Next year, the Swiss company Holcim will be spinning off all of its North American facilities, including those in Michigan. Among them are an aggregate mining operation near Dundee and a cement kiln operation in Alpena.
Before selling its cement plants, some environmental groups want the company to make plans to reduce pollution.
Holcim is a huge name in the construction world, primarily for concrete. Concrete is the most common construction material, used to build roads, skyscrapers, and home foundations, among many, many other structures.
To make concrete, you need cement. Making cement involves emitting a lot of greenhouse gases. That construction material sector is estimated to contribute 7 to 8% of the world’s greenhouse gas emissions.
“We think that this moment in time for Holcim in advance of its spin off of its North American businesses next year, is a perfect opportunity for the company to invest in decarbonizing its existing U.S. fleet,” said Ash Lauth with Industrious Labs. She’s involved in a campaign supported by several environmental groups called Concrete Change.
Part of the campaign strategy includes submitting an investor brief for the upcoming Initial Public Offering (IPO) of the estimated $30 billion spin off of Holcim’s North American cement plants and other operations.
The brief lists significant pollution violations across the U.S., including mercury pollution in an Alpena quarry. But will investors pay attention?
“You know, waving the flag, 'Hey, pay attention over here,' can be useful,” said Erik Gordon, Clinical Assistant Professor in Entrepreneurial Studies at the University of Michigan.
He’s frequently interviewed by business news media, including public radio’s Marketplace.
“But, you know, in this case, the environmental situation, environmental problems of the company are pretty well known. And anybody who's going to invest in it is going to be familiar with them.”
Gordon said as a service to investors, he doesn’t see the brief from Industrious Labs as a big revelation.
“However badly the company might be acting, you have to ask yourself how much effect it will have because when the company goes public, it has to disclose in excruciating detail a hundred pages of legalese, all of the risks that the company faces, that management knows about.”
Industrious Lab’s Ash Lauth said they are also making demands of Holcim.
“We would like them to have at least one flagship plant be net zero by 2030,” Lauth said.
Net zero is a lofty goal because the process of using heat to break down the base minerals of cement such as limestone causes a chemical reaction that releases carbon dioxide. That occurs in addition to the greenhouse gases released from the fossil fuel used to create the heat, which is often coal or petroleum coke, often called pet coke. It’s a byproduct of oil refining.
“We would like them (Holcim) to operate no wet kilns by 2035,” said Lauth.
A wet kiln is a long-used method of crushing limestone, adding water and turning into a slurry that’s then heated. It is not as energy efficient as other newer methods, but it is well understood and in most cases it is cheaper.
“And we would like them to pledge to reach a Scope One emissions target of 420 kilograms of carbon emissions per ton of cement or less by 2030,” Lauth added.
Scope One emissions are those that come directly from the plant.
420 kilograms amounts to about half of what is currently emitted.
A metric ton is 1,000 kilograms and approximately 800 to 900 kilograms of carbon emissions can be produced in making a ton of cement.
“So, to really clean up the cement industry, we need to be changing both what we're burning in the kiln, the limestone, but under the kiln as well, the fossil fuels,” Lauth said.
The Industrious Lab’s Concrete Change brief and the demands have gotten a fair amount of media attention, but Erik Gordon suspects Holcim will view them simply as a bit of grandstanding. But he added even if Holcim ignores the brief and demands during its run up to the sale of its North American facilities, they still might have some value.
“If you are an environmental organization, you really want people to know what you're doing. You don't want it to be invisible, whether or not it moves the needle. You do want people to know, hey, we're on the job here. We are being a watchdog.”
We requested an interview with Holcim about the brief. The response from the Zurich office was, “At this time, our focus is on preparing for a successful spin-off so we're going to decline providing a comment.”
