Climate change

At Argos we are aware of the evolution in the criticality of the effects of climate change over time, of the measures promoted both at a global and local level, by the public and private sectors to face this challenge of humanity, and of the crucial role that our Company has in the construction-materials sector in taking innovative, forceful and sustained actions that favor both mitigation and adaptation to climate change. Likewise, we recognize that climate change is an opportunity to promote and boost sustainable construction and, thereby, contribute to the creation of social value in the geographies where we operate.

 

For this reason, through our Climate Change Strategy, we have committed to acting throughout our value chain, mitigating direct and indirect CO2 emissions, generating the necessary capacities to adapt to their impacts, and researching and developing initiatives to advance in solutions aimed towards the capture, storage and use of carbon; thus seeking to contribute to the competitiveness and resilient growth of both the Company and its Stakeholders.

 

Together with the most important companies in the cement- and concrete-production sector in the world, we have adhered to the Climate Ambition Plan promoted by the Global Cement and Concrete Association (GCCA) to offer carbon-neutral concrete to society by 2050.

  • For society:  To contribute to meeting the challenges arising from climate change by developing initiatives to mitigate CO2 emissions, focused on the use of alternative fuels, optimization of the cement clinker factor and energy efficiency, in addition to strengthening efforts to generate innovative products and solutions with sustainability characteristics that leverage the capacities to adapt to climate change and that contribute to sustainable construction.

 

  •  For the company:  To mitigate the risks related to climate change, generate the necessary capacities to adapt to the impacts of this phenomenon and enhance the opportunities arising from said problem, through the efficient management of our operations and research and development of better processes, products and solutions, ensuring the competitiveness and permanence of the Company over time.

During 2021, we built the Technical and Financial Roadmap to reduce CO2 emissions and reach the goal set for 2030; the result of this Roadmap was the sum of efforts from multiple Company Departments that were aligned with the OKR (Objective Key Result) established from the Presidency and that called for action to “Become leaders in the industry in mitigation and climate-change adaptation in the next three years”.

 

Likewise, the mandate was established to constantly monitor compliance with the reduction goals, carry out a cyclical review of project validity or optimization, and evaluate the inclusion of new projects within the Board of Directors’ Sustainability and Corporate Governance Committee, the Climate-Change Cell and the committees of the three Regions, all in favor of fulfilling the commitments made with our Stakeholders.

 

To date, we have approved the premises and technical considerations that mobilize the levers to reduce CO2 emissions(1), the short-term resources within the company's CapEx, as well as the internal reserve of resources for the medium term,(2) (which guarantee the annual allocation of resources to fulfill the Roadmap).

 

  1. Within the initiatives and projects contained in the Technical and Financial Roadmap to reduce CO2 emissions by 2030, the following are considered:
    • The operational continuity of facilities with low performance in terms of CO2 emissions,  due to the nature of their technology.
    • The optimization of caloric consumption that depends on the operational and infrastructure adaptations that allow the Argos facilities to homogeneously expand and diversify their fuel mix.
    • The inclusion of oxygen-enrichment and hydrogen-injection technologies.
    • Optimization of the cement clinker factor under the premise of diversifying and enriching the Company's portfolio with low-carbon products.
  1. The investments approved in this Roadmap to reduce our direct emissions (Scope 1) amount to USD 52.9 million and will be distributed as follows:
    • We will invest 44% of the total in projects and initiatives that optimize caloric consumption.
    • Forty percent (40%) in co-processing projects.
    • Nine percent (9%) in projects that make feasible, energize and improve the fuel mix to achieve emission reductions.
    • Seven percent (7%) will be invested in initiatives to leverage the reduction of the cement/clinker factor.

The Climate-Change Strategy guides our actions in mitigation, adaptation to the impacts of climate change and research and development of technologies for carbon capture, use and storage (CCUS), allowing us to minimize risks and enhance opportunities associated with this phenomenon. This strategy permeates the entire value chain and was built with scenarios to mitigate CO2 emissions, with the possibilities of optimizing processes, and with analyses to identify and assess risks (physical and transition) and opportunities for innovation and sustainable growth that the construction-materials sector brings us.

 

The action framework of the Climate-Change Strategy considers:

 

  •   Management of Risks and Opportunities: Reducing the risks and enhancing the opportunities associated with climate change.
  •   Innovation: The search for permanent innovation.
  •   Green Financing: The use of financing mechanisms that include sustainability criteria.
  •  The Government: Preserving transparency in decisions and good Corporate Governance practices.