2018 Sustainability Report
Championing Impact & Sustainability - “Building prosperity & self-suffciency across Africa” 6 7
The Dangote Way Building prosperity & self-sufficiency across Africa
The Dangote Way is based upon the Seven Sustainability Pillars that support our approach to creating a world-class, multinational manufacturing company.
Driven by the highest levels of governance, it is embedded in our corporate culture and guides our approach to building a prosperous and sustainable business.
“The 7 Pillars of Sustainability are at the core of The Dangote Way, which reflects my personal commitment to build a socially responsible and impactful business that serves all stakeholders.”
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“It’s not all about making money. It’s about making impact. For more than 20 years, Dangote was just a trading company. Then we decided we wanted to be an industrial giant — and we had to start somewhere. It wasn’t just about cement. It was about industrialisation. If you look at what Dangote Group is doing, it’s about improving people’s lives”.
The global business space is fast re- grow sustainably and make even we are enacting the philosophy that all levels of employees are involved We also realise that the adoption of industrialization. If you look at what evolving. More and more, the critical greater impact. a win-win approach to business in walking the talk on sustainability. global sustainability principles and Dangote Group is doing, it’s about question that entrepreneurs and helps us build a sustainable and In the year under review, Dangote standards is good for our business. improving people’s lives”. CEOs are made to answer is: “what For us operationalizing the Dangote respected brand. We propose to Cement Group held its first ever is the impact of your business on Way means supporting Africa to earn our social license to operate by Sustainability Week across its We remain strongly optimistic We aim to be the number one in stakeholders and the society?” develop rapidly and sustainably. building sustainable local economies Nigerian and Pan African operations. about Africa’s economic prospects everything that we do. Our business This is why we continue to invest around all our areas of operation. I am proud that over 500 Dangote and are committed to using our strategy has always been one that At Dangote Cement, we strongly in sectors that have the potential to employees took part in social quality products, services and enables our ‘play to win’ approach. agree that every business must bolster infrastructure development, We value the contributions of our impact initiatives that further investments to expedite the Sustainability is gaining more ask itself this pertinent question as massive job creation, and to stakeholders towards the success strengthened our relationship with continent’s sustainable growth and traction across the Dangote Group part of a continuous performance reverse Africa’s decades of import story that the Dangote brand has host communities. development. There are challenges, as we deepen our commitment self-assessment. The traditional dependence which has stifled local become. We will continue to engage no doubt; but none that we cannot, to deploying a win-win approach notion of business as a ‘profit only’ industries and foreign exchange our host communities and build To keep our sustainability journey with the support of our valued to business partnerships, whilst venture, is fast being eroded by earnings. long-lasting, mutually beneficial on track, we also understand the stakeholders, overcome. retaining industry leadership in new global realities. The value that a relationships. We understand importance of leveraging global We thank you all for your faith in Nigeria, Africa and globally. business creates for its employees, For example, from importing 68% the importance of securing the partnerships, including the United us and your loyalty to the Dangote customers, shareholders, investors, of its cement needs as at 2004, well-being of our people, local Nations Global Compact, the World brand. Together, we will continue to governments and host communities Nigeria is now a net exporter of the communities, and the natural Economic Forum, and the Global take our brand and our continent to is now rightly seen as integral to commodity, due mostly to Dangote environment. We have in 2018 Cement and Concrete Association. greater heights. ‘who’ and ‘what’ that brand is. Cement’s huge investments and invested significant resources to We are committed to sustainability aggressive expansion. Today, ensure that our business operations principles and standards such as Like I said, during a 2017 interview It is therefore part of our business Dangote Cement makes up seven do not jeopardise the health and the IFC Performance Standards, with Bloomberg ‚ “It’s not all about strategy to always ensure that our out of every 10 bags of cement safety of our employees and the Nigerian Stock Exchange making money. It’s about making market presence is positively felt, used across Africa. As we grow, affected stakeholders. Sustainability Disclosure Guidelines impact. For more than 20 years, not just in the local communities we are committed to ensuring that and the Global Reporting Initiative. Dangote was just a trading company. where our businesses are directly our business growth translates to We cannot achieve these objectives As one of the 10 biggest cement Then we decided we wanted to sited, but within the larger positive socio-economic progress in without the active involvement of companies in the world, we be an industrial giant — and we ALIKO DANGOTE population and host countries. This the markets where we do business. all members of the Dangote family. recognise the need to align with had to start somewhere. It wasn’t Chairman of the Board & Group is the only way we can continue to Through our sustainability function, This is why we ensure that global standards and best practices. just about cement. It was about President/CEO, Dangote Group
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environmental footprints across schools, hospitals, housing, and a Beyond our financial numbers, our huge value chain, as well as new African future that we all will we are excited about the progress positively and sustainably enhance be proud of. We are in business our Sustainability & Governance the socioeconomic potentials of our not just to make profits, but also Team has recorded across our host communities. to impact our societies and world, other performance parameters CEO’s positively. We will strive to sustain in 2018, defined by The Dangote For us, in 2018 the definition our first position in profitability, Way and the 7 Sustainability Statement of business growth has been market leadership, sustainable Pillar Methodology we adopted. ENGR JOSEPH MAKOJU A Successful Year and Strategy expanded beyond prioritising growth and development impact This involves reporting more Group Managing Director/ operations, finance and risk on our local communities, markets, comprehensively including our Chief Executive Officer for Sustainable Growth management to include the economies and countries in which financial, economic, operational, development of a corporate culture we operate. institutional, social, environmental that prioritises compliance with and cultural sustainability and national laws, regulations and global This is why we have commissioned impact. I am pleased to present The global cement industry and report impact in our home in our sustainability journey. We best practices, improves the health a five year sustainability impact our first substantive stand- continues to experience country. For instance, the gross are building the needed capacity, and safety of our employees and plan (2019-2023) that would alone Sustainability Report. It is exponential growth driven mostly value we created in our Nigerian systems, processes and policy products, and continuously tracks enable us use our business heartwarming to report that our by rapid expansions in urbanisation, operations rose from N476 billion framework that would enable us and reports our performance in the operations to achieve sustainable sustainability vision has been industrialisation and infrastructure as at financial year 2017 to N504 lead this evolving sustainability management of our environmental, development. We are focused on embraced by our board directors development especially in billion in 2018, representing a space in Nigeria, Africa and economic and social risks. We aim ensuring that our market presence as well as even the reception desk emerging economies. Recent 5.9% growth. On social impact, global. We are excited about how to optimise the positive impact we and operations in our different where you are welcomed to our studies estimate that until 2025, the number of students in Nigerian far we have gone in our goal of make in the lives of our employees, host countries lead to positive offices. the cement industry will grow local communities that benefited embedding sustainability into every investors and shareholders, local impact on employment numbers, by an annual aggregate of 7.3%. from our scholarship schemes aspect of our business operations communities and the larger society. school enrolment, primary We will continue to leverage our This prospect represents great doubled from about 400 in 2017 as evidenced. Our commitment is backed by the healthcare, household income, size, market share, ultramodern opportunities for Dangote Cement, to over 980 in 2018, leading quality of corporate governance entrepreneurship and thereby to a operational facilities, and the and we are also ideally positioned to a record increase in student Our Leadership Team clearly that our institution deploys, and we reduction in the number of persons quality of skills and competences to build on our competitive enrolment in host communities. understands the problem of are proud to state that the mission living below the poverty line. in our workforce to drive economic advantage in operational efficiency, Our employee headcount also climate change and global warming of Sustainability across the 7 Pillars, growth, self-sufficiency and reliance quality product, ultramodern increased with over 900 new hires and the collective impact of which we call “The Dangote Way”, In 2018, Dangote Cement across Africa. We are pleased that facilities and technology to leverage in the year under review, supporting our business operations in this is being driven by the highest levels continued on its strong growth The Dangote Way, substantiated our unique economies of scale government’s efforts at fighting regard. We also understand that of governance at Dangote Cement trajectory in Nigeria and Pan- Africa. by the 7 sustainability pillars, have and know-how. Our aim will be to unemployment among youth and as the biggest cement company Plc. Gross revenues grew by 11.8%, so clearly helped us manifest our achieve sustainable growth and in local communities surrounding in Africa and one of the top from N805.6 billion in 2017 to business objectives and shape development across our value rapidly industrialising localities such 10 in the world, our direct and As has become characteristic N900.7 billion in the year under our approach towards a more chain, in our local communities as our areas of operation. indirect environmental, social and of our operations, we remain review. Our Profit before tax rose sustainable Africa. and to optimally reward our various economic impact could be massive, committed to supporting the from N289.6 billion to N300.7 stakeholders. With over 500 sustainability both positively and negatively. efforts of African governments to billion within the same period. Our champions and 100 sustainability We are therefore fully committed reduce their import dependence performance was driven by strong Nigeria serves as our Headquarters data owners designated and to working with stakeholders at in cement. We are proud to drive demand for our high quality, fairly and largest impact and production trained across our Nigerian and Pan the national and global levels to self-reliance in the production of priced products, which has also location. For reasons of materiality, African operations in 2018, we are ensure that we curtail, mitigate this essential commodity and help sustained our market share and ENGR JOSEPH MAKOJU Group Managing Director/ Chief we feel obliged to single out poised to move to the next level and significantly reduce our build infrastructure, industries, dominance. Executive Officer
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Our Approach – Determining material topics and indicators DR NDIDI NNOLI for sustainability Group Chief Sustainability & Governance
In 2018, the Sustainability & called “The Dangote Way”, every Our resulting Materiality Matrix can a unique platform for bonding during the year, in accordance with to produce a GRI-compliant Governance Function of the aspect of our business is touched be found in the Appendix of this and networking across functions, the Global Reporting Initiative (GRI). Sustainability Report across all our Dangote Group, embarked on an and involved in the agenda to build report. This Matrix was developed involving both senior and junior Africa Operations by 2020. We extensive Stakeholder Engagement a sustainable global brand. Our and shared with a cross-section of colleagues working side-by-side for We are aware of the critical have already identified the topics exercise to operationalize its sustainability journey is centered employees and other stakeholders a good cause. At different levels, importance of stakeholder and that significantly influence the approach to Sustainability. Dangote around people and systems and for further validation, after which the week-long initiative also offered shareholder feedback in our views and decisions of stakeholders Cement Plc (DCP) is pioneering involves all business functions we presented it for final sign-off to Dangote employees an opportunity efforts to achieve compliance with as well as reflect our economic, this initiative, driven by the highest including Operations, Marketing, the DCP Board of Directors. to demonstrate their social the highest global standards. We environmental and social impact. levels of governance and involving Finance, Risk, Community commitment to host communities remain committed to building a We are committed to achieving all key management functions of Relations, Health & Safety, A significant fall-out from the in the different countries where we socially responsible, responsive full regulatory compliance, the business. Environment, Social, Procurement, Employee Survey was our maiden operate. Overall, this engagement leading global institution which against which objective we have Human Resources, Legal and Sustainability Week, which was unleashed enormous goodwill actively solicits and values benchmarked our reporting against Dangote Cement’s adoption of the Compliance. Most importantly, we inspired by ideas from our staff. which is reflecting positively on stakeholder reviews. Although various local and global standards, 7-Pillar Approach to Sustainability have prioritized internal stakeholder The Sustainability Week initiative our brand and on employee we could not achieve extensive as outlined on the following page. mainstreams the business’ engagement in order to nurture a took “Living The Dangote Way” commitment to our sustainability external stakeholder engagement in These include the Global Reporting commitment to evolve a holistic culture of sustainability thinking and from the workplace to communities journey. the year under review, we ensured Initiative (GRI), IFC Performance strategy, structures, processes, doing among all our employees. across 6 major African locations, public engagement in the form of Standards, Global Cement and systems, human capital and internal with initiatives supported by top During the year, we made a media survey and peer review. Concrete Association (GCCA), capacity to drive the Group-wide Our 2018 activities were interlinked, management across 9 DCP Plants significant efforts to gauge our These insights were factored into United Nations Global Compact sustainability agenda across all with every new initiative cascading and almost entirely employee- sustainability performance. We the topics we consider as material (UNGC), Sustainable Development its operating companies in Africa. into the next. The feedback led. Projects carried out during benchmarked our activities against and integrated in this report. Goals (SDGs), Securities Exchange During the current reporting from our employee survey, for the Week included environmental those of leading global brands, In 2019, we will also increase Commission (SEC) and the period, we furthered our efforts example, prompted a group-wide sanitation, waste management, such as CEMEX, Lafarge Holcim, the frequency and scope of our Nigerian Stock Exchange (NSE), to institutionalize sustainability sustainability training program, economic empowerment, Argos, Heidelberg Cement, stakeholder engagement. all of which provide certification by enrolling 500 Sustainability which we co-facilitated with the educational, health and road Budimex and our joint venture, and/or guidelines for driving Champions and 97 data owners Sustainable Business Initiative infrastructure development, with Sephaku Cement SA, which is The 2017 Sustainability baseline a sustainable business. In this across the various business of the University of Edinburgh. some of these subsequently listed on the Johannesburg Stock covered Nigeria, while our 2018 manner, a culture of regulatory functions. Following the survey, which 1170 adopted as programs to sustain Exchange. This process also Sustainability Report focuses on compliance has been designed staff participated in, we prioritized by the business. In addition to contributed significantly towards four African countries: Nigeria, to coincide with the spirit of “The Leveraging the 7-Pillar approach certain sustainability indicators in the positive socio-economic our identification of material Senegal, South Africa and Ethiopia. Dangote Way”. to sustainability, which we have accordance with GRI Standards. impact, the initiative providing sustainability topics and indicators This is in line with our journey
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Our Approach...Cont‘d Regulatory compliance
Our approach to regulatory The New Nigerian Code of to the Application of the Code, with Goals 1, 3, 4, 5, 10, and 16; Our compliance with various institutional, cultural, operational, compliance involves alignment with Corporate Governance championed Board of Directors, Relationship while our cultural pillar 4, 5, 10, principles, guidelines, standards environmental and social, align with local and global laws, regulations by the Federal Reporting Council of with Shareholders, Relationship 11, 16 and 17. Our cultural pillar and laws highlighted above enables the IFC Performance Standards. and guidelines. Our process Nigeria was also released in 2018. with other Stakeholders, essentially provides the framework us to build internal sustainability By benchmarking against global has involved benchmarking our This Code seeks to institutionalize Risk Management and Audit, for integrating sustainability into our policies, systems and structures that standards, we continually strive to reporting against new guidelines the highest standards of corporate Accountability and Reporting, business processes and values. We are in line with best practices. We go beyond the industry level of which emerged in 2018, including governance among Nigerian Communication, Code of Ethics and seek to foster a corporate culture are also promoting and encouraging compliance locally to standardise the Nigerian Stock Exchange (NSE) companies and suits our objective Interpretation. With our institutional that aligns sustainability “thinking” employee volunteerism and our performance globally. Sustainability Disclosure Guidelines to build a world class organization and cultural pillars, we are making with sustainability “doing” and in have dedicated our group-wide for which we have been an early with sustainable governance concerted efforts to align with all this regard our cultural sustainability sustainability week initiative to Transcending national regulatory adopter. practices. Our institutional, cultural, thirty-seven provisions that make up pillar pays a unique and important demonstrating our innovative requirements, we specifically operational, environmental, social the SEC code. We believe that by role to support our commitment in approach to social responsibility. adopted the Global Reporting The NSE Guidelines have four core and financial pillars address 22 aligning with this Code, we would driving sustainable development in We will also continue to ensure Initiative (GRI) reporting standards areas, economic, environmental, out of the 28 principles of the be strengthening our commitment all the markets where we operate. the high-quality of our product for our sustainability reporting. We social, and governance, and Code. We are committed to to building a strong governance as a sustainable, durable and have made remarkable progress these align directly with our working diligently and achieving full structure and a compliant and We are one of the founding resilient building material to drive since 2017 in our efforts to use economic, environmental, social compliance in advance of when the responsible business. members of the Global Cement the realisation of the infrastructural GRI guidelines for our non-financial and institutional pillars. The code becomes effective in January and Concrete Association (GCCA), needs of the new Africa we reporting to stakeholders. Through NSE Guidelines elicit corporate 2020. As a socially responsible a best practice forum dedicated envision, being one that harnesses compliance with these standards, responsibility from listed companies organisation, we are committed to driving responsible industry the continents young growing urban we seek to enhance transparency, such as Dangote Cement, and As a publicly listed company, and a to working with like-minds in the leadership in the manufacture population to create prosperity for accuracy and credibility, improved benchmark our efforts against those member of the Premium Board of effort to address global challenges. and use of cement and concrete. all. stakeholder’s engagement and data of industry peers. the Nigerian Stock Exchange, our This explains our alignment with Our operational, environmental integrity. Our 2018 Sustainability activities especially the governance the United Nations Sustainable and social pillars align with the 5 The Performance Standards Report was prepared in compliance We are currently putting in place dimension are guided by the Development Goals (SDGs). Our focus areas of the GCCA – which on Environmental and Social with GRI requirements. structures that will enable us Code of Corporate Governance sustainability pillars are linked are health and safety, social Sustainability by the International improve on material ESG issues, of the Securities and Exchange with 15 of the 17 SDGs. Our responsibility, climate change Financial Corporation (IFC) develop management strategies, Commission (SEC). Established in economic pillar addresses Goals and energy, environment and also informs the Corporation’s establish action plans, as well as 2003, the SEC Code has been an 1, 2, 8, 11 and 16; the financial nature, and circular economy. Our approach to effective ESG and risk monitor and responsibly report important governance guideline pillar addresses Goals 8 and 11; obligation to the guidelines is at management. The IFC Performance our sustainability performance. for publicly listed companies in our environmental pillar aligns with the heart of improvements at our Standards were developed as Our 2018 Sustainability Report Nigeria and seeks to ensure that Goals 6, 7, 12, 13 and 17; the sites to enhance energy efficiency, guidelines for IFC clients and already fulfills most of the reporting businesses proactively maintain an institutional pillar addresses Goals reduce gas and dust emissions partners, and have become globally requirements of the NSE Guidelines acceptable standard of corporate 8, 16 and 17; while the operational and strengthen health and safety recognized and accepted as a DR NDIDI NNOLI and we will build on this progress in behaviour. The Code has 9 broad pillar addresses Goals 8, 9, 12 measures. credible sustainability framework. Group Chief our 2019 report. parts that address issues related and 13. Our social pillar connects 6 of our 7 Sustainability Pillars - Sustainability & Governance
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Employee Volunteerism: DCP employees preparing roads for repairs during the inaugural 2018 Sustainability Week.
Dangote Cement Plc (DCP), the leading cement social, financial), every business function is engaged pilot Sustainability Week was held in September 2018 other employees’ benefits also increased by 15.4 conglomerate in Africa and Nigeria’s biggest indigenous and involved in our sustainability journey, thereby with over 500 employees in about 6 countries coming percent, from N49.9 billion to N57.6 billion. Similarly, company, is an important part of the Dangote Group. embedding sustainability - beyond issues of risk out for different community development projects. wealth created for local suppliers and vendors across DCP is listed on the Nigerian Stock Exchange but management or compliance. Our performance in the operational and environmental our supply chain rose by 4 percent, from N281billion in is owned primarily by its parent company, Dangote pillars show progress in our commitment to innovation 2017 to N292billion in the year under review. Industries Limited (DIL). With operations in three Our performance in the institutional pillar in 2018 in production processes and standards, particularly In addition to nurturing our growth numbers which is locations in Nigeria and across 10 African countries, shows a consistent focus on upholding corporate in Operational Health and Safety. Likewise, we critical to our financial pillar, we also made tremendous the social, environmental and economic impact of DCP governance that is in line with global best practice continuously strive to enhance our environmental progress in our economic and social pillars in 2018. is significant and diverse. As a leading global company, and evolving regulations in our different markets. stewardship and are committing more resources to With over N1.4 billion new investments in social we are committed to ensuring that our operations are In the year under review, we successfully aligned improvements in line with growing concerns about projects and nearly 1000 students benefitting from fully aligned with the group-wide sustainability vision. our 7 sustainability pillars with global principles energy efficiency, resource optimisation, circular Dangote scholarships in our Nigerian operations alone, and standards including the United Nations Global economy, carbon emissions and climate change. In we remain focused on building lasting relationships In 2017, DIL on behalf of all its subsidiaries engaged Compact, IFC Performance Standards, Global Reporting 2018, we won the SERAS Award for best company in with host communities, enhancing their socioeconomic professionals to define and streamline issues of Initiative, SEC Code of Corporate Governance, NSE Supply Chain Management, one of the key indicators wellbeing and sustaining our social license to operate. Sustainability and Governance. Through extensive Sustainability Disclosure Guidelines, Global Cement we track under our operational pillar. We also continue to improve on our health and safety engagements with internal and external stakeholders, and Concrete Association, Nigeria Code of Corporate standards in the workplace and in local communities the Group developed its unique approach to Governance 2018 and the United Nations Sustainable Our financial performance in 2018 once again gives as well as our investments in human capital sustainability management around 7 pillars also called Development Goals. We understand that building our credence to our commitment to growing a world development. “The Dangote Way”. business operations around these best standards will class business that increasingly creates and sustains consistently keep us ahead of competition while also value for all stakeholders. Compared with 2017, our Dangote Cement Plc remains the flagship from At Dangote Cement, we have adopted a stakeholder- fostering our corporate existence. gross revenues in the year under review grew by 11.9 which Dangote Group’s Sustainability agenda will be oriented approach in order to clearly define who percent, from N805 billion to N901 billion. Our profit replicated across all the other businesses. We are well we are, where we are and where we want to be. By In our cultural pillar, 2018 saw tremendous progress in before tax also rose by 13.8 percent year-on-year, from poised to harness best practices in sustainability and aligning with The Dangote Way, we ensure that every efforts to build a workplace where the highest level of N454 billion to N517 billion in 2018. A review of our governance to further solidify our leadership in the aspect of our business aligns with global sustainability leadership champions our sustainability acculturation value added performance shows that our earnings diverse markets where we play. principles. Through the 7 pillars (institutional, goal, and where diversity, equality, values, ethics, rule per share rose from N11.6 to N22.8, a 96.5 percent cultural, operational and environmental, economic, of law and active staff involvement are nurtured. Our increase over the 2017 figure. Wages, salaries and
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2018 Milestones
Extensive Stakeholder Engagement, Trained and engaged 500 Materiality Assessment and Baseline Sustainability Champions, Survey against Global Peers with 50 including Management of ALL core GRI indicators to track and report DCP Africa plants on Sustainability performance; Reporting based on GRI Global Standards;
Deployed Sustainability Week, Developed Sharepoint which mobilized hundreds of Sustainability Data Management employees to engage in voluntary System for data collection Waste Management, Community across 13 DCP Africa Plants for Infrastructural Development and Sustainability Reporting, which is boost Social Performance across 7 to be automated in 2019. African countries and 9 DCP Plants;
2018 Africa Sustainability Enterprise & Responsibility Awards
500 Sustainability Champions & Volunteers Trained for Social Impact
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We commenced our journey towards sustainability reporting in 2017 and developed a roadmap to Our achieve compliance with the Global Reporting Initiative (GRI) by 2020:
2020 We plan to: Sustainability • Institutionalise group-wide GRI compliant sustainability reporting from 2020 • Commence integrated reporting.
Journey - 2019 We plan to: • Conduct an external assurance on sustainability report • Commence ISO pre- certification and training • Unveil the quarterly Dangote Way Sustainability Newsletter. Olakunle Alake We had started our sustainability journey a long time SUSTAINABILITY GMD, DIL & GOVERNANCE ago. However, developing a strategy around the 7 Journey towards GRI Standard Compliant 2018 Sustainability Reporting We: pillars inspired a strategic model of sustainability across the Group • Engaged internal stakeholders for identification of management which has grown organically in our material aspects using surveys and other channels • Expanded sustainability reporting to cover Cement organisation. We are led by a strong desire to improve. Group (four operating countries) across Africa • Strengthened sustainability implementation, reporting and governance by recruiting highly experienced sustainability professionals • Designated and trained 500 sustainability champions and 100 data owners in DCP • Achieved full GRI reporting compliance ahead of earlier schedule of 2020 for DCP • Embedded Sustainability Thinking and Doing at all levels of governance, operations and corpo rate SUSTAINABILITY culture: The Dangote Way
2017 We: • Developed and institutionalised a robust data gathering framework for embedding a strong GOVERNANCE ACTIVITIES STANDARDS AWARDS data-centric sustainability culture across Dangote Cement • Facilitated roadshows and workshops which informed the sustainability policy, processes, systems and culture.
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Towards operationalising a Sustainability Governance data-centric sustainability Sustainability governance at Dangote stems from Our Sustainability and Governance unit drives the highest echelon of the group and cascades awareness and provides training on sustainable culture down across all levels. business practices across our operational network. The Group Chief manages a team of sustainability The data gathered from the sustainability reporting process enables us to identify gaps and design The Board of Directors is advised by the professionals who liaise with sustainability effective measures for optimal performance management across all aspects of our operations. President and the Board Technical Committee champions that have been nominated in all the on sustainability matters. They are supported by relevant department/units of the group. the GMD, Dangote Cement Plc. and the Group Chief, Sustainability and Governance. To ensure The Board oversees the development of our sustainability is embedded into our entire business sustainability strategy and enforces its adoption strategy, we nominated champions that represent across the group. The Board also works closely all the geographical regions where we operate. with the sustainability team to identify material sustainability issues, and to approve set BRIDGING THE GAP Establishing who is accountable for the sustainability targets. actualization of each indicator, assign to Single Point of Accountability (SPOA), SUSTAINABILITY GOVERNANCE plan actualization. E.g. recruiting for diversity (be it internal or external) STRUCTURE
THE BOARD Chair/President
MEASURING PERFORMANCE Actual performance is measured along side root cause analysis of any deviation Board Technical from target performance. Committee
GMD, DIL GMD, DCP TARGET SETTING To live The Dangote Way and embed Executive sustainability in our operating model, Champions sustainability indicators need to be part of business performance measurement by setting targets for the indicators. Group Chief, S&G
Country Directors
DATA GATHERING GM, Sustainability Identify and agree on the indicators, data owners/champions, data gathering and verification modalities. S&G Unit > Sustainability Data Owners > > Champions
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500 Sustainability Champions Sustainability standards and codes that Networked and Educated in 2018 we comply with:
Our Sustainability Champions act as the linkages between us and all the units across the group. In our bid to institutionalise sustainability and embed it in our organisational DNA, we instituted a Sustainability Champions programme. During the year, we trained 500 persons as Sustainability Champions to bolster our sustainability efforts across all locations.
LEADERSHIP GOVERNANCE IMPACT
D A N G O T E DIVERSITY SUSTAINABILITY INCLUSION ENTREPRENEURSHIP The SERAS Awards 2018
In 2018, we devoted 1,083 staff hours to training in sustainability awareness and sensitisation, The Sustainability, Enterprise and Responsibility Environmental Excellence. which represented 0.2% of our total staff training hours. Awards (The SERAs) is the most recognised and Some of the Group’s Award nominations were prestigious corporate social responsibility (CSR) credited to its impactful community support and Sustainability Award in Nigeria. During the activities during the 2018 Sustainability Week. 2018 ceremony which held on December 1, 2018, CASE STUDY at the Muson Centre, Lagos, Dangote Group Two members of the Dangote Group family, — emerged fnalist in fve categories. Dr. Ndidi Nnoli, Group Chief, Sustainability & SUSTAINABILITY WEEK Governance; and Eunice Sampson, General Dangote Cement won the Award for the Best Manager/Head, Sustainability, Dangote Cement Our first Sustainability Week was a massive success, with Company in Supply Chain Management, while Plc, were among 6 Nigerians that were singled colleagues showing great enthusiasm to live The Dangote Way and reach out to help local communities, touch lives and create Dangote Rice won the Best Company in Hunger, out for individual SERAS awards for their a more conducive environment for coexistence and cooperation. Food and Security. distinguished contributions to the growth of CSR Our Sustainability Champions worked on diverse projects and Sustainability in Nigeria. targeted at improving hospitals, roads, schools, communities and small businesses. The Group was fnalist in fve other award categories which include Best in Poverty Sustainability Week projects Eradication, Best in Support for SME and Best in 500 13 6 Volunteers Locations Countries
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Our Values
Ernest Ebi Our commitment to sustainable Our values represent our overall work culture which guides our staff in the Non-Executive performance of their duties in line. Director value creation is driven by the • SERVICE: As a world-class organisation, we understand that we exist highest level of governance. to serve and satisfy our customers. Accordingly, our customer orientation reflects intimacy, integrity and continuous learning.
• LEADERSHIP: We thrive on being leaders in our business, markets and communities. To drive this, we focus on continuous improvement, partnership and professionalism.
• ENTREPRENEURSHIP: We continuously seek and develop new business, employing state-of-the-art methods to sustain our market leadership.
• EXCELLENCE: We are a large organisation, working together to deliver the best products and services to our valuable customers and stakeholders.
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Value Creation Model
Our value creation model is our system of creating sustainable value from various aspects of our activities for internal and external stakeholders. It represents our strategic objectives and how they are distributed among the 7 Pillars. The model shows the inter-linkages between the pillars with emphasis on governance (institutional and cultural pillars); license to operate (operational and environmental pillars); and, operations (economic, social and financial pillars). How we propose to achieve Sustainability Leadership in Africa In continuation of our sustainability journey, we have developed a clear strategy for value creation that positions us as an industry disruptor. In the coming years, while developing and enhancing our sustainability strategy for the Dangote Cement Group, we have determined 3 levels which we identify as critical:
1. FOUNDATIONS: PLAY TO CREATE NEW VALUE 1 2 3 Compliance with internal policies, international standards and regulations – these are the foundation of how we conduct business. Building value-driven business is key for us. We comply with the applicable laws in all the countries in which we operate. We also aim to raise standards through knowledge Impact, Strategic sharing and benchmarking across the plants. We implement new data gathering systems to raise Excellence in Innovation Community ESG management Investment effectiveness and manage risks quicker.
Diversity Continuous Strategic 2. CHANGE MANAGEMENT: PLAY TO CAPITALISE Management Improvement Stakeholders Engagement Good governance is not only about procedures and policies. We are developing internal culture to enable transformation across the whole Group. We infuence behaviours in order to live the values Compliance with Management Non-financial National, Pan-African systems, Policies, Integrated Reporting we respect. We are more proactive in our HSE risk management processes and practices, with HSE & Global standards Monitoring tools being promoted from being a standalone activity into a key performance indicator. We are building a culture focused on prevention. Also, by adopting a pragmatic stakeholder management approach which Pillars guides the way we engage with our stakeholders, we are able to listen and identify their key concerns and develop strategies for addressing them while maximising our positive impacts. However, we are INSTITUTIONAL OPERATIONAL ECONOMIC aware that there is still room for improvement in the feld of environment, social and governance PILLAR PILLAR PILLAR management. CULTURAL ENVIRONMENTAL SOCIAL/ PILLAR PILLAR COMMUNITY 3. LEADERSHIP: PLAY TO WIN INVESTMENT We strengthened our market leadership in 2018 and believe that our strategy will enable us to continue FINANCIAL growing and consolidating our position in Sub-Saharan Africa. The opportunities are enormous. The PILLAR United Nations estimates that the region’s population will grow to more than 2 billion people by 2050, with the urbanised population growing by 800 million over the same time, which is 2.5 times America’s LICENSE TO GOVERNANCE OPERATIONS current population. We understand that these growths could also have negative impacts on the OPERATE environment. We want to help to shape transformation in a more responsible manner.
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4. INSTITUTIONAL & CULTURAL
Strategic 1.1. SECTION objective: Compliance with national, Pan-African and global standards Description ONE - Commitment to compliance with the highest business standards in all the markets where we operate. How we strengthen governance Strategic 1.2. objective: Diversity management
Description For us, diversity means a workforce with a mix of visible, underlying differences in ethnicity, culture, INSTITUTIONAL religion, nationality, age, gender, education and appearance. PILLAR Managing diversity and inclusiveness is critical to achieving business success. Our goal is to develop a CULTURAL management system that will allow us to live the values rooted in our DNA. PILLAR
Strategic 1.3. objective: Excellence in ESG management
Description Improved bottom line results, balanced scorecard reports, and better ratings and awards from organisations/ frameworks such as GCCA, GRI, the UN Global Compact; the International Labour Organisations; the OECD Guidelines; the IFC Performance Guidelines; the NSE Sustainability Disclosure Guidelines, etc. Our goal is to raise our ratings within the global cement market, and also to encourage 1 our supply chain network to improve their business practices and adopt global sustainability principles.
Excellence in ESG management
Diversity To achieve Excellence in GOVERNANCE. management STEP 1 EXPECTED Stronger regulatory compliance and improved public perception of the value our business Compliance with OUTCOME: creates; improved brand equity; improved access to capital investments that will help national, Pan-African & scale up and expand our business. global standards
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Institutional
Definition Management Approach
Building a world-class Our approach to governance essentially involves balancing our business institution centered around interests with the interests of our valued stakeholders, which include a culture predicated shareholders, employees, customers, suppliers, financiers, governments on best practices in and host communities. With our seven pillar approach, Sustainability is Dr Nike corporate governance and Fajemirokun For us, the Sustainability being engrained into our business decisions, processes and practices. sustainability principles that Group Executive We ensure that the highest level of governance champions our Director promote legal/regulatory & Governance Function compliance, transparency sustainability vision, goals and objectives. and business continuity. is key to effective Risk We are building an institution that is governed by values and ethical norms of behaviour and where effective governance is flagged as the Management - these are driver of corporate performance, not just in financial returns but also in social, economic and environmental impact. To ensure business integrity two sides of the same and continuity, we prioritise legal and regulatory compliance, effective coin. risk management and strive to achieve transparency in our business activities across all locations.
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What are the standards we comply with? Performance Tracker PILLAR: Institutional GRI IFC UN SDG‘s SEC Code UNGC NSE NCCG KPIs
GRI 102: Performance SDG 8: Code: Principle 7, ORGANISATIONAL TRANSPARENCY BOARD DIVERSITY BOARD COMPOSITION HUMAN RIGHTS: Governance General Standard 7: Decent work 1, 2, 3, 4, 5, 6, 8, 9, 10, 11, Disclosures Indigenous and economic 8, 9, 10, 11, 12, 12, 13, 14, 15 Peoples growth 13, 15, 16, 17, • Principle 1: Businesses should & 16 19, 21, 22, 23, (Board of support and respect 2 12.5% 20% 24, 25, 26, 27, Directors) Performance SDG 16: the protection of Peace, justice 29, 30, 32, 34, Standard 8: internationally Financial and non-fnancial Female composition on Board Increase in Independent Cultural and strong 35, 36 proclaimed human Principle 21, reports released to disclose Non-Executive Directors Heritage institution rights; and 22 & 23 impact to stakeholders Relationship
• Principle 2: with Share- SDG 17: Make sure that they Partnership for holders are not complicit in the Goals human rights abuses. Principles 24 & 25 LABOR: (Business • Principle 3: Conduct with Our Sustainability Commitment Businesses should Ethics) uphold the freedom For us, a high level of trust, together with a strong business reputation, makes it easier to operate; attract of association
and the effective Principle 26 and retain best quality people, customers, and suppliers; contribute to good relationships in our local (Sustainabi- recognition of the lity) communities; and pave the way to confdently entering new markets. right to collective bargaining; Principles 27 • Principle 6: Our Compliance function serves as an essential element of our company’s culture of integrity - The elimination & 28 (Transparen- of discrimination requiring responsible conduct from all of our employees, suppliers, and third-party business partners in cy) in respect of accordance with all applicable laws, internal codes and policies. employment and occupation. Principle 17, 18, 19 & 20 (Assurance) ANTI-CORRUPTION: • Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. Aliyu Suleiman Group Chief I believe with the 7 ENVIRONMENT: Strategy • Principle 7: Sustainability Pillars, we Businesses should support a precautionary have a well-defined and approach to environmental challenges; clearly laid out strategy to
LEGEND: deliver sustainable growth SEC - Code of Corporate Governance SDG - Sustainable Development Goals and impact. GRI - Global Reporting Initiative NCCG - Nigerian Code of Corporate Governance IFC - International Financial Corporation NSE - Nigerian Stock Exchange UNGC - United Nations Global Compact
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SUSTAINABILITY AND RISK Institutional Standards ARE TWO SIDES OF A COIN - DR ADENIKE FAJEMIROKUN Chief Risk Offcer DIL
GRI 102: Q. How does risk management help to A. For companies that occupy similar positions AL DISCLO create positive long-term value? like us, compliance to various local, national GENER SURES and global industry standards are a given. As a FORMANCE S A. Risk identification, assessment and mitigation company with footprints in many localities, we (PER TANDA IFC 7, 8 RD) are critical aspects of any business that wants have to also ensure that we play by the rules to play for a long time. At Dangote Cement, as they relate to our economic, environmental, GCCA* risk management is a top priority and the risk social and governance activities. For instance, implications of every business decision and in our Nigerian market we have to comply (PR UNGC INCIPLES action are thoroughly assessed from the short with several regulations like NSE Sustainability 2, 3, 6, 7, ) 1, 10 to the long term, scrutinising areas of potential Disclosures Guidelines, SEC code of corporate SDGs opportunities and competitive advantage, governance and the Nigerian Code of Corporate 8, 16, 17 and areas where negative impact mitigations Governance. ,4,5,6,8,9,1 1,2,3 0,11, are required. We have expanded our risk : , 21, 22, 23, 24, 2 12,1 EC7, 19 5, 26, 3 S16, 1 , 32, 34, 35, 3 27, 2 15, 30 6 9 management scope to cover critical governance, Q. What are the biggest social and NSE social and environmental risks. By doing this, we environmental risks to Dangote Cement? GOVERNANCE are able to account for the various dimensions of N C C G our risk profile, including externalities. Our activities can be socially and environmentally beneficial or damaging TITUTION INS AL Q. How is sustainability embedded in your depending on the level of responsibility and risk management? the type of management adopted. Our biggest social risk will be those associated with our A. For us sustainability and risk are two sides relationships with communities that play host to of a coin. Leveraging on our sustainability our plants. For our environmental risk, the most 7 SUSTAINABILITY management system and structures, we are able critical are our emissions which contribute to PILLARS to identify business risks and opportunities and climate change. We have identified these risks, proactively take steps to minimise the risks and and have dedicated teams who work tirelessly maximise the opportunities. Our sustainability to mitigate and if possible, avoid them. structure and system being put in place, shapes our perspective and approach of risk, especially Q. What is the 2019 outlook for when they border on governance and socio- sustainability related risk management at environmental issues accompanied with external Dangote Cement? Institutional Indicators costs. These set of risk are comprehensively assessed to ensure that negative impact are The first process is to identify our risk, which is Corporate governance Risk management reduced to the minimum. what we have done. We have some systems Interview in place, and we are still building structures to Culture based on ethics and integrity Stakeholders‘ engagement Q. What are the biggest compliance risks to ensure best practices in their management. Dangote Cement?
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Corporate governance The Committees
A successful business is one that is driven by strong, yet supportive corporate governance that guides its Nomination Audit Committee Finance and Technical Remuneration Committee Members General Purpose and Operations Committee long-term strategy for proftable and sustainable growth. Ernest Ebi (Chairman) Members Committee Members Members Olakunle Alake Aliko Dangote (Chairman) Members Fidelis Madavo (Chairman) Emmanuel Ikazoboh Ernest Ebi Sani Dangote Olusegun Olusanya Joseph Makoju (Chairman) Olusegun Olusanya Devakumar Edwin (Chairman) Olakunle Alake Sani Dangote Emmanuel Ikazoboh Emmanuel Ikazoboh Olakunle Alake Abdu Dantata Abdu Dantata Fidelis Madavo Fidelis Madavo Sani Dangote Ernest Ebi Ernest Ebi Olusegun Olusanya Ernest Ebi Devakumar Edwin Devakumar Edwin Dorothy Ufot Devakumar Edwin Douraid Zaghouani Olusegun Olusanya Emmanuel Ikazoboh Dorothy Ufot Fidelis Madavo The Board of Directors Douraid Zaghouani Joseph Makoju Attended Not attended Not yet joined
The Technical and Operations Committee oversees We also comply with several socio-environmental the sustainability function. It is mandated to guidelines and policies that are specifc to sub- ensure sustainability acculturation in all aspects of lines of our business such as mining.
Aliko Dangote GCON Joseph Makoju OFR GCSO Brian Egan Abdu Dantata the business. Chairman Non-Executive Director Attendance Attendance Attendance Attendance To strengthen our Corporate Board performance
The Board, in furtherance of its mandate, ensures and to allow for more independent and unbiased that its Committees are composed of members views on Board activities, we increased the with the requisite knowledge, skill set and number of Independent non-Executive directors experience to effectively discharge their duties. by 20%, which brings our Board size to sixteen, Members of the Executive Management team are consistent with the requirements of Section 4 Cherie Blair Devakumar Edwin Dorothy Ufot SAN Douraid Zaghouani often in attendance at Committee meetings in of the SEC Code. We also increased our Board Independent Non-Executive Director Non-Executive Director Independent Non-Executive Director Non-Executive Director Attendance Attendance Attendance Attendance order to provide necessary information, support diversity by on-boarding another woman to the
the Committee and give status updates on Board. We believe that a more inclusive Board is decisions from previous meetings. more likely to avert skewed decisions and we hope to further increase the number and participation of Governance at Dangote Cement is managed women in the future. The affairs, composition and in compliance with various local corporate meeting guidelines for the Board Members are laid Emmanuel Ikazoboh Ernest Ebi Fidelis Madavo Sir Michael Davis Independent Non-Executive Director Independent Non-Executive Director Non-Executive Director Independent Non-Executive Director governance laws such as the SEC Consolidated out on our Board Charter. Attendance Attendance Attendance Attendance Rules, Investments and Securities Act, The Complaints Management Framework of the Out of the 28 principles that make up the 2018 Nigerian Capital Market, Code of Corporate Nigeria Code of Corporate Governance, 22 of Governance For Public Companies, Nigerian them are directly related to sustainability and Code of Corporate Governance, NSE Corporate governance issues. We are committed to ensuring Compliance, NSE Sustainability Disclosure that we comply with the provisions way ahead of Olakunle Alake Bachelors degree in Olusegun Olusanya Sani Dangote Viswanathan Shankar Civil Engineering Independent Non-Executive Director Non-Executive Director Independent Non-Executive Director Guidelines, King IV Code on Corporate Governance the January 2020 set compliance monitoring date. Non-Executive Director Attendance Attendance Attendance Attendance and other relevant local governance guidelines.
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COMPLYING WITH SEC DISCLOSURE REQUIREMENTS Culture based on ethics - and integrity MAHMUD KAZAURE Head of Legal We recognise that a culture of integrity is critical their commitment to this code on a yearly basis. to achieving our long-term sustainable growth. Our employees are also guided by the same high Q. Diversity and inclusion is topical living conditions and development of In order to achieve this, Dangote prides itself standards of ethics. Our employee code of conduct today. How does Dangote apply this infrastructure, all of which align with Dangote in setting the tone from the top by having a is disseminated to all levels of employees during concept, especially at the executive Cement’s interests. In Nigeria, we have Board Committee - The Audit, Compliance and onboarding. It is also contained in the Employee level? contributed significantly to self-sufficiency in Risk Management Committee - saddled with Handbook, which all employees can assess. cement production, moving the country from the responsibility of overseeing the Company’s A. We are developing a gender–balanced and a major importer barely a decade ago, to a compliance programme and adherence to the inclusive work environment where diverse net exporter of the commodity. Code of Business Ethics. The Code extends to our other stakeholders and talents can thrive and contribute to superior addresses issues and realities in the different business results. This is evidenced by the Q. What measures are put in place The Board is guided by our Directors’ Code of countries where we operate. These issues include: absence of discriminatory gender policies and to minimise exposures to incidents Ethics, which clearly sets out the standards of confdentiality, bribery and corruption, compliance, practices. We ensure gender equity in our of non-compliance, sanctions and conduct expected of them. Our directors renew money laundering, conficts of interest, etc. employment across all levels. In line with our litigation? company‘s policy, employees are regarded equally irrespective of race, colour, religion, A. Our legal team works closely with the sex or ethnic background. Risk, Compliance, Internal Audit and other
Interview In our recruitment or promotion practices, relevant departments to proactively manage suitability for the job is hinged solely on merit our risk exposures. Our ultimate objective - qualification, leadership qualities, experience, is to ensure that observed risks do not knowledge of the job, as well as good conduct crystallise. and character.
Q. How does Dangote Cement align its business interests with national interests?
A. Some of the priorities of any progressive government are job creation, enhanced
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Anti-corruption THE STAFF HANDBOOK Dangote Cement is committed to fghting bribery Our Anti-bribery and Corruption demonstrates — and corruption across all locations with extra the Company’s zero tolerance for all forms The Staff Handbook was developed as a practical manual to provide useful precautionary measures taken in countries of fraud including but not limited to bribery, information for staff on the organisation’s policies, rules and regulations, that have been identifed as high risk. We have corruption, asset misappropriation and fnancial employee benefits, educational programs, services and the general code of an Anti–bribery and Corruption Policy which statement fraud. conduct, ethics and standards expected of them. is part of the overall Anti–Fraud Compliance Programme. It aims to align with all relevant Acts, Codes, Laws, Guidelines and Policies designed CONFIRMED INCIDENTS to prevent, detect and respond to issues on OF CORRUPTION IN 2018 corruption and bribery. — In 2018, one confirmed case of corruption In our Nigerian operations, we are guided by in Senegal was reported. An employee was two anti-bribery laws which are the Corrupt involved in sending a binding contract offer Practices and Other Related Offences Act of to a competitor in order to have them as the Independent Corrupt Practices Commission a reference for going cheaper. The issue (ICPC); and the Money Laundering (Prohibition) was investigated and disciplinary measures Act of the Economic and Financial Crimes were meted as appropriate. Commission (EFCC).
Whistle-blowing mechanism Human Rights
Dangote Cement operates a robust whistle about suspected impropriety or wrongdoing. The As Nigeria’s foremost manufacturing company protection in all our operations consistent blowing policy, which guarantees protection, Anti-Fraud Committee decides on the appropriate and a major job provider in the country; we strive with International Labour Organisation (ILO) anonymity and non-reprisal for whistle-blowers. To method and level of investigation. to ensure compliance with Human Rights laws Convention No. 182 and IFC Performance Standard ensure best practices, our whistleblowing system for both our direct employees and players in our 2. In the whole Group, the Child labour abolition is hosted by an independent global organisation. When required, the Anti-Fraud Committee supply chain. In addition to our employee hand and prevention policy has been implemented, This provides an extra layer of credibility and decides on the appropriate method and level of book – which covers many of the identifed human and this policy has been developed and will be objectivity. investigation. The Anti-Fraud Committee is made rights areas, we have a number of standalone implemented in consultation with employees at all up of the following members: policies. levels. All employees and stakeholders have the opportunity to make confdential disclosures Dangote Cement is committed to creating Additionally, we have also implemented forced or awareness among staff and other key stakeholders compulsory labour prevention and abolition policy, on our child rights policies and the prohibition which is binding on all employees. • Chief Executive Officer; • Chief Legal Officer; • Chief Human Resources Officer of child labour. We also support child rights • Chief Financial Officer • Head of Internal Audit; • Chief Risk Officer.
The Committee reviews the Group’s whistle-blowing practices every year to assess their effectiveness, and take remedial actions where necessary. Out of all the cases investigated during 2018, 70% have been resolved and 30% are still ongoing.
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Cultural
Definition Management Approach
Cultural sustainability is one of At Dangote Cement, we are building a culture of ethical business, the distinctive ways in which professionalism, anticorruption, brand loyalty, excellent corporate sustainability is viewed and governance, mutual trust and respect among all major stakeholders. managed at Dangote Cement. We are committed to growing a workplace that is inclusive and It is defned by our cultural Musa Rabiu accommodates and tolerates the culture of all stakeholders without bias, By imbibing a culture of pillar, which is the foundation Group Chief, stereotyping or discrimination. We encourage and reward teamwork, Human Resource upon which our organisational Officer sustainability, we would ethos is built. Every member integrity and meritocracy in our workplace. across every hierarchy, and build a brand that every operational activity in We seek to embody our core values in the way we do business, outlives us. the organisation functions in including a respect for cultural diversity and giving back to the societies tandem with this underpinning in which we operate. We are committed to building a workforce guiding principle. of sustainability champions, and specifically environmental and socio-economic impact enthusiasts, and create a work environment where sustainability is a way of life.
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The global standards we are committed to Performance Tracker PILLAR: Cultural GRI IFC UN-SDGs SEC Code UNGC NSE NCCG KPIs
GRI 102: Performance SDG 4: Code: Principle 7, TRAINING EXPENDITURE SUSTAINABILITY CHAMPIONS TRAINED INTERNAL ENGAGEMENT HUMAN RIGHTS: Governance General Standard 5: Quality 14, 18, 28 8, 9, 10, 11, Disclosures Land Educationh 12, 13, 14, 15 Acquisition & • Principle 1: Businesses & 16 Involuntary (Board of GRI 400: SDG 5: should support 134M 500 623 Social Resettlement Gender Directors) and respect the Standard Equality protection of Expended on training and Sustainability Champions Dangote Cement employees Series Performance internationally Principle 21, capacity building in 2018 designated and trained in 2018 took part in the 2018 internal
Standard 7: SDG 10: proclaimed human 22 & 23 stakeholders survey Indigenous Reduced Relationship rights; and Peoples Inequalities with Share- holders • Principle 2: Performance SDG 11: Make sure that Sustainable Standard 8: they are not Principles 24 Cultural cities and complicit in & 25 Heritage communities (Business human rights Conduct with abuses. SDG 16: Ethics) Our Sustainability Commitment Peace, justice HUMAN RIGHTS: For an African economy with a problem of high unemployment rate, we see job creation as a corporate and strong Principle 26 institution (Sustainabi- responsibility. • Principle 3: lity) Businesses SDG 17: should uphold Partnership for Dangote Cement continues to solidify its position as a major employer of labour in Africa, with more the freedom of Principles 27 the Goals association and & 28 than 17,000 employees in its Nigerian operations alone. In line with our strategy to become a major (Transparen- the effective cy) global player in the cement industry, we are expanding into new markets, creating job opportunities in recognition of the right to collective the process. bargaining;
• Principle 4: The elimination of all forms of forced and compulsory labor;
• Principle 5: The effective abolition of child Musa The company is building labor; and Hassan-Tom Head of a corporate culture that • Principle 6: Compliance The elimination goes beyond compliance. of discrimination in respect of We are entrenching employment and occupation. sustainability as our way of doing business. LEGEND: SEC - Code of Corporate Governance SDG - Sustainable Development Goals GRI - Global Reporting Initiative NCCG - Nigerian Code of Corporate Governance IFC - International Financial Corporation NSE - Nigerian Stock Exchange UNGC - United Nations Global Compact
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Cultural Standards MANAGING OUR MOST IMPORTANT CAPITAL ENERAL DIS DR. MUSA RABIU - : G CLOSU Group Chief Human 102 R Resources Offcer GRI ES GRI 400: SOCIAL Q. How does DCP encourage employees environment that allows our people to thrive RMANCE (PERFO STAND to imbibe a personal culture of and achieve their full potential. We also IFC 5, 7, 8 ARD ) sustainability? ensure that our employees are carried along GCCA* in the decision making process, especially on A. The Dangote Way and its 7 Sustainability issues that could impact them. Pillars are gradually becoming the way we C (PRINCIP UNG LES) work and the way we live. Our employees Q. How is Dangote cement responding 1, 2, 3, 4, 5, 6 across all functions are aligning with our to the global call for increase in SDGs sustainability agenda which is driven by top women’s participation in STEM related 5, 10, 11, 16, 4, 17 management. Our cultural pillar is helping fields such as manufacturing? SEC 14 ,18 ,28 us achieve a cultural shift from mainstream thinking to sustainability thinking. A. Internally, we are always happy to NSE GOVERNANCE say that we offer a level playing ground N C C G To ensure that sustainability is institutionalised, for professionals who are willing to work we work closely with the sustainability team and grow. We practice a culture of non- to identify and place sustainability champions discrimination on the basis of gender, CULTURAL in every department. These champions are and our recruitment and promotion the key actors that spearhead sustainability processes are unbiased. We understand acculturation across the Group. that a gender balanced perform better, and we are making conscious efforts to Q. How are talents managed and achieve improved gender balance in our 7 SUSTAINABILITY continuously motivated at Dangote workplace. Women employees in Dangote PILLARS Cement? Cement are part of a larger Dangote
Interview Women Network. This initiative offers our A. Our employees enjoy robust benefits female staff the opportunity to support one such as Annual Leave, Maternity Leave, another, exchange ideas for growth, network Compassionate Leave, Casual Leave, and support more women to join the Cultural Indicators Examination Leave, Sick Leave, Children manufacturing field. Education Support, Marriage Gift, Birthday New hires and turnover Inclusive workplace and Gift, Contributory Pension Scheme, Production non-discrimination Premium Scheme, Sales and Marketing Bonus Employee distribution Scheme, Performance/ Merit-Based Salary Collective bargaining increases and several others. We ensure that Diversity we promote a healthy and relaxed working Learning and development
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CASE STUDY Non-discrimination — Dangote Cement‘s recruitment policy stipulates WOMEN IN MANUFACTURING non-discrimination in its recruitment process. Personnels in charge of recruitment are constantly
Globally, the cement industry is not one that readily admits and attracts For every position that is open the most qualifed trained on the company‘s non-discrimination women. This is due to the stereotypical perception of the nature of person is recruited irrespective of gender, policies. Furthermore, our employees receive the job as masculine, and the low number of women in the Science, religion, ethnic group, physical condition or state trainings on identifying, managing and addressing Technology, Engineering and Mathematics (STEM) space. Irrespective of of origin. Where employees become disabled instances of discrimination and harassment in these factors, we are aligning with Goal 5 of the SDGs which seeks to they are retrained to be able to cope in the the workplace. We are dedicated to sustaining promote equity and fairness irrespective of gender. work environment as much as is practicable. an ethical workplace. We periodically, assess We are deliberately seeking out opportunities to attract qualified women information about the Company through the employees’ perceptions using surveys and other to various departments of the company. In Nigeria, Ethiopia, Senegal Internal Communications Unit, which publishes forms of engagements. and South Africa, women make up 9% of our workforce. We are looking information on our website and intranet. to improve on the diversify of our senior management and Board in the years ahead.
CASE STUDY —
In Zambia, there were two reported cases of discrimination in 2018. The first one centred around unequal Labour practices pay (including benefits) for equal work performed by locals and expatriates. The second allegation was that the locals were denied the opportunities to rise beyond certain positions. For instance, GM positions Our Leadership Principles support respectful have deployed multiple programmes that foster are held only by expatriates. behaviour towards all staff members, employee inclusiveness, such as our quarterly CEO forum, development, and a culture of strong feedback. Departmental meetings and workplace surveys in Steps have been taken to investigate and address these concerns. For example, succession planning that prioritises local employees is being implemented. Job evaluation is also being carried out to determine addition to our open door policy which encourages which locals qualify for what managerial positions. Salary survey to benchmark what competitors are A clear tone at the top encourages an inclusive staff to engage with line managers on personal paying still needs to be done in the near future. workplace where all employees are given a level and work related problems. playing ground to thrive in their careers. We
Freedom of Association and Collective Bargaining Child, forced and compulsory labour In all the markets where we operate, we ensure compliance with all applicable labour laws and regulations. We remain committed to entrenching best practices in collective bargaining for all categories of employees. Whether at our corporate head offce, plants, to work outside their own volition and consent. About 10.4% of our employees in the following markets were covered by collective bargaining agreements or in third party engagements, we uphold the In some of our business locations, we have begun as at year end 2018:w prohibition of all forms of child, forced, compulsory the process of monitoring our partners to ensure or slave labour. We carry out internal due diligence compliance with these labour policies. In Ethiopia, Number of employees covered by on workers in our direct employment as well as Senegal and South Africa, for example, our vendors 2018 on contractors, to ensure that all members of the are assessed using social criteria such as whether collective bargaining agreements workforce meet the nationally determined working or not they use child, forced and compulsory Nigeria N/A age limit. We also ensure that no worker is forced labour. Ethiopia 420 Senegal 120 South Africa 190
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Building a Work Environment DANGOTE ACADEMY – where employees are LEARNING FOR EMPOWERMENT JULIET OSHAGBEMI - Head of Dangote empowered to thrive Academy
Q. Tell us about the thoughts behind the setting up of Dangote Academy Benefits and Compensation A. The Dangote Academy was set up to develop the much needed human capital that will We motivate our workforce by offering attractive and competitive salaries and other benefts which sustainably run various aspects of our business, now and in the foreseeable future. Our industry is include a generous annual leave allowance, marriage allowance, and child‘s school support, birthday labour intensive and highly skills based. As we all know, there is dearth of highly skilled (especially allowance, loans/salary advances, health insurance and long service awards among others. The Company technical) workforce in several of the countries where we operate. It was therefore very expedient also operates a contributory pension scheme for its employees in Nigeria, in line with the provisions of that we set up a structured skills development and education centre – the Dangote Academy. the Pension Reform Act 2014. The scheme is funded through employees’ and employer’s contributions in Additionally, we envisioned that the academy could help address the dearth of technical manpower the ratio of 8% and 10% of the total emoluments of the employee, as prescribed by the Act. in our home country, Nigeria by providing training to thousands of Dangote employees. The Academy was also identified as a medium through which we could infuse professional, ethical values in all employees, including all trainees that would be absorbed into the company’s workforce.
Q. How has the impact of the training been measured in the output of staff over time? A. We have various mechanisms for monitoring the impact of our Learning and Development initiatives. At the point of training, we have a post-training feedback form which is shared to get Good Practices feedback on the knowledge gained and how this would impact job performance and productivity Interview going forward. We also conduct performance measurements during employees’ career milestones Creating a work environment for growth such as post probation period, annual year-end employee review, and several others. The performance review process gives Line Managers an opportunity to asses if learning took place and We place a premium on supporting our employees to achieve their career goals and aspirations, we do this if employees’ productivity/output is directly linked to specific training/development initiatives. by providing a work environment where they fnd job satisfaction and are motivated for higher productivity. We have systems in place (including employee recruitment and promotion processes, employee training and Q. What criteria determined the selection of training programs in 2018? development, performance measurement and monitoring, etc) that defne and support employees‘ growth A. Our understanding of the types of skill sets we need to function optimally as a business is the trajectory. Our desire is to build leaders that are capable of functioning optimally under varying conditions. primary criteria for the selection of training programmes. These skill sets are often not acquired in traditional learning environments. It is therefore critical that we build these requisite skills for the growth of our employees and the business. Our training programmes are also selected in line with the requirements of the technological age that we are in, so that our employees are progressive, able CIP – Corporate Interactive Platform to utilise modern tools, and compete globally. Our appraisal system makes provisions for employees to identify the training that they believe they need to be able to perform their functions optimally. As a multinational entity, we recognise the importance of uniformity in measurement methodologies and metrics. This feedback is taken into account in developing our training programs. This is why we have designed an intelligent platform using Microsoft SharePoint to protect the integrity of data input and retrieval retrieval. Q. What initiatives are planned for 2019? A. In 2019, we would continue with our Graduate Engineers Training Scheme (GETS), the Vocational Leveraging this interactive platform, we have deployed a uniform data gathering tool used across all our business Training Scheme (VTS) and the Junior Technician Scheme (JTS), through which hundreds of young operations. Information inputed by data owners are validated for completeness, accuracy and integrity before they persons are trained, and a good percentage retained. In addition, we are currently designing the are submitted to the SharePoint platform. structure and strategy for Training existing staff within the Group. The planned initiatives centre around Functional training, Technical Training and Leadership development programmes, VDMA, Management development programs and E-learning (Learning Management System). The Dangote Academy will be working in partnership with Business Unit Management to ensure that all the necessary training interventions are identified in line with our overall business objectives/ goals.
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Learning and development COUNTRY Total Number of Employees Trained per Employee Level
We understand the critical importance of learning and development to our business growth and for the Executive/Snr Mgt Management Senior/Professional Junior/Technician TOTAL career advancement of our employees. This is why at Dangote Cement, we take the issue of learning very WOMEN MEN WOMEN MEN WOMEN MEN WOMEN MEN WOMEN MEN seriously and have a robust annual training plan which accommodates employees at all levels. Nigeria - HQ 0 4 5 82 39 115 0 28 44 229 Nigeria - Gboko 0 0 0 16 15 126 2 232 17 374 Nigeria - Ibese 0 0 1 26 20 392 7 1034 28 1452 Nigeria - Obajana 0 0 0 52 18 318 7 1443 25 1813 Ethiopia 0 2 0 11 1 41 27 380 28 462 Good Practices Senegal 2 13 2 20 14 48 8 44 26 125 South Africa 4 19 23 23 47 248 130 442 204 732 Full-time education study leave TOTAL 6 38 31 230 154 1288 181 3603 372 5159
At Dangote Cement, we prioritise the educational development of our employees. We understand that the optimal performance of every business is directly linked to the capacity of its employees. It is expected that quality education and training yield high return on investment (ROI) and improved effciency which positively impact proftability. At Dangote Cement, we grant study leave of up to 2 years to qualifying employees who wish to undertake full-time studies. On completion of such approved studies, employees are eligible for educational Number of training hours (without hours of anti-corruption training) provided to COUNTRY employees subsidy and other benefts which includes increase in basic salary where applicable.
Executive/Snr Mgt Management Senior/Professional Junior/Technician TOTAL
WOMEN MEN WOMEN MEN WOMEN MEN WOMEN MEN WOMEN MEN
Nigeria - HQ 0 72 80 1352 6800 1952 0 224 760 3600 Nigeria - Gboko 0 0 0 384 360 3024 48 0 408 3408 We are mindful of employees’ concerns about their career growth and development. By providing Nigeria - Ibese 0 0 24 416 320 6272 112 16512 456 23200 them a platform for continuous learning and development, we are supporting the achievement of their Nigeria - Obajana 0 0 0 832 432 7632 168 23088 60 31552 aspirations while also enhancing our own business productivity. Ethiopia 0 2 0 6 0 4 0 25 0 37 In 2018, 44.5% (11,707) of our employees across all our plants and head offce (including transport Senegal 72 430 144 729 112 384 64 352 392 1895 workers) were trained for a total of 381,704 hours. Within the reporting year, N134 million was spent on South Africa 376 496 369 272 752 2441 2136 5976 3633 9185 employee training and development. TOTAL 448 1000 617 3991 2656 21709 2528 46177 6249 72877
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CASE STUDY — REWARDING CULTURE – Graduate Drivers Academy INTERNATIONAL SECONDMENTS — IN SENEGAL Dangote Cement’s drivers are perhaps the most highly visible part of our workforce. As such, we believe that they must be seen as good ambassadors of our brand, conveying its values properly The most important component of the Senegalisation Policy is the as they go about their daily deliveries. Our Graduate Drivers Academy is designed to improve the empowerment of local employees. Through knowledge and skills quality of transport fleet drivers. We teach them safe and defensive driving techniques, highway transfer programmes, we support them to take on managerial positions. management standards and HSE awareness, thereby helping to reduce accident rates and improve In 2018, our capacity building initiatives included an exchange programme to other African plants such as Sephaku in South Africa and, drivers’ attitudes when managing the delivery of Dangote Cement products to our customers. in some cases, to European countries like Denmark.
One of the participants, Bachir Lo, shared the following insight about his experience. “This training in a mature industrial environment was clearly an eye opener, teaching us a lot about technology driven processes, sustainability (emissions, alternative fuels, circular economy) and industrial behaviour (timeliness, accountability, leadership, reactivity). It Professional Trainee Programme (PTP) was definitely a real career boost.” — Our Professional Trainee Programme is a graduate initiative focused on developing technical expertise. PTP is a new programme commencing in 2019 and is similar to our existing MTP, but with emphasis is on technical skills development. The main objective is to increase the organisation’s capability by generating a pool of highly qualifed and skilled technical professionals in-house, that can competently manage technical/operational challenges in our plants. Training engineers — Due to the evolving nature of the manufacturing process and new production facilities in our plants, Dangote Cement consistently needs competent engineers. We have therefore established three training schemes, the Graduate Engineers Training Scheme (GETS), the Vocational Training Scheme (VTS) and the Junior Technician Scheme (JTS). Between them, they provide a wide range of skills necessary for the operation and maintenance of our cement factories across Africa. Of these, GETS ofers the most advanced training, preparing graduate engineering students with all the necessary technical and supervisory skills they need to become team leaders within Dangote Cement.
GETS operates in four phases, covering engineering theory, workshop skills, information technology and management skills. In 2018, nearly 50 students graduated from GETS, with more than 100 graduating from JTS. Many will be deployed at Dangote Cement, with others finding work at other Dangote Group companies, such as Dangote Flour Mills and Dangote Sugar Refinery.
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Dangote Sustainability Survey
Effective employee engagement and assessment the respondents were aged between 31 and 50 To further our alignment with the SDGs, we were, ‘support for local communities’, 14.30%; of level of awareness are important to years. 32% of these respondents had advanced collected responses on our top 5 contributions to ‘educational activities’, 12.81%; ‘provision of sustainability acculturation. This is why we degrees. Employees in the management and the United Nations Goals. Responses indicated internship opportunities for young people’, made concerted efforts to “actively listen to senior management cadre recorded the highest that, amongst other goals, Dangote is contributing 10.09%; ‘networking opportunities’, 9.40%; ourselves” during the reporting year. In May participation in the survey vis-à-vis other employee most signifcantly to ‘No poverty’ (SDG1), ‘good ‘establishment of partnerships with global 2018, we engaged a demographically diverse groups, contributing 82% of all responses. health’ (SDG3), ‘quality education’ (SDG4), ‘decent and local NGOs’, 8.97%; while other initiatives group of internal stakeholders through a survey work and economic growth’ (SDG8) and ‘industry, including angel investments in small businesses, administered across Dangote Industries Limited The outcome of the survey demonstrated that innovation and infrastructure’ (SDG 9). This mentoring, etc., made up the remaining 44.43%. to bolster sustainability awareness and enhance employees believe are being carried along in was according to 9.51%, 9.35%, 9.32%, 8.70% the scope of sustainability reporting in our the Group’s efforts to entrench sustainability, as and 8.14% of respondents, respectively. We are Respondents also offered their perspectives organisation. We asked questions ranging from more than 90% of the respondents admitted to leveraging feedback from this survey to strengthen on the “nice-to-haves” that could facilitate the employees’ views and perceptions about our being aware of the development of a strategic and maximise our SDGs impact. achievement of desired results. While nearly internal processes and structures, our external sustainability agenda by the Group. 25% agreed that it will be nice to have employee activities and how these are reported. The Social pillar of The Dangote Way targets volunteering programmes, about 33% opined that In response to the question on their perception enhancing inclusivity and cordiality in our working the incorporation of sustainability performance The survey was administered to employees in about Dangote‘s business impacts, the environment. To this end, we also engaged evaluation into the staff appraisal system is of 12 locations across Africa. 1,170 respondents (of respondents ranked our top fve impacts to include employees on issues that are most critical to them. utmost importance in order to realise impressive which 84.7% men and 15.3% women) completed job creation, 18.89%; economic growth, 18.06%; For 18.44% of respondents, it was ‘enhancing results. This comes against the backdrop of the survey. 53.25% of the respondents were training and development, 13.96%; community career growth and development opportunities’; more employees admitting that sustainability personnels of Dangote Cement, the biggest development, 11.98%; tax contributions, 11.06%. 17.46%, ‘skills and knowledge development’; implementation and engagements are important business unit of the Dangote Group. 70.52% of 15.19%, ‘compensation and benefts’; 14.03% for their overall performance on the job ‘equal opportunities for all employees’. For our throughout the various categories. external relations, the major areas of concern
Job Creation 18.89%
Boosting economic growth 18.06% Employees ranking of sustainability success factors
Training and people development 13.96%
Host community 11.98%
Tax contribution 11.06%
Local content and participation 7.47%
Sustainability thinking 6.91%
CSR/Social license to operate 4.01%
Governance 2.74%
Cultural development 2.59% To make Dangote sustainability To make Dangote sustainability Biodiversity 1.93% Employees’ ranking of agenda successful, it will be nice to agenda successful, it will be nice Dangote’s impacts on host have management buy-in to have incentives and rewards for Others 0.42% countries and communities employees’ sustainability led projects
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Dangote Sustainability Champions Training Program
As a direct outcome of our 2018 employee survey, mind-set and reporting practices. Attendees where 1,170 staff members participated and participated in breakout sections which focused, gave insights on their state of sustainability in among other topics on expectations from the organisation, training programmes were held Dangote Sustainability Champions and how to in collaboration with the Sustainable Business do things differently towards achieving positive Initiative, University of Edinburgh Business School. environmental and social impact. To make Dangote sustainability agenda To make Dangote sustainability agenda A total of three programmes were held in 2018 successful it will be nice to have successful, it will be nice to have sustainability training for all effective management/communication - April, July and August. The frst of these was Following the insights acquired from the survey, of information on sustainability introductory and facilitated by in-house experts. our collaboration with the University of Edinburgh It focused on sustainable business principles aimed at facilitating data collection and analytics and had over 300 employees in attendance. The on sustainability management across Dangote subsequent two were facilitated by the University Group. Part of our aim was also to create greater of Edinburgh and held at the Dangote training sustainability and impact awareness, and to Academy in Ikeja and the Dangote headquarters, introduce an innovative reporting culture across Ikoyi, respectively. Participants were drawn from Group. These strategic objectives were pursued in across the various DCP operations in Africa. order to:
In all, approximately 500 Sustainability Champions and 99 data owners were trained on introduction to sustainability, industry peer review, leadership
To make Dangote sustainability agenda To make Dangote sustainability agenda successful, it will be nice to have successful, it will be nice to have 01 02 03 sustainability performance evaluation employee volunteering programs in staff appraisal exercises Help internal stakeholders Enable better measurement, Introduce a formal platform for understand Dangote’s increased understanding and communicating both positive impact on a wide range of seamless communication of and negative sustainability sustainability issues, enabling Dangote Group’s economic, performance and impacts increased transparency environmental, social, about emergent threats and institutional, cultural, operational Over 40% rated having management buy-in and introducing incentives and rewards for employees’ opportunities. and financial performance against sustainability-led projects as highly crucial success factors. Respondents in excess of 50% opined set goals and manage changing business environment more that effective management/communication of information on sustainability and facilitation of effectively sustainability training for all are critical. Learning style preferences were also considered in the survey. A disproportionate number of employees preferred face-to-face classroom trainings to e-learning training. Precisely, these were 30.6% and 6.5%, respectively. The majority, standing at 62.9%, opted for The training explained the notion of sustainability as a business imperative in the present era and a blend of both physical and online-based classes. Other suggestions towards enhancing employees’ highlighted “The Dangote Way” of operationalising sustainability within the Group. As an outcome of the sustainability engagement, in the order of importance, include awareness programs, staff welfare and training, participants collectively agreed to participate in one or more of the listed initiatives: motivation, communication, reward, etc.
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Sustainability • Create a sustainability champions’ network (mobile or web-based)
• Develop and imbibe a culture of Following this exercise, all Week responsible waste management, participants were requested backed by policy to volunteer for at least one of these initiatives in • Implement a staff volunteering initiative, backed by policy addition to becoming active members of the Sustainability • Develop a strategic data integrity Champions‘ Network. and impact measurement/ tracking system, backed by policy
• Introduce Dangote Sustainability Week
Training objectives: Challenges identified: • To create greater awareness on sustainability • Multiple reporting frameworks impact and foster innovative thinking and • Lack of standardisation of data collection reporting culture across Dangote Group techniques • To facilitate data collection and analytics for • Lax company reporting culture sustainability reporting • Fear of fallouts from disclosures. • To set the foundation for the development of GRI Standards sustainability reporting
Solutions proffered: Building a corporate culture of long-lasting sustainability begins and ends with effective Harmonise frameworks, metrics and indicators • employee mobilisation and involvement. One of the highlights of our 2018 activities was Create a multi-year reporting strategy and • the Dangote Sustainability Week which was held in tandem with the United Nations General design reports that serve the information needs of Assembly. The Dangote Sustainability Week is all about unleashing the initiatives of our different stakeholders employees - our greatest resources - to solve social, economic and environmental challenges • Adopt a culture of zero backlash on full in our host communities and markets. disclosure backed by corresponding policies.
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2018 Dangote A list of some major initiatives during Sustainability Week the 2018 Dangote Sustainability Week:
In September 2018, the Dangote Group The massive success of the 2018 embarked on its frst Sustainability Week. Sustainability Week clearly illustrates the Nigeria Cameroon The Sustainability and Governance Unit business case for sustainability and the provided centralised coordination of critical synergy that should exist between HQ • Donation of educational materials and visit the initiative, but allowed employees the trio of employees, host communities and to bilingual secondary school, Diedo to come up with ideas on the kinds of corporate leadership. It also demonstrates • Environmental Sanitation and Economic activities that could beneft our host that when impact is bottom-up, measurable, Impact Project - Oniru Block Makers Village, communities. Different locations came up meaningful to employees and host Lagos with customised, innovative programmes communities (i.e. based on stakeholder that they identifed as most benefcial to engagement and proper needs assessment), Ibese Congo local communities. In the end, the Week it is more sustainable and better appreciated • Donation of materials to Ibese market women • Rehabilitation of clinic and road in Bounsa was a massive success with so many great by communities and markets. We believe District testimonials. that the business case becomes even more viable when driven by our employees and During the programme which held from backed by a sustainability culture, even Obajana September 24 to 28, 2018, hundreds without any direct fnancial investments. • Community clinic road rehabilitation of employees in 12 locations across 6 • Community clinic refurbishments Tanzania African countries including Ghana, Congo, There have been extensive feedbacks, • Tree planting Tree planting around plant Cameroon, Tanzania, Senegal and Nigeria’s including letters of appreciation from • Educational outreach to Obajana • Obajana, Ibese and Gboko, volunteered. The communities that beneftted from the Community Secondary School • Sustainability awareness programs for plant staff initiatives took place under the theme “Living initiatives. From the joyous faces of the the Dangote Way”. Employee participation school children in Deido, Cameroon across our Pan-African business units was who received educational and sanitation Gboko entirely voluntary and self-driven. materials, to the district hospital chief in • Educational outreach Bounsa, Congo who declared “it is the • Rehabilitation of road at Yandew roundabout Ghana In addition to providing a unique platform frst of this kind of social involvement • Beach sanitation in Tema for bonding and networking among from any company in Congo”; and the DCP Depot Isolo colleagues at different levels, the week-long emotional gratitude expressed by cement initiative also offered the Dangote brand retailers in Oniru, Lagos where staff from • Community Environmental Sanitation an opportunity to demonstrate its social headquarters including Group Chiefs and programme commitment to host communities and the offcers convened to clean up the immediate Senegal • Plant sanitation and sustainability awareness countries in which it operate. It let loose environment, the feedbacks from the NASCON Nigeria a lot of positive goodwill and refected initiatives has been most complimentary. programmes positively on our brand. • Community awareness and environmental sanitation
Dangote Apapa (Flour, Sugar, Greenview, Port Operations) • Environmental sanitation • Refuse disposal
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Did you Know: NIGERIA Most populous 7th Most populous 203,452,505 country in Africa country in The World July 2018 est.
Population growth projected to reach 392 Million in 2050 (This would make Nigeria the world’s fourth most populous country)
Multi-ethnic population, with over 250 ethnic groups in total: 27.4% 14.1% 13.9% 6.3% HAUSA IGBO (IBO) YORUBA FULANI
Including heterogeneous religious population: 50% 40% 10% MUSLIM CHRISTIAN TRADITIONAL
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5. OPERATIONAL & ENVIRONMENTAL
Strategic 2.1. SECTION objective: Management systems, policies, monitoring tools Description Establish and maintain control systems, policies and standards that ensure effective operational risk TWO - management, production effciency and environmental stewardship in all our business locations. How we improve our operations Strategic 2.2. objective: Continuous improvement OPERATIONAL PILLAR Description We implement the policy of continuous improvement in our production processes, and invest in state-of-the-art production facilities that minimise our negative environmental and operational ENVIRONMENTAL impacts, while working assiduously to optimise the socio-economic value we create. Our value PILLAR chain is perhaps the largest in the African cement market. We are constantly evolving best practices in procurement, in an effort to build a supply chain that provides win-win opportunities for all stakeholders in the economies, societies and ecosystems where we operate.
Strategic 2.3. objective: Innovation
Description Adopt, develop and invest in innovative systems and technologies which will enable us to save cost, especially with regards to energy consumption. 2
Excellence in Innovation ESG management
Diversity Continuous Management Improvement STEP 2 Prioritisation of OPERATIONAL efficiency. Serve and satisfy our markets by working together with partners to deliver the best products and Compliance with Management EXPECTED services to our valued customers and stakeholders through continuous product improvement, National, Pan-African Systems, Policies, OUTCOME: new business development, product innovation, and employing state-of-the-art technologies and & Global standards Monitoring tools systems to constantly deliver cost efficient and a ‘circular economy’ approach to business.
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Operational Driving operational efficiency for us means striving to attain the highest standards in product responsibility, product quality, products information dissemination and labelling, efficient production processes as well as service delivery that exceeds the expectations of our esteemed customers. We seek to maintain operational standards that are aligned with global best practices in occupational health and safety, making our work environment and project sites safe for all internal and external stakeholders.
To foster operational sustainability, we continuously invest in innovative technologies and processes that promote our goal of utilising available production capital optimally and resourcefully minimise our negative environmental and operational impacts, while working assiduously to optimise the socio-economic value we create.
Definition Management Approach
Serving and satisfying Our focus on operational sustainability demands that we maximise our markets by working the addition of value to raw materials and local resources, whilst being together with partners to mindful of health and safety and our impact on the environment. We deliver the best products strive to improve efficiency at every stage of the production process, Arvind Pathak and services to our valued Group Chief We are committed to customers and stakeholders from mining to distribution, and have demonstrated our commitment to Operations through continuous product innovation by launching new products in our key market, Nigeria. Officer continuous innovation improvement, new business and are moving away development, product We are exploring ways to improve our use of alternative fuels in our kilns innovation, and employing and researching how we can recycle by-products such as fly ash for use from the traditional linear state-of-the-art technologies and systems to constantly as extenders when we grind clinker into cement. mode of production optimise cost effciencies. towards a ‚circular N208.6B 3Mta economy‘ approach to TOTAL VALUE OF BOUGHT-IN OUR LARGEST KILNS, IN doing business across MATERIALS AND SERVICES NIGERIA AND TANZANIA, ACROSS ALL DANGOTE CAN PRODUCE UP TO 3MT our value chain. CEMENT OPERATIONS IN 2018 OF CEMENT PER YEAR
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The global standards we are committed to Performance Tracker PILLAR: Operational GCCA GRI IFC UN-SDGs UNGC NSE NCCG KPIs
Circular GRI 103: Performance SDG 8: Environ- LOCAL PROCUREMENT CAPACITY UTILISATION SUPER-DISTRIBUTORS Manage- Decent work HUMAN RIGHTS: Principle 26 Economy: Standard 3: mental (Sustainability) • Promote ment Resource and economic the principles Approach Effciency growth • Principle 1: Businesses of a circular and Pollution should support 79% 49% 568 economy Prevention SDG 9: and respect the across the Performance Industry, protection of 85% patronage of local Ccapacity utilisation of plants in Super-distributors in our value chain innovation and internationally contractors, suppliers, our Nigerian operations Nigerian operations infrastructure Performance proclaimed human vendors, distributors, in our • Guidelines Standard 5: rights; and supply chain developed for Land SDG 12: fuel and raw Acquisition & Responsible material use Involuntary consumption • Principle 2: Make sure that in cement Resettlement and production they are not complicit in SDG 13: human rights Climate Action abuses. institution Our Sustainability Commitment Key elements of our business model are: ANTI • To target high-growth, populous markets with cement defcits and older/less effcient producers CORRUPTION: • To be the leader in product quality, pricing and service delivery wherever we operate • Principle 10: • To adopt and develop a circular economy approach to business across our value chain. Businesses should work against In all our markets, we offer excellent quality products at competitive prices. This strategy has been effective in corruption in all its rapidly enhancing our market share. forms, including extortion and bribery. Both Nigerian and Pan-African operations performed well in 2018 despite challenges such as unfavourable weather conditions, civil unrests and production disruptions.
Ejura Ejumedia It is our individual xxxx responsibility to ensure we leave the world a better, not worse place LEGEND: than we met it. GCCA - Global Cement and Concrete Association SDG - Sustainable Development Goals GRI - Global Reporting Initiative NCCG - Nigerian Code of Corporate Governance IFC - International Financial Corporation NSE - Nigerian Stock Exchange UNGC - United Nations Global Compact
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Operational Indicators NURTURING PEOPLE, THE ENVIRONMENT AND OUR BUSINESS ARVIND PATHAK GRI 103: Chief Operational Risk - GEMENT APPR MANA OACH Q. Sustainable business practices attract penalties. Our operations across Africa sometimes come with a cost. What has are guided by these global standards. ANCE ERFORM STANDA the Dangote experience been? Q. With over 500 super-distributors C (P 3, 5 RD) IF and 7000 sub-distributors, how is A. We understand how the burden of initial Dangote Cement working to imbibe GCCA* costs could sometimes influence decisions sustainability practices across tour RCULAR ECONOMY CI on sustainability adoption. At Dangote value chain? NGC (PRINCIPLES) U 1, 2, 10 Cement, we overcome this constraint by having the end in mind from the very A. Our sustainability journey is in its infant SDGs beginning. For example, we know that every stage and we are still building systems and 8, 9, 12, 13 dollar spent on renewable energy today, structures that will enable us manage our SEC could save us huge energy cost in the future, footprints and enhance our positive impact. while also ensuring our environmental We have identified our supply chain and NSE IRONMEN stewardship in form of cleaner energy. In the procurement practices as critical areas where ENV TAL N C C G end, sustainable investment is a win-win for improvements are required. This is why our business. we are now set to integrate environmental and social risk management across our RATION OPE AL Q. As the leading cement company supply chain. Our ultimate goal is to make in Africa, is Dangote Cement looking environmental and social responsibility to assume the leadership role in condition precedent for our business sustainable cement production in the relationships. continent? 7 SUSTAINABILITY Q. What are the key of areas focus for PILLARS A. As one of the founding members of the Operations Unit in 2019? the GCCA which evolved from the Cement Sustainability Initiative, Dangote Cement A. In 2019, we are looking at incorporate is already a leader in sustainable cement sustainability indicators into our procurement Operational Indicators Interview production in Africa. As you may be aware, practices. We are also looking to make more the GCCA is a quasi-regulator that mandates sustainability related investments in the form Innovation Due diligence it members to adopt nothing but global best of innovative technologies and incorporation practices in their cement production. Cases of systems that will enable us achieve Product quality Resource management of non-compliance with GCCA‘s stringent resource and cost efficiencies as well as sustainable cement production standards create positive footprints. Product health and safety Health and safety
Customer service
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Product quality and market BUILDING REQUISITE SYSTEMS competitiveness AND STRUCTURES - Who are our customers? EUNICE SAMPSON GM/Head, Sustainability, Government Construction Dangote Cement Plc Contractors companies Distributors Q. The leadership and staff of Dangote Cement seem very enthusiastic about the acculturation of sustainability. Do you think that the requisite systems and structures are Private sector Real estate and contractors infrastructure Retailers in place? developers A. Indeed, the Dangote Cement family is excited about the ongoing integration of sustainability principles and standards into every aspect of our business operations. Much has already been done in terms of building the requisite systems and structures for driving sustainability implementation and more is being done to fill observed gaps. For example, we are integrating sustainability indicators Innovation into the reporting template of all key departments across Dangote Cement. We are also developing We are committed to improving our research ideal for buildings such as single-storey houses, policies and standards that would make our sustainability implementation as seamless as possible. As and development as a strategy for improving our walls, mortaring and driveways. Our new you know, sustainability is a journey of continuous improvement. Building the relevant systems and overall effciency and productivity. We have a BlocMaster cement is a premium 42.5R product, structures is critical at this point because we do not want sustainability to be an appendage to our dedicated Research and Development unit across rapidly setting to provide excellent early strength business processes. We are building our entire business around it, in line with our 7 Pillars which cover all our operations, and are constantly striving after one day, and superior strength after 28 all aspects of the business. We are on track in our goal of building processes and standards that are to improve our quality and standards based on days. It is ideal for block makers, often small global and yet customised to meet our business goals and objectives.
feedbacks from engagements with our customers entrepreneurs in the informal sector, enabling Interview and employees. them to turn their moulds quicker than with other Q. Let’s talk about data. How important is data management in sustainability products. implementation and reporting? DCP plants are all equipped with cutting edge A. Data management is critical to sustainability implementation and reporting. For reporting to be technology like Prompt Gamma Neutron Activation Both Falcon and BlocMaster were developed after seen as compliant with global reporting standards, it must be based on data that is qualitatively and Analysis (PGNAA) for online analysis, robotic extensive in-house research and feedback from quantitatively reliable. A global best practice in sustainability and business management is documenting laboratory, and fully automated central control the market. We will continue to drive product how your processes are managed. Good quality data helps us make informed decisions, track our room system equipped with Human Machine innovation to meet the needs of local builders progress, address weak links and monitor performance. Without a robust data management system, Interface technology (HMI). across the ten markets in which we operate. quality sustainability reporting cannot be achieved; neither is it possible to effectively track and measure implementation challenges, progress, milestones and material indicators. Our brand, Dangote 3X Cement was formulated to meet the yearnings of our customers for cement Q. How would you rate the level of progress that has been made in putting a robust with extra strong, extra life and extra yield quality. 32.5N sustainability data collation system in place at Dangote Cement? We have constantly deployed the most advanced A. The issue of data integrity is taken very seriously at DCP. One of our milestones in 2018 was A CEMENT GRADE SUITABLE FOR machinery at our new plants that improve overall LOW-LOAD BUILDING NEEDS working with external consultants to set up a sustainability data base that aligns our 7 pillars with effciency in cement production. global sustainability standards, such as the GRI, UNGC, IFC, SDGs, GCCA, NSE Sustainability Disclosure Guidelines, and so on. This way, we are sure that our principles and standards are world-class and In 2018, we launched two new products into our 42.5R yet custom-built to serve our unique sustainability objectives. Also during the year, Dangote Cement main market, Nigeria: Falcon and BlocMaster. designated and trained about 100 data owners across different functions in our Nigerian and Pan- A STRONGER, MORE RAPIDLY Falcon is a 32.5-grade cement that addresses SETTING CEMENT FOR African operations. With this initiative, we now have data champions that understand our sustainability needs at the lower end of the market, where MULTIPLE APPLICATIONS data needs and have been trained on best practices and requisite tools for gathering them. With strength is less of a requirement. As such, it is sustainability implementation and reporting, virtually everything hinges on availability of quality data, and having in place systems and standards that give clear directions on how set goals will be actualised.
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Product Quality Our plants are required to disclose all relevant safety information on the product bags. We aspire to achieve a culture of excellent product quality. Our goal is to carry Disclosure of product components our suppliers and vendors along in this quest for product excellence Dangote Location as well as safe use and disposal In previous years, we had audited the suppliers on In 2019 we will begin the process of holding our information our production sites and supply points against the major suppliers, vendors and contractors for their Ethiopia YES DCP Guiding Principles. We work closely with our environment and social practices. For instance, vendors to safeguard the quality of products they they will be required to commit to and implement Nigeria - Obajana YES supply to us. our sustainability Code as a condition for our business relationship. Nigeria - Ibese YES
South Africa YES
Product health and safety We understand that our products could sometimes employees and contractors. Management is Good Practices be hazardous and cause injury to people especially held accountable for ensuring safe behaviour, when they are not used correctly. We therefore implementing workplace improvements on a Our Safe Work Initiative provide instructions on usage, leveraging the regular basis and promoting a culture of safety in CEMBUREAU guidelines on use of wet cement. our everyday activities. In order to minimise exposure to hazards and prevent incidents and near-misses, Dangote Cement plants have designed a Safe System of Work. The initiative seeks to enhance workplace safety through pre-work inspections, job Health and safety (H&S) is a top priority at DCP. At our plants ensure that all of their products hazard analysis and regular HSE meetings and audits. We strive to achieve zero incidents by improving and services are tested for quality assurance and and reinforcing safe behaviours among our safety. During job hazard analysis, near-misses and actual accidents are investigated and fndings are leveraged to develop and implement corrective actions.
Percentage of significant product and Dangote Location service categories for which health and Dangote Cement plants are also obliged to The quality of our supply chain management safety impacts are assessed report incidents of non-compliance concerning attracted several positive feedbacks and accolades product and service information and labelling. in 2018. These include Award for Best Quality Ethiopia 100% Of all the reporting plants (Ethopia, Nigeria – Cement by the Standards Organisation of Nigeria; Obajana, Nigeria – Ibese, Senegal, South Africa), the SERAS Award for Best Company in Supply Nigeria - Obajana 100% none reported any incident of non-compliance Chain Management; and, MANCAP certifcates concerning product labelling and marketing from the Standards Organisation of Nigeria for Nigeria - Ibese 100% communications. various cement products. South Africa 100%
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Supply Chain Management Customer service Suppliers Sustainability Programme
Our core strategic goal is to become the most Moreover, our experts in felds such as geology, We continue to develop strong relationships Our 2020 goal is to evaluate at least 30% of our customer-centric company in our industry. We chemistry, materials science, and various across our supply chain. We have begun the major suppliers and vendors using environmental are moving from a product-selling company to a other engineering disciplines work alongside process of creating sustainability awareness and social criteria. As part of our procurement comprehensive solutions provider. behavioural scientists, cultural anthropologists, across our suppliers network, which is aimed practice, we prioritise patronage of local vendors. and commercial strategists to anticipate and at communicating and promoting responsible In 2018, 79% of our total procurements were Ultimately, we aim to create solid relationships understand evolving societal trends, and to create practices. We are also now developing KPIs to sourced locally. Of the total of N208.6 billion, N165 with our customers by establishing the innovative, sustainable construction solutions that actively measure and track suppliers performance billion was spent on local purchases. Our suppliers foundations for long-lasting partnerships. We satisfy our customers’ current and future needs. in this regard. range from Small and Medium-scale Enterprises leverage our cutting-edge business processes to (SMEs) to large multinational companies. develop superior cement solutions. We will also develop and administer a standardised Sustainability Code of Conduct for Vendors, Suppliers and Contractors from 2019.
Good Practices Good Practices
Customer Service Week Customer Trucks Empowerment Scheme (CTES)
The Dangote Group’s Customer Service Week is a yearly to the 5th of October 2018 and will hold from the 7th- We support our SME distributors by investing towards their business growth. For example, we invested over N3 event that helps to create awareness and consciousness 11th of October 2019. Dangote Cement Operations in on the critical importance of excellent customer service Nigeria has 7,248 direct retailers (customers) of which billion to purchase 125 trucks that we gave out to our distributors (with a 5 year payback period at no interest). This across various business functions. In the preceding two approximately 568 are classifed as Super Retailers is a win-win investment that ensures seamless transportation of our products from our depots to retail outlets. The years, our Customer Service Week has created great responsible for the distribution of a signifcant amount of initiative has also helped us in enhancing effciency in our operations and those of key business partners. Between opportunities to specially appreciate our valued internal our products across various geo-political zones. 2017 and 2018, the trucks under the initiative grew by 178, from 408 to 586. and external customers. The ambience that typifes the As part of activities to commemorate the 2018 Customer event creates the right atmosphere for team bonding, fun, Service week, each of our external customers received enlight enment and healthy competition among Dangote a specially customised e-card to symbolise Dangote staff. Cement’s appreciation for their contributions that have ensured our market dominance. Our key distributors Our 2018 Customer Service Week captioned “Excellence are critical not just to our business but to the Nigerian Happens Here-The Dangote Way”, supported our goal economy. They oversee tens of thousands of other In 2018, two DIL subsidiaries received of creating continuous awareness on the need for commercial re-sel ling operations providing employment, the SERAS Sustainability Awards for: exceptional customer service across the Group. While the sustaining livelihoods and empowering households in customer service week is not unique to Dangote, we have different markets. Also as part of the event, employees succeeded in ingraining it into our corporate culture. participated in competitive quizzes and were rewarded Best Company in Best in Supply Chain with cash prizes. The quizzes sought to improve working Hunger & Food Security Management The 2018 edition focused on how we could leverage the knowledge of all aspects of the business and to foster global event to achieve great service delivery, productivity, corporate ownership among team members. and build lasting relationships with customers and among co-workers. The event took place from the 2nd
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Suppliers due diligence We are committed to supporting our distributors Dangote subsidiaries are expected to screen new Dangote Cement seeks to completely eradicate the suppliers where they are made to disclose any past to build sustainable businesses and also to suppliers using environmental criteria. risks of incidents of child, forced and compulsory criminal offences or indictments. Provision is being optimise our indirect environmental and social labour in its operations and across its supply chain. made in 2019 for background screening to be performance. In 2018, Senegal considered hiring new suppliers None of the countries reporting in 2018 (Nigeria, done on key suppliers to rule out environmental and screened all of them according to established Ethiopia, Senegal, and South Africa), recorded any and social violations. In our Ethiopian, Senegal and South African environmental criteria. Conversely, South Africa such incidents in the year under review. However, operations, a third-party evaluator performs considered hiring 12 suppliers but did not screen Senegal classifes all suppliers that provide labour The same precautions are taken with regards to environmental and social assessments on them according to laid-down environmental services as being at risk of employing child labour the risk of compulsory or forced labour. Ethiopia suppliers using ISO 26000 standards. They are standards. Our Ethiopian plant, on the other hand, or young workers, and is highly proactive in reports no such incidents in their operations. also assessed on Health & Safety (H&S), Business did not contract new suppliers in the year under combating this risk. In order to ensure that this risk South Africa also identifes no such threats, as Ethics, Stakeholder Relationships and Financial review. does not crystallise, Dangote Cement Senegal has its labour practices are governed by the Basic Performance. The outcomes of these assessments close engagements with suppliers that have high Conditions of Employment Act 75 of 1997, which are documented and corrective actions are In addition to environmental criteria, we also seek employee numbers. regulates working conditions in the country. recommended to suppliers where necessary. to ensure that our new suppliers are screened Violation of the Act is a criminal offence. according to established social criteria. For the Our Senegal operation also evaluates the salaries This evaluation is periodically reviewed and countries reporting in 2018, Ethiopia did not and social conditions of third party employees On the other hand, Senegal recognises that such suppliers scored based on their performance. screen any of its 6 potential suppliers using social to ensure that the rights of young worker are not risks could occur with service providers used for Suppliers‘ ratings are integrated into their criteria. Senegal screened 80% of its prospective violated. South Africa, on the other hand, is not temporary or permanent jobs during shutdowns or scorecards to track and reward those that suppliers. South Africa screened 100% of the a high risk country for child labour. Use of child for fxing faulty equipment. In order to combat this demonstrate improved sustainability practices. potential 118 new suppliers. labour in South Africa is a criminal offence under threat, Dangote Cement Senegal applies the same section 43 of the basic conditions of employment measures that govern direct employees to such act and the National Child Labour Programme of service providers. Every job on site that is done by Action for South Africa, Phase IV. However, as a third party workers starts with a clear explanation preventive practice, Sephaku administers Standard of what the labour and safety rules are. Request for Proposal (RFP) questionnaires to
Resource Management Our business operations are dependent on having Ore in cement production which is a cheaper long-term access to mineral based raw materials alternative to traditional components. At Dangote within the vicinity of our plants. Such resources Cement, we understand that water is a fnite are fnite and their local exploitation often leads to resource that should be managed responsibly. local community concerns. We therefore, view the In our operations, we ensure that water is used sustainable sourcing of raw materials and resource effciently and reused or recycled as much as is effciency as a key strategic task. practicable.
Our strategy for resource effciency also involves the use of alternative raw materials such as Iron
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Health and Safety As the leading cement company in Africa, we inspections, frequent HSE meetings and a Permit to HSSE System Framework understand the importance of health and safety for Work system. We implemented corrective actions our workers, visitors and host communities. from near misses reported, accident investigated and We are continuously improving our processes to audit reports. Dangote Cement has also developed an E&S Policies enhance safety and minimise harmful incidents. We annual HSE Plan & Objectives, which will enable us - HSSE Policy - HIV/AIDS Policy are working towards achieving our “Goal Zero” on manage HSE the way we manage our core business. - Malaria Policy E&S Risk & fatalities and recordable injuries by implementing the In developing their various HSE Plan & Objectives for External Impacts best health and safety practices across all our sites. 2019, all operating countries will be expected to set Communications - ESIA In 2018, we focused on improving compliance with targets for tackling material HSE risk indicators. These - Sustainability - HSSE Risk Management applicable laws, regulations and Dangote Cement’s will also be accompanied by corrective action plans Reporting own HSE policies and standards. for identifed risk factors. Organisation We have started to diligently document, track and Leaders at all levels are responsible and accountable Capacity report on plant fatalities, lost time injuries and lost for HSE affairs in their areas of operations. In Competence Stakeholder DIL Strategy & time injury frequency. Between 2017 and 2018 our 2019, we will begin the process of developing and Engagement - Company Organogram lost time injuries fell from 47 to 22, representing implementing an integrated HSE management system Business Model - Role & Responsibility - Stakeholder a 53% decrease. However, we remain committed in line with the newly introduced ISO 45001. This will - Knowledge & skills Engagement to achieving zero lost time injuries, fatalities and help us in the transition to becoming a world-class accidents frequency rates in all our operations. HSE performer. Management We are strengthening our accident investigation We trained a total of 24 HSE professionals across Monitoring Program processes and competencies are being developed in Obajana, Ibese and Gboko (plant and transport) up & Review - Safety Management this area. We closely monitor implementation of all to the UK NEBOSH International General Certifcate - Incident Reporting & Investigation - Occupational Health corrective actions arising from all incidents and HSE standard. This is a signifcant investment in capacity - HSSE Performance Reporting Emergency Management audits. We try to ensure that no accident is repeated. building with expected long-term positive impact - HSSE Assurance Planning - Environmental Management - Land Acquisition & We are also more proactive in our HSE risk on the Group’s HSE records and performance. We - Emergency Preparedness and Resettlement management, entrenching it from being a standalone continuously train our employees on best practices Response - Sustainable Social activity into a key performance indicator. During 2018, in health and safety in the workplace and emergency Investment we emphasised to our employees the benefts of response procedures. We also ensure that we provide - Security Management reporting all incidents without fear of punishment. We the personal protective equipment they require to promoted compliance with the Group’s 15 Golden carry out their jobs safely. Our Health and Safety Safety Rules and strengthened our safety reporting Policy is championed by the Chief Executive Offcer format. and is designed to achieve continuous improvement in safety practices across the Dangote Group, for In 2018, we also introduced our Safe System of Work employees, contractors, host communities and all Elvis Akalusi I am glad to be associated initiative, including job hazard analysis, pre-work stakeholders. Head, Health & Safety, Ibese with The Dangote Way. I am beginning to see LOST TIME INJURIES LTI PERCENTAGE DECREASE a paradigm shift where 22 53% safety is now everyone’s 2017: 47 business in the plant.
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Environmental
Definition Management Approach
Entrenching sustainable We continuously seek to improve on our operational efficiency as a environmental management way of optimising our impact on the natural environment. We adopt practices to address the improved business practices and processes that support the protection challenges, and leverage of host communities, preservation of air and water quality, promotion of Massimo the opportunities of climate Bettannin This year, we decided biodiversity and ensuring the overall sustainability of natural resources. change, while optimising Group Chief, HSSE to consolidate key our performance in energy effciency, water usage and We strive to adhere to sustainability principles that will ameliorate global environmental indicators, greenhouse gas emissions. and local environmental challenges and mitigate the negative impact of including energy climate change. Our business activities are undertaken with conscious thoughts for our natural environment and the need to consistently consumption, water enhance our environmental stewardship while also leveraging the usage, greenhouse gas opportunities this presents . emissions in order to make better informed business decisions.
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The global standards we are committed to Performance Tracker PILLAR: Environmental
GCCA‘s GRI IFC UN SDG‘s UNGC NSE NCCG KPIs
Climate GRI 300: Performance SDG 6: ENVIRONMENT: Environ Principle 26 TOTAL VOLUME OF CO2 EMISSIONS [T CO2] WATER CONSUMPTION Change & Environ- Standard 1: Clean water and mental (Sustainability) GREENHOUSE GASES Energy: mental Assessment & sanitation • Principle 7: • Develop a Standard Management of SGD Businesses climate change Series Evironmental & should support mitigation Social Risks and SDG 7: a precautionary 687Kg CO2 -7.2% +29% strategy, and Impacts. Affordable and approach to publish targets Clean Energy environmental Per tonne cementitious material Reduction in CO2 emissions Increase in water usage in and progress. challenges; Performance produced in 2018 in our South African our South African operations
Standard 6: SDG 9: operations due to increased production Environment & LBiodiversity Industry, • Principle 8: Nature: Conservation innovation and Undertake initia- • Apply & Sustainable infrastructure tives to promote Environment Management of greater environ- & Nature Living Natural SDG 12: mental responsi- guidelines Resources Responsible bility; and Set emission Performance consumption targets and and production • Principle 9: report publicly Performance Encourage the on progress Standard SDG 13: development Environmental 3: Resource Climate Action and diffusion of Effciency and institution environmentally Management & Compliance Pollution Pre- friendly techno- vention logies. Dangote Cement believes that sound technologies and systems that would help to environmental management, together with a signifcantly reduce our environmental impact. strategic, proactive approach to addressing the challenges and opportunities of climate change Our goal is to minimise the negative footprints and water scarcity, is fundamental to maintaining a that our business operations could pose to the successful and resilient cement business. environment.
As the largest cement company in Africa, we We are committed to implementing ISO understand the environmental impacts of our 14001:2004 Environmental Management System operations and are committed to complying (EMS), which would improve our approach to with all relevant environmental regulations in environmental management within the defned the countries where we operate. We invest in scope of our operations.
LEGEND: GCCA - Global Cement and Concrete Association SDG - Sustainable Development Goals GRI - Global Reporting Initiative NCCG - Nigerian Code of Corporate Governance IFC - International Financial Corporation NSE - Nigerian Stock Exchange UNGC - United Nations Global Compact
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ENVIRONMENTAL STEWARDSHIP AT DCP Environmental Indicators - MASSIMO BETTANIN Group Chief, HSSE
Q. What are the key environmental Q. Can you describe DCP’s approach to impacts of Dangote Cement‘s operations? environmental sustainability? GRI 300: A. As the largest cement manufacturer in A. We understand that our line of business Africa, Dangote Cement has potentially high could come with huge environmental footprints ENVIRONMENTAL environmental impact. The major polluting if not properly managed. This is why we ORMANCE STA substances emitted during cement production continuously look for better ways of combating (PERF NDA IFC 1, 3, 6 RD) are dust, Nitrogen oxide (NOx) and Sulphur our actual and potential impacts. We keep dioxide (SO2). The actual amount emitted is of taking precautionary steps to tackling the impact GCCA* CHANGE & E course dependent on the production inputs (the our business could have on the wellbeing of IMATE NERG CL IRONMENT & NAT Y raw materials and fuels used), processes applied, the physical environment. Our ultimate goal ENV URE RINC UNGC (P IPLES) and the condition and quality of the plant. is to reduce, as much as is feasible, our CO2 7, 8, 9 Dangote Cement is continuously working emissions, water consumption, waste generation SDGs to mitigate and minimise the impacts of its and dust emissions. We also plan to leverage 6, 7, 12, 13, 17 production on the environment. We strongly the advantages offered by the Circular Economy SEC believe that sound environmental management, business model, by re-utilising wastes produced together with proactive approaches to addressing in our sites, such as old tyres and packaging NSE these challenges are fundamental to achieving materials. This way, we would be improving IRONMEN Interview ENV TAL environmental responsibility. on our environmental performance and also N C C G significantly reducing our operational costs. ENVIRONMENT Q. What distinguishes DCP’s factories IRONMENT ENV AL from its peers? Q. The Chairman and Founder of DCP A. Our factories are mostly ultra modern, with recently signed the GCCA Charter, how most of our lines having opened in the last does DCP plan to comply with the 7-10 years. They have been designed to be requirements? intrinsically efficient through the adoption of A. The global cement industry is a major 7 SUSTAINABILITY cutting edge technology in cement production producer of carbon dioxide emissions. Therefore, PILLARS such as: it is necessary that major players in the sector, • Pre-heater and pre-calciner technologies, which such as Dangote Cement, are accountable are regarded as the most efficient technology for their impacts and strive to manage them because they recycle heat from the kilns to pre- efficiently. We have started compliance with this heat the raw mixture and achieve much of the all-important cement operations standards by Environmental Indicators chemical transformation of limestone before it mapping the 5 pillars of the GCCA Charter with even enters the kiln; our operational, environmental and social pillars. Operational effciency Dust emissions • Vertical rolling mills for raw material, coal and The HSSE Group will be working closely with cement grinding which are 40–50% more relevant departments and function owners to Carbon management Water management efficient than traditional ball mills; ensure that DCP achieves full compliance with • Mechanical material transport and transfer the GCCA Charter. Circular economy systems equipped only with conveyors and bucket elevators, which are up to 80% more efficient than the traditional pneumatic systems.
Dangote Cement | Sustainability Report 2018 Dangote Cement | Sustainability Report 2018 114 115 Operational Efficiency Understanding & Managing The production of cement requires a lot of energy, is a cleaner energy source, to improve our overall which has signifcant economic and environmental energy and operational effciency. This could come our Carbon Footprint implications. It is therefore imperative that we with availability challenges. But we are committed The yearly global demand for cement increases Also in 2018, we further consolidated our continue to enhance our energy effciency. We plan to adopting global best practices in energy usage as at an average of 5-7%, with much of the demand greenhouse gas emission monitoring and reporting to optimise the utilisation of Natural Gas, which much as is feasible. growth driven by emerging markets such as system to re-verify the actual carbon footprints of Africa, owing to rapid urbanisation, economic and all our operations and identify areas that require Our plants are designed to achieve particulate emission levels (30mg/Nm3) far below demographic growth. improvements. Despite the newness of our what the environmental emission (100mg/Nm3) regulations in Nigeria permit. plants, we understand the need to always explore We have deployed measures to maintain overall effciency across our plants including: The cement industry accounts for over 5% of the innovative ways to continuously reduce carbon Utilising effective particulate emission control systems, including baghouse filters and total global CO2 emissions annually. Approximately footprints across our entire value chain. electrostatic precipitators; 60% of these emissions are produced during the Efficient energy recovery in kiln operation using mechanical flow regulator in the coolers; conversion of limestone (CaCO3), a key natural Total greenhouse gas emissions resulting from ingredient, to clinker (CaO), an essential component captive power plants and generators, kilns and Use of cement additives to have a high cement clinker ratio which improves both energy usage and CO2 emissions per tonne of cement produced. of cement; whilst the remaining 40% of CO2 is vehicles used at the quarries and sites (Scope 1), as generated by the combustion of fossil fuels in the well as those associated with the use of purchased Use of storm water harvesting and recycling (South African and Obajana operations) and use of water decanting from other mines (our Zambian operations); kiln and to produce electricity. electricity (Scope 2), were estimated at 16.4 million tonnes, equivalent to a specifc or average Vertical roller mills for raw material, coal and cement grinding which are 40-50% more efficient than traditional ball mills; However, our plants are mostly new and ultra- unit based emission of 687kgCO2eq / tonne of modern. They have been designed to be more cementitious material produced. Mechanical material transport and transfer system equipped only with conveyors and bucket elevators which are up to 80% more efficient than the traditional pneumatic system; energy effcient using cutting edge technology in cement production. These measures have resulted Use of long OLBC conveyors for raw material transport rather than the less efficient dumpers; in operational cost savings and, at the same time,
Robot lab equipment for automatic sampling and preparation for X-Ray screening which allows less CO2 emissions in our operations. for a better process control with direct effect on the quality of our cement and indirectly, a 3-5% energy reduction compared to plants provided with manual sampling system; Big process fans provided with Variable Frequency Drivers (VFD) to vary the ventilation rate based on the actual demand/operating conditions. VFD can reduce input power by 40-80% (depending on the % flow rate) compared to dampers; Pre-heater and pre-calcinate which is regarded as the most efficient technology. Energy Consumption [ GJ ]
YTD Precautionary Approach to Ethiopia 4,607,769 Environmental Management Nigeria - Gboko 2,784,265 Nigeria - Ibese 24,613,136 We have a robust risk assessment and We proactively manage any identifed hazard management system that enables us to identify and continuously deploy new technologies that Nigeria - Obajana 13,620,909 and manage environmental risks before they would help improve our operational effciency Nigeria HQ - actually crystallise. As much as possible, we and environmental stewardship. Some of our Senegal 2,985,808 strive to identify and pre-empt operational processes are being redesigned to improve South Africa 3,872,732 and environmental risks as our way of our performance in resource effciency, waste averting irreversible damages to our business management, carbon emission and so on. TOTAL 52,484,619 environment, employees, host communities and the general public.
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CASE STUDY — INVESTORS’ ENVIRONMENTAL WATER PRESERVATION IN SOUTH AFRICA CONCERNS Although the cement industry is not a large user of water, we recognise the need to reduce the - amount we use, conserve local supplies and ensure that we do not pollute water bodies. CARL FRANKLIN Head, Investor Relations In South Africa, Dangote Cement is committed to reducing its water impact for the benefit of its local communities. Our Aganang facility, situated approximately 40km west of the town of Lichtenburg in the North West Province, sits in an area known well for agriculture and cement Q. You interface with Dangote Cement’s gaining traction among top business executives production. investors on regular basis. What would you worldwide, environmental, social and governance Both industries, which have a major impact on the region’s economy, are largely dependent on say are their environmental concerns? issues will become key considerations in the the area’s available groundwater resources. investment decisions made by key investors. A. Greenhouse gas emission is seen as the Companies that demonstrate sustainability The Aganang Plant has been designed in such a way as to drain storm water into concrete lined canals and pathways leading to a single discharge point. From this point, the wastewater is biggest contributor to climate change and global stewardship will of course attract good investment further directed into two return water dams. warming. Given that cement production is rated opportunities relative to their peers. as the third largest producer of CO2 in the The plant has three authorised dams: a borrow pit of 275 000m3 and two Return Water Dams, each with storage capacity of 45 000m3. world, our investors, like other investors around Q. In the light of these investors’ concerns the world, are interested in our CO2 emissions, and your thoughts about how significant The borrow pit, which is situated in the mining area, collects almost 190 000m3 per annum, resource efficiency, waste management practices, this will become in the future, what and this is used for dust suppression. About 122,500 m3 volume of water from the return water dams is recycled and re-used as process water, reducing our need for boreholes. This dust emission, health and safety issues, and so is Dangote Cement doing to ensure means that we take far less groundwater, which can instead be used by local communities for on. Their major concern of course revolves around environmental sustainability? agricultural and domestic purposes. how effectively these issues are managed to This is part of Dangote Cement’s commitment to reducing the water footprint of its operations. ensure business and environmental sustainability. A. At Dangote Cement, we are already tackling these issues. We are designing innovative Interview Q. Given this development, how do you strategies and investing in new technologies as think environmental issues will affect the we strive to minimise our negative environmental future of institutional investments in the impacts. We are infusing environmental Cement industry? considerations into all aspects of our operations, in the effort to ensure that sustainability becomes A. I think environmental concerns will become integral to how we run the business. even more significant for investors in the future. Eunice Sampson If we are to leave behind for our General Manager/ With sustainable finance framework increasingly Head, Sustainability, descendants a world where they can co- Dangote Cement Plc exist harmoniously with nature and continue to enjoy its FINITE resources, then we must take the concept of sustainability seriously. When the natural environment is violated, it Did you Know: pushes back with calamitous consequences. Conversely, when you nurture the physical Cement is the most widely consumed commodity after water. It is the main component in the construction of infrastructures and for the development of environment, it nurtures you back. residential houses, public buildings, water and sewage systems, and much more.
That is comparable to offsetting the yearly average carbon emissions from 1.3 million passenger vehicles.
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6. ECONOMIC , SOCIAL, FINANCIAL
Strategic 3.1. SECTION objective: Economic Impact, strategic community investment Description We aim to apply economically sound sustainable development principles to our business. As a leading THREE - African brand, we are partners of governments and local communities in the effort to build a prospe- rous African economy. This is why our social impact projects are deliberately targeted at meeting the most pressing needs of the different communities in line with the outcome of our community engage- How we build license ment programmes. to operate
ECONOMIC Strategic 3.2. PILLAR objective: Strategic stakeholder engagement
SOCIAL Description It is important to us that we respond to how our stakeholders see our company and we strive to create PILLAR an environment in which their feedback and opinions can be gathered, understood and acted upon in order to sustain and strengthen our business and our strategic relationships. We are consciously crea- ting a learning environment and platform for our employees to grow and achieve their fullest potential, FINANCIAL while adhering to the highest standards of health and safety. In our host communities, we strive to de- PILLAR velop resilient and sustainable prosperity through direct and indirect employment, skills transfer, local entrepreneurial development and the prioritised patronage of local suppliers and contractors.
Strategic 3.3. objective: Financial and non-fnancial Impact Description We focus our efforts on demonstrating to stakeholders the importance we attach to value creation. We create value by leveraging all available capital to ensure the sustainable growth and impact of our orga- nisation.
3
Impact, Strategic Excellence in Innovation Community ESG management Investment
Diversity Continuous Strategic Management Improvement Stakeholders LICENSE TO OPERATE achieved. Engagement STEP 3 We aim to be the leading brand in the infrastructural development of the new African EXPECTED continent that we envision. We recognise that our brand values must reflect all the Compliance with Management Non-financial commitments we make to our esteemed stakeholders. This way, we sustain our license to National, Pan-African Systems, Policies, Integrated Reporting OUTCOME: operate. & Global standards Monitoring tools
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Economic
Definition Management Approach
Promoting inclusive, Our approach to economic sustainability is to invest in growing economies sustainable economic growth, and in tandem continuously grow our bottom line. We secure the future of self-reliance, self-suffciency our business by establishing efficient, world class production facilities and and industrialisation across delivering quality products. We promote inclusive, sustainable economic growth, Africa, by establishing LUK Our economic self-sufficiency and industrialisation in all the economies where we operate. effcient production facilities HAELTERMAN CEO, DCP investments benefitted and developing resilient SENEGAL local economies in strategic We ensure that our business activities and model support national productivity, 1,200 households locations and key markets. job creation, household incomes, GDP growth and economic prosperity. We support our host countries and local communities by developing a value chain directly and created that prioritises the patronage of local labour, suppliers, vendors and contractors as a way of building local capacity and content. We maintain transparency employment for about and due diligence in the payment of taxes and other statutory remittances to 600 persons from host governments and public institutions. communities in 2018.
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The global standards we are committed to Performance Tracker PILLAR: Economic GRI UN SDG‘s UNGC NSE KPIs
JOBS SUSTAINED GVA HOUSEHOLD INCOME GRI 200: SDG 1: LABOR: Economic Economic Standard No poverty • Principle 3: Businesses SDG 2: should uphold the Zero Hunger freedom of association and the effective 37K N504B N72.7B SDG 8: recognition of the right to DIRECT, INDIRECT TOTAL GROSS VALUE ADDED DIRECT, INDIRECT AND Decent work and collective bargaining; AND INDUCED JOBS ACROSS THE DCP GROUP INDUCED HOUSEHOLD economic growth SUSTAINED IN NIGERIA INCOME GENERATED • Principle 4: SDG 11: The elimination of all Sustainable cities forms of forced and and communities compulsory labor;
SDG 16: • Principle 5: Peace, justice and The effective abolition of strong institution child labor; and Our Sustainability Commitment • Principle 6: At Dangote Cement, we understand that the growth of our business depends on how well the local The elimination of economies perform. We are committed to supporting host countries towards realising their goals of discrimination in respect of employment and self-suffciency in cement production, jumpstarting rapid industrialisation, job creation and enhanced occupation. household income. • Principle 5: The effective abolition of child labor; and
ANTI CORRUPTION:
• Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
LEGEND: GRI - Global Reporting Initiative SDG - Sustainable Development Goals IFC - International Financial Corporation NCCG - Nigerian Code of Corporate Governance UNGC - United Nations Global Compact NSE - Nigerian Stock Exchange
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MARKETING FOR DIFFERENTIATION Economic Standards - ADEYEMI FAJOBI National Sales & Distribution Director, DCP
GRI 2 00: Q. Ensuring immediate availability of Q. Identifying potentially viable markets products where they are needed is at the is at the heart of growth and expansion of ONOMI EC C core of sustainable marketing. How does every business. What are DCP’s strategies Dangote manage the risks of time lags around this and are you exploring ORMANCE S (PERF TANDA between order and delivery times? entering new territories? IFC RD)
GCCA* A. Building an efficient delivery system, as A. Africa is currently experiencing increasing
you noted, allows for timely distribution of infrastructural growth and development. As a our products to markets and ready buyers. key producer of an enabling product, it is our (PRINCIP UNGC LES) This determines our reach and success in the responsibility to ensure that we close observed 3, 4 ,5, 6, 10 marketplace. Thus, we take this responsibility very gaps in demands. Thus, where it makes good SDGs seriously. This is why we maintain the biggest fleet business sense, we would explore our options , 2, 8, 11, 16 1 of trucks across the country – our trucks number to expand. SEC over 8000 in Nigeria where we have our biggest operations. In Ghana, we also maintain a fleet Q. How would you describe Dangote’s NSE ECONOMIC of about 1000. We maintain our own delivery distribution model, especially in relation N C C G fleet in several other markets where we operate, to reaching the retail market? enabling us to meet the needs of our customers Interview and minimise downtime. A. As a deliberate strategy, we have developed ECONOMIC various models and channels, keeping in mind Q. Marketing and Advertisement the need to create value down the chain, from Communication in recent times has shifted bulk takers to bulk breakers and retailers. For from traditional to digital with innovations ease and timeliness of product evacuation in data mining and big data analytics and distribution, we developed a scheme to 7 SUSTAINABILITY allowing quicker assess to the right support our partners and the market called PILLARS audience. How does Dangote responsibly the ‘Customer Trucks Empowerment Scheme’ leverage these evolving technologies? (CTES). Under this scheme, our key customers are provided with trucks which they pay for in A. Our approach to marketing and advertisement installments over time. Trucks under our CTES is ultimately knowledge driven. Using new initiative grew from 408 in 2017 to 586 in Economic Indicators technologies, we focus on creating top-of-mind 2018. This scheme has had significant impact brand awareness to position our new and on product evacuation, Turn Around Time of Economic development and Economic impact analysis existing products advantageously. We strive to distribution and has benefited our trade partners self-suffciency attract a larger customer base by maintaining a significantly. Income generation reputation of being the producer of high-quality Inclusive economic growth cement, leveraging continuous innovation and Community infrastructure investments improvement of our products to meet consumer Job creation needs.
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All Dangote Cement’s factories are modern, fuel- Given recent fnancial pressures faced by some Dangote’s contribution to the effcient plants that use the latest technology to manufacturers in the region, it is obvious that our produce high-quality cement. strategy has disrupted Sub-Saharan Africa’s cement economic development of Africa markets. This enables us to compete very effectively in a Sub- Dangote Cement currently operates in ten countries across Sub- DEVELOPING Saharan African cement industry that is fragmented With 65% market share in the Nigerian cement market Saharan Africa, a region that experienced GDP growth of 2.7% in MARKETS and characterised by smaller-scale operators for example, we further strengthened our market 2018 according to the World Bank. This compares favourably with with older technologies, some even using legacy leadership in 2018. We believe that our strategy will SSA economic growth other regional growth rates such as the 2.2% growth estimate for technologies such as wet-process production, which is enable us to continue growing and consolidating our the European Union, 2.9% for the United States and 2.2% for the G7 highly energy demanding. As a result, we can operate position in Sub-Saharan Africa. group of countries. +2.7% as the lowest-cost producer and support our cement 2017 2016 manufacturing with strong investment in marketing All the ten countries where we operate are developing economies +2.4% +1.3% and logistics. with growth rate of between 2% and 5%. For Nigeria, our key SOURCE: IMF Regional Economic Outlook, October 2018. market, 2018 GDP growth rate was 1.93%.
This economic growth is refected in the fact that most of our host Our commitment to Nigerian GDP countries increased consumption of cement during the year. Our recovering largest market, Nigeria, saw a 11% increase in cement consumption, inclusive economic growth from 18.6 million tonnes in 2017 to 20.6 million tonnes in 2018. +1.93% Cement provides the strength upon which Africa’s conditions. In regards to the economic pillar, we Although its core business is dependent on the Nigerian economy, economy is being built. Using locally sourced pride ourselves on ensuring inclusive economic 2017 2016 materials and services, our products help nations growth, fair employment opportunities, fair labour +0.8% -1.6% Dangote Cement is a diversifed business and this reduces the impact of economic and political uncertainties across our theatre of become self-suffcient, enable people to build practices and employee representation, as well as SOURCE: Nigeria Bureau of homes and places of work and enable us to support thorough regard for the health and safety of our Statistics, 2018. operations, as well as the impact of seasonal factors such as rainfall. families and communities through the creation of employees, local communities and customers. Cement demand is driven by GDP and population growth and jobs that provide a decent wage and good working • Nigeria’s economy is the this anchors our belief that we have strong potential for growth in largest in Sub-Saharan Africa the coming decades as our host countries bring infrastructure and • GDP at US$376B (2017 housing up to international standards. estimate) Contribution to job creation • Estimated population size of Cement is an attractive product to sell in the build-out phase of a 195 million region’s economic growth because it can be considered to act as As the largest manufacturer in Nigeria and one of challenge confronting many African economies, • 2018 GDP growth at 1.93% a “GDP multiplier”. For example, when roads are built they require the larger employers in Sub-Saharan Africa, we have the jobs we create help to alleviate unemployment • Oil sector contributes nearly signifcant amounts of cement; the road itself improves logistics, created jobs throughout our operations for many and poverty levels. In Nigeria, we estimate that the 9% of GDP, while agriculture reduces industry’s transportation costs and generates the need for thousands of Nigerians and local people in nine more than 17,000 jobs we sustain directly have a contributes approximately buildings along its length, all of which will have positive impacts other countries. multiplier effect in the economy well beyond our 23% on GDP growth. This, in turn, feeds back into higher demand for operations. • Higher oil prices, curtailed cement. Likewise, buildings such as factories will use cement and Aside from our direct job creation, our activities pipeline vandalisation, and create jobs and prosperity that enable people to buy, build or extend support thousands other jobs along our supply In fact, we believe that nearly 37,000 jobs (direct, higher agricultural output are their homes. chain and elsewhere, by way of indirect and indirect, induced) jobs are sustained in Nigeria helping recovery after recent induced impact. In an era when unemployment, because of our operations, which makes a recession . particularly amongst youth, has been a huge signifcant economic impact.
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Economic impact of Dangote Cement Contribution to income generation – Employment By creating jobs across Africa we also drive income our headcount. We estimate that in Nigeria, our generation in host communities and others that contribution to household income is more than 17,447 beneft directly and indirectly from our market ₦72.7 billion, including direct, indirect and induced EMPLOYEES DIRECT IMPACT presence. This helps to increase local and national impacts. 36,797 JOBS prosperity to the beneft of many more people than + TOTAL NUMBER OF JOBS SUSTAINED IN NIGERIAN ECONOMY IN 2017 BY 11,414 DANGOTE CEMENT EMPLOYEES INDIRECT IMPACT Economic impact of Dangote Cement + MULTIPLIER 2.11* EVERY JOB PROVIDED DIRECTLY BY 7,936 DANGOTE CEMENT OPERATIONS IN – Household Income EMPLOYEES NIGERIA SUSTAINS A TOTAL OF 2.20 INDUCED IMPACT JOBS IN THE NIGERIAN ECONOMY N72.7BLN N29.6BLN TOTAL HOUSEHOLD INCOME DIRECT IMPACT GENERATED IN NIGERIAN ECONOMY + IN 2018 BY DANGOTE CEMENT 41% N32.0BLN The number of jobs sustained by INDIRECT IMPACT Dangote Cement in Nigeria is equivalent to 41% of the Federal Government’s + MULTIPLIER 2.45* 89,000 civil service jobs. EVERY N1.00 OF HOUSEHOLD INCOME GENERATED DIRECTLY BY DANGOTE CEMENT‘S N11.1BLN OPERATIONS IN NIGERIA GENERATES A TOTAL INDUCED IMPACT OF N2.45 IN THE NIGERIAN ECONOMY
14,621 N72.7B WOULD FUND THE BUILDING OF 14,621 AVERAGE SIZED, THREE- BEDROOM BUNGALOWS IN A RURAL AREA OF KOGI STATE.
Contribution to income generation – Host communities
We estimate that in Nigeria, our contributions to household income N72.7BLN + was about N72.7B, including: DIRECT, INDIRECT, & INDUCED IMPACTS.
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Economic impact of Dangote Cement Contribution to job creation As the largest manufacturer in Employment in Nigeria Nigeria, and one of the larger employers in Sub-Saharan Africa, CONTRIBUTION TO INCOME GENERATION IN we have created jobs throughout our operations for many thousands HOST COMMUNITIES 17,447 11,414 7,936 of Nigerians and Africans in nine — Employees Employees Employees other countries. The direct and indirect jobs we create have multiplier effect on the Direct impact Indirect impact Induced impact Aside from our direct job creation, economies where we operate, generating income opportunities for our activities support thousands our internal and external stakeholders. For example, the total income more jobs in our supplier chain generated by Dangote Cement in Nigeria grew from 72.4 billion as at and elsewhere, by way of indirect ₦ 2017 to 72.7billion in 2018, representing an increase of [0.4]%. 36,797 jobs and induced impact. ₦ Directly sustained in Nigeria by Dangote Cement In an era when unemployment, particularly amongst youth, has been a huge challenge confronting many African economies, the 2.11x* 41% jobs we create help to alleviate Every job provided directly by Dangote The number of jobs sustained by Dangote unemployment and poverty. Cement operations in Nigeria sustains a Cement in Nigeria is equivalent to 41% of the total of 2.2 jobs in the economy Federal Government’s 89,000 civil service jobs. In Nigeria, we estimate that the more than 17,000 jobs we * Presented multiplier refers to the impact generated among suppliers and sub-suppliers (indirect sustained directly (including impact) as well as economy as a whole through household spending (induced impact). It does not account for impact generated across distributors and retailers. transport workers) have a multiplier effect on the economy well beyond our operations.
Economic impact of Dangote Cement In fact, we believe that nearly Household incomes in Nigeria 37,000 jobs (direct, indirect, induced) jobs are sustained in CASE STUDY Nigeria because of our operations, — which makes a significant ₦29.6B ₦32.0B ₦11.1B economic impact. WOMEN FROM POUT RECEIVED THEIR Direct impact Indirect impact Induced impact TRAINING CERTIFICATES ON FRUITS AND Contribution to income VEGETABLES PROCESSING generation By creating jobs across Africa we After a two-week training session on how to process fresh fruits and vegetables, also drive income generation in fifty women from Pout municipality received their diplomas. The town of Pout is host directly and indirectly from reputed for its production of various fruits and vegetables. Unfortunately, most of ₦72.7B our presence. Total household income supported by Dangote these are lost because owing to the market’s inability to absorb them. Dangote Cement in the Nigerian economy in 2018 This helps to increase local Cement Senegal Plant has given around 6000 US dollars to finance these training and national people than our sessions. headcount. This project is in line with our CSR strategy that sets out to empower local We estimate that in Nigeria, our communities in critical sectors as health, education, agriculture, manufacturing, 2.45x 14,621 contribution to household income Every ₦1.00 of household income ₦72.7B would fund the building of 14,621 and so on. Dangote will continue to support the women of Pout, helping them to is ₦73B, including direct, indirect generated directly by Dangote Cement‘s average-sized, three-bedroom bungalows build a network through which they can sell their fresh and processed products. operations in Nigeria generates a total of in a rural area of Kogi State. and induced impacts. ₦2.45 in the Nigerian economy. It is really important that the initiative will continue to flourish.
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Educational infrastructure SENEGAL Community infrastructure IMPACT IN LOCAL COMMUNITIES IN CAMEROON development — We understand that governments alone cannot meet the We contributed largely to various communities that play host and are impacted needs of our local communities. As a major stakeholder in by our operations in Cameroon. We can correctly say that our investments have these communities, we remain committed to supporting the created positive footprint on the environment, social, economic and community development of social amenities. In 2017, more than ₦5 billion endeavours of local communities in Cameroon. On the environmental and was spent by the three Nigerian plants on various community cultural fronts, we reclaimed a ten hectare land for the local Douala community Our 1.5Mta plant is located near development projects, especially road networks, schools, for the celebration of their annual cultural festival and other recreational activities. Pout in Senegal. Opened in hospitals and several other public utilities in the effort to close December 2014, it employs more In solidarity and support for the local community, our staff also participated in some of the infrastructural gaps. than 600 people from the local the cultural festival. We invested in some infrastructural projects such as building community. The plant produced of a pharmacy block for the Batoke mining community, constructed a shed in more than 1.4 million tonnes of the Limbe market, and built a town hall for the Tombel mining community. To cement in 2018, approximately 91% support education for educationally underserved local communities, we offered of its operating capacity. xxxxxx scholarships to deserving beneficiaries of the Deido and Batoke communities. Looking at the 2017 and XXXXX 2018 figures of Direct and As part of its social investment Total Gross Value Added programmes, our plant in in Nigeria, it can be rightly Senegal has carried out a said that Dangote Cement number of projects that have is contributing immensely benefited 1,200 households, to the Nigerian economy Our host communities are among our most and develop local infrastructure. Furthermore, we including: as well as to Africa‘s important stakeholders. They live close to our must operate with minimal harmful impact on growth. plants, they often are our employees, and they our local communities, taking care to respect their • Construction of the Solidarity are impacted by our operations in ways that can land and property, their animals, the air that they Bridge of Keur Moussa, which has be benefcial or detrimental. They have given us, breathe, their dignity, their cultural and religious benefited eleven villages cut off directly or tacitly, the right to build a factory, mine beliefs and their way of life. Did you Know: from the nearby town by flooding; their land and transport our products through their • Rehabilitation of roads in communities. In effect, they have given us a “social Nigeria’s economy is the largest in Sub-Saharan Ngomene; licence to operate”. We are committed to helping young businesses Africa and the most important to Dangote Cement • Construction of a college in and entrepreneurs to grow and achieve their full Niakhip; We recognise that the benefts of this licence must potential. In addition to the multiplier effect that • Construction of a maternity $411BLN 1.9% 2.3% be mutual and therefore we understand the need to our value chain activities have on the real sectors of Estimate in 2018 2018 2019 hospital in Pout; (Source: Trading Economics) IMF GDP Estimate IMF GDP Estimate continue to invest in our host communities, create all the economies where we operate, we have also • Construction of classrooms, a new job opportunities for local people, provide engaged directly in the empowerment of start-ups teacher’s house and toilets for scholarships for their children, provide healthcare, with innovative business ideas. We prioritise the 9% 23% a school in Dias; Oil sector Agriculture housing, education and access to water where patronage of local businesses in the effort to boost • Rehabilitation of a primary school Contribution to GDP Contribution to GDP necessary, support local businesses and contractors their productivity, earnings and proftability. and construction of a health centre Higher oil price, less pipeline disruption, increased in Mont Rolland. agricultural output helping recovery after recent recession.
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APPENDIX - About the Report -
The SERAS Award DCP won the 2018 Sustainability, Enterprise and Responsibility Awards in Supply Chain Management
Dr. Ndidi Nnoli Group Chief This is the first standalone sustainability report Sustainability & for Dangote Cement. The Report is prepared in Governance accordance with the Global Reporting Initiative (GRI) Standards, core option. Beyond GRI, our Reporting Framework is centered around the 7 Pillars of Sustainability adopted by Dangote Cement Plc as “The Dangote Way”, benchmarked against 7 national and global sustainability principles and standards.
This year’s Sustainability Report focuses on 4 major markets: Nigeria (Gboko, Ibese and Obajana), South Africa, Senegal and Ethiopia, it however also provides an insight into all our areas of operation. We will reach full GRI compliance across the whole Dangote Cement Group by 2020.”
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Our 2018 Sustainability Report is the first standalone report for the Input-output Methodology Dangote Cement Group prepared based on the most recognized international standards and guidelines: In order to measure the impacts of Dangote Cement on the Nigerian economy, an advanced Input-Output model is used. The model is based on the work of Noble Prize winning economist Wassily Leontif, and it uses the latest available input-output tables for the Nigerian economy. Thanks to the model, one is able to quantify the “backwards” positive economic effect Dangote has on the Nigerian economy through its direct production and its value chain. The following impacts were captured in the analysis:
In accordance with the Global Reporting Referencing to The Global Cement and Concrete Association (GCCA) sustainability Initiative (GRI) Standards core option, labeled by guidelines, IFC’s Performance standards and Direct Impacts the GRI Materiality Disclosures Service UN Sustainable Development Goals (SDGs)
Which are the effects of Dangote Cement Nigeria activities themselves.
Indirect Impacts In line with Nigerian Stock Exchange In line with UN Global Compact requirements Which relate to the company’s business transactions with its suppliers. Dangote Cement Nigeria’s purchases of goods and services from local suppliers generate business for these suppliers, thus enabling them sustain and create jobs, while also generating value added and income. Additionally, indirect Corporate impacts also include the second tier of suppliers, so the suppliers of Dangote’s suppliers. These suppliers’ Governance Code production is also the result of the initial impulse from Dangote’s business activities. This creates a ripple effect in the economy. All such effects are taken into account in the model.
The sustainability report comes out annually across Africa (relevant information marked within Induced Impacts covering the events and actions of each reporting the content). In 2020, Dangote plans to prepare period starting from the 1st January to the 31st the GRI report covering the whole Cement Group. Which are consequences of an additional impulse created in the economy through the spending of December each year (2018 in this example) [GRI Dangote Cement’s employees and the employees of their frst and second tier suppliers. This impulse 102-50; GRI 102-52]. Previous report (released Limited external assurance was carried comes from the increased in demand, then causes an increase in output in the economy and leads to the in April of 2018) was embedded as part of the out on some indicators in the report by creation of additional jobs, value added, and income generation. Group’s Annual Financial Report for 2017 [GRI 102- PricewaterhouseCoopers, using the ISAE 3000 51]. Standards in line with non-fnancial reporting assurance principles. [GRI 102-45]. [GRI 102-45; GRI 102-48; GRI 102-49] This year’s The Report is structured to align with our report focuses the scope of GRI indicators on the 7 customized sustainability pillars (The 4 major markets for Dangote Cement: Nigeria Dangote Way), which are institutional, cultural, (Gboko, Ibese and Obajana), South Africa, Senegal social, fnancial, economic, operational and and Ethiopia. Additionally, case studies on environmental. The seven pillars are a refection of performance and key initiatives are presented also our business impact materiality and demonstrates from other 6 Pan-African locations (Cameroon, our commitment to embedding sustainability Congo, Ghana, Sierra Leone, Tanzania, Zambia). principles across our entire value chain. In some cases, GRI indicators cover all 10 markets
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Materiality Dangote’s process – Materiality Matrix 2018 Determining material topics & indicators fo the 2018 sustainability report
As part of our journey to best reporting. In addition, an external and shared with a cross-section of practices in Reporting, we had benchmarking of topics reported by employees, data owners and board referenced our 2017 Sustainability manufacturers in both the cement members at Dangote Cement for Report against the Global Reporting and non-cement industries was validation. These individuals were Initiative (GRI). This year, the carried out, looking at CEMEX, asked to rate each indicator’s level of Sustainability & Governance Function LafargeHolcim, Argos, Heidelberg importance from their perspective, mapped those topics that significantly Cement, Budimex and our joint especially where influenced the assessments and venture Sephaku Cement, which is they disagreed with the proposed decisions of stakeholders regarding listed on the Johannesburg Stock placement on the matrix. Once the our economic, environmental and Exchange. This process contributed matrix was updated we presented social impact. In 2018, we have significantly towards enabling us to it for final validation and conclusion. complied with the GRI Sustainability create a meaningful and high-quality The result is shown to the right. Reporting Guidelines in determining sustainability report for Dangote materiality according to our internal Cement this year and on which we This is the first standalone stakeholders, with the aspiration to could improve in 2019. sustainability report for Dangote Our process for materiality identification followed GRI Standards methodology: fully engage all external stakeholders Cement. The Report is prepared in in 2019. We are aware that public and accordance with the Global Reporting 1. STEP 1: IDENTIFICATION shareholder feedback is crucial within Initiative (GRI) Standards, core option. Identifcation of relevant topics from the perspective of sustainable development within the key areas of In May 2018, we carried out a the guidelines set by the Beyond GRI, our Reporting the organisation‘s impact: economic; environmental; social comprehensive employee survey GRI board and therefore must Framework is centered around the How we accessed it? across all of our locations which be factored into every action 7 Pillars of Sustainability adopted o Review of Dangote’s 7 pillars has guided the development we take in our journey towards by Dangote Cement Plc as “The o External benchmark of topics reported by cement and non-cement industry and focus of this report. Also as GRI compliance. Although external Dangote Way”, benchmarked against o Review of media survey GRI recommends that qualitative stakeholder engagement was not 7 national and global indicators. This o Review of employee survey analysis, quantitative assessment and our aim this year, we decided that year’s Sustainability Report focuses o GRI sector supplements (cement and non-cement) discussion be used to determine if a some form of public engagement on 4 major markets: Nigeria (Gboko, topic is material, this survey targeted should be carried out. This resulted Ibese and Obajana), South Africa, 2. STEP 2: PRIORITISATION a diverse group of employees for a in a media survey from which our Senegal and Ethiopia however also Involvement of key stakeholders in the process of assessing the relevance of the indicated topics representative sampling of Dangote team identified key topics frequently provides an insight across all our from the perspective of the organisation‘s interior. We have conducted a survey fulflled by over 1000 Cement across Africa. A total of 1,170 reported, to identify at least the areas of operation. employees stakeholders across twelve locations direction of public interest. This participated. Through this survey, we insight was factored into the topics We will reach full GRI compliance 3. STEP 3: VALIDATION were able to identify the main topics considered as material for 2018 across the whole Dangote Cement In order to confrm the effects of prioritisation of relevant topics, we have conducted around 15 that Dangote Cement’s employees A list of prioritised indicators was Group by 2020. interviews with top management which enabled us to defne key issues to be reported and constraints consider to be material for our then created on a materiality matrix occurring within key impact areas (relevant topics).
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