Sustainability Report 2009/2010

Foundations Sustainability Report 2009/2010 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyﬁgures 05 Employees About this report 06 Society Independent Limited Assurance

Schelklingen quarry of- fersliving proof that natureconservation and rawmaterials extraction arenot mutually exclu- sive. Ecologically appropriate renaturation and recultivation actually contribute to an increase in biodiversity.

Contents

Thepublication of this report is an extension of our communication activities regarding sustainability and improves their usefulness. Unlike our approach in previous years, when we provided aprinted report and aPDF,this year we arealso making the contents of the report and additional, moreextensive information available on our website for the ﬁrst time. http://www.heidelbergcement.com/sr2010

Anetworked report We want to make it as simple as possible for you, the reader,toﬁnd your way around this report. We have thereforedeveloped aspecial set of symbols for different kinds of references. This will enable you to know at aglance whereyou can obtain further information:

Additional information is available online. Simply enter the corresponding link.

Youcan ﬁnd further information on this topic either on the corresponding page of this report or in our current Annual Report (“AR 2010”).

Youcan find explanatory key figures on the specified page of this report.

GRIIndex online In order to give the GRI Index sufﬁcient space for acomplete and easily comprehensible representation, we have decided to provide the Index in the Internet. Youcan browse it or download it at http://www.heidelbergcement.com/sr2010/GRI 02 03

Company portrait 08 Organisational structureand business activities 09 Business trend 01 10 Business lines and product groups

Challenges and strategy 12 Challenges 13 Our values 14 Partnerships and stakeholder dialogue 15 Sustainability strategy and activities 02 18 Targets and achievements

Management 20 Responsible corporate governance 03 22 Sustainability management

Environment 26 Energy and climate protection 27 Raw materials and fuels 28 Land use and biodiversity 28 Local environmental impact 04 32 Sustainable construction

Employees 34 Employees and employment 35 Remuneration policy and work time regulation 35 Occupational health and safety 36 Training and career development 05 38 Diversity and equal opportunity 38 Employee satisfaction and retention

Society 40 Regional responsibility 06 41 Corporate citizenship

Headings 04 Preface 06 Chronicle 44 Keyﬁgures 48 About this report 50 Independent Limited Assurance 51 Imprint 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures 05 Employees About this report 06 Society Independent Limited Assurance

Preface

“COur company’s focus on sustainability is “ ompliance is one of the most important not limited to environmental protection and aspects of acompany’s sustainability man- occupational safety.Because of our strong agement. By commissioning an external local business operations, social respon- review of the existing cartel rights compli- sibility is also an essential part of our local ance system, HeidelbergCement has managers’ leadership tasks.” demonstrated its strength in this regard.”

Dr.Bernd Scheifele Fritz-Jürgen Heckmann Chairman of the Managing Board Chairman of the Supervisory Board 04 05

Dear readers,

In 2009, we wereinadifficult situation with an extremely unfavourable business climate. We drew the necessary consequences and placed our capital and financing structureon acompletely new and solid foundation. Our business results for 2010, which have clearly developed in apositive direction, demonstrate that this reorientation was the right course. We regardthis decision as another example of our commitment to sustainability. Thebusiness decisions we make today must reflect our sense of responsibility for the futureifwewish to be successful in the long run.

That’s why we regardsustainability as amanagement task and part of our corporate strategy.Weare committed to efficiency,sustainable profitability,aclear focus on customers and profitable growth. This requires aresponsible approach not only to the needs and interests of our employees, customersand business partnersbut also to potential conflicts of interest at our business locations. In line with our corporate philosophy,“Think globally —act locally”, such an attitude implies akey task for our local managers: to minimise the effects of our business operations on the local environment and society and to act in our coreareas of competence in ways that benefit society and generate business opportunities for our company.

In the past two yearswehave continually made progress regarding the implementation of our sustainability strategy.Among other things, we’ve reduced our CO2 emissions, inten- sively used alternative fuels and promoted biodiversity in our quarries.

Occupational safety continues to be an equally important priority for our company. Despite the progress we’ve made in recent years, we unfortunately experienced atotal of 19 fatalities in 2010, including ﬁve employee deaths. This is unacceptable and explains why occupational safety is akey issue for us in 2011.Our targets for 2012 areclear: to halve the number of accidents compared to 2008 and reduce the number of deaths to zero. We will work hardtoreach these goals, and we expect to be judged accordingly.

This is the fourth time in our corporate history that we have submitted asustainability report for the Group. Thepurpose of this report is to make our business activities transparent and binding —sothat all of our stakeholderscan clearly see and understand the way in which we operate. Please feel free to get in touch with us. Your opinions will help us to stay on course as we endeavour to enhance sustainability at our company.

Dr.Bernd ScheifeleFritz-JürgenHeckmann Chairman of the Managing BoardChairman of the Supervisory Board 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures 05 Employees About this report 06 Society Independent Limited Assurance

Our modernisation ef- mated facility is significantly moreenergy-efficient forts in 2009 weresuc- than its predecessorsand generates less waste. cessful. Environmentally Hungary: Municipalwaste as fuel friendly technology Thecement plant in Beremend has been mod- enabled us to double ernised, and after atwo-year construction period it the production capacity resumes production. One focus of the investments was the improvement of environmental protection of our cement plant in and energy efficiency through the greatly increased Tanzania. use of alternative fuels such as municipal waste.

October 2009

Indonesia: Award for environmental protection Chronicle TheCiteurop plant of the HeidelbergCement subsidiary Indocement in Indonesia achieves first place in the “PROPER Programme” for its outstanding February 2009 environmental protection activities. Theprogramme, which was instituted and implemented by the In- Guidelines forthe promotionofbiodiversity donesian Ministry of the Environment, encourages HeidelbergCement is the first company in its sector firms to improve their environmental management. to introduce Group guidelines for improving biodiversity in its quarries, sand pits and gravel pits Georgia: Developmentpartnership forbiodiversity and protecting the environment. HeidelbergCement and the German development aid organisation GIZ sign acontract to form apub- June 2009

Tanzania: Green modernisation of acement plant TheHeidelbergCement subsidiary Tanzania Portland Cement Company (TPCC) reopens its cement plant, which has been modernised with environmentally friendly technology.The production capacity of the plant, which is located near Dar Es Salaam, has been morethan doubled, to 1.4million tonnes.

Sustainability Ambitions2020 TheManaging Boardpasses the Sustainability Ambi- tions 2020 for the HeidelbergCement Group, which defines the company’s long-term goals in six key lic-private partnership in Georgia. Theaim of the areas of sustainability activities as well as the means partnership is to promote biodiversity in the com- of monitoring and controlling these activities over pany’s quarries in the country. the long term. November 2009 September 2009 Sweden:Ultramodern dust filter system at the United Kingdom: Highly efficientbrickyard Sliteplant Astate-of-the-art brickyardofficially begins produc- Theinstallation of ahigh-powered fabric filter at the tion operations in Measham, Leicestershire. Sustain- cement plant in Slite, Sweden, drastically reduces ability was one of the considerations governing the dust emissions. This is the largest filter ever installed design and construction of the plant. Thefully auto- at afacility of the Group. 06 07

January 2010 June 2010

Heidelberg Technology Center Belgium: Sustainablewaste management TheHeidelberg Technology Center Global (HTC Anew,ultramodern Recyfuel plant is commissioned Global) is opened in Heidelberg. It is an internation- in Belgium. At this facility,waste is processed under ally oriented centreofexpertise with four focus areas: Research &Development, Engineering, Geol- ogy and Training &Benchmarking.

February 2010

Ukraine: Outstandingenvironmental management HeidelbergCement plants in Ukraine receive an awardfromthe country’s Ministry of Environmental Protection for their outstanding environmental management. Theawardhonoursenvironmentally friendly technologies, ultramodern renaturation methods and the reduction of CO2 emissions at companies. supervision to produce alternative fuels that exhibit ahigh caloriﬁc value and can be used by the cement May 2010 industry.

Africa:IFC agreement October 2010 HeidelbergCement signs an agreement with the In- ternational Finance Corporation (IFC) on the expan- Tanzania: Tree nursery promotes sustainable sion of infrastructureincountries in sub-Saharan development Africa. Thelocal cement production capacity is also In apublic-privatepartnership with GIZ, aGerman to be increased. Another goal is to improve environ- organisation that promotes development abroad, a mental standards at the company’s locations. tree nursery is planted in the disused quarry of our subsidiary TPCC near Dar es Salaam. Thetreenurs- UEPG sustainability award ery will create jobs and help to reforest areas at risk TheEuropean Aggregates Association (UEPG) pre- over the long term. sents two HeidelbergCement subsidiaries, Hanson November 2010

“Manifesto forEnergyEfficiencyinBuildings” HeidelbergCement signs the “Manifesto for Energy Efficiency in Buildings” of the World Business Coun- cil for Sustainable Development. In doing so, it commits itself to improve the energy efficiency in its office buildings.

December 2010

Germany: TheWetzlarplant is closed down Lowuse of capacity andagrowing need forinvest- UK and NorStone AS,with an awardfor exemplary ment andrepairslead to the decision to close down biodiversity management. In addition, Hanson UK the plant in Wetzlar,Germany.Inthe future, other receives the ﬁrst prize for social commitment as a HeidelbergCement plants will supply the market result of its occupational safety management. with cement. Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures 05 Employees About this report 01 06 Society Independent Limited Assurance

HeidelbergCement is one of the world’s biggest producersofbuilding materials. We currently operate in morethan 40 countries. Our core business encompasses the production and distribution of cement and aggregates, the two essential rawmaterials for concrete production.

Company portrait

Organisational structureand Europe-Central Asia, North America, Asia-Pacific, business activities and Africa-Mediterranean Basin. These in turn are subdivided into three or four business lines in accor- HeidelbergCement is one of the world’s biggest dance with existing product and service units. We producersofbuilding materials. Thecompany’s core also have asixth Group area —Group Services — activities encompass the production and distribution in which our global trading activities areconsoli- of cement and aggregates, the two essential raw dated. materials for concrete production. We supplement our product range with downstream activities such Strategicpartnershipsand equity participations as the production of ready-mixed concrete, con- Our dual growth strategy focuses on micro-markets crete products and concrete elements, as well as that stand out through rates of growth that are other related products and services. Cement and higher than those recorded in surrounding regions. aggregates form the basis of our dual rawmaterials In order to reduce risks and ensurebetter market and growth strategy. access, our growth strategy also relies on strategic Our focus in relation to cement production activities partnerships with local manufacturersinour target is on growing markets, whereas in well-established markets. We contribute our technical expertise markets we concentrate on expanding vertical inte- to these partnerships and seek to acquireamajor- gration and securing rawmaterials for aggregates. ity interest in return. In those instances where HeidelbergCement relies on an integrated manage- HeidelbergCement obtains amajority participation ment approach. Its success is based on abalance and management control, it defines all standards between local business responsibility,Group-wide and measures, including those related to sustaina- standards and global leadership. HeidelbergCement bility management. revamped its organisational structureatthe start of Detailed overview of ourholdings: AR 2010,p.207 ff. the 2010 business year.The key components of the organisation arenow the five main geographic Ownership structure Group areas: Western and Northern Europe, Eastern ForHeidelbergCement, business year 2009 was 08 09

HeidelbergCement organisational structure of Group areas and business lines

Western and Eastern Europe- North America Asia-Pacific Africa-Mediter- Group Northern Europe Central Asia ranean Basin Services

–Belgium –Bosnia and –USA –Bangladesh –Benin –Denmark Herzegovina –Canada –Brunei –DRCongo –Estonia –Croatia –China –Gabon –Germany1) –Czech Republic –India –Ghana –Latvia –Georgia –Indonesia –Liberia –Lithuania –Hungary –Malaysia –SierraLeone –Netherlands –Kazakhstan –Singapore –Tanzania –Norway –Poland –Togo –Sweden –Romania –Australia –Switzerland –Russia –Israel –United Kingdom –Slovak Republic –Spain –Ukraine –Turkey

–Cement –Cement –Cement –Cement –Cement –Aggregates –Aggregates –Aggregates –Aggregates –Aggregates –Building products –Concrete-service- –Building products –Building products –Concrete-service- –Concrete-service- other –Concrete-service- –Concrete-service- other other other other

1) Germany,asamaturemarket, is reported on as part of the Western and Northern Europe Group area. Formanagement reasons, however,the country belongs to the area of responsibility of the same Managing Boardmember who is in charge of Eastern Europe-Central Asia.

largelymarked by the global economic crisis and our growth markets such as Asia and Africa, as well thereorganisation of our financing structurefollow- as the onset of arecovery in North America and ing the Hanson acquisition in 2007.Tothis end, we parts of Europe. Total Group turnover increased by successfully implemented acapital increase in au- 5.8% in 2010 to EUR 11.8 billion. tumn 2009, while simultaneously selling off old Our earnings situation also improved in 2010. Along shares from the former majority shareholder,the with favourable market developments,this positive Merckle group. This transaction attracted renowned result was due to the appreciation of key curren- internationalinstitutionalinvestorsthat have now cies against the euro, as well as successful Group- Free float: become HeidelbergCement shareholders. Thelevel wide initiatives to reduce costs and enhance effi- of free float has increased to just under 75%, which ciency. 74.89% together with the higher trading volume resulted Furtherinformation on business developments:AR2010, in HeidelbergCement being incorporated into the p. 46 ff. Number of Group German DAXindex of leading companies in June locations worldwide: 2010. Capacity development Ourshareholder structure: AR 2010,p.37 Decliningsales in 2009 ledustoadjustcapacity approx. utilisationatall of ourbusinesslines worldwide. Such adjustmentswereparticularly necessary in the 2,500 Business trend USA, the UK and Spain, which werehardhit by the crisis on real estate markets. Despite the cost-cut- Our Group turnover declined in 2009 by 21.6% to ting measures introduced during the economic cri- EUR 11.1 billion (2008: 14.2 billion) due to the ef- sis, we nonetheless continued to invest in cement fects of the global economic crisis, especially in the production capacity in attractive growth markets industrialised countries of North America and Eu- in 2010, especially in Indonesia, the Democratic rope. Thecrisis then bottomed out for the Group in Republic of the Congo and Russia. 2010, when turnover rose once again in amanner Locations, sell-offsand acquisitions: AR 2010, p. 51 ff. that reflected the ongoing positive developments in Development of workforce numbers: p. 39 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures 05 Employees About this report 01 06 Society Independent Limited Assurance

ducing cement (limestone and marl) areextracted from nearby quarries, wherethey arecrushed be- PRACTICAL EXAMPLE forebeing transported to cement plants. Thece- ment facilities then dry them, add aggregates and grind the mixtureinto rawmeal. Thecement clinker Modernisation of the Beremend plant burned out of this is ground together with other additives into cement. Thecement plant operated by our Duna Dráva Ce- Cement is used as abinder for the production of ment Ltd. (DDC) subsidiary in the southern Hungar- concrete and mortar.Different types of cement with ian city of Beremend has over 200 employees, specific compositions areused in line with the appli- making it one of the major employersinthe region. cation in question. Properties can also be varied Modernisation of the plant was completed in sum- through the use of additives. mer 2009 after about two yearsofwork. Theup- HeidelbergCement manufactures and supplies all of grades promote environmental protection and offer the common types of cement: normal and special competitive advantages, thus benefiting residents cements, bindersfor specific civil engineering appli- of the region. Theplant is now fully equipped to cations, and cement for the construction chemicals face the future, which means it can safeguardjobs industry.Wealso consider it important to continu- thereover the long term. Investment has focused ally improve the CO balance of the cement and mainly on increasing capacity and efficiency.Among 2 concrete we sell. Lowering clinker proportions is the other things, anew kiln line with acapacity of some most effective way to minimise energy consumption 3,450 tonnes of cement per day has now replaced and CO emissions and conserve natural resources. two older kilns that utilised alarger amount of en- 2 That’s why composite cement with lower clinker ergy to burn much less cement clinker.New storage content is becoming an increasingly important prod- areas and dosage facilities allow morewaste materi- uct group for us. als to be used as alternative fuels without any loss Cement is generally transported in bulk on trucks, of quality,thus conserving natural resources. The rail vehicles or ships and transferred in terminals facility also reduced CO emissions per tonne of 2 between shipping segments. Asmall proportion of clinker by 3% to 768 kg between 2009 and 2010. cement is shipped to customersinbags. This means the plant has almost reached the bench- mark target of 766 kg CO per tonne of clinker 2 Aggregates that is required by Phase III of the EU Emissions Theaggregates business line handles the quarrying, Trading System, which will begin in 2013. Moreover, refinement and sale of aggregates. Beremend is also making avisible contribution to Aggregates can be divided into two categories — the EU’s goal of reducing the amount of municipal Number of people crushed stone and grit, and sand and gravel. The waste held in landfills. When the cement plant whose municipal waste stone material for crushed stone and grit is ex- operates at full capacity,itcan utilise the high- with high calorific values tracted in quarries by means of drilling and blasting, calorific-value municipal waste of around one mil- can be used as fuel after which it is mechanically crushed to different lion people. by our cement plant in particle sizes in crushers. Thematerial for sand and Beremend when it gravel is found in currently existing or Ice Age river operates at full capacity: beds and is obtained through wet or dry mining processes. After being sieved and cleaned, the ma- 1million Business lines and product groups terial is sorted in accordance with its particle size, after which it can be sold. Our operations have been divided into four busi- Whereas crushed stone and grit is used for road ness lines in accordance with our most important construction and maintenance, sand and gravel are products and product groups. used to make concrete. Aggregates aretransported by truck, rail or ship. Because aggregates areused Cement around the world but many of them cannot be Thecement business line manufactures and sells found everywhere, they arealso traded on interna- cement. Theraw materials that areneeded for pro- tional markets. 10 11

KEY FIGURES

Groupprofitand loss accounts (short form)

2008 2009 2010 EURm EURm EURm Turnover 14,187 11,117 11,762 Operating income beforedepreciation 2,946 2,102 2,239 Amortisation and depreciation of intangible assets and tangible fixed assets -799 -785 -809 Operating income 2,147 1,317 1,430 Additional ordinary result -371 -495 -102 Result from participations 51 38 6 “Our global business ac- Earnings beforeinterest and taxes (EBIT) 1,827 860 1,334 Financial result -829 -875 -735 tivities aregrounded in Profit/loss beforetax from continuing operations 998 -14 599 our close ties to each of Taxes on income -327 190 -60 our locations. Our suc- Net income from continuing operations 671 176 539 cess is largely based on Net loss from discontinued operations 1,249 -8 -28 Profit for the financial year 1,920 168 511 good local business rela- Group shareofprofit 1,808 43 343 tionships, utilisationof local know-how,and ex-

tensive and neighbourly Group sales

dialogue. This approach 2004 2005 2006 2007 2008 2009 2010 proved to be very effec- Cement and clinker (million tonnes) 65.2 68.4 79.7 87.9 89.0 79.3 78.4 tive during the economic Aggregates (million tonnes) 69.5 77.2 85.8 179.6 299.5 239.5 239.7 crisis as well.” Asphalt (million tonnes) 4.8 12.1 10.0 9.1 Ready-mixed concrete (million cubic metres) 19.5 21.8 24.9 32.7 44.4 35.0 35.0

AndreasSchaller Director Group Communication &Investor Relations, HeidelbergCement

Concreteand asphalt distances directly to building sites, using ready-mix Ourready-mixed concrete and asphalt business ac- trucks. Asphalt is amixtureofaggregates and a tivities areakey focus of our concrete-service-other binder that contains bitumen. Among other things, business line. it is used to fortify road surfaces, as well as for hy- Concrete is made up of amixtureofcement, gravel, draulic engineering applications.Asphalt is mixed in sand and water.Inthis sense it is the ﬁnished prod- ahot state, transported to the location whereitis uct based on HeidelbergCement’s coreactivities: needed at an optimal temperatureand immediately the production of cement and aggregates. Concrete processed on site. is avery versatile building material. Its properties can be changed by altering the composition of the Building products mixtureused to make it, which means that it can Our building products include bricks and light blocks fulﬁl the requirements posed by many different for use in residential construction. This business line areas of application. Because it is atime-critical also manufactures concrete pipes, precast concrete material, concrete is only transported across short parts and concrete pavement tiles. 01 Company portrait Contents Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures 05 Employees About this report 02 06 Society Independent Limited Assurance

Occupational safety is always atop priority for a manufacturing company like HeidelbergCement. Everyone —fromMan- aging Boardmembersto executives and employees —must contribute to asafe working environment.

Challenges and strategy

Challenges term local access to mineral-based rawmaterials. Such resources arefinite, and their exploitation Thecement and aggregates industries aremarked often leads to conflicts of interest that sometimes by certain special characteristics. Forone thing, by extend beyond the local level. We thereforeview their very natureboth sectorsare bound to the lo- the proper securing of rawmaterials as acentral cations wherethey operate —inother words, their strategic task, and we place great value on long- facilities need to be very close to rawmaterial de- term planning, sustainable quarrying and subse- posits. Both of them arealso raw-material intensive quent utilisation of extraction sites and the use of industries —which is why resource conservation alternative rawmaterials. We seek to achieve con- plays such akey role in their business operations. tinual efficiency improvements along the entirepro- Other characteristic features include ahigh level of duction process chain as ameans of offsetting the capital and the high energy consumption associated sharp increases in the prices of fuels —such as coal with cement manufacturing. and gas —electricity,raw materials, transportation, Theenhancement of our energy efficiency is there- spareparts and machines. forecrucial from both an economical and an ecological perspective. Occupational safety is also atop Nature conservation andspecies protection priority as far as we areconcerned. In fact, it is Our rawmaterial extraction and quarrying activities adaily challenge for the entiremanagement team, temporarily disrupt the surrounding landscapes. particularly given the fact that we operate at so Although we areunable to fully compensate in the many internationallocations. short term for many of these encroachments, which As one of the world’s leading building materials affect water supplies, land, floraand fauna, we can manufacturers, HeidelbergCement thus faces ase- outweigh them over the medium and long term. ries of global sustainability challenges. We consider it important to make surethat the subsequent use of our quarries is in line with nature Securing rawmaterials conservation principles and has been planned in Our business operations arebased on having long- consultation with local stakeholders. 12 13

Energy efficiency andclimate protection HeidelbergCement Guidelines Cement production is avery energy-intensive process that results by its very natureinahigh level of Leadership Principles Basis for standardised management culture CO2 emissions. We have succeeded in lowering Code of Business Binding rules of conduct for all our CO2 emissions continually and will continue Conduct employees to implement the measures necessary for ensuring further progress in this area. Forthis reason, we Corporate Occupational Guidelines for reducing the risk of Health and Safety employee accidents, injuries and support international targets and initiatives aimed Policy occupational illnesses at reducing CO2 emissions and combating global Sustainability Ambitions Measures and goals for the six most warming –aslong as they create alevel playing 2020 important areas of our sustainability ﬁeld for all building material producersand do not strategy lead to carbon leakage. Corporate Citizenship Binding aspects of our commitment Guideline to society

Occupational safety Purchasing Guidelines; Binding sustainability guidelines Occupational health and safety is atop priority at Supplier Code of for purchasing and supplier HeidelbergCement —not just in relation to our em- Conduct management ployees but also for visitorsand staff from outside companies. Most of the accidents at our business locations and throughout the industry arecaused by inattentiveness or incorrect behaviour.Our goal business activities. As an internationally operating is thus to clarifythe most frequent causes of acci- company,weare also obligated to adheretoglobal dentsand maximise employee awarenessregarding values and standards. We arethereforecommitted hazards in the workplace. to the ILOcorelabour standards and the OECD guidelines for multinationalenterprises. We expect our employees and business associates worldwide Our values to comply with these essential guidelines and recommendations, and we adheretothe guidelines Long-term business success can only be achieved formulated by the Cement Sustainability Initiative. through adherence to sustainability principles and Cement Sustainability Initiative:p.14f. responsible behaviour towardcustomers, business partnersand employees at all of our locations. We Principles andguidelines areaglobally operating company with apresence in In 2009 we replaced our own Corporate Gover- morethan 40 countries around the world. Despite nance Principles with ageneral reference to the rec- the global scope of our operations, we ﬁrmly be- ommendations contained in the German Corporate lieve that “all business is local business”. First of all, Governance Code, which we comply with. Our our operations arestrongly impacted by develop- Group Leadership Principles form the foundation of ments on local markets. In addition, we realise that our shared management culture. At the same time, the only way for us to gain social acceptance for our our endeavourstoachieve outstanding business business activities is to make surewenever lose performance and attain ahigh standing in our sector sight of the long-term welfareofthe people and make it imperative that our behaviour strictly com- natural environments at our sites. We thereforeseek plies with all legal and ethical standards. Forthis to be agood neighbour and we feel obligated to reason, we have abinding Code of Business Con- maintain an open dialogue with local communities duct that speciﬁes the ethical and legal standards in order to help improve the quality of life wherever for all business activities —fromstrategic planning we do business. Our employees base their actions to daily operations. We have also developed Group- on the common values and principles that arelaid wide guidelines and policies that explain how our out and communicated in our Group Guidelines. obligations regarding health and occupational safety, HeidelbergCement considersrespect for,and com- environmental protection, sustainable supplier pliance with, the laws and regulations of the coun- management and social responsibility aretobeput tries whereweoperate to be the legal basis of our into practice on adaily basis. Together,these guide- 01 Company portrait Contents Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures 05 Employees About this report 02 06 Society Independent Limited Assurance

lines and codes form aGroup-wide framework for Forum for Sustainable Development of German responsible business operations. Business”, for example. This network consists of approximately 30 companies from various sectorsthat work together to make politicians moreawareof Partnerships and stakeholder the importance of establishing areliable legislative dialogue framework that promotes the development of sustainable innovations. econsense utilises open and We know that we can only be successful as acom- constructive dialogue to present the industry’s pany if we maintain cordial and cooperative rela- stance on sustainability and related concerns in tionships with the various stakeholdersinsociety order to help actively shape the corresponding po- who areaffected by our business operations at the litical and social decision-making process. local, national and international levels. In order to www.econsense.de ensurethat these relationships arebased on afirm foundation of trust, we work to achieve frank com- HeidelbergCement andits subsidiaries areworking munication and aconstructive dialogue that does with GreenBuildingCouncilsinseveral countries not shy away from addressing important problems on thedevelopment of certification systems for sus- and issues. tainable construction, as well as on efforts to make Most of our plants and quarries aresituated in the the design, construction and operation of buildings direct vicinity of communities, which is why con- moresustainable. In 2010 HeidelbergCement joined stant dialogue with local governments, authorities the Green Building Councils in Romania, Sweden and NGOs is an indispensablefactor for ensuring a and Poland and co-founded the Green Building stable business environment. This is true not only in Council in Norway. those instances whereweneed to make acase for www.worldgbc.org our own interests or launch new projects, but also in situations in which communities approach us to Participation in the Cement Sustainability Initiative pose questions or discuss critical issues. We take the On theinternational level, HeidelbergCement is a criticism of our stakeholdersseriously and consider member of theCementSustainabilityInitiative the points they bring up. This has enabled us to (CSI), affiliatedtothe World Business Council for adopt new approaches in many places that reconcile Sustainable Development (WBCSD). Within the the objectives of the company with those of the framework of the initiative, we have teamed up community. with other cement manufacturerstodevelop guide- Dialogue with capital market professionals is also lines and performance indicatorsfor the following becoming moreimportant, as an increasing num- areas: climate protection, rawmaterials and fuels, ber of financial analysts and rating agencies are health and occupational safety,and emissions and expressing interest in specific aspects of our sustain- environmental impact. All CSI membersmust imple- Thenumber of major ability activities and thus requiredetailed informa- cement manufacturers tion. BindingCSI guidelines that have joined to- CSI Charter gether in the Cement Dialogue at thenationallevel Sustainability Initiative: HeidelbergCement is amember of both general and Health and Safety in the Cement Industry: Guidelines for Measuring and Reporting industry-specific associations that represent their members’ interests through acontinual dialogue Guidelines for the Selection and Use of Fuels and Raw 23 Materials in the Cement Manufacturing Process with the worlds of politics and business as well as the general public. Many of the associated coopera- Guidelines for Emissions Monitoring and Reporting in the Cement Industry tive partnerships focus on challenges that arespe- cific to individual countries and to industrial policy Environmental and Social Impact Assessment (ESIA) Guidelines with regardtoraw material security,environmental protection, energy conservation and health and oc- CO2 Accounting and Reporting Standardfor the Cement Industry cupational safety.AsaGroup that has its headquar- tersinGermany,weare active in the “econsense — 14 15

ment andcomplywiththe associated regulations Memberships of our subsidiaries: and voluntary commitments. TheCSI also provides www.heidelbergcement.com/sr2010/memberships an appropriate platform for cooperation with external stakeholdersatinternational and sector levels. One way it does so is by staging the annual CSI Fo- Sustainability strategy and rum, which brings together politicians, NGOs, in- activities dustrial and business associations,and research in- stitutes for adiscussion with CSI membersonkey is- HeidelbergCement’s corporate strategy is geared sues related to sustainability in the cement industry. towardholistic efficiency,sustained profitability,a Detailed information on the initiativeisavailable at sharp focus on our customers’ interests and prof- www.wbcsdcement.org itable growth. Such an approach necessitates cost- consciousness and discipline, highly efficient struc- Political dialogue in Europe tures, speedy processes and rigorous implementa- European Union directives areincreasingly affecting tion of pertinent measures. However,our long-term “Our co-operation with daily business operations in the cement industry and business success also depends on responsible be- HeidelbergCement in will also determine the sector’s futurecourse re- haviour towardour customers, business partners garding sustainability.HeidelbergCement therefore and employees at all of our locations. Sustainability Georgia has enabled us operates an EU Public Affairsdepartment whose is thereforeakey pillar of our corporate strategy. to increase the accept- main task is to represent our interests in the Euro- We seek to act in asocially and ecologically respon- ance and knowledge of pean Cement Association (CEMBUREAU), an organi- sible manner,and we feel aparticular obligation to modern recultivation sation that speaks for European cement manufac- minimise the negative impact our business activities turersindiscussions and negotiations with the EU have on the environment and society.This approach methods among institu- and its institutions. Thekey issues addressed by also involves taking precautions against risks. Our tions and the public CEMBUREAU include the use of alternative rawma- goal is to apply our coreareas of expertise in aman- through an exchange of terials and fuels, climate change, emissions, biodi- ner that benefits society while also generating busi- ideas and opinions. This, versity and occupational health and safety.Asa ness opportunities for our company. member of the EU Aggregates Association (UEPG), in turn, is helping to pre- HeidelbergCement is also now involved in advocacy Taking stakeholder expectations into account serve our shared natural activities related to aggregates. Our interests regard- We focused on several areas when we defined the environment. Iwould ing concrete arerepresented by the European key components of our sustainability strategy and encourage Heidelberg- Ready-Mixed Concrete Organization (ERMCO) and our communication measures. One of these areas the EU Concrete Platform. involves the expectations of our external and inter- Cement to make the nal stakeholders, which we identify through system- knowledge it has gained atic analyses and subsequently incorporate into our from this development HeidelbergCement Groupmemberships strategy.The following key issues weredefined by partnership available to Business and Biodiversity Initiative the CSI after close consultation with numerous stakeholder groups and experts: climate protection, other companies.” econsense —Forum for Sustainable Development of German Business rawmaterial and fuel consumption, emissions, bio-

CEMBUREAU (The European Cement Association) diversity,sustainable construction and health and Monica Jäger-Klenk occupational safety.These issues arelargely in line UEPG (European Aggregates Association) ProjectManager,Development with the sector criteria of the IÖW/futureRanking Partnerships with the Economies ERMCO(European Ready Mixed Concrete Organization) of Sustainability Reports. Asurvey of our executives Europe and the Caucasus, EUCOPRO (European Association for Co-processing) also revealed strong agreement with the sustainabil- GIZ GmbH WBCSD CSI (Cement Sustainability Initiative of the ity objectives and activities we have deﬁned for our- www.giz.de World Business Council for Sustainable Development) selves.

ECRA (European Cement Research Academy) Other issues areas can be derived from the structure of the cement market. Forone thing, many regions CEPS (Centrefor European Policy Studies) have only asmall number of cement suppliers, Nanocem which is why our objectives in these and other locations include transparency and fair competition. 01 Company portrait Contents Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures 05 Employees About this report 02 06 Society Independent Limited Assurance

Materiality: What is most important?

Stakeholder interests

Water management

Human rights Noise emissions “Continual dialogue with

Energy andCO2 our stakeholdersenables Supply chain management us to determine their management Sustainable land use expectationsregarding and biodiversity Continuing our sustainability strategy education Social Alternative raw Pollutant and our management responsibility materials and fuels emissions system. This dialogue Sustainable products/ Compliance also helps us focus more sustainable construction strongly on key issues Dialogue with Occupational health as we work to improve stakeholders and safety our sustainability performance.” Diversity and equal opportunities Work-life BernardMathieu balance Director Global Environmental Corporate Sustainability,HeidelbergCement governance

Theinterests of HeidelbergCement

Furthermore, our international presence compels Wheredowesee potential for making improve- us to respect cultural diversity and to take regional ments, and which issues areviewed by society as economic development into account in all of our being particularly critical? By taking this approach, quarrying projects. we have been able to set priorities for our business Twoquestions areofthe utmost importance when- activities in terms of the contribution they can ever we need to decide wheretofocus our business make to sustainability. activities. In every case, we have to ask ourselves: See the Materiality chart: Whatismostimportant? 16 17

TheHeidelbergCement Ourmostimportant activities:SustainabilityAmbitions 2020 Sustainability Ambitions Activity Obligation Measures 2020 describe our most Occupational health and safety Our most important obligation as an employer is to safe- HeidelbergCement seeks important activities for Occupational health and safety is guardthe health of the employees at our plants and quar- to completely eliminate promoting sustainability. atop priority. ries. Our objective hereistoimplement our high standards accidents, injuries and of safety at all of our locations worldwide. Occupational occupational illnesses. Theprogramme deﬁnes safety is thereforeatop priority of our sustainability strat- the corecomponents of egy.Our goal is clear: Zeroaccidents! our sustainability strategy,but it does not ex- Energy and climateprotection Energy supply security and climate change areamong the HeidelbergCement works clude the incorporation Climate protection is akey issue. most important challenges we face today.Because we oper- continuously to reduce its of additional measures ate in an energy-intensive industry,wecontribute to efforts carbon dioxide emissions to halt climate change and expressly support the EU’s goal and also provides solutions into our efforts to im- of reducing carbon dioxide emissions by 20% between now aimed at combating the and 2020. At HeidelbergCement, energy efﬁciency holds effects of climate change. prove our sustainability the key to the futureviability of our company. performance.

Biodiversity TheWorld Conservation Union (IUCN) has been publishing HeidelbergCement seeks We make amajor contribution to aRed List of endangered animal and plant species for many to expand its leading role maintaining biodiversity. years. This list had morethan 17,000 entries in 2010, and in promoting biodiversity the number of threatened species continues to increase at its quarries around the year after year.Our quarry renaturation activities provide us world. with agreat deal of freedom in terms of improving biodiversity,and we plan to systematically exploit the associated opportunities.

Alternative raw materials and fuels Thewaste and byproducts generated by other industries Our use of waste and We use waste and byproducts as areakey source of rawmaterials and fuels for the cement byproducts as alternative alternative rawmaterials and fuels. manufacturing activities carried out by HeidelbergCement. rawmaterials and fuels Our rigorously applied internal guidelines ensurethe safe, reduces natural resource transparent and ecologically responsible processing of consumption and offers such materials. In this manner we actively contribute to solutions for sustainable the conservation of natural resources, and we also offer wastemanagement. solutions for sustainable waste management.

Sustainable construction HeidelbergCementisworking with Green Building Coun- HeidelbergCement en- We support and promote sustain- cils around the world on the development of certiﬁcation deavourstosupply sustainable construction. systems for sustainable construction, as well as on efforts to able building materials that make the design, construction and operation of buildings have apositive impact on moresustainable. We also invest substantially in innovative society and the environ- product solutions for sustainable construction. ment both during and after their service life.

Furtherreductionsofour environ- Among other things, our environmental policy focuses on HeidelbergCement seeks mental impact continual investment in environmental protection and to play aleading role in We arereducing the impact our the global implementation of environmental management the control and minimisa- company has on the environment. systems. We work to establish and maintain energy-efﬁcient tion of negative environ- processes and to reduce emissions at all of our business mental effects. lines. Water management is also becoming increasingly important to us in regions plagued by drought. 01 Company portrait Contents Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures 05 Employees About this report 02 06 Society Independent Limited Assurance

Targets and achievements

Target Achieved 2009/2010 Status Deadline Page

Challengesand strategy

Partnerships anddialoguewithstakeholders

–Strategic involvement of stakeholders. – Guidelines on stakeholder relationships adopted and published j Ongoing 14 f. internally. –Integration of sustainability criteria into decision-making – External audit of environmental and occupational safety indica- j Ongoing 50 processes in line with the CSI. torsasreported in line with CSI stipulations. –Implementation of the guidelines formulated by the CSI. – Guidelines adopted for “Contractor Safety and “Driving Safety” // j Ongoing 35 f. Reporting in 2011 Sustainability Report implemented.

Management

Reporting

–Expansion of the scope of reporting to include social, – Definition of additional occupational and environmental protec- j Ongoing 44 ff. economic and ecological indicators, and extension of such tion indicatorsinSustainability Ambitions 2020 // Collection reporting to additional business lines. of employee qualification data. –Group-wide controlling of employee qualification – Employee occupational safety qualification data published in j 2013 37 f.,47 programmes. the 2011 Sustainability Report.

Sustainability management

–All cement plants aretooperate with acertified environ- – 74% of all plants worldwide operate with an environmental j 2020 22, 45 mental management system. management system (2008: 69%). –All facilities will undergo an environmental audit once every – An environmental audit has been conducted at 34.1% of all R 2020 22, 45 five years. Theaudit is to be carried out either by an external aggregates facilities (excl. North America) and at 21.3% of all expert or aneutral auditor from within the company. cement plants over the last five years. –Clear stipulations for suppliersand service providerswith – TheSupplier Code of Conduct has been abinding element j 2011 25 regardtocompliance with social, ecological and ethical of all new supplier contracts since 29th April 2011. criteria. –Customer surveys and the creation of acustomer satisfaction –Surveys had been carried out in 20 countries served by the j 2012 24 indicator. cement business line by the end of 2010. Plans call for surveys to be conducted in 20 countries served by the concrete and aggregates business lines in 2011. Competitiveness

–Cost reductions of EUR 250 million in 2009 and EUR 300 – Total savings reached EUR 550 million by the end of 2009 j 2009/2010 8f. million in 2010. and an additional EUR 323 million was saved in 2010. –Maintenance of cost leadership with liquidity savings of – New target. n.A. 2013 8f. EUR 600 million by the end of 2013. –Research and innovation: moreextensive research into the –Workforce numbersfor research and development at the j Ongoing 24 recycling of building materials and special concrete. Global HTC rose 30% in 2010.

Employees

–Raising employee awareness of occupational health and – Reducing accident frequency,severity and deaths to zero. j Ongoing 35 f. safety issues. –Reducing accident frequency rate and accident severity – Accident rate 2010: 4.3 (2009: 4.6). Accident severity indicator j 2020 35 f. indicator to zerofor HeidelbergCement employees. 2010: 146 (2009: 167). –Occupational health and safety: reducing the number of –Fatality rate 2010: 1.1(2009: 1.7). j 2012 35 f. fatalities to zerofor HeidelbergCement employees. –Diversity: maintaining or increasing the shareoflocal managersintop executive positions. – As of 2010: 80% j Ongoing 38 f. –Diversity: 30% shareofwomen in management trainee programmes. – New target. n.A. 2015 38

j improved R no change greenarrows indicate targets from our Sustainability Ambitions 2020 18 19

Target Achieved 2009/2010 Status Deadline Page

Environment and naturalresources

CO2 emissions and alternative raw materials and fuels

–Reducing net speciﬁc CO2 emissions per tonne of – As of 2010: -17. 9%. j 2010 26, 45 cementitious material by 15% from 1990 levels. –Lowering clinker content of cement to 70%. – As of 2010: 76.1% (2009: 76.1%). j 2020 26, 46 –Increasing the shareofalternative fuels used to 30%. – As of 2010: 16.0% (2009: 16.9%). R 2020 26 f.,46 –Increasing the shareofbiomass fuels to 9%. – As of 2010: 4.5% (2009: 5.8%). R 2020 26 f.,46 –Increasing the shareofalternative rawmaterials to 12%. – As of 2010: 11.6% (2009: 11.3%). j 2020 26 f.,46

Local environmental impact

–Lowering water consumption and initiating aGroup-wide –Implementation of awater management plan at our j 2009 28 ff. exchange of best practices in the area of water consump- African locations. tion/management. –Measuring emissions of heavy metals, volatile organic –Continuation of emission measurements. R 2010 28, 46 compounds (VOC) and dioxin/furan at all locations. –Lowering emissions per tonne of clinker (reference year: –Asof2010: j 2020 28, 46 2008): –Dust: -35% –Dust: by 35% –NOX:-6% –NOX:by10% –SO2:-18% –SO2:by10% –Reducing total energy consumption at the aggregates –Asof2010: -2.5%. j 2020 45 business line by 15% (reference year: 2009). –Intensifying the sharing of best practices for noise reduction. –Expansion of best practices portfolio. j Ongoing 28

Subsequentlanduse and biodiversity management

–Restoration plans for 100% of cement and aggregate –Asof2010: cement: 90.6%, aggregates: 81.3%. j 2020 28, 46 quarries. –Implementation of internal guidelines for promoting –Introduction of the guideline in Europe (2009); as ahand- j 2010 28, 46 biodiversity. book in Asia-Oceania (2010) // Working group established for implementation in North America. –Application of biodiversity indicatorsatall locations in –Training materials have been developed // Assessment of j 2010 28, 46 Germany. mapping to date completed // Indicatorsintroduced at three German locations.

–Map Natura2000 protected areas in the UK,Benelux –Asof2010: Completed. j 2011 28, 46 and Spain. –Cement business line: Biodiversity management plans –Asof2010: 54.4%. j 2020 28, 46 arebeing implemented at 50% of the quarries in areas with high biodiversity value.

Sustainableconstruction

–Participation in national Green Building Councils in all –Membership in ten Green Building Councils worldwide. j 2020 32 countries whereHeidelbergCementoperates.

Society

–Group-wide documentation of charitable and cooperation – As of 2010: System in place; initial data collection for 2010 R 2011 41 ff. projects. completed.

j improved R no change greenarrows indicate targets from our Sustainability Ambitions 2020 01 Company portrait Contents 02 Challenges and strategy Preface Management Chronicle 04 Environment Keyfigures 05 Employees About this report 03 06 Society Independent Limited Assurance

All of our sustainability management activities arecoordinated at company headquarters, wherevarious corporate bodies meet regularly to discuss pertinent issues, exchange ideas and plan futuresteps and measures.

Management

Responsible corporate governance functional units aresupported herebyelectronic learning platforms and programmes as well as Inter- We believe that the purpose of responsible corpo- net and telephone reporting systems. rate governance is to ensurethat our efforts to post Over the past two yearswehave received reports solid earnings areaccompanied by measures that on individual cases of violations of our compliance safeguardthe futureviability of our company. guidelines. We have investigated these reports and, Among other things, responsible corporate gover- wherenecessary,implemented measures at the nance means achieving outstanding business per- local level to prevent futuremisbehaviour.Group- formance and attaining ecological expertise, while wide implementation of the compliance programme at the same time taking on social responsibility and is monitored through semiannual compliance re- acting ethically in line with relevant legislation. ports and general and specific examinations carried Corporategovernance: AR 2010,p.120 ff. out by our internal auditing department. TheMan- Management structure: AR 2010, p. 122 ff. aging Boardreport to the Supervisory Boardutilises information from the compliance reports. TheSu- Compliance pervisory Board’s Audit Committee is responsible HeidelbergCement’s compliance programme is a for determining whether the compliance pro- coreelement of our management cultureand is gramme conforms to legal requirements and recog- thereforefirmly integrated into our Group-wide nised best practices. management and monitoring structures. Among other things, the programme focuses on Importantongoing proceedingsconcerningantitrust competition law,occupational safety and environ- legislation mental regulations. We also make an intense effort In June 2009 the Higher Regional Court of Düssel- to ensureadherence to anti-corruption and capital dorf,Germany,fined HeidelbergCement AG approx- market regulations, as well as the laws on data imately EUR 170 million. Thejudgment stemmed security and equal opportunity for all employees. from legal proceedings that wereinitiated against Compliance officersatour various regional and German cement companies in 2002 concerning 20 21

Sustainability managementatHeidelbergCement

Chairman of the Managing Board GroupManagingBoard

Information/reporting

TheGroup’s sustainability strategy is managed and monitored in the Sustainability Steering Committee by the Managing Boardmember responsible for environmental sustainability and the heads of the Human Resources, Sustainability Steering Committee Procurement, Communication, Research and Develop- ment and Environmental Sustainability departments. Thecommittee also serves as aplatform for an exchange of ideas and information on current sustainability issues.

Sustainability Ambitions2020 –Biodiversity and natural resources –Sustainable construction EnvironmentalSustainability Committee –Fuels and waste recycling –Energy and climate protection –Emissions and environmental impact –Occupational health and safety

Groupfunctions Additional action areas –Human Resources –Human resources management and compliance –Purchasing –Supply chain management –Communication –Corporate citizenship and sponsoring –Research and Development –Product innovation

market collusion in the industry over aperiod of conducted by outside lawyers, have not confirmed several years. We filed an appeal against this ruling the alleged antitrust violations. In December 2010 with the Federal Court of Justice. As of 30th April the European Commission informed Heidelberg- 2011,nojudgment on the matter had been made Cement and other European and international ce- by the court, nor had the Regional Court of Düssel- ment manufacturersthat it had launched an official dorf ruled on arelated damage claim filed by the investigationofalleged violations of EU competition Belgian company Cartel Damage Claims SA. Despite law in several countries within the European Eco- the ruling of the Higher Regional Court of Düssel- nomic Area. However,according to the Commis- dorf against HeidelbergCement, the company still sion, this does not mean it has conclusive evidence believes thereisachance that it can successfully of any wrongdoing. defend itself against the damage claim suit. These and other proceedings motivate us to contin- In November 2008 HeidelbergCement was con- uously review and develop extensive internal pre- fronted with additional cartel allegations after re- cautions in order to prevent any violations of cartel views wereconducted by the European Commission law.Tothis end, our antitrust law compliance sys- at locations in Germany,Belgium, the Netherlands tem was reviewed in 2010 by arenowned external and the United Kingdom. HeidelbergCement’s own specialist in the field, who concluded that all the es- investigations of the circumstances, as well as those sential elements of an orderly and effective antitrust 01 Company portrait Contents 02 Challenges and strategy Preface Management Chronicle 04 Environment Keyfigures 05 Employees About this report 03 06 Society Independent Limited Assurance

law compliance system wereinplace and that these knowledge management activities include the sys- corresponded to the current standards applied at tematic networking of our experts and the inte- other companies of asimilar size in acomparable grated “World of Knowledge” platform, which is sector. used extensively by our employees and enables them to access knowledge and internal experience wherever it is needed for the development of new Sustainability management products and processes. Our Knowledge Manage- ment Board, which consists of representatives from Sustainable corporate development is atop prior- our Group areas or functions and from the Heidel- ity at HeidelbergCement. Themanagement systems berg Technology Center,controls internal knowl- at our various business units ensureacontinual edge management and supports our activities in process of improvement in line with our sustain- national and internationalbodies. ability strategy.Within these systems, we have defined areas of responsibility and created structures Environmentalmanagement that support the effective implementation and Group environmental protection policies and meas- monitoring of the measures we employ to achieve ures aremanaged by the Group Environmental Sus- our sustainability goals. This also ensures compli- tainability Committee. This body was established in ance with the guidelines we have set for ourselves. 2008 in order to improve our performance in the Goalsand achievements in 2010:p.18f. areas of environmental protection and occupational Ourguidelines: p. 13 f. safety (two very important issues in our sector) and to promote the exchange of information between TheSustainability Steering Committee, which is regions and business lines. Under the lead manage- headed by the Chairman of the Managing Board, ment of the Global Environmental Sustainability defines the basic framework for controlling and department, the committee’s experts from the dif- monitoring our sustainability strategy. ferent business lines and Group areas define guide- Theinterdisciplinary committee’s membersare cho- lines, goals and measures, and coordinate their sen from throughout the Group and consist of the implementation. Managing Boardmember responsible for environ- Ourenvironmental protection goals: p. 19 Cement plants that cur- mental sustainability and the heads of the Human rently operate with a Resources, Purchasing, Research and Technology, We areplanning to introduce certified environmen- certified environmental and Communication &Investor Relations depart- tal management systems at all of our cement plants management system: ments, as well as the Group-wide Global Environ- worldwide by 2020 in order to further solidify our mental Sustainability department. environmental protection activities at all of our 74% Operational responsibility for the achievement of locations. Our efforts herewill be based on the ISO sustainability targets and the implementation of 14001 international environmental management Deadline by which sustainability measures lies with the individual standard. We will, however,also permit the use of environmental manage- Group departments and the Group Environmental nationally recognised environmental management ment systems aretobe Sustainability Committee, whose tasks aredescribed systems. At the moment, 74% of our cement plants in place at all facilities in moredetail in the chapter on environmental operate with acertified environmental manage- worldwide: management. ment system. Sustainability management at HeidelbergCement:p.21 In addition, we have set ourselves the goal that 25% 2020 of the facilities operated by all of our business lines Knowledgemanagement will have undergone an independent environmental Forward-looking research and development arethe audit in the five yearsby2012. Additional plans call foundation of the futureviability of any company. for all locations to have undergone such an audit In order to gain acompetitive edge, we have by 2020. These audits arenot only important to us adopted an approach that relies on the targeted in terms of monitoring our environmental perform- sharing of knowledge and experience in internal ance; they will also help us identify and address projects, external partnerships and our operational areas in need of improvement. We also frequently business. Thekey components of our Group-wide employ locally developed environmental protection 22 23

“Virtually all of our research and development projects seek to create ﬁnancially successful products and applications with aminimal ecological footprint, whereby thereisaclear

focus on reducing CO2 emissions to aminimum. This aspect is taken into consideration as early as the project planning PRACTICAL EXAMPLE phase by means of life cycle analyses.” Research and technology: Consolidation and networking on aglobal scale

Dr.Wolfgang Dienemann In 2010 we consolidated our Group-wide research and Twoofthe four existing regional HTCs arelocated in Director Global Research development activities related to cement and concrete Europe, one is in North America, and one is in Asia. The &Development, Heidelberg into the new Heidelberg Technology Center (Global HTCs assist our plants with all technical issues, ranging Technology Center HTC) in Heidelberg, Germany.The centre’s global focus from safeguarding rawmaterials to process optimisation serves to supplement and support the four existing and control, as well as quality assurance. In some cases, HTCs in the Group areas. the HTCs remain involved in plant investment projects Theprimary task of the Global HTC is to optimise the right up to commissioning. Our Competence Center transfer of knowledge and the coordination of tech- Materials (CCM) provides support in asimilar manner nology activities and major construction projects all to Group companies that do business with aggregates, over the world. One of the most important aspects of ready-mixed concrete and asphalt. Theclose contact this process is the development of products with mini- between the HTCs or the CCM and the Group locations

mal CO2 emissions. With this in mind, we areplanning is akey element of our continual improvement proc- to further increase the number of employees at the esses. It also ensures that all of the available optimisa- centrein2011. tion opportunities areefﬁciently exploited. 01 Company portrait Contents 02 Challenges and strategy Preface Management Chronicle 04 Environment Keyfigures 05 Employees About this report 03 06 Society Independent Limited Assurance

solutions as examples of best practice that can be through the use of other components such as blast used by other facilities. furnace slag and fly ash. This not only reduces Natureconservation and biodiversity management energy consumption but also conserves natural play akey role in our environmental protection resources. In general, we now employ new product activities. We established an internal guideline for life cycle analyses during the development phase in Europe in 2009 in order to promote biodiversity in order to assess and reduce the environmental im- our quarries in atargeted manner and to minimise pact of our products throughout their entirelife the impact our business activities have on the natu- cycle. Finally,weare conducting research into com- ralenvironment. This guideline defines for the first pletely new binder systems that requirenoclinker time our Group-wide standards for recultivation what-soever.Such alternative products areinthe and renaturation measures. early stages of research, and it will thereforetake Our goal hereistocreate abiodiversity manage- several yearsbeforethey areready for the market ment plan for all the quarries within the Natura and for mass applications. 2000 network of the European Union. This plan will Furtherinformation about alternative raw materials and “Theperformance and enable us to safeguardlong-term rawmaterial sup- fuels: p. 27 f. motivation of our em- ply and production in accordance with stringent ployees will play akey environmental legislation. In Asia-Oceania we have Humanresources management role in determining how introduced the guideline in amodified form as a Highly qualified and motivated employees area handbook of recommendations that takes special key prerequisite for the long-term success of well HeidelbergCement regional conditions into account. Thesame proce- HeidelbergCement. That’s why our Group-wide is equipped to face the durewill be applied for North America. human resources policy focuses on identifying and futureand in defiing the further developing the talents of our employees, company’s position in Research anddevelopment as well as competing with other companies to at- Our innovation performance is based on intensive tract and retain talented individuals. As arespon- the global competitive research and development activities. Forthis reason, sible employer,wealso believe that one of our field. This is why we be- we significantly upgraded our Research and Devel- very important obligations is to provide our work- lieve that asustainable opment department in 2010 and created the new force with asafe and comfortable working envi- human resources policy Global Heidelberg Technology Center (see Practical ronment. Example, p. 23). Thecentre, which is also known as In order to develop and retain its employees, also includes investment Global HTC, consolidates our Group-wide research HeidelbergCement has created acompetence mo- in extensive training and and development activities for cement and con- del that defines the demands we make of our staff continuing education crete. Theprojects that Global HTC manages arede- members. Among other things, this model allows programmes, even in fined and implemented in close cooperation with supervisorstocarry out systematic Group-wide our operating companies. performance and potential assessments based on difficult times.” Our research and development activities areclosely standardised rules. It also serves as abasis for strate- coordinated with our markets and our customers, gic executive development and effective succession AndreasSchnurr with astrong focus on the development and im- planning. We seek to achieve three goals here: Director Group Human provement of bindersand concrete with optimised Resources, HeidelbergCement properties and innovative functionality. We also 1. to fill key positions worldwide with top-quality work to continually improve our production proc- candidates from within the company; esses and cost structures. This includes the cost- 2. to develop top talents in atargeted manner; effective substitution of alternatives for fossil fuels 3. and to bind employees to the company over the and natural resources, as well as measures that long term by offering individual development reduce energy consumption. programmes. Athirdpillar of our R&D activities is the development of types of cement and concrete that display Several other issues have influenced our human

better CO2 balances. Themost important lever we resources work over the last two years. Occupa- employ hereinvolves the reduction of clinker con- tional health and safety continues to have the high- tent. To this end, we arereﬁning our composite est priority at the Group. We have set ourselves cements and have lowered their clinker content the goal of minimising the number of accidents at 24 25

our facilities and reducing the risk of injuries and been made within adefined period of time, or if the occupational illnesses through improved preventive supplier is found to be unwilling to make such cor- measures. rections. More on occupational safety:p.35ff. Supplier Code of Conduct: www.heidelbergcement.com/sr2010/suppliers We have also developed aconcept for diversity management that is tailored to fit the specific condi- Customer relations management tions at our company.This concept relies on team- HeidelbergCement develops,producesand distrib- work and on the integration of various cultures, utes high-quality building materialsfor customers talents and experiences in an effort to achieve a throughout the world. We strive to cooperate workforce composition that reflects our presence on closely with our customerswherever they may be international markets, our customer structureand and to retain their loyalty over the long term. We our business environment. thereforecontinually work to improve our relationships with customers, and we clearly emphasise the Supplier relationsmanagement importance of good customer relationships in our Thecosts of purchasing goods and services at Leadership Principles. We seek to offer our cus- HeidelbergCement amount to morethan 60% of tomersthe greatest possible utility and to establish our total turnover.Approximately 30% of this partnerships that arebased on trust. This approach amount is accounted for by locally procured goods includes sincereand honest communication —par- and services. Our purchasing volume thereforerep- ticularly with regardtoadvertising measures related resents aconsiderable economic factor in many re- to the marketing of innovative and environmentally gions. We know that our sense of corporate sound products, which requiremoreexplanation Shareoftotal turnover responsibility will also be judged by how effectively than our standardised products. accounted for by we ensurecompliance with sustainability standards Customerswho wish to make complaints or file the costs of purchasing throughout our supply chain. claims can get in touch with their local contact part- goods and services: Our Group-wide purchasing guidelines provide clear ners. We ensurethat such complaints —whether instructions regarding the supplier relationships they areofatechnical, logistical or commercial 60% and purchasing activities of HeidelbergCement. As nature—will be directed to the right contact part- abasic principle, these relationships arebased on ner within the Group. This process is carried out Proportion of locally respect, fairness, ethics and credibility,inline with within our customer relations management system procured goods and our Code of Business Conduct. Our business activi- in Germany,for example. services: ties aresubject to local legislation and also take into In 2009 our Corporate Sales and Marketing depart- account regulations concerning environmental pro- ment and national organisationslaunched the first- 30% tection, quality assurance, product safety and social ever large-scale customer survey in all the Group conditions. We also expect our supplierstoadhere areas in the cement business line in order to learn Number of countries to our Supplier Code of Conduct, which is based on moreabout our customers’ wishes and expecta- that participated in the Code of Business Conduct that has been in ef- tions. Thesurvey was completed in 20 countries in the cement business fect for many yearsand which takes into considera- all Group areas (with the exception of Asia) at the line’s customer survey tion key elements of the SA 8000 International end of 2010. Other countries in Asia will follow in in 2010: Social Accountability Standard, the ISO 14001 inter- 2011,and 20 additional surveys will also be con- national environmental standardand the principles ducted for the concrete and aggregates business 20 of the International Labour Organisation. lines this year. TheSupplier Code of Conduct, which is available Our goal is to have carried out similar surveys in in many languages, forms the basis of all the con- approximately 20 countries for each of our business tractual supplier relationships maintained by lines by 2012. Theresponses of our customerswill HeidelbergCement throughout the world. If the be carefully analysed, and the results of the analysis Supplier Code of Conduct should be categorically will subsequently be used to develop country- violated in any way,HeidelbergCement will termi- specific measures that will help us to retain our nate the supplier relationship in question if it is de- customersand further enhance customer satis- termined that the necessary corrections have not faction and loyalty. 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle Environment Keyfigures 05 Employees About this report 04 06 Society Independent Limited Assurance

We believe that environmental protection also means species protection. That’s why we are implementingtargeted measures to create and preserve habitat for rare animals and plants in our quarries.

Environment

Energy and climate protection Participationinthe EU EmissionsTrading System HeidelbergCement operates 48 facilities in 11 coun- Climate protection is acoreelement of Heidelberg- triesthatparticipate in theEUEmissions Trading Cement’s environmental policy.Asacompany that System (ETS). It is also active in the market for uses agreat deal of energy,wehave been striving emission certiﬁcates. In anticipation of such asitu-

to minimise our CO2 emissions for many years. ation, we established aGroup-level position for Between 1990 and 2010, we reduced our speciﬁc emission issues several yearsago. Theassociated

net CO2 emissions per tonne of cement (the ﬁgures corporate department not only manages trading refer to cement and cementitious materials) by activities in the EU but also monitorsdevelopments

morethan 17.9% to 638.4 kilogrammes of CO2 per in countries outside of Europe that might affect our tonne. We have thus overachieved our current plants.

goal –15% less CO2 emissions by 2010. By 2015 HeidelbergCement also employs Kyoto Protocol

we now aim to attain aCO2reduction of 23% com- emissions reduction mechanisms. We arecurrently pared to the 1990 level. implementing three projects in accordance with the Clean Development Mechanism methodologies. We have been implementing several measures to Our Joint Implementation project was ofﬁcially

lower CO2 emissions. They include: recognised in October 2010. As part of the project,

–the continual investment in energy-efﬁcient tech- we arereducing CO2 emissions at our Kryvyi Rih Ce- nologies and production processes ment plant in Ukraine through the use of alternative –the increased use of composite cement —afea- fuels. turethat has enabled us to reduce the clinker TheEUwill soon make major decisions regarding content to 76.1% of our total cement production the futureofEuropean emissions trading for the to date period 2013–2020. EU institutions agreed on a –and greater use of alternative fuels including bio- benchmarking method for the cement industry in mass (20.5% of our total energy consumption in March 2011.This method stipulates that cement 2010). manufacturerswill receive free allocations for a 26 27

portion of their emissions during the thirdphase Alternativeraw materialsfor cement manufacturing of the ETS. Our production of clinker —the most important However,discussions regarding the level of such intermediate product for cement manufacturing— allocations continue, and uncertainties therefore involves the utilisation of alternative rawmaterials. remain. In the medium term the allocations will These include old foundry sand, potter’s plaster most probably not cover all of HeidelbergCement’s from the porcelain industry and sludge from drink-

anticipated CO2 emissions. We thereforeexpect ing water purification systems. that we will have to purchase additional emission Through the use of additives in the cement grinding certificates. process, we have been able to reduce the propor- Regulatory risks: AR 2010,p.93f. tion of clinker,which is very expensive to burn, in the final product. We primarily utilise blast furnace Innovationsfor climateprotection slag from steel production operations, as well as fly HeidelbergCement is working hardtodevelop and ash that remains as abyproduct in coal-fired power

implement innovative solutions that will lower CO2 plants. Thesharp decline in steel production follow- emissions. In many countries, we arethe leader ing the global ﬁnancial crisis led to ashortage of when it comes to using biomass fuel. We arealso blast furnace slag in 2009. This development forced funding aforward-looking research project involving us to adjust our cement portfolio.

the captureand storage of CO2 at our facility in Bre- Our Eastern European and Indian plants have tradi- vik, Norway. tionally been the leadersinthe use of blast furnace In addition, we wereone of the first companies in slag. In fact, cement plants in Ukraine and Russia are Europe to generate electricity from waste heat from often built directly next to steelworks in order to kilns. We have accumulated many yearsofexperi- generate synergy effects. Theexpertise we have ence with this procedureinplaces like Germany and gained in this area is gradually being transferred to Sweden, and we arenow applying the expertise ac- other regions. quired around the world. In China, we arecurrently All in all, the shareofalternative rawmaterials generating electricity from waste heat in five kiln in clinker and cement production operations de- lines. Some 35% of the electrical energy require- creased from 13.0% in 2008 to 11.6% in 2010. ment in these plants is now produced with waste During the period under review we did not achieve kiln heat that previously went unused. We plan to our goal of further reducing the proportion of Reduction of specific introduce this technology in other countries where clinker in our cement. This proportion currently net CO2 emissions since the Group is active in cases whereitmakes eco- amounts to 76.1%. 1990: nomic sense to do so. Forexample, we arenow building a15-megawatt power generation facility in Alternativefuels replacenatural resources 17.9% Canakkale, Turkey,that will utilise waste heat from An even moreimportant goal for HeidelbergCement two kiln lines. Once the facility is completed, ap- is to replace fossil fuels with alternative fuels wher- Shareofthe electricity proximately 6% of the energy requirement at the ever possible. Theutilisation of waste materials and requirements we are cement business line will be covered by production byproducts from other industrial sectorsnot only already covering with from alternative energy sources at Heidelberg- enables us to contribute to natural resource conser- waste heat from the kilns Cement. vation but also creates potential new solutions for in five Chinese plants: sustainable waste management. Thetype of material used depends on such factorsasavailability and 35% Raw materials and fuels calorific values. We also take into consideration the chemical com- When manufacturing our coreproducts –aggre- position of the substances we employ in order to gates and cement –wemainly utilise rawmaterials avoid harmful emissions and anegative impact on from our own quarries and sand and gravel pits the environmental compatibilityofthe product in in the direct vicinity of the production locations. question. Our selection and use of alternative mate- When producing aggregates, we process the raw rials areinaccordance with the guidelines devel- materials from such sites without the use of addi- oped by the World Business Council for Sustainable tives. Development. 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle Environment Keyfigures 05 Employees About this report 04 06 Society Independent Limited Assurance

Our alternative fuels strategy focuses on three on promoting biodiversity for all forms of subse- globally available waste material flows: quent land use —for example, crop cultivation, –sorted fractions of domestic and municipal forestry or natureconservation.Proper renaturation waste with high calorific values results in true added value in terms of naturecon- –sewage sludge servation and species protection. –hazardous waste. In 2011,webegan collecting data on biodiversity indicatorsthroughout the Group. Thetopic has Theshareofalternative fuels (incl. biomass) in thus become acomponent of our environmental the total fuel mix was 20.5% in 2010. As aresult, management system. At least 50% of all quarries HeidelbergCement remains the global leader in the in areas marked by ahigh level of biodiversity will cement manufacturing industry. be assigned management plans by 2020. Morethan www.heidelbergcement.com/sr2010/fuelmix 110 such plans have already been drawn up in pilot projects to date. In 2011 we will develop an implementation guideline for the plans and begin carrying Landuse and biodiversity them out. www.heidelbergcement.com/sr2010/biodiversity HeidelbergCement takes into account both economic and environmental sustainability when deciding which deposits aresuitable for extraction. Quarries Localenvironmental impact and gravel pits completely transform the existing landscape, destroy local habitats and alter the mor- Airpollution controland noiseemissions phology of the surrounding area. Because animals Besides having to address the issues of dust and can usually relocate within ashort time, but plants noise, HeidelbergCement also faces amajor chal- cannot, we take great carewhen removing topsoil. lenge in terms of air pollutant emissions at the After all, the plant seeds, tubersand roots areavital cement business line. Whereas dust and noise are archive of the variety of vegetation in the area. generated during various phases of the production We need to develop feasible approaches for mini- process, nitrogen oxides, sulphur oxides, heavy met- mising our interventionsand offsetting their conse- als, dioxins and furans areproduced only during kiln quences. That is why we adheretoacomplex operation. These pollutants areregularly monitored permission process beforeweopen anew quarry and measured. State-of-the-art filtering technolo- or expand an existing one. gies, innovative procedures and process-integrated This process includes an environmental impact as- environmental protection measures have enabled sessment and —ifthe site is located in aparticularly us to substantiallyreduce the impact our activities

biodiverse region —specialised biodiversity studies have on people and nature. SO2 emissions have Percentage of quarries such as the natural habitats and wild ﬂoraand fauna declined by 18% since 2008, for example. Our goal in areas with high biodi- assessment of compatibilityinEurope. Compensa- is to further reduce these emissions. Considerable versity value, for which tory measures such as reforestation and support for investment in this effort will continue to be neces- abiodiversity manage- natureconservation projects arealso sary in the cement business line. To this end, we

ment plan has been de- deﬁned during this process. have already installed ascrubber for SO2 reduction veloped: at our Brevik cement plant in Norway,and we have Biodiversity management at ourquarries also invested extensively in new technologies in 54.4% Recultivation plans areanimportant component of North America that will reduce the emissions of permission procedures today.These plans deﬁne the mercury,dust and NOX. goals and timetable as far as reincorporating a www.heidelbergcement.com/sr2010/emissions quarry into the surrounding landscape is concerned. Even during extraction operations, which arecarried Water management out in close consultation with the appropriate au- HeidelbergCement hasset itself thegoalofmitigat- thorities and local municipalities, we already begin ingthe impact of its activities on natural water re- with the renaturation and recultivation of sections sources to the greatest extent possible. We comply that arenolonger being quarried. Our focus hereis with stringent environmental regulations to ensure 28 29

“Successful biodiversity management for the renaturation of aquarry depends on expertise and the strong commitment of all participants. At the same time, we see renaturation as an PRACTICAL EXAMPLE opportunity to show the local community,public Breeding sites for the sand martin authorities,interest groups and othersthat Sand martins have difficulty finding suitable locations idea is simple enough. If extraction work is planned we take the preservation in which to breed. Their habitat is steep sand dunes on at asteep slope that sand martins arealready using or of biodiversity seriously.” river banks, almost all of which have disappeared due which could attract them, the plant involved provides to river-straightening and floodwater-protection meas- the birds with man-made slopes or break lines as sub- ures. As aresult, the bird’s numbershave declined stitute habitats. At the same time, the areas earmarked KerstinNyberg dramatically in Europe. for extraction arelevelled beforethe sand martins can Environmental Manager, Because they love steep slopes, sand martins tend to return, making them no longer attractive to the birds. Cementa choose the freshly excavated faces of gravel and sand pits as alternative breeding areas. But the needs of SuccessthroughoutEurope gravel extraction and breeding can come into conflict We arecurrently implementing such protection meas- when the birds make their nests on sites whereextrac- ures at about 90 locations in Europe. Thecountries tion is necessary for production. To avoid possible con- involved include Germany,the UK,Belgium, the Czech flicts in relation to species protection and naturecon- Republic, Poland and Norway.And our efforts have servation, HeidelbergCement has developed aspecies borne fruit: counts taken in 2009 and 2010 show protection programme for the sand martin. Thebasic that up to 11,172 breeding pairshave been protected.

that rawmaterial quarrying will not damage local water treatment technologies. Regular employee surface water or groundwater.Wealso employ efﬁ- training and continual internal and external audits cient procedures in order to limit water consump- ensurethat all deﬁned processes areemployed at tion at our production units and we utilise effective all the units. 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle Environment Keyfigures 05 Employees About this report 04 06 Society Independent Limited Assurance

“Conflicts aremostly irreconcilable when the DISCUSSION habitats that will be affected arevery rare or cannot be restored. They It’s not aquestion of whether to extract, but rather how. arenon-negotiable. As far as we’reconcerned, Is it possible to reconcile rawmaterials extraction with Baumann: Icom- these areas aretaboo.” natureconservation? In ajoint interview,Dr. Andre pletely agree with Baumann, Director of the Baden-Württemberg section what you say.Often of NABU, the Natureand Biodiversity Conservation it’s not at all aques- Dr.Andre Baumann Union, and Dr.Michael Rademacher,Manager Bio- tion of whether to Director of the diversity and Natural Resources at HeidelbergCement, extract, but rather Baden-Württemberg discuss limits and possible ways of achieving this goal. how.And that means section of NABU extraction must be www.nabu.de Dr.Baumann,asanenvironmentalist, canyou in any environmentally wayapprove of quarries’impactonnature? compatible, with aview to protecting biodiversity while Baumann: That depends. As is the case in other areas, taking the interests of the stakeholdersinto account. “It is very importantfor natureconservation encompasses avariety of goals. Over the past few years, HeidelbergCement has en- companieslikeoursto Forexample, Icannot approve plans to extract rawma- deavoured to engage in acritical dialogue with us on engage in adialogue terials in areas wherewewant to protect near-natural this issue and shown that it is also very much con- with communities and forests. On the other hand, it’s known that former cerned about how rawmaterials areextracted. quarries can turn into unique habitats for so-called Experience shows that the sooner you talk to one an- local environmental pioneer species. other,the better the chance that you’ll avoid conflicts organisations at an early Conflicts aremostly irreconcilable when the habitats and achieve positive results. Many quarries arenow stage.” that will be affected arevery rare or cannot be restored. man-made biotopes from which everyone benefits. Alluvial forests areexamples of such habitats in Baden- Dr.MichaelRademacher Württemberg. They have to be preserved and protected Does that mean that engaging in acontinuousdialogue Manager Biodiversity and Natural against extraction. They arenon-negotiable. As far as aboutits locationsisamustfor HeidelbergCement? Resources, HeidelbergCement we’reconcerned, these areas aretaboo. Rademacher: Yes. It’s very important that companies like oursengage in adialogue with communities and Do you see irreconcilable differences here, local environmental organisations well in advance and Dr.Rademacher? stay in touch. To make this possible, we organise open Rademacher: Not at all. We also know that natural allu- days, for example, as well as discussion events and vial forests need to be preserved. They aretaboo for school and natureconservation partnerships. Over us as well, which is why we won’t go near them. How- the years, we have discovered that less conflict arises ever,weare often faced with lesser conflicting goals whenever we promote adialogue about our sites. when dealing with local natureconservation groups Isometimes even advise the person responsible against and the communities in which we operate. After all, aproject if aplanned quarry creates irreconcilable en- we can’t just pick alocation and say “Let’s extract vironmental conflicts —for instance, very rare species here.” We need to find places that have usable raw will be affected or the habitats will be difficult to re- materials. Afterward, an environmental impact assess- store. However,wewill fight to realise aproject if we ment needs to be made to determine if the rawmateri- believe that we have to extract rawmaterials at apar- als can be extracted in an environmentally friendly ticular location for business reasons and the project manner.Aspart of the evaluation, we analyse if the re- is environmentally compatible. naturation of the quarries can be carried out in such a way that destroyed habitats will be able to re-emerge Is thecompany doingenoughtomaintainbiodiversity? after extraction is discontinued. Baumann: Idon’t want to create the impression that 30 31

HeidelbergCement does not have aGroup-wide water management guideline. Thecreation of such aguideline would requireastandardised survey of water consumption and waste water volume at our 2,500 locations worldwide. However,we rely on the local initiatives of our subsidiaries, particularly in regions suffering from water short- ages. natureconservation groups areinsatiable. But “enough” Forexample, all of our company’s African locations is awordwerarely use. We do indeed recognise that aresubject to awater management plan that com- HeidelbergCement is on the right track hereand out- plies with the environmental and social standards of performs other companies from related industries. the InternationalFinance Corporation (IFC). Every However,HeidelbergCement will have to continue to facility will implement this plan in line with local pursue this course. conditions and requirements. Theobjective of the plan is to achieve optimal water consumption and Rademacher: And treatment so as to ensurethat the lowest possible that’s exactly what amount of fresh water is used in our production we’ll do. But Ialso processes. Our Kakanj plant in Bosnia-Herzegovina think that nature was also recently equipped with astate-of-the-art conservation groups water treatment plant that has significantly reduced have an obligation to water consumption. Forseveral yearsnow,wehave do moretomake been documenting such practical examples and people awarethat the sharing them throughout the company in order to way former quarries enable each facility to benefit from the expertise of areused is also aform of environmental protection. the others. We know that quarries that areleft alone will eventu- www.heidelbergcement.com/sr2010/water ally have avery high level of biodiversity.Wehave to jointly communicate this finding and make it clear that Waste environmentally-compatible renaturation is avaluable No processwaste is produced during themanufac- alternative to the use of former quarries for agriculture ture of cement. Theonly important by-product is or forestry. kiln dust, which is extracted during the clinker burning process. We aim at reincorporating this dust into So it lookslikethere is greatunanimity betweenraw the cement production process, thereby improving materialsextractionand nature conservation? our ecological efficiency.Kiln dust that cannot be Baumann: Not so fast, though! Thedevil is in the de- recovered is sold for various applications and only tails. If we aretalking about working aspecific quarry exceptionallydeposited in landfills. We dispose our and the economic interests at the location areobvious, maintenance waste -essentially waste oil -inaccor- then conflicts can arise, of course, and people on both dance with the applicable regulations. sides can lose their tempers. But our aim is to engage in discussions in order to avoid such conflicts in advance. Logisticsand transport Fuel consumption and emissions arekey environ- Rademacher: That is exactly how we see things. There mental factorswhich we arestriving to reduce in will always be controversial discussions and differences our internal and external logistics systems. We are of opinion between the communities close to the sites, always working to further optimise the energy natureconservationists and extracting companies. But consumption related to our quarries. if you look at how many such instances of conflict hap- When it comes to transporting our cement and pen per year,itisclear that things have cooled down aggregate products, we consider the pros and cons considerably.That suggests that it is possible to com- of all modes of transportation in terms of econom- bine rawmaterials extraction and natureconservation. ic and ecological factors. We try to utilise environmentally friendly ship and rail transport to the 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle Environment Keyfigures 05 Employees About this report 04 06 Society Independent Limited Assurance

greatest extent possible. This is why we launched Sustainable construction aworldwide initiative in 2010 to analyse all of our rail and ship transport. Current uses of road Concrete’s characteristics such as durability and transport arebeing checked to determine if a local availability make it asustainable, affordable switch to moreecological transport means is pos- building material. High performance concretes like sible. ultrahighstrength concrete has aproven durability State-of-the-art IT systems support our transport recordeven in the most extreme marine environ- planning operations. We employ such systems for ments of offshorewind farms. Additionally,the everything from incoming orderstodelivery plan- thermal mass of concrete can be used to reduce ning processes. This is how we ensureoptimal energy consumption in buildings. Concrete is also utilisation of our vehicles and minimise route dis- arecyclable material and can be used again in new tances. Strategic planning of the makeup of our concrete as well as material for road construction. transport fleet also allows us to carry out adjust- HeidelbergCement supports the CSI report on re- ments in line with futurerequirements and thus cycling with an ultimate goal of “zerolandfill of improve capacity utilisation. concrete”. Through research in the Netherlands, we Theglobal importance of our Group for this seg- arefinding ways not only to increase recycling rates ment of vehicle production is prompting the manu- but also to increase recycling into higher-value ap- facturerstoimprove their products, boost their plications. effectiveness and adjust new variants to our needs. These processes arebeing reinforced by our pur- Sustainablebuildingmaterials chasing decisions, which arelinked to the total To further boost the sustainability of our products, cost of ownership (TCO) and thus take into account our research is concentrating on developing com- both the procurement costs and all aspects of the posite cements, replacing clinker content with alter- vehicles’ subsequent use. Diesel consumption and native rawmaterials. We develop new products to pollutant emissions arekey factorshereinterms of meet the market’s growing sustainability-related costs and environmental friendliness. needs. Forexample, our photocatalytic cement However,fuel consumption is influenced not only TioCem® helps break down airborne pollutants. Number of manage- by the vehicles themselves but also by the way TermoCem® increases thermal conductivity,making ment plans related to they aredriven. We thereforeprovide regular driver geothermal projects moreeffective. Other special biodiversity that we training instruction to make our driversawareof cements make it possible to substantially accelerate developed in 2010: how their driving styles affect consumption and to the repair of roads and airport runways. Over the ensurethat their technical knowledge remains up last few years, we have also expanded our Life Cycle 110 to date. Analysis expertise, which we now systematically use during product development. We plan to fur- Shareofquarries in Production accidents ther intensify all these research and development areas with ahigh level In 2009 and 2010, the company management activities in the future. of biodiversity,for received no reports regarding production, storage which we will assign or transport accidents in which significant amounts SupportofGreen Building Councils worldwide plans by 2020 at the of environmentally hazardous substances might Throughout the world, HeidelbergCement and its latest: have been, or were, released. We use only very subsidiaries support Green Building Councils in their small amounts of hazardous substances in the efforts to develop certification systems for sustain- 50% processes used to make cement, aggregates and able construction and to make the design, construc- concrete. It is only when we use hazardous waste tion and operation of buildings moresustainable. In derived fuels that we have to deal with large 2010, HeidelbergCement joined the Green Building amounts of hazardous material. When handling Councils in Romania, Sweden and Poland, and co- such waste, we always ensurethat the highest stan- founded the Green Building Council in Norway. dards of safety aremaintained. We also regularly provide courses that train our employees on how to deal with the materials involved. Alternative fuels replacenaturalresources:p.27 32 33

KEY FIGURES

Absolute CO2 emissions Specific CO2 emissions in million t in kg CO2 /t cementitious material

/Gross/net emissions /Gross/net emissions

55.6 55.0 55.4 52.8 47.1 44.5 49.2 46.6 787.4 778.5 669.5 637.8 667.1 629.0 674.1638.4

“Anyone who wants to create something good 1990 2008 2009 2010 1990 2008 2009 2010 for society and the envi- After afall in CO2 emission levels between 2008 and We had been able to constantly reduce speciﬁc CO2 emis- ronment can learn from 2009, the economic recovery in Europe and economic sion levels up until 2009. Their rise in 2010 was aresult of nature’s ‘product devel- growth in Asia led to arise once morein2010. the reduced availability of alternative fuels. opment’. Natureshows us how we can do many Clinkercontentinthe cement Alternative fuels ratio

things better —ifonly Alternative fuels ratio (incl. biomass) we observe. Heidelberg- of which biomass Cement has developed a 84.3% 75.0% 76.1% 76.1% 3.1% 18.5% 22.7% 20.5% cement, TioCem®,that 0.0% 5.0% 5.8% 4.5% uses aphotocatalytic re- action to remove nitrogen oxides from the air in the same way that a 1990 2008 2009 2010 1990 2008 2009 2010 leaf on atreecleans pol- Theclinker content in the cement remained stable in Thealternative fuel ratio fell between 2009 and 2010, lutants out of the atmos- 2010 against abackground of increased clinker and because we could only use asmaller amount of alternative phere. We will need cement production. fuels despite the rise in clinker production. intelligent products like

this in the future.” Alternative fuels mix in 2010 Emissionsofdust, NOx and SO2 in g/t of clinker Plastics 19.4% Agricultural waste Progress since ProfessorDr. MichaelBraungart Waste oil 3.3% and waste wood 6.6% 2008 2009 2010 2008 Cradle to Cradle® Chair at the Tyres 16.1% Other biomass 5.1% Dutch Research Institute for Solvents 5.3% Other alternative Dust 406 254 265 -35% fuels 33.8% Transition, Erasmus University Sewage sludge 3.2% SO2 509 373 418 -18%

Rotterdam; Chair at the Univer- Bone meal and NOx 1,422 1,210 1,334 -6% sity of Twente; founder and animal fat 7.1% scientiﬁc director of EPEA Internationale Umweltforschung Considerably less bone meal was available in 2010 than Our investments in environmental protection have been GmbH in Hamburg in previous years. We could not entirely compensate for worthwhile. We have been able to reduce dust, and NOx this in 2010 by means of alternative waste ﬂows. and SO2 emissions considerably since 2008. www.epea.com 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures Employees About this report 05 06 Society Independent Limited Assurance

Qualiﬁed, motivated employees areakey prerequisite for the long-term success of the company. This is why providing professional development measures for our employees and earning their loyalty arefocal points of our human resources policies.

Employees

Employees and employment employees and business associates worldwide to conform to these essential guidelines and recom- HeidelbergCement strives to achieve outstanding mendations. corporate performance and aleading position as one of the best companies in its industry.Todothis, Trade unions and employee representation asolid foundation of legally and ethically correct HeidelbergCement hasalongtradition of employee behaviour must be in place. With this in mind, the co-determination,which hasbeenproveninopera- Managing Boardapproved aCode of Business Con- tional practice at oursites in Germany. Together the duct that applies throughout the Group and must individual panels form the General Council of Em- be complied with by all employees. TheCode of ployees and its committees for the AG,the Council Business Conduct specifies our values and the high of Employees for the Group and the European ethical and legal standards that apply to all of our Works Council at the international level. Employees business activities —fromstrategic planning to areequally represented on the Supervisory Board. everyday business operations. Thereisalso employee representation in most Euro- pean countries. Managersand employee represen- Respecting internationalstandards andnorms tatives on the European Works Council work to At HeidelbergCement it is amatter of course to maintain aconstant constructive dialogue address- respect and comply with the laws and regulations ing business and social concerns. Thestated aim of all the countries whereweoperate, which are is to initiate talks early on, especially when there the legal basis of our business activities. In addition, areconflicts of interest, and to ensurecooperation we operate in accordance with the generally ac- based on mutual trust for the benefit of the em- cepted recommendations and standards of recog- ployees and the HeidelbergCement Group. The nised national and internationalorganisations. information and consultation process involving the HeidelbergCement is committed to upholding the corporate management and the European Works ILOcorelabour standards and the OECD guidelines Council harmoniously complements the existing for multinational enterprises, and we expect our local processes with employee representatives of 34 35

the Group companies in the individual European of tax-free deferred compensation within the frame- countries. In addition, thereare trade unions and work of an employee-financed company pension similar organisations in almost all the countries in scheme. Similar provisions apply at our locations in which HeidelbergCement operates. countries wherethereare no state-supported pension plans or national health insurance. In these Employeesworldwide countries we provide our employees with support At the end of 2010 HeidelbergCement employed that is commensurate with local practices. In this atotal of 53,437 men and women (2009 total: regardour employees benefit from being part of an 53,302). Theincrease of 135 employees was essen- internationally active group, which typically offers tially the result of two opposing developments. On better standards. the one hand, the workforce was reduced due to local optimisation measures and capacity adjust- Work time regulation ments, above all in North America and the UK.On In ourworktimeregulation practices, we conform the other hand, the number of employees was in- to the legal requirements in effect at our locations. creased in Africa and Russia as aresult of the initial We promote adherence to these regulations by consolidation of cement activities in the Demo- means of our compliance system, which employees cratic Republic of the Congo and of the CJSC “Con- can use to individually report possible violations struction Materials” cement plant in the Republic (passive monitoring). In Germany,for example, the of Bashkortostan. works council conducts random testing on an annual basis to determine whether therehave been violations of the work time regulation. Remuneration policy and work In terms of flexible work time options, we offer time regulation models such as flextime, part-time positions and leaves of absence. Part-time work currently ac- Theobjective of the Group-wide remuneration counts for 9.3% of all positions at Heidelberg- policy is to ensurethat personnel costs areinline Cement AG.Older employees have the options of with the development of the company’s business. early retirement or,for example, pre-retirement Our remuneration systems arebased on perform- part-time work. ance and results, in accordance with the market standards for internationally operating companies in Number of Heidelberg- our sector.Inaddition to fixed salaries, which are Occupational health and safety Cement employees on specified by collective bargaining agreements or 31st December 2010: individual employment contracts, the employees of In our corporate guideline on occupational health HeidelbergCement AG also receive variable remu- and safety we have specified the fundamentals of 53,437 neration components that depend on individual our policy for promoting the good health of the job performance and the success of the company. workforce. Thestated objective is to minimise the Target year by which Theemployees of our foreign subsidiaries profit risk of accidents and injuries, and the risk of occu- we aim to reduce our from attractively designed remuneration systems pational illness, by means of intensified preventive accident frequency that correspond to the conditions of the respective measures. With the Sustainability Ambitions 2020 rate to zero: local labour markets. Temporary employment is we aim to reduce the frequency rate and severity not common in our company. rate of accidents to zeroby2020. Thesame target 2020 applies to the number of fatalities but should be Personnelcosts andsocialbenefits reached already by 2012. In 2010 our expenditures for wages and salaries, social security and pension scheme contributions and Groupstandards social aid increased by 2.2% to EUR 2,086 million In recent yearsthe Group standards concerning (previous year: EUR 2,042 million). Theamount of work at height and machine safeguarding have the contribution to the company pension scheme focused primarily on production processes. In 2010 corresponds to the accepted market level. In Ger- we also addressed construction project safety and many,for example, we have created the possibility driving safety.Weanalysed anumber of projects 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures Employees About this report 05 06 Society Independent Limited Assurance

and used the findings as abasis for revising and arediscussed in training courses in order to raise supplementingthe existing safety requirements for awareness of accident risks. construction projects. This updated standardwill be included as an element in contracts for futurecon- Accident trends struction projects. It is true that we have succeeded in further reducing Thenew standardfor driving safety resulted above the frequency and severity of accidents in all units all from the work of the “OccupationalHealth and during recent years. Unfortunately,the accident fig- Safety” task force in the CSI. HeidelbergCement has ures arestill much higher than we had hoped. The served as co-chair of this task force since the start of dismaying fact remains that we still have to mourn 2010. Theanalysis of work-related fatalities at all deaths of our employees, employees of external CSI member companies in recent yearsindicates companies we commission and thirdparties with no that most of the accidents in the industry occur in connection to the Group, mostly in traffic accidents. logistic activities, on facility grounds or public roads. Using this finding as abasis, the CSI task force Occupational illnesses developed recommendations to be implemented by Most cases of occupational illness that have been the member companies. identified in recent yearshave involved noise-in- “In order to prevent acci- www.wbcsdcement.org duced hearing loss. With 42 cases worldwide in dents caused by human 2010, the absolute number of cases was lower than error,itisvitally impor- To prevent work-related accidents, safe equipment in previous years. Further occupational illnesses tant to repeatedly make and appropriate management structures areneeded. of relevance wereRSI syndrome (repetitive strain Processes for safe work practices, specified in writ- injury), back injuries and respiratory illnesses. To all employees aware ing, exist at all the locations. In addition, 84% of prevent illnesses, we check the levels of noise and of the potential risks of our locations have management systems that also dust at the work sites at most of our locations and their activities. And that stand up to evaluation by external specialists —and monitor the employees’ health. In countries with is also our biggest chal- most of them conform to the OHSAS18001 re- less developed statutory health caresystems, our quirements. subsidiaries offer comprehensive health check-ups lenge.” for all employees and in some instances for their Occupational safety is aresponsibility families as well. At these locations, medical treat- Dr.Klaus Hormann of management ment is for the most part provided through dedi- Group Manager Health &Safety, Although we arecontinually improving occupational cated health stations or clinics staffed by medical HeidelbergCement health and safety at the technical and organisational personnel. levels, the fact remains that fatal accidents still hap- www.heidelbergcement.com/sr2010/prevention pen from time to time, even in countries that have established high standards in technical and organisational areas. Theimmediate cause of the accidents Training and career development in most cases is human error.This is why we are intensifying our efforts to make the employees and Training contractorseven moreacutely awareofrisks in the Sustainablehuman resources policy means investing workplace. In particular,wewant to make surethat in training even in difficult times. In other words, our managersincreasingly serve as role models. We we arehiring and training the next generation of aim to achieve this by means of targeted training qualified young employees. In Germany,the share programmes for managersand continuing education of our workforce accounted for by trainees remains at all levels. unchanged at 6.5%, which far exceeds the number In the spring of 2010, for instance, we distributed we need for our business. We hire76% of our our safety film throughout the Group. Thefilm is trainees for permanent positions. Our extensive based on real-life accidents and is used for training training programmes in almost all work areas stand purposes. We have produced postersthat call atten- out by virtue of the practical instruction they pro- tion to all existing Group standards. Translated into vide, and thus they offer ideal conditions for our the languages of the countries in which we operate employees’ continual professional and personal de- and displayed at locations Group-wide, the posters velopment. 36 37

Management training Themotivation and skills of our managersand experts is one of the main factorsinfluencing Heidel- bergCement’s position in the global competitive field and its readiness to face the challenges of the future. In order to prepareour managersand experts for their futureassignments, we offer training courses that arespecially tailored to the needs of our company.Training is provided in classic disci- plines such as strategy,leadership and management, and investment methodology,and special training options areoffered in technical fields. As part of a strategic Group initiative we will further strengthen the expertise of our senior managers. To help make this possible we have upgraded the content and concepts of the existing programmes in cooperation with Duke Corporate Education, one of the leading business schools for customised management training. Between 2011 and 2014, 500 managersfrom PRACTICAL EXAMPLE throughout the Group will complete athree-stage curriculum focusing on general management and leadership that takes into account global, regional “ZeroTolerance” programme for and local issues. We also offer adoctoral pro- improved occupational safety gramme that has been designed to support talented In 2010 the Górazdze Group, aHeidelbergCement internal and external employees with their disserta- subsidiary,developed aprogramme to increase Trainees as percentage tions. occupational safety at its plants and quarries. Called of the workforce in “ZeroTolerance”, the programme’s aim is to moti- Germany: Career advancementfor youngmanagers vate employees to not only examine their own ac- Measures for the professional development of tions with an eye to occupational safety,but also young managershave been consistently continued 6.5% to have zerotolerance for the incorrect practices of despite the difficult economic conditions in 2010. others. Thecoreofthe programme consists of ten Percentage of trainees We offer highly motivated and qualified college rules of conduct, which also arethe focal points in Germany who are graduates internationaltraining programmes con- of numerous training courses conducted internally subsequently hired: centrating on technology,sales, finance, human and with contractors. resources, purchasing and IT.In2010 atotal of Another central element is alarge-scale information 122 people took part in these programmes. Anew 76% campaign intended to foster amorepreventive ap- featureisaspecial multi-year curriculum that pre- proach to occupational safety.Herethe employees Participants in interna- pares highly qualified engineersfor advancement arealso called on to keep alist of any near-accidents tional graduate training into management positions. they have experienced, the risks involved in their programmes in 2010: everyday tasks, as well as new ideas for improving Documentationofcareerdevelopment hours safety in the work environment. Theunits that are In 2010 we recorded the average number of career 122 most successful will be honoured on aregular basis development hoursper employee for the first time. for their proactive behaviour and for improvements Themain focus areas of the career development in the area of occupational safety. programmes were—inaddition to occupational In late 2010 the Polish state ministry for mining safety —technical skills, management expertise and honoured the ZeroTolerance programme as ana- foreign languages. We had already recorded the tional example of best practice because of its unique data on career development in occupational health management approach. and safety in recent yearsaspart of apilot project. Thereliable data we have for 2010 shows that each 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures Employees About this report 05 06 Society Independent Limited Assurance

employee received an average of 9.8 hoursofcareer who must reconcile their family and professional development training in this area. We will further responsibilities, we rely on models such as ﬂextime improve the reporting system and publish abalance and part-time work as well as leaves of absence. sheet of the career development hoursfor several Given the relatively small size of our locations, co- theme areas in the next Sustainability Report. operation with external networks has provided good solutions in the areas of daycareorcarefor family memberswho requireassistance. Diversity and equal opportunity

We regarddiversity as amanagement concept that Employee satisfaction and relies on teamwork and the incorporation of various retention cultures, talents and experiences to achieve awork- force composition that reflects our presence on in- Motivated employees who feel astrong bond with ternational markets, our customer structureand our our company areanimportant prerequisite for business environment. Thegoal is to promote and the success of HeidelbergCement. In 2009, at our recruit employees with excellent qualifications who Heidelberg location in Germany,wecommissioned areprepared to provide top performance and apply astudy conducted as part of an academic thesis to their various social and professional skills to con- examine how our CSR activities affect the commit- tribute to the business success of our company. ment and satisfaction of the employees. Thefindings enabled us to conclude that the em- Hiring formanagementpositions ployees feel astrong bond with the company.A We also make diversity ahigh priority when we majority of those surveyed for the study said their arefilling management positions. Theinternational satisfaction with their working environment was character of our management team enables us to at ahigh to very high level. benefit from avaried spectrum of experiences in different cultures and to thus flexibly react to global Management survey concerning thecorporate Percentage of local challenges as well as satisfying the needs of local cultureand work satisfaction managersinsenior markets. Local managersaccount for 80% of all of To analyse the senior managers’ satisfaction with management positions: our senior management positions. their working environment, in 2010 we surveyed At our company we believe that diversity also 1,200 managersaround the world for the first time 80% means that when we arefilling management posi- regarding our corporate strategy,their approaches tions the ratio of women to men should reflect the to management and leadership, corporate values Percentage of women corresponding ratio in our workforce as awhole. In and issues concerning their working environment in the total workforce: 2010 women made up around 15% of the Group’s in general. Especially positive werethe responses entireworkforce, and about 8% of the senior man- to the questions about strategy,corporate culture, 15% agement positions wereoccupied by women. In company management and management style. Germany women accounted for about 17% of the After evaluating the responses (response rate: 87%), Percentage of women workforce and around 5% of the senior manage- we introduced numerous individual measures in senior management ment positions. To increase the number of women worldwide that aredesigned to help ensureabetter positions: in management positions, we areintensifying work environment. Thefocus hereisonactivities our efforts to promote young women through our for the optimisation of human resources develop- 8% career development programmes. Group-wide, ment and for cooperation across business lines and women account for about 15% of the participants units. Forthe next survey,which will be conducted in these programmes, and the figurefor Germany in 2012, the managerswill be asked to assess the is 28%. implementation of these measures.

Reconcilingfamilyand work responsibilities In competing for the best employees around the world, we aremaking adjustments in line with changing lifestyles. In support of our employees 38 39

KEY FIGURES

Employees by Group area

31 Dec. 2008 31 Dec. 2009 31 Dec. 2010 Western and Northern Europe 15,770 14,640 14,302 Eastern Europe-Central Asia 11,556 9,481 9,959 North America 15,739 12,601 11,899 Asia-Paciﬁc 15,044 14,030 13,682 Africa-Mediterranean Basin 2,680 2,499 3,539 Group Services 52 51 55 Total 60,841 53,302 53,437

“My vision for Cementa in Personnel costs

Skövde is to continue an 2008 2009 2010 open dialogue with our EURm EURm EURm neighbours, cooperating Wages, salaries, social security costs 2,170.4 1,891.9 1,991.3 with other companies Costs for retirement beneﬁts 81.0 94.5 71.4 Other personnel costs 46.2 55.1 23.5 and the university col- Total 2,297.6 2,041.5 2,086.2 lege nearby.Iwant the know-how existing in

the company to develop Occupational safety statistics –Group

further through this form 2006 2007 2008 2009 2010 of collaboration. We Accident frequency rate1) 7. 4 5.8 4.8 4.6 4.3 have to stay open to new Accident severity indicator2) 191 154 132 167 146 3) ways of thinking. That Fatality frequency rate 0.3 0.6 0.9 1.7 1.1 will make us an attrac- 1) Number of accidents involving Group employees with at least one lost working day per 1,000,000 hoursworked. tive employer for young 2) Number of working days lost due to accidents involving Group employees per 1,000,000 hoursworked. 3) people —for women as Number of fatalities of our own employees per 10,000 Group employees. well as men.“ Occupational health statistics

MatildaHoffstedt 2008 2009 2010 PlantManager,Cementa Occupational illness frequency rate4) 0.66 1.49 0.69 Proportion of employees –represented by H&S committees 98.3% 99.8% 99.9% –represented by H&S committees with trade union representation 82.9% 89.4% 91.5% Training hours 9.7 12.5 9.85)

4) Number of ofﬁcially recognised cases of occupational illness suffered by Group employees per 1,000,000 hoursworked. 5) Thereporting system for recording training hourswas changed in 2010. This could explain the decrease. 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures 05 Employees About this report 06 Society Independent Limited Assurance

We implement our sense of social responsibility ﬁrst of all at our company locations. This includes partnerships with schools, in which we give pupils aclose-up view of daily operations in our company.

Society

Regional responsibility Localconflicts of interest Over the past two years, therehave been conﬂicts Our corporate philosophy is expressed succinctly with nongovernmental organisations at two com- by the motto “Think globally —act locally.” In pany locations, in Israel and Australia. In both cases shouldering our responsibility to the community at therewas an alleged violation of quarrying rights; in our various locations around the globe, we lay the both cases, we carefully investigated the issue, to- foundations for our business practices —and our gether with local management, and initiated discus- success —all over the world. This is how we make sions at the local level. We wereable to obtain the good business contacts, capitalise on existing necessary authorisationatboth locations beforeany knowledge and maintain avigorous dialogue with quarrying work began. We have not pursued any our neighbours. Our aim is to join together with quarrying activities without having ﬁrst received the local partnerstocreate added value not only for requisite permits, and we intend to abide by this ourselves as aGroup but also for the larger commu- principle in all of our futureoperations. nity at our company locations. Wherever possible, it is our policy that local em- Cooperative activities ployees should take over the management of local We also consider it important to make surethat operations. Only in exceptional cases do we bring our business operations have aminimal impact on in managersfromabroad. the regional environment and to actively help re- At the same time, all of our plants work closely with storenatural habitats to their former state. To this local suppliersand service providers. In fact, around end, we have set up two public-private partnerships 30% of our procurement volume is invested in the (PPPs), one in Georgia and one in Tanzania (see immediate vicinity of our plants. Practical example, p. 42). In this way,and by providing jobs, we help to create In Georgia, for example, we teamed up with the added value and to promote —bymeans of wages, German development aid organisation GIZ investment, purchases and taxes —economic devel- (Deutsche Gesellschaft für Internationale Zusam- opment at our various company locations. menarbeit) in October 2009 to launch aPPP that 40 41

PRACTICAL EXAMPLE

Emergency aid after the volcano eruption in Indonesia

Mount Merapi, avolcano on the Indonesian island of further 2,200 packages of rice and cooking oil to fami- Java, erupted on 26th October 2010. Further eruptions lies in eight villages who had returned to their homes followed in subsequent weeks. Red-hot ash rained after the eruption. down on the surrounding areas, killing many people Thedecisions regarding the type and amount of aid and forcing thousands to flee to neighbouring districts. to be given weretaken on location according to the Villages and farmland wereengulfed by fireand then actual needs of the villagers. coated with athick layer of ash. Donationsfromemployees Thousandsofaid packages These and other aid measures werefunded by Indoce- Our subsidiary Indocement immediately initiated its ment together with the company workforce. All in all, own measures to provide humanitarian assistance. employees have donated approximately US$37,000 In November and December 2010, the company to help the victims of various natural disastersthat have dispatched its own “careteam” to the disaster area in hit Indonesia in recent years. In addition to the erup- Yogyakarta, which is located approximately 600 kilo- tion of Mount Merapi, these include the tsunami that metres from company headquartersinJakarta. hit the Mentawai Islands in western Sumatraatthe Theteam distributed thousands of aid packages to end of October 2010 and the flooding in West Papua, people from the many villages that wereaffected by which also occurred in October. the eruption. Inside the packages were, among other ForIndocement, helping to provide emergency relief things, sanitary articles, toiletries, biscuits, milk pud- for the victims of natural disastersthroughout Indonesia ding, blankets and mattresses. During asecond relief is akey element of our Corporate Social Responsibility mission in December,the careteam handed out a programme.

is scheduled to run for athree-year period. Its aims to invest this money in the expansion of its cement aretorestoreand conserve biodiversity at all of production capacity in the countries in this region. our quarries in Georgia, to increase public accept- Our company will bring to this partnership not ance of modern renaturation and recultivation only many yearsofinternational experience in the methods, and to promote the sharing of knowledge production of building materials but also its Proportion of procure- between stakeholdersfromgovernment and ad- commitment to rigorous standards in the fields of ment volume invested ministration, business, science and research, nature corporate governance, ethics and environmental in the immediate conservation organisations, and the local popula- protection. This investment programme will yield vicinity of our plants: tion. ahost of benefits. In addition to improving local Similarly,HeidelbergCement and the International infrastructureand supporting the construction of 30% Finance Corporation (IFC), amember of the World new housing, it will create jobs and raise environ- Bank Group, signed an agreement in May 2010 that mental standards. will facilitate the improvement of infrastructurein African countries south of the Saharabyincreasing the availability of cement in the region. In line with Corporate citizenship this agreement, IFC and its finance partnershave acquired aminority stake, amounting to as much as Corporate responsibility is not limited to acom- US$180 million, in HeidelbergCement’s operations pany’s business processes and the areas wherethey in Africa. In return, HeidelbergCement has pledged have adirect impact. As a“corporate citizen”, we 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures 05 Employees About this report 06 Society Independent Limited Assurance

“In Tanzania, the needs of the community are many,but we at TPCC aretrying to ensurea better sustainable future for the Tanzanian people. We arethereforefocus- ing on primary education, assistance to various orphanages and helping the most vulner- able social groups.” PRACTICAL EXAMPLE

NatashaD’Souza Tanzania: Anursery for anew city forest CSR Executive, Tanzania Portland Cement Company Deforestation and intensive land use aretwo major and supplying plant material to rehabilitate the de- problems facing the outlying areas of the major city of commissioned quarry,the project will provide young Dar es Salaam in Tanzania. Forthe majority of people, trees to help reforest ravaged areas of woodland in and charcoal is the main source of energy in the household. around Dar es Salaam. Thehope is that anew forest But although the surrounding woodlands have been area will provide not only ahabitat for endangered almost completely denuded, thereare no immediate fauna and ﬂorabut also awelcome retreat for city plans for reforestation or recultivation. dwellersand asource of ﬁrewood —but only to the In order to encourage sustainable land usage in the extent that this can be replenished by new trees. In areas surrounding the quarries of the Heidelberg- other words, it will be ashining example of sustainable Cement subsidiary Tanzania Portland Cement Compa- forestry management. ny (TPCC), we have teamed up with the German de- We arecooperating closely with the provincial govern- velopment aid organisation GIZ (Deutsche Gesellschaft ment on this project and organising training programmes für Internationale Zusammenarbeit)tolaunch apublic- on sustainable land management with universities, private partnership (PPP). schools and NGOs. Anetwork made up of national Themain purpose of this project is to set up atree and international institutions as well as other companies nursery in partnership with external environmental or- in the sector is facilitating knowledge transfer and sup- ganisations. In addition to creating jobs for local people porting further projects in this area. 42 43

areapart of society,and we benefit from being fully Quarry sports involved at the community level at our company Formany yearsnow,wehave helped to organise locations around the world. We arealso playing an health-promoting activities in Górazdze, Poland. active role in the search for solutions to social issues These include sporting events held in our quarry. that affect these locations. Forexample, therewas aNordic walking compe- Our understanding of our role is in line with our tition in April 2010 whose route ran, in part, along corporate citizenship guideline, which lays down thenaturetrail in the quarry. the general benchmarks and objectives related to our sense of social responsibility.These objectives Help with schoolsfor theyoungest have been deliberately drawn up with our core Formany yearsnow,wehave contributed materials business in mind. In other words, we assign priority to school and hospital building projects in Africa to areas wherewehave specific know-how and and have helped to maintain schools and hospitals. wherewecan achieve the best possible results for In 2010, for example, we funded the construction the community: of five additional classrooms for aprimary school in Wazo Hill, Tanzania, near our company location –Construction, architectureand infrastructure: in Dar es Salaam. We also joined together with we provide practical assistance with the con- other benefactorstofinance the purchase of 150 struction of buildings and infrastructureby new tables for the school’s pupils. Following the providing materials, time, financial assistance official ceremony to hand over the new classrooms, and know-how. morethan 2,000 adults and children from the vil- –Environment, climate and biodiversity: we pro- lage gathered for acelebration. mote initiatives that deal with the most impor- We have also helped with the construction of anew tant environmental impacts of our business primary school in the Tanzanian town of Bagamoyo. activities. Our company plant Twiga Cement provided 25 –Education, training and culture: in this case, we tonnes of cement for concreting and rendering tailor our activities to the specific needs of each work. Thanks to the dedicated efforts of numerous of our locations. helpers, the new school was able to open for teach- ing by the end of September 2010. We have also laid down certain criteria for evalua- In January 2010 we also donated EUR 100,000 to tion in order to ensurethat these voluntary acti- the Red Cross in order to provide emergency relief vities aretransparent and effective. We support for earthquake victims in Haiti. This money was des- projects, initiatives and organisationsthat operate ignated for setting up and running amobile hospital at our locations or to which we have adirect and for providing the latter with asupply of clean connection. We make it apriority to ensurethat water. the guidelines and principles of such organisations areinaccordance with those of HeidelbergCement. Corporatevolunteering TheGroup Communication &Investor Relations In many countries, our employees take advantage Total donated (in EUR) department is responsible for documenting all of opportunitiestodocharitable work during their in support of the earth- of the corporate citizenship activities throughout hoursofemployment. In Germany,for example, we quake victims in Haiti: the Group and for reporting on them within the support acompany network called Wissensfabrik, framework of our internal sustainability commu- which aims to encourage an interest in science and 100,000 nication activities. All of the decisions regarding business among young people. Anumber of our support for projects in individual countries or at employees arealso donating their time to the KIS, our locations aretaken decentrally by country man- acooperative project involving industry and educa- agerswithin budgetary limitations. Furthermore, tional institutions.The KIS gives teachersand pupils these managersare responsible for implementing insights into the practical workings of various areas and controlling the projects and for external re- of the company and provides them with informa- porting. tion about topics that have amajor social impact, Theexact wordingofour CorporateCitizenship Guideline: such as globalisation, sustainable development, www.heidelbergcement.com/sr2010/cc-guideline natureconservation and environmental protection. 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures 05 Employees About this report 06 Society Independent Limited Assurance

Keyfigures

In order to provide you with the most complete overview possi- Formany years, cement was HeidelbergCement’s traditional core ble of developments at HeidelbergCement, we have summarised business. Asecond strategic pillar in the form of aggregates was the relevant key figures regarding the various business lines. added with the takeover of Hanson in August 2007.Asaresult of Insofar as possible, we have sought to provide all of the figures this history,the reporting for cement was implemented at amuch over aperiod of three years. Nonetheless, as we arecontinually earlier date than for other business lines. Furthermore, the com- improving and extending our data, once again some figures have plex process of cement production and the associated obligations been recorded for the first time in 2009 and 2010. This informa- regarding environmental reporting mean that thereare morekey tion is naturally only available for the corresponding years. figures concerning this area to report.

Company portrait

Groupprofitand loss accounts (summary)

2008 2009 2010 EURm EURm EURm Turnover 14,187 11,117 11,762 Operating income beforedepreciation 2,946 2,102 2,239 Amortisation and depreciation of intangible assets and tangible fixed assets -799 -785 -809 Operating income 2,147 1,317 1,430 Additional ordinary result -371 -495 -102 Result from participations 51 38 6 Earnings beforeinterest and taxes (EBIT) 1,827 860 1,334 Financial result -829 -875 -735 Group sales volumes Profit/loss beforetax from continuing operations 998 -14 599 2008 2009 2010 Taxes on income -327 190 -60 Cement and clinker (million tonnes) 89.0 79.3 78.4 Net income from Aggregates (million tonnes) 299.5 239.5 239.7 continuing operations 671 176 539 Asphalt (million tonnes) 12.1 10.0 9.1 Net loss from Ready-mixed concrete (million cubic metres) 44.4 35.0 35.0 discontinued operations 1,249 -8 -28 Profit for the financial year 1,920 168 511 Group shareofprofit 1,808 43 343 Material costs and other operating expenses

2008 2009 2010 EURm EURm EURm Material costs 5,692.9 4,219.5 4,731.3 Other operating expenses 3,719.2 2,931.5 3,168.8

Additional information: p. 8ff. 44 45

Management Environment

Managementsystems

2008 2009 2010 Proportion of cement plants in which acertiﬁed environmental management system such as ISO 14001 has been implemented 69.0% 74.0% 74.0% Production facilities in which independent environmental audits have been carried out within the last ﬁve years –Cement 21.3% –Aggregates (excluding North America) 34.1%

Investments in environmentalprotection, research and development Energy andclimate protection

2008 2009 2010 1990 2008 2009 2010 Investment in tangible ﬁxed assets (mainly Cement related to maintenance, optimisation and –Absolute gross CO2 emissions environmental protection measures) in EURm 1,101 795 734 in million t 55.6 55.4 47.1 49.2 Costs for research and technology –Absolute net CO2 emissions in EURm 63.2 63.6 67.6 in million t 55.0 52.8 44.5 46.6 Employees in the business unit Research –Speciﬁc gross CO2 emissions and Technology 754 736 748 in kg CO2 /t cementitious material 787.4 669.5 667.1 674.1

–Speciﬁc net CO2 emissions in kg CO2 /t cementitious material 778.5 637.8 629.0 638.4

–Indirect CO2 emissions in million t 4.9 5.8 4.1 6.0 –Speciﬁc energy consumption in kJ/t cement 4,250 3,516 3,425 3,444 –Absolute energy consumption of cement business line in GJ 300,133 291,119 242,044 251,609

Aggregates –Speciﬁc energy consumption in MJ/t 36.5 35.6

Management of supplier relations

More about CO2 management: p. 26 ff. Proportion of countries in the Group 100% in which the Supplier Code of Conduct (The Supplier Code of Conduct was is valid introduced on 29th April 2011)

Managementofcustomer relations

2010 Countries in which the Group-wide customer survey launched in 2010 has been carried out (cement business line) 20

Detailsofour sustainability management: p. 22 ff. 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures 05 Employees About this report 06 Society Independent Limited Assurance

Rawmaterials andfuels Emissions

1990 2008 2009 2010 2008 2009 2010

Fuel mix for burning clinker NOx –Hardcoal 59.6% 55.3% 55.3% 56.7% –Absolute emissions in t 79,130 54,665 61,286 –Brown coal 0.0% 5.3% 5.4% 7.6% –Speciﬁc emissions in g/t clinker 1,422 1,210 1,334 –Petroleum coke 2.3% 8.1% 10.1% 8.2%

–Natural gas 22.6% 10.6% 4.8% 4.9% SO2 –Light fuel oil 0.9% 0.4% 0.3% 0.5% –Absolute emissions in t 28,326 16,871 19,231 –Heavy fuel oil 8.3% 0.7% 0.7% 0.6% –Speciﬁc emissions in g/t clinker 509 373 418 –Other fossil fuels 3.2% 1.2% 0.7% 0.9% –Alternative fuels 3.1% 13.5% 16.9% 16.0% Dust –Biomass 0.0% 5.0% 5.8% 4.5% –Absolute emissions in t 22,610 11,486 12,192 –Proportion of biomass –Speciﬁc emissions in g/t clinker 406 254 265 in mix of alternative fuels 0.0% 27.1% 25.7% 22.0%

Proportion of clinker produced in Alternative fuel mix for burning clinker kilns with continuous or discontinuous –Plastics 0.0% 16.9% 18.7% 19.4% measurement of all emissions 64.0% 63.0% 82.0% –Waste oil 39.0% 4.8% 3.5% 3.3% Proportion of clinker produced in kilns with continuous measurement –Tyres 34.2% 17.1% 14.7% 16.1% of dust, NOx and SO2 emissions 81.0% 87.0% 87.0% –Solvents 4.7% 5.2% 4.6% 5.3% –Sewage sludge 0.0% 3.8% 3.3% 3.2% –Bone meal and animal fat 0.0% 9.0% 9.4% 7.1% Biodiversity and preservation of resources –Agricultural waste and waste wood 0.0% 7. 9% 8.2% 6.6% 2010 –Other biomass 0.0% 6.4% 4.7% 5.1% Proportion of quarries in areas with ahigh –Other alternative fuels 22.2% 28.8% 32.9% 33.8% biological value –Cement 41.3%

Clinker content in cement 84.3% 75.0% 76.1% 76.1% –Aggregates 18.2%

Proportion of alternative rawmaterials 13.0% 11.3% 11.6% Proportion of quarries in areas with ahigh biological value, with biodiversity management plans –Cement 54.4% Mercuryand dioxins/furans –Aggregates 32.6%

2010 Mercury Proportion of quarries with restoration plans –Number of kilns reporting 36 –Cement 90.6% (proportion of clinker production) (42%) –Aggregates 81.3% –Speciﬁc emissions in g/t clinker 0.037

Dioxins and furans Sustainableconstruction

–Number of kilns reporting 33 2008 2009 2010 (proportion of clinker production) (37%) Sales of recycled aggregates in t 1,732,968 2,189,076 2,294,950 –Speciﬁc emissions in μgTEQ/t clinker 0.020

Detailed overview of our environmentalmanagementsystem:p.26ff. 46 47

Employees

Occupational health and safety

2008 2009 2010 Number of fatalities –Own employees 5 8 5 –Employees of other companies 11 7 11 –Thirdparties 5 7 3

Fatality rate1 0.9 1.7 1.1 Fatality rate1 (cement business line) 1.7 2.4 0.9

Accident frequency rate2 4.8 4.6 4.3 2 Professional development Accident frequency rate (cement business line) 3.6 3.5 3.6

2008 2009 2010 Accident severity indicator3 132 167 146 Employees by Group area Accident severity indicator3 (cement business line) 78 108 105 –Western and Northern Europe 15,770 14,640 14,302 –Eastern Europe-Central Asia 11,556 9,481 9,959 Occupational illness rate4 0.66 1.49 0.69 –North America 15,739 12,601 11,899 –Asia-Paciﬁc 15,044 14,030 13,682 Proportion of employees represented by –Africa-Mediterranean Basin 2,680 2,499 3,539 H&S committees 98.3% 99.8% 99.9% –Group Services 52 51 55 Proportion of employees represented by –Total 60,841 53,302 53,437 H&S committees with trade union representation 82.9% 89.4% 91.5% Training hoursinthe area of occupational safety 5 5 Proportion per employee 9.7 12.5 9.8 –Women among total employees 18.0% 15.3%

–Part-time employees 4.9% 1 Number of fatalities of Group employees per 10,000 Group employees. –Women in top and senior management 6.0% 8.0% 2 Number of accidents involving Group employees with at least one lost –Women in trainee development programmes 15.0% working day per 1,000,000 hoursworked. 3 Number of working days lost due to accidents involving Group employees per 1,000,000 hoursworked. Age structure 4 Number of ofﬁcially recognised cases of occupational illness among <20 0.5% 1.0% Group employees per 1,000,000 hoursworked. 5 Thereporting system for recording training hourswas changed in 2010. 20–29 10.0% 12.7% This could explain the decrease. 30–39 24.3% 24.3% 40–49 32.4% 31.2% 50–59 27.0% 25.3% >60 5.8% 5.5% Personnelcosts andsocialbenefits 2008 2009 2010 EURm EURm EURm Wages, salaries, social security costs 2,170.4 1,891.9 1,991.3 Costs for retirement beneﬁts 81.0 94.5 71.4 Other personnel costs 46.2 55.1 23.5 Total 2,297.6 2,041.5 2,086.2

Moreabout employee development and occupational safety:p.34ff. 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures 05 Employees About this report 06 Society Independent Limited Assurance

HeidelbergCement is publishing aGroup Sus- tainability Report for the fourth time. Thereport provides asummary of what we achieved in 2009 and 2010 and shows how the sustainability mindset has developed at our company.

About this report

This report provides information on how Heidelberg- We ourselves rate the extent to which the GRI G3 Cement is living up to its economic, ecological and guidelines have been met as A+. Forus, it was cru- social responsibility.Itdescribes the key challenges cial that our main sustainability themes arederived that our company faces and explains the strate- from the GRI principles for determining the content gies we arepursuing in order to overcome these of the report (materiality,stakeholder inclusiveness, challenges. TheSustainability Report is targeted sustainability context and completeness). As are- at our employees, as well as at investors, analysts, sult, the report’s organisation and content reﬂect customers, contractors, politicians and NGOs. our sustainability strategy as well as external analyses and insights gained from talks with our stakeholders. Report content and organisation Thereport is divided into acompany portrait, adescription of the challenges we face in the various In order to comply with internationalreporting sustainability-related areas, an explanation of the standards and ensurecomparability with other com- strategy derived from these challenges and from our panies, our report takes its lead from the latest coreareaofbusiness, and asection on our sustain- guidelines of the Global Reporting Initiative (GRI ability programme. This is followed by adescription G3). of our strategic management approach. After this Our complete GRI index can be found at: arethree chaptersinwhich we explain in depth http://www.heidelbergcement.com/sr2010/GRI how we areliving up to our responsibility toward the environment, our employees and society.This section is supplemented by acomprehensive range of data tables. 48 49

Scope and method of the report In line with the two-year reporting cycle, the next printed Sustainability Report will appear in 2013. The2009/2010 Sustainability Report concerns the We will make updated data and information avail- business years2009 and 2010 of the Heidelberg- able on our website in 2012. Cement Group, with each business year extending from 1st January to 31st December. Thekey financial figures included in this report cor- Disclaimer respond to those in the Group annual accounts and management report of HeidelbergCement’s Annual Theinformation and key figures contained in this Report for 2010. This is also the case with the key report werecollected with great care. All of the figures concerning our workforce and occupational report’s content was checked by the responsible safety. employees. We cannot fully exclude the possibility Forthe environmental and occupational safety data, that information might be incorrect. we have drawn up the report in line with the guide- Theinformation contained in the report is not in- lines of the Cement Sustainability Initiative (CSI) of tended to represent an assessment of compliance the World Business Council for Sustainable Devel- with applicable laws, regulations or accepted indus- opment (WBCSD). try sustainability practices. The guidelinesare available in fullat: www.wbcsdcement.org Supplemental information This year marks the first time that aselection of the on the Internet cement business line’s key figures on environmental protection and occupational safety weresubject to To supplement the printed report, we have pub- an independent review,asrequired by our member- lished additional information on our website. ship in CSI. Thereview also fulfils the wish of our Theprinted report contains links that will take you stakeholderstohave key indicatorsindependently directly to the online information. verified. Theresults of this review can be found on http://www.heidelbergcement.com/sr2010 page 50 of this report.

Data collection

We collect data at the level of individual facilities with the help of specific methods and systems. In- ternal reporting and consolidation areconducted by central electronic KPI data management systems at the Group, wherethe key figures arealso checked to determine their credibility and completeness. Standardised Group-wide definitions of all of the relevant key figures areavailable on the intranet, as arethe procedural guidelines for the reporting processes.

Publication

This Sustainability Report is published in German and English. Theeditorial deadline was 29th July 2011.The last report was published in August 2009. 01 Company portrait Contents 02 Challenges and strategy Preface 03 Management Chronicle 04 Environment Keyfigures 05 Employees About this report 06 Society Independent Limited Assurance

Independent Limited Assurance

Independent Limited Assurance Report on Certain Aspects of the –Guidelines for Emissions Monitoring and Reporting in the Cement Sustainability Report 2009/2010 of HeidelbergCement Aktienge- Industry,version 1.0, March 2005 sellschaft, Heidelberg –CO2Accounting and Reporting Standardfor the Cement Industry, version 2.0, June 2005 To –Safety in the cement industry: Guidelines for measuring and report- HeidelbergCement Aktiengesellschaft ing, version 3.0, Updated October 2008 Berliner Straße 6 69120 Heidelberg, Germany Summary of workperformed We conducted our review in accordance with the International Stan- Introduction dardonAssurance Engagements (ISAE) 3000, “Assurance Engagements We have reviewed certain aspects of the HeidelbergCement Aktien- Other Than Audits or Reviews of Historical Financial Information” in gesellschaft Sustainability Report for 1January to 31 December 2009/ order to obtain limited assurance on the subject matters. Alimited 1January to 31 December 2010 (the “Report”), and of parts of the un- assurance engagement requires that we plan and perform the review derlying management systems. to obtain moderate assurance as to whether the subject mattersare,in all material respects, in accordance with the criteria. TheReport and the underlying management systems, including the subject mattersand criteria, arethe responsibility of HeidelbergCement Our work included (i) analytical procedures, (ii) interviews with Health Aktiengesellschaft‘s management. Our responsibility is to issue acon- &Safety as well as environment management representatives and em- clusion based on our review. ployees at HeidelbergCement Group headquartersinHeidelberg; and (iii) visits to and phone reviews via video-Life-Meeting with alimited Subjectmatters number of reporting sites, including non-OECD countries. We have reviewed the following subject matters: 1. Theprocedures and their presentation in the Report for the collec- Thescope of areview is limited and thus it provides less assurance tion, compilation, validation and aggregation of 2010 data for than an audit. performance indicatorsofthe production in the cement business line on Conclusion

–Direct and indirect CO2 emissions Based on our work described above, nothing has come to our atten-

–NOX,SO2and dust emissions tion that causes us to believe that at HeidelbergCement Aktienge- –Occupational safety sellschaft and selected reporting units: at HeidelbergCement Aktiengesellschaft and selected reporting –procedures for the collection, compilation, validation and aggrega- units. tion of 2010 data for performance indicatorsofthe production in

2. Thesystems, structures and processes and their presentation in the the “Cement” business line on direct and indirect CO2 emissions;

Report for managing performance of the production in the cement NOX,SO2and dust emissions; and occupational safety,including business line for indicatorson presentation and disclosureinthe Report, werenot applied ade-

–Direct and indirect CO2 emissions quately.

–NOX,SO2and dust emissions –systems to manage performance of the production in the “Cement”

–Occupational safety business line for indicatorsondirect and indirect CO2 emissions;

at HeidelbergCement Aktiengesellschaft and selected reporting NOX,SO2and dust emissions; and occupational safety and their units for 2010. presentation in the Report werenot designed appropriately during 3. Themethodology and process that HeidelbergCement Aktienge- 2010; sellschaft has put in place for the preparation of the Report, as –the methodology and process that HeidelbergCement at Group level described in the chapter “About the Report“ of Report. has put in place for the preparation of the Report, as described in the chapter “About the Report“ of the Report werenot appropriate. Our engagement is limited to the presentation of the production in the “Cement” business line and the above subject mattersrelated to direct Frankfurt am Main, 29.07.2011 and indirect CO2 emissions; NOX,SO2and dust-emissions; and occupational safety.Wedid not perform any assurance procedures on other Deloitte &Touche GmbH information presented in the Report. Wirtschaftsprüfungsgesellschaft

Thescope of our review procedures at site level was limited to 11 of a total of 103 reporting sites.

Criteria Based on an assessment of materiality and risk we have gathered and evaluated evidence supporting the conformity of the subject matters with the criteria established by the following protocols issued by the “World Business Council for Sustainable Development” (WBCSD) and JensLöffleri.V.Dr.-Ing. Sam Vaseghi the “Cement Sustainability Initiative” (CSI): Wirtschaftsprüfer Engagement Manager 50 51

Imprint

Editorialdeadline: 29th July 2011

Responsibleonbehalfofthe publisher Andreas Schaller

ProjectmanagementSustainabilityReport Stefanie Kaufmann

Contact Phone: +49 (0)6221 481-9739 Fax: +49 (0)6221 481-217 e-mail: [email protected] http://www.heidelbergcement.com

Concept and realisation Group Communicationdepartment HeidelbergCement AG SLau Konzepte &Kommunikation teamkom Kommunikation+Design abcdruck GmbH

Picturecredits Picturearchive HeidelbergCement, Heidelberg Andreas Becker,Schlier

This Sustainability Report is also available in a German-language edition. TheGerman version is binding.

Carbon-neutrally printed on environmentally friendly PEFC-certiﬁed paper: carbon neutral natureOffice.com |DE-135-910204 print production HeidelbergCementAG Berliner Straße 6 69120 Heidelberg, Germany www.heidelbergcement.com