Testimonials

In 2012 Lafarge made the strategic shift to conduct its operations by country rather than by business line. Maintaining good relations with the countries and the populations that host Lafarge's activities will have to be even more at the center of the group's attention. 

Through this report, Lafarge demonstrates its commitment to creating favorable conditions for a local environment that is conducive to all. Indeed, the group will have to further advance its local anchoring with the communities around its sites. Community development programs must be completely integrated, at country level and in each production unit, and develop through tangible, measurable, significant and positively "impactful" actions:

• actions co-developed with local partners representing local communities;
• fair and balanced actions that are inscribed in the long-term, across the entire value chain.

For this, the company must mobilize significant resources over the coming years. As an engaged member of the stakeholder panel, I will pay particular attention to these issues.

Lafarge's Code of Business Conduct covers a wide range of areas, including compliance with laws and regulations on:

• free competition and trade, 
• corruption and insider trading;
• conflicts of interest;
• health and safety; 
• prevention of discrimination and harassment;
• and respect for the environment. 

However Business Ethics is more than abiding by ‘customs' and ‘laws'. Trade unions welcome that Lafarge recognizes the utmost importance of respecting human rights in all countries where it operates and that human rights are addressed in business-decision making, in Russia, Qatar, China and elsewhere where human and trade union rights are not guaranteed by governments. Lafarge took the right way forward: firstly, employee awareness-building and training and verification at country level and global reporting that show that the company respects human rights in practice. The United Nations Guiding Principles on Business and Human Rights state that showing involves communication, providing a measure of transparency and accountability to individuals or groups who may be impacted and to other relevant stakeholders, including investors.

Lafarge's next sustainability report should take this up and contribute to more transparency and accountability with regard to Human Rights. Secondly Lafarge's supply chain assessment and the commitment to ensure suppliers' compliance with the ten UN Global Compact principles in all purchase orders is a real benchmark against its competitors. However, reporting on the results would be appreciated.

lafarge's affordable Housing ambition is one of the most important sustainability issues in the company's long term strategy because it addresses a universal and ever increasing human challenge. Global demographics consistently point to three major challenges of sustainable development:

• Firstly, an ever increasing rate of population growth.
• Secondly, a rise in the numbers and levels of poverty.
• Finally, a rapid rate of urbanization with more than half of the world's 7 billion citizens in cities today.

All three place tremendous pressure on an already declining natural resource base and are particularly severe in developing countries. 

Lafarge's partnership approach is particularly appropriate because urbanization to the world's poorest not only calls for affordable housing alternatives but for urban regional planning which incorporates sustainability. This is the role of national governments, but sadly many either lack resources or are indifferent to the negative impact of poor planning. Therefore, to the degree that Lafarge is able to raise awareness and create a sense of urgency in the countries in which the company operates, this will be a valuable first step and contribution to a global problem. However, in the long run strategic partnerships with all of Lafarge's stakeholders is a critical success factor'. 

For Lafarge employee diversity is a necessity, considering its activities cover a large geographical area with different cultures, habits, attitudes and behaviors. Diversity is a source of performance, creativity and innovation, which the Group can exploit to achieve a competitive advantage. Lafarge uses diversity to help identify opportunities for each employee to increase their own potential, as well as the organization's performance.

Lafarge invests in maximizing employee specific skills. It offers a positive environment, where every employee can feel valued so that their skills can be used to a maximum in order to achieve Group's goals. For diversity to be well managed, Lafarge takes surveys about:

• staff expectations,
• incentives and ways to stimulate the workers,
• the level of informing and counseling, 
• and the quality of the workplace.

For 2020 increasing the number of women in senior management up to 35% is an achievable goal. 

Sustainability needs to permeate the built environment no matter where we are. In the present positioning it is clear that Lafarge recognizes the urgency of addressing urbanization - and this already includes engaging with less formal sectors, that host close to 1 billion people in large and very large cities, where the pace of transformation rarely allows room for planning. 

Lafarge is beginning to interact with these new markets by providing them with the products they have selected from the existing offer, but there are many more opportunities that need to be addressed to improve living conditions in these informal urban contexts. In isolation, governments, NGOs and communities don't seem to have the required power to reach these vast populations and to tackle their real needs. Is there a local creative leadership role Lafarge can take on and support, collaborating with the abovementioned actors and involving the wider business sector, to embrace the opportunities of the still unraveled dimensions of the urbanization challenge and make a larger difference to these 1 billion people? 

This report is chockfull of impressive milestones, as well as bold targets, initiatives and ambitions, many linked to climate protection:

• 33% on CO2,
• 50% on alternative fuels,
• Aether,
• climate lobbying,
• conservation. 

And yet these float alongside, rather than square the circle with, two key challenges: 

• the world's overconsumption of resources, as the Sustainability Ambitions rightly acknowledge,
• and Lafarge's day job -delivering sustained profit growth. 

Where is this missing fil conducteur that can weave together, in one integrated corporate strategy, customer satisfaction, shareholder value and Net Positive Contribution for society as a whole? The promise lies in the Circular Economy, where Lafarge has made real strides. Rather than just selling building materials, however innovative, and driving down harmful impacts, however ambitiously, Lafarge can recast itself as a true cradle-to-cradle business, one that transforms materials into materials, some of them virgin but more and more of them derived from other people's waste, making a profit at each turn and delivering essential services, throughout the cycle.

Whilst recognizing Lafarge's leadership within its sector the more important factor is whether Lafarge can sustain year on year continuous improvement in reduction of fatalities and work related injuries and illnesses. The reduction in fatalities in 2012 is welcome but there is still a long way to go. The priority of this journey is exemplified by the Chairman and CEO personally reviewing every fatality investigation. The deterioration in the employee LTIFR is of concern. For the last decade Lafarge has achieved continuous improvement by rigorous deployment of standards and risk management processes with demonstrable management leadership.

To lose momentum in 2012 is disappointing but I commend Lafarge for rapidly identifying and addressing the root cause. Ensuring consistency of leadership is crucial and the emphasis on the Visible Felt Leadership program is entirely appropriate. I am pleased with and support the development of the Occupational Health program and the progress achieved.

Lafarge made good progress in improving its biodiversity performance in 2012, including by creating biodiversity management plans for 99% of quarries in internationally sensitive areas, and in developing a new Biodiversity Strategy for the Group.

We especially welcome the new commitment on protected areas, and the ambition to have a net positive impact on biodiversity at the site level. Similarly, we welcome the publication of Lafarge's Biodiversity Guidance, which was developed in partnership with WWF, and which provides all Lafarge sites (including quarries, plants and offices) with practical guidance on how to protect, restore and enhance local biodiversity. This Biodiversity guidance document should also prove useful to many other companies, in a variety of sectors. We are also pleased to see Lafarge work on the responsible sourcing of paper cement bags, including the new preference for FSC paper and the use of WWF's Check Your Paper tool. 

On the Climate front, we applaud Lafarge's new commitment to increase the portion of biomass in its alternative fuel to 30% by 2020 and its commitment to only use sustainable sources. We would have hoped to have seen greater progress towards an increase in Lafarge's share of renewable electricity. Although we understand that this is not core business for Lafarge, in absolute terms Lafarge is a very big purchaser of electricity, and thus has a responsibility to play its part in promoting the shift to renewables. Looking forward we expect to see Lafarge play a leading role in advancing ambitious global and regional EU climate deals.

I have reached my tenth year on the lafarge Panel and have decided it is time to move on. But what a report on which to exit! Here, we see the group placing higher expectations on its supply chain. This matters because sustainability cannot happen in isolation from suppliers. 

In such ways, Lafarge raises the level of the whole industry's playing field. We hear a lot about corporations driving standards down, but here is one that drives them up. That is how we can together leverage a better world. I am also pleased to see a reminder of Lafarge's pioneering recognition of the UN Declaration on the Rights of Indigenous Peoples, and seeking good relationships with communities. So much is being achieved by Bruno Lafont's team.

On rare occasions over the past decade when I have raised concerns they have always been promptly addressed. My time on the panel has been rewarding, effective and enriching, and I move on with much admiration and every blessing.