystemsthroughincreasedtrainingandmonitoringcontrols;

extendthehotlinetocountriesthatmightposeahigherrisktoCRH,e.g.Chinaandimprovetheeffectivenessofitsimplementationincertainregions,e.g.Ukraine;

implementationofasystematicprocessforidentifyingkeylocalstakeholdersandtheirissues.

EstherGarcia SvenJPStarckxLeadVerifier ProjectManager

DetNorskeVeritasCertificationBV,Rotterdam,21June2007

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3264



DNV Assurance Statement of CRH 2006 CO2 Emissions

Introduction

CRHplchascommissionedDNVtoperformalimitedreviewofCRHplcreportedCO2emissionscoveringthecalendaryear2006fromitscementplantsaspresentedinCRHCorporateSustainableReport2006onp70.

CRHplcwasresponsibleforreportingtheCO2emissionsinaccordancewiththeWorldBusinessCouncilforSustainableDevelopment–CementSustainableInitiativeProtocol“CO2AccountingandReportingStandardfortheCementIndustry”,June2005.

OurresponsibilityinperformingthisworkistothemanagementofCRHplconlyandinaccordancewithtermsofreferenceagreedwiththem.DNVexpresslydisclaimsanyliabilityorresponsibilityforanydecisions,whetherinvestmentorotherwise,baseduponthisassurancestatement.

Scope of Work

Ourlimitedreviewaddressedthereportedgreenhousegasemissions(totaldirectCO2emissions(gross),totaldirectCO2emissions(net),directCO2emissions(kg)/mtonneofcementitiousproduct(gross)anddirectCO2emissions(kg)/mtonneofcementitiousproduct(net))forthecalendaryear2006generatedwithinCRHplc’scementproductionfacilitieslocatedinIreland(2facilities),Switzerland(2facilities),Poland(2facilities),Finland(2facilities),Ukraine (1 facility - 99% equity share), Portugal (4 facilities – 49% equity share), Tunisia (1 facility - 49% share) and Israel (2 facilities - 25 % equity share).

Assessment Methodology

Our risk-based verification approach draws from the criteria set in ISO14064, the verification protocol developed by the International Emissions Trading AssociationaswellasthecriterialaiddownintheWBCSD-CSICO2AccountingandReportingStandardfortheCementIndustry,June2005.ThisreviewwasconductedduringMay-June2007.

Asapartoftheverificationprocess,DNV:

obtainedanin-depthunderstandingofthesystemsusedtogenerate,aggregateandreporttheselectedgreenhousegasindicatordataatthereportingunit,regionalandgrouplevel;

conductedinterviewswithgroupandrelevantentitylevelresponsiblepersonsfordatagathering,aggregationandconsolidationprocesses;

hadaccesstospecificdocuments,dataandinformationmadeavailablebyCRHplcandreportingunits;

conductedsitevisitsto2cementproductionfacilities:PodilskyCementinUkraineandCimentsdeGabèsinTunisiatoassessthecompletenessofthesourcescovered,theactivitydata,thedatagatheringandmanagementprocessanddataqualityatsitelevel.

ForreportingpurposesCRHmadeuseofthereportingtoolrecommendedbythebytheWBCSD-CSI.ValidationoftheWBCSD-CSIreportingtoolwasnotpartofthescope.

Opportunities for Improvement

Currentlythereisnoformalqualitymanagementplanincludingproceduresforallorganizationallevelsandinventorydevelopmentprocesses–frominitialdatacollectiontofinalreporting.Itisrecommendedtoembedthecurrentdatagatheringprocessinamoreformalplantoensureconsistencyandquality

Currentlevelsofcontrolensuringqualityofthedatathroughoutthedatatransferprocessescanbeimproved.Itisrecommendedtoinstitutionalizeformalfeedbackloopsbetweencorporateteaminventoryteamandthepersonsresponsibleforpreparingtheinventoryatsitelevel.

Itisrecommendedtouseactualemissionfactorsinsteadofdefaultfactorswheretheyarereadilyavailable.

Conclusion

Basedupontheabove,inouropinionnothinghascometoourattentionthatcausesustobelievethatthereportedCO2emissionssetoutinthe2006CSRreportp.70arenotfairlystated.

SvenJ.P.Starckx LucLarmuseauProjectDirector ManagementRepresentative

DetNorskeVeritasCertificationBV,Rotterdam,22June2007

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3265


Appendices

External EndorsementsCRHcontinuestoberankedamongthesectorleadersbyallthekeySociallyResponsibleInvestment(SRI)ratingagencies.

InSeptember2006,CRHcontinuedinboththeDowJonesWorldandSTOXXSustainabilityIndexes,asassessedbySAM(Zürich),whichnotedthat:

“CRH continues to demonstrate strong commitment in addressing key corporate

sustainability challenges. The strong efforts in reducing the environmental

footprint of its business activities and continued dedication to safety improvement,

combined with best in class human resources management, make CRH a CSR

reference company for the building materials sector.”

In March 2006, CRH became a constituent member of the FTSE4Good (London) index,withthecommentthat:

“FTSE Group is delighted to confirm that CRH has been independently assessed

according to the FTSE4Good criteria, and has satisfied the requirements to

become a constituent of the FTSE4Good Index Series.”

InJune2006,Innovest(London)raisedCRHtoan“AA”rating,statingthat:

“CRH has made significant improvements in addressing its key corporate

responsibility risks. The company demonstrates its awareness of the strategic

profit opportunities that can be derived from environmentally beneficial products,

and intends to incrementally progress towards reporting in accordance with the

Global Reporting Initiative (GRI) guidelines by 2007.”

InJanuary2006,Vigeo(Paris)indicatedinitssectorreviewthat:

“CRH’s performance on CSR issues is in the top three performers. It demonstrates

positive and stable performances for customers and suppliers, human rights,

community involvement, corporate governance and human resources, and an

improved rating for environmental issues compared to its 2004 rating.”

InMarch2007,StorebrandInvestmentsSRIdesignatedCRHas“BestinClass”statinginitssectorreviewthat:

“CRH’s CSR Report 2005 is an excellent example of a particularly well structured

report, each section being organised into policy, management system and

performance, covering most of the central sustainability issues in the industry.”

InJune2007,CRHunderlineditscommitmenttoCSRintheIrishcontextthroughitssignatureoftheBusinessintheCommunityIrelandMembershipCharter.

“Business in the Community Ireland commends CRH plc for another leading and

inspirational CSR report. We note the Company’s commitment to transparency and

accountability on its impacts and operations throughout the group and particularly

in key areas such as CO2 emissions and safety performance. It is an example of

best practice in CSR reporting within the Irish context.”

3266


Appendices

Relationship to GRI GuidelinesGRI-G3 Description Page 2006 Disclosure

Strategy & Profile

Profile

�.� CEOStatementonrelevanceofsustainabilitytotheorganisation&strategy 1-3 FullDisclosure

�.2 Descriptionofkeyimpacts,risks,andopportunities 1-3 FullDisclosure

Organisational Profile

2.� Nameoftheorganisation. 7 FullDisclosure

2.2 Primarybrands,products,and/orservices 4-14 FullDisclosure

2.3 Operationalstructureoftheorganisation 4-14 FullDisclosure

2.4 Locationoforganisation’sheadquarters. 7 FullDisclosure

2.5 Countrieswheretheorganisationoperates 7,11,12 FullDisclosure

2.6 Natureofownershipandlegalform. 7 FullDisclosure

2.7 Marketsserved 7-9,11-12 FullDisclosure

2.8 Scaleofthereportingorganisation 9,11-14 FullDisclosure

2.9 Significantchangesduringthereportingperiodinsize,structure,ownership 5,10 FullDisclosure

2.�0 Awardsreceivedinthereportingperiod. 37,46 FullDisclosure

Report Parameters

3.� Reportingperiod(e.g.,fiscal/calendaryear)forinformationprovided. 5 FullDisclosure

3.2 Dateofmostrecentpreviousreport(ifany). 5 FullDisclosure

3.3 Reportingcycle(annual,biennial,etc.) 5 FullDisclosure

3.4 Contactpointforquestionsregardingthereportoritscontents. 72 FullDisclosure

3.5 Processfordefiningreportcontent 5 FullDisclosure

3.6 Boundaryofthereport 5 FullDisclosure

3.7 Anyspecificlimitationsonthescopeorboundaryofthereport 5 FullDisclosure

3.8 Basisforreportingonjointventures,subsidiaries,etc. 5 FullDisclosure

3.9 Datameasurementtechniquesandthebasesofcalculations 5 FullDisclosure

3.�0 Explanationofeffectofre-statementsofinformationprovidedpreviously Nosignificantchanges

3.�� Significantchangesinscope,boundary,ormeasurementmethods Nosignificantchanges

3.�2 TableidentifyingthelocationoftheStandardDisclosuresinthereport. 65-69 FullDisclosure

3.�3 Policyandcurrentpracticeonseekingexternalassuranceforthereport 4, 57,58 FullDisclosure

Governance, Commitments, and Engagement

4.� Governancestructureoftheorganisation 16-17 FullDisclosure

4.2 IndicateifChairoftheBoardisalsoanexecutiveofficer 16 FullDisclosure

4.3 TheBoardmembersthatareindependentand/ornon-executivemembers. 15-16 FullDisclosure

4.4 Waysforshareholders&employeestoproviderecommendationsordirection 15-19 FullDisclosure

4.5 LinkbetweencompensationofBoardandmanagementwithperformance 16 FullDisclosure

4.6 ProcessesinplacefortheBoardtoensureconflictsofinterestareavoided. 16,17,19 FullDisclosure

4.7 ProcessfordeterminingthequalificationsandexpertiseoftheBoard 16-17 FullDisclosure

4.8 Internallydevelopedstatementsofmissionorvalues,codesofconduct,&principles 1-61 FullDisclosure

4.9 ProceduresoftheBoardforoverseeingidentificationandmanagementofperformance 15-19 FullDisclosure

4.�0 ProcessesforevaluatingtheBoardsownperformance 16 FullDisclosure

4.�� Explanationofwhetherandhowtheprecautionaryapproachorprincipleisaddressed 1-2,15-19 FullDisclosure

3267


Appendices

Relationship to GRI Guidelines continued

GRI-G3 Description Page 2006 Disclosure

4.�2 Externallydevelopedeconomic,environmental,andsocialcharters,principles 19,23 FullDisclosure

4.�3 Membershipsinassociations 1-2,23,64 FullDisclosure

4.�4 Listofstakeholdergroupsengagedbytheorganisation 56-61 FullDisclosure

4.�5 Basisforidentificationandselectionofstakeholderswithwhomtoengage 5,47-61 FullDisclosure

4.�6 Approachestostakeholderengagements 47-61 FullDisclosure

4.�7 Keytopicsandconcernsthathavebeenraisedthroughstakeholderengagement 47-61 FullDisclosure

Economic

DisclosureonManagementApproach 1-2,15-19 FullDisclosure

EC� Directeconomicvaluegeneratedanddistributed 6-14 FullDisclosure

EC2 Financialimplicationsandotherrisksandopportunitiesfortheorganisation’sactivitiesduetoclimatechange. 1-2,18,23-26 FullDisclosure

EC3 Coverageoftheorganisation’sdefinedbenefitplanobligations 50 FullDisclosure

EC4 Significantfinancialassistancereceivedfromgovernment Nosignificantassistance

EC5 Additional:Rangeofratiosofstandardentrylevelwagecomparedtolocalminimumwage 50-51 PartialDisclosure

EC6 Policy,practices,andproportionofspendingonlocally-basedsuppliers 55 FullDisclosure

EC7 Localhiringandproportionofseniormanagementhiredfromthelocalcommunity 53 FullDisclosure

EC8 Developmentandimpactofinfrastructureprovidedprimarilyforpublicbenefit 8-14,61 FullDisclosure

EC9 Additional:Understandinganddescribingsignificantindirecteconomicimpacts 6-14 FullDisclosure

Environmental

DisclosureonManagementApproach 20-22 FullDisclosure

EN� Materialsusedbyweightorvolume 8-9 FullDisclosureProductionquanti-tiesrelatecloselytomaterialuse

EN2 Percentageofmaterialsusedthatarerecycledinputmaterials 24,28 FullDisclosure

EN3 Directenergyconsumptionbyprimaryenergysource 26 FullDisclosure

EN4 Indirectenergyconsumptionbyprimarysource 26 FullDisclosure

EN5 Additional:Energysavedduetoconservationandefficiencyimprovements 26 FullDisclosure

EN6 Additional:Energy-efficientorrenewableenergyproductsandservices 23-26,28,34-36 FullDisclosure

EN7 Additional:Indirectenergyconsumptionreductioninitiativesandresults 26,34-36 FullDisclosure

EN8 Totalwaterwithdrawalbysource 30 Partial-sourcevaries

EN9 Additional:Watersourcessignificantlyaffectedbywithdrawalofwater Nonesignificantlyaffected

EN�0 Additional:Percentageandtotalvolumeofwaterrecycledandreused 30 FullDisclosure

EN�� Locationandsizeoflandbyprotectedareasandareasofhighbiodiversityvalue 31 FullDisclosure

EN�2 Descriptionofsignificantimpactsofactivities,products&servicesonbiodiversity 31 FullDisclosure

EN�3 Additional:Habitatsprotectedorrestored 31-32 FullDisclosure

EN�4 Additional:Managingimpactsonbiodiversity 32 FullDisclosure

EN�5 Additional:IUCNRedListspeciesandotherlistspecieswithhabitatsaffectedbyoperations 32 Partial-managedlocally

EN�6 Totaldirectandindirectgreenhousegasemissionsbyweight 23-26 FullDisclosure

EN�7 Otherrelevantindirectgreenhousegasemissionsbyweight CO2isonlyrelevantGHG

EN�8 Additional:Initiativestoreducegreenhousegasemissionsandreductionsachieved 23-26, 34-36 FullDisclosure

3268


Appendices



EN�9 Emissionsofozone-depletingsubstancesbyweight Notrelevantforbuildingmaterials

EN20 NOx,SOx,andothersignificantairemissionsbytypeandweight 26 FullDisclosure

EN2� Totalwaterdischargebyqualityanddestination 30 Partial-destina-tionvaries.

EN22 Totalweightofwastebytypeanddisposalmethod 29 FullDisclosure

EN23 Totalnumberandvolumeofsignificantspills Nosignificantspills

EN24 Additional:Weightofwastedeemedhazardous 29 FullDisclosure

EN25 Additional:Detailsofwater&habitatssignificantlyaffectedbydischargesofwaterandrunoff Nonesignificantlyaffected

EN26 Initiativesandextentofenvironmentalimpactsofproductsandservicesmitigation 23-25,34-36 FullDisclosure

EN27 Percentageofproductssoldandtheirpackagingmaterialsreclaimedbycategory 28-29 FullDisclosure

EN28 Significantfinesandnon-monetarysanctionsfornon-compliancewithenvironmentallaw 22 FullDisclosure

EN29 Additional:Significantenvironmentalimpactsoftransportingproductsetc.andworkforce 25-26 FullDisclosure

EN30 Additional:Totalenvironmentalprotectionexpendituresandinvestmentsbytype 33 FullDisclosure

Social : Labour Practices and Decent Work

DisclosureonManagementApproach 47-53 FullDisclosure

LA� Totalworkforcebyemploymenttype,employmentcontract,andregion 49 FullDisclosure

LA2 Totalnumberandrateofemployeeturnoverbyagegroup,gender,andregion 50-51 FullDisclosure

LA3 Additional:Benefitsforfull-timeemployeesnotprovidedtotemporaryorpart-time Nodatayetavailable

LA4 Percentageofemployeescoveredbycollectivebargainingagreements 51 FullDisclosure

LA5 Minimumnoticeperiod(s)regardingsignificantoperationalchanges Nodatayetavailable

LA6 Additional:%workforceinformalmanagement-workerhealth&safetycommittees DatanotgatheredatGrouplevel

LA7 Ratesofinjury,occupationaldiseases,lostdays&absenteeism,&numberofwork-relatedfatalitiesbyregion 41-45, 51 FullDisclosure

LA8 Education,training,counselling,prevention,andrisk-controlprogrammesinplacetoassistworkforcemembers,theirfami-lies,orcommunitymembersregardingseriousdiseases

Notapplicableaswedonothaveapresenceincountrieswithsuchendemicdiseases.

LA9 Additional:Health&safetytopicscoveredinformalagreementswithtradeunions DatanotgatheredatGrouplevel

LA�0 Averagehoursoftrainingperyearperemployeebyemployeecategory 51 Partial-categoryvaries

LA�� Additional:Programmesforskillsmanagementandlifelonglearningthatsupportthecontinuedemployabilityofemployeesandassisttheminmanagingcareerendings

52-53 FullDisclosure

LA�2 Additional:%employeeswithregularperformance&careerdevelopmentreviews DatanotgatheredatGrouplevel

LA�3 Compositionofgovernancebodiesandbreakdownofemployeespercategoryaccordingtogender,agegroup,minoritygroupmembership,andotherindicatorsofdiversity

15-16, 49 FullDisclosure

LA�4 Ratioofbasicsalaryofmentowomenbyemployeecategory Samejobsamepay

Social : Human Rights

DisclosureonManagementApproach 48 FullDisclosure

HR� Percentageandtotalnumberofsignificantinvestmentagreementsthatincludehumanrightsclausesorthathaveunder-gonehumanrightsscreening

Sinceearly2007,wehaveasmallpresenceindevelopingcountries,andarecurrentlydevelopingourpoliciesinthisarea.

HR2 Percentageofsignificantsuppliersandcontractorsthathaveundergonescreeningonhumanrightsandactionstaken Nodatayetavailable

3269


Appendices



HR3 Additional:Hoursand%ofemployeetrainingonpoliciesandproceduresinhumanrights Sinceearly2007,wehaveasmallpres-enceindevelopingcountries,andarecur-rentlydevelopingourpoliciesinthisarea.

HR4 Totalnumberofincidentsofdiscriminationandactionstaken 49-51 FullDisclosure

HR5 Operationsidentifiedinwhichtherighttoexercisefreedomofassociationandcollectivebargainingmaybeatsignificantrisk,andactionstakentosupporttheserights

None

HR6 Operationswithsignificantriskforincidentsofchildlabour,andmeasurestakentoeliminate None

HR7 Operationswithsignificantriskofforcedorcompulsorylabour,andmeasurestoeliminate None

HR8 Additional:Percentageofsecuritypersonneltrainedintheorganisation’spoliciesorproceduresconcerningaspectsofhu-manrightsthatarerelevanttooperations

Notapplicable-notincountriesofconcern

HR9 Additional:Incidentsofviolationsinvolvingrightsofindigenouspeople&actionstaken Notapplicable-notincountriesofconcern

Social : Society

DisclosureonManagementApproachDisclosure 48 FullDisclosure

SO� Nature,scope,andeffectivenessofanyprogrammesandpracticesthatassessandmanagetheimpactsofoperationsoncommunities,includingentering,operating,andexiting

Notapplicable,wearealocalbusiness,see p. 14

SO2 Percentageandtotalnumberofbusinessunitsanalysedforrisksrelatedtocorruption Nodatayetavailable

SO3 Percentageofemployeestrainedinorganisation’santi-corruptionpoliciesandprocedures Nodatayetavailable

SO4 Actionstakeninresponsetoincidentsofcorruption 13-17 FullDisclosure

SO5 Publicpolicypositionsandparticipationinpublicpolicydevelopmentandlobbying 22 FullDisclosure

SO6 Additional:Totalvalueoffinancialandin-kindcontributionstopoliticalparties,politicians,andrelatedinstitutionsbycountry Nosignificantdonationstopoliticalparties

SO7 Additional:Totalnumberoflegalactionsforanti-competitivebehaviour,anti-trust,andmonopolypracticesandtheiroutcomes

Nosignificantissues.See2006AnnualReport p. 44-49

SO8 Monetaryvalueofsignificantfinesandtotalnumberofnon-monetarysanctionsfornon-compliancewithlawsandregulations Nosignificantissues.See2006AnnualReport p. 44-49

Social : Product Responsibility

DisclosureonManagementApproach 8,34-36 Notfullyapplica-bleforbuildingproducts

PR� Lifecyclestagesinwhichhealth&safetyimpactsofproductsandservicesareassessedforimprovement,andpercentageofsignificantproductsandservicescategoriessubjecttosuchprocedures

45 Full

PR2 Additional:Incidentsofnon-compliancewithregulationsandvoluntarycodesonhealth&safetyimpactsofproductsandservicesduringtheirlifecycle,bytypeofoutcomes

Noneknown

PR3 Typeofproductandserviceinformationrequiredbyprocedures,andpercentageofsignificantproductsandservicessubjecttosuchinformationrequirements

Notapplicableforbuildingproducts

PR4 Additional:Totalnumberofincidentsofnon-compliancewithregulationsandvoluntarycodesconcerningproductandserviceinformationandlabelling,bytypeofoutcomes


PR5 Additional:Practicesrelatedtocustomersatisfaction,includingresultsofsurveysmeasuringcustomersatisfaction 54 FullDisclosure

PR6 Programmesforadherencetolaws,standards,andvoluntarycodesrelatedtomarketingcommunications,includingadver-tising,promotion,andsponsorship


PR7 Additional:Totalnumberofincidentsofnon-compliancewithregulationsandvoluntarycodesonmarketingcommunica-tions,includingadvertising,promotion,andsponsorshipbytypeofoutcomes

None

PR8 Additional:Totalnumberofsubstantiatedcomplaintsregardingbreachesofcustomerprivacyandlossesofcustomerdata None

PR9 Additional:Monetaryvalueofsignificantfinesfornon-compliancewithlawsandregulationsconcerningtheprovisionanduseofproductsandservices

Nosignificantfines

3270


Appendices

CSI KPIs for Cement ActivitiesCSI KPIs for Cement Activities 2005 2006

Climate Change

TotalDirectCO2emissions(gross),mtonnes 9.83 �0.��

TotalDirectCO2emissions(net),mtonnes 9.73 9.86

DirectCO2emissions(kg)/mtonneofcementitiousproduct(gross) 751 75�

DirectCO2emissions(kg)/mtonneofcementitiousproduct(net) 744 733

Alternative Fuel and Materials

Energyefficiency,kcal/kgclinker 954 973

%Fuelsubstitutionforvirginfuels 7.48% 8.57%

%Biomassinkilnfuel 1.45% �.63%

%Alternativematerials(clinkerandcement) 5.97% 6.�3%

Clinker:cementratio 85.23% 85.03%

Health & Safety

Employeefatalities 1 0

Employeefatalityrate 3.5 0

Contractorfatalities 1 �

Third-partyfatalities 0 0

Employeelosttimeincidents 19 �9

EmployeelosttimeincidentFrequencyRate 3.64 3.64

Employeelostworkingdays 577 346

EmployeelosttimeincidentSeverityRate 111 66

Contractorlosttimeincidents 1 8

Contractorlostworkingdays 7 ��8

Emissions

Particulates,specificg/tonneclinker 349 375

Particulates,total(tonnesperyear) 4,060 4,332

NOx,specificg/tonneclinker 1,684 �,554

NOx,total(tonnesperyear) 19,568 �7,932

SOx,specificg/tonneclinker 144 �54

SOx,total(tonnesperyear) 1,671 �,778

%Clinkerproducedwithmonitoringofmajorandminoremissions 79.5% 79.9%

%Clinkerproducedwithcontinuousmonitoringofmajoremissions 67.6% 79.4%

Local Impacts

%Siteswithbiodiversityguidelines 78.6% 78.6%

%Siteswithcommunityengagementplans 78.6% 85.7%

%Siteswithquarryrehabilitationplans 92.9% 92.9%

Note �: FordefinitionsoftheseKPIs,refertotheCSIInterimReport,June2005onwww.wbcsdcement.org

Note 2:

Thefiguresabovefollowtheconventionoftakingallcompanies,includingassociatesonanequitysharebasis,exceptthehealth&safetyKPIswhichreferonlytofullyownedcompanies

Note 3: ThefiguresexcludeSecilminorityholdingsinLebanonandAngola

327�


Appendices

Abbreviation Explanation

C&D ConstructionandDemolitionmaterial

CO2 CarbonDioxide,generatedbothbyfuelcombustionandchemicaldissociationorcalcination,(bothsuchanthropogenicemissionsbeingconsideredtobeacauseofClimateChange/GlobalWarming)

CSI CementSustainabilityInitiative

CSR CorporateSocialResponsibility

DJSI DowJonesSustainabilityIndex

EIA/EIS EnvironmentalImpactAssessment/Statement

ELO EnvironmentalLiaisonOfficer(designatedpersonineachcompanywithfunctionalresponsibilityforenvironmentalcompliance)

EMS EnvironmentalManagementSystem

EPA EnvironmentalProtectionAgency(ofthecountryconcerned)

G Giga(109units)

GHG GreenHouseGas

GWh Gigawatthours

Ha Hectares(oflandrestoredorlandscaped),where1ha~2.5acres

IPC, IPPC IntegratedPollution(Preventionand)Control,i.e.permittingwhichintegratesemissionstoair,water,wasteetcintoasinglelicence

ISO 900� TheInternationalStandardsOrganisationmodelformanagementandexternalcertificationofquality

ISO �400� TheInternationalStandardsOrganisationmodelformanagementandexternalcertificationofenvironmentalperformance

k Onethousandunits

km Kilometre(1.6miles)

KPI KeyPerformanceIndicator

L Litre

m Onemillionunits

mg Milligram

MSHA MineSafetyandHealthAdministration(US)

NAP NationalAllocationPlan(forCO2emissions)

NAPA NationalAsphaltPavementAssociation(US)

NGO Non-GovernmentalOrganisation

NOx NitrogenOxides

OSHA OccupationalSafetyandHealthAdministration(US)

OHSAS �800� OccupationalHealth&SafetyAssessmentSeriescertificationofoccupationalHealth&Safety

NSSGA NationalStone,Sand&GravelAssociation(US)

QPA QuarryProductsAssociation(UK)

RAP RecycledAsphaltPavement

SAM SustainabilityAssetManagement(ZurichBasedRatingAgencyforDJSI)

SCC Self-CompactingConcrete

SOx SulphurOxides

SRI SociallyResponsibleInvestment

Specific Atermdefiningemissionsonapertonneofproductbasis

t MetricTonnes(=1.1UStons)

T Tera(1012units)

TWh Terawatthour

Tonnes Metrictonnes

WBCSD WorldBusinessCouncilforSustainableDevelopment

Glossary

3272


Appendices

Youarewelcometocontactuswithanyqueries,ortosendyourfeedbackto:

CRHplcInvestorRelationsBelgardCastleClondalkinDublin22Ireland

Contact Information

ContactPerson:JimO’BrienGroupTechnicalAdvisor

Telephone: +353.1.404 1000Fax: +353.1.404 1007E-mail:[email protected]

Website:www.crh.com

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