Can cement emissions be curbed, while still allowing for crucial infrastructure growth?
After water, concrete is the most consumed material globally, due to its utility, abundance, and low cost. Cement acts as the binder between fine rocks (aggregates) in the formation of concrete and, though it only makes up about 10% of the mix, it is responsible for nearly all of concrete’s CO2 emissions.
Globally, the production and use of cement is responsible for about 7% of CO2 emissions and generates the largest emissions per dollar revenue of all industrial emissions. In the coming decades the demand for cement is expected to grow, largely due to the expansion of urban areas and public infrastructure, particularly in emerging economies. Between 2015 and 2021 the global carbon intensity of cement increased by about 1.5% annually. This is far off the IEA’s net zero pathway, which sees the carbon intensity of cement decrease by 3% every year until 2030.
Significant investment is needed by cement companies to address these challenges. Yet the sector’s high carbon intensity may make it more difficult to raise the capital required, as investors looking to achieve portfolio decarbonisation goals could be tempted to cut their carbon footprint by re-allocating to other sectors with fewer challenges. A net zero approach that allows continued investment in cement players with clear net zero strategies is required to achieve real-world results, which is the aim of the net zero strategy we have tailored and adopted at Columbia Threadneedle Investments.
Interested in learning more?
Europe’s cement producers are committed to net zero – but are their plans ambitious and achievable? We’ve been engaging with the cement sector to better understand the challenges companies are facing and discuss how businesses can transform their operations to deliver this critical material sustainably. Download the full ESG Viewpoint to discover more.
