Year 2020 may not have been utopian for any corporate entity or individual due to the Covid-19 pandemic that shut down the global economy, but Dangote Cement Plc, relied on its 7 sustainability pillars as it strived to achieve the highest level of governance.
Operating from 10 countries in Africa including Nigeria, Cameroon, Congo, Ethiopia, Ghana, Senegal, Sierra Leone, South Africa, Zambia, Tanzania, and Zimbabwe creating a world-class enterprise certainly cannot be a walk in the park, given the peculiar challenges each environment presents.
But with its 7 Sustainability Pillars, tagged: “The Dangote Way”, the cement giant with revenues in excess of US$2.5 billion and yearly production capacity of about 48.6 million tonnes (Mt), hopes to build “a prosperous and sustainable business.”
According to Dangote Cement, “Our sustainability vision, goals and objectives are driven by the highest level of governance to convey ‘tone at the top’, and achieve enterprise-wide buy-in and ownership.”
For the Dangote Group, which also has interests in other manufacturing, agriculture and refining businesses, “Sustainability Thinking” enables it to better balance its economic, social, and environmental priorities. This also sustains its financial, operational, and institutional goals, while safeguarding the wellbeing of present and future generations, and maintaining a holistic respect for ethical values and local cultures.”
The Dangote Way
To achieve its set goals, Dangote said the 7 Sustainability Pillars are embedded in its corporate culture.
Chairman of the Board & Group President/CEO, Dangote Group, said: “With the adoption of all 7 Pillars, every aspect of our business operations is touched and involved in the agenda to build a sustainable and global brand,” adding that they provide the appropriate framework for embedding and continuously strengthening its corporate values and strategic objectives and central to its Financial and Sustainability Report.
He continued: “Our ambition is to drive both financial and non-financial values by continuously innovating, improving processes across our value chain, enhancing partnerships that bring win-wins and exploring new opportunities for our business, while creating socioeconomic value for all key stakeholders and the larger society.
“‘Sustainability Thinking’ enables us to better balance our economic, social and environmental priorities, while propelling our financial, operational and institutional goals. Running our business with strong sustainability commitment ensures that we maintain our ethical values and respect for the local cultures in all the markets where we operate. Ultimately, we are positioned to be able to support the wellbeing of the present and future generations.”
Supporting the present and future generations in the cement industry that is associated with a lot of environmental hazards is definitely an onerous task.
To this, the Group Managing Director/Chief Executive Officer, Michel Puchercos, said: “As Africa’s leading cement producer with a hard-earned reputation for excellent business practices and quality products, our vision is to be a world-class enterprise that is passionate about supporting the well-being of the society, while still giving high return on investment to our esteemed shareholders. This, without doubt translates to a world in which communities and societies become more prosperous, safer, healthier and more environmentally sustainable.”
Behind the 7 Pillars
The 7 Dangote Sustainability Pillars are cultural, economic, operational, social, environmental, financial and institutional through which it pursues specific goals, and the import of each pillar was better felt during the 2020 Sustainability Week.
According to the Sustainability Report, about 409 women benefited from various empowerment initiatives, while 58 communities impacted.
Through the cultural pillar, which embodies the core values in the way it transacts its business, embracing respect, teamwork, empowerment, inclusion, integrity, learning and meritocracy within the organisation to enable it to build a culture of sustainability.
The report said the 2020 Sustainability Week recorded significant and measurable impacts. A total of 1,560 employees volunteered 7,633 hours on 70 initiatives across 13 Dangote Cement operations in 10 African countries.
In addition, “the employee volunteering initiatives cost a total of ₦46,795,802 in cash expenses; equivalent of 65 days of community service and ₦39 million in man-hours calculated at an average hourly salary of the participants, to derive the estimated Value of Volunteer Time (VoVT).”
With the economic pillar, Dangote Cement said it contributes to Africa’s long‑term economic development by promoting inclusive economic benefits, self‑reliance and self-sufficiency through the sustainable industrialisation of the continent’s key markets for the benefit of all its stakeholders.
Again, it uses its business activities and model to strengthen national productivity, job creation, growth in household incomes, GDP growth and economic prosperity. It also supports its host countries and local communities by “developing a value chain that prioritises the patronage of local labour, suppliers, vendors and contractors as our way of building local capacity and content. We maintain transparency and due diligence in the payment of taxes and other statutory remittances to governments and public institutions,” the report said.
In the area of sustainable supply chain, Dangote said it ensures that “our procurement activities and engagements with supply chain partners are carried out in an environmentally, socially and economically responsible manner.”
In 2020, Dangote Cement’s social investment was up 67% at ₦2.85billion, which it uses to strengthen relationships with local economies. “The Social Pillar supports nurturing the growth and wellbeing of our employees and host communities, ensuring they share in our success and enjoy high standards of health, safety and environmental care.”
Being the most impacted in its operations, Dangote Cement uses the Environmental Pillar to promote caring for the environment by creating sustainable practices to address the challenges of climate change, optimising energy efficiency, water usage and emissions control.
To this end, it constantly discloses its environmental performance through its annual Climate Disclosure Projects (CDPs) and Sustainability Reports. Admitting that the score for the year in review is lower than the African regional average of B- and the Cement & Concrete sector average of B, it insists that its commitment and progress towards environmental stewardship, continuous improvement on climate governance, and periodic performance benchmarking with local and global peers, is strong and unrelenting.
“While there are negative environmental fallouts from our business operations, including dust pollution, CO2 emission, and so on, we remain committed to continually improving our environmental stewardship.”
As a member of the Global Cement & Concrete Association (GCCA), Dangote Cement subscribes to its Sustainability Framework Guidelines. The GCCA issues performance enhancement guidelines, gathers and publishes data recording the industry’s sustainability commitments, and initiates research on five key issues that are material for the global cement industry, namely climate change and energy, social responsibility, environment and nature, circular economy, and health and safety.
“Dust emission in cement plants is one of the biggest challenges faced during the cement production cycle. This is because dust emanates from across the production value chain – raw material handling, limestone crushing, kiln processing, clinker production and storage, finished cement grinding and power utilities, cement bagging, and so on. We strive to minimise the release of dust emissions into the atmosphere and ensure compliance with both legal requirements and international standards,” the report revealed.
Although its operations do not require large quantities of water compared, the company expressed its commitment to reducing the amount of freshwater utilised in its business activities. “Our efficient water management system involves periodic measurement of operational water footprints and efforts to reduce freshwater withdrawal and consumption through water recycling, rainwater harvesting, and storm water management,” to ensure more water is available for the local communities.
Through the Institutional Pillar Dangote Cement strives to build a world-class company based on strong governance, sustainable growth, transparency, dialogue and compliance with laws and regulations.
Sustainability Thinking’ enables us to better balance our economic, social and environmental priorities, while propelling our financial, operational and institutional goals.
“Our approach to corporate governance essentially involves balancing our business interests with those of our key stakeholders, including shareholders, employees, customers, suppliers, financiers, governments, and host communities.”
The company said it continuously strives towards compliance with relevant ESG laws, regulations and guidelines, such as the United Nations Global Compact’s Ten Sustainability Principles; the Nigerian Stock Exchange’s Sustainability Disclosure Guidelines; and the SEC Code of Corporate Governance. Others are the Nigerian Code of Corporate Governance; GRI Sustainability Reporting Standards; the sustainability principles and framework of the Global Cement and Concrete Association; and other applicable regulations in the different countries where it operates. Accordingly, there were no cases of non-compliance across continental operations, the report said.
With the Financial Pillar, Dangote strives to deliver strong and sustainable returns to shareholders by selling high-quality products at reduced costs, and despite the Covid-19 pandemic, earnings were up 37.7% in 2020 compared to 2019.
“As a business that strives to sustain its relevance to the present and future generations, we identify, document, mitigate, measure and monitor material risks and opportunities that the phenomenon of climate change portends for our business and hedge/leverage these risks and opportunities for optimal financial performance.”
Concluding, Chairman, Board Technical & Sustainability Committee, Sir Michael Davis, took pride in Dangote’s Institutional principle, saying: “Our approach is built on the premise that sustainability must be owned and practised at every level of our organisation, especially at the highest levels of institutional governance. We also believe that measuring and reporting our activities transparently and consistently is a crucial component to constantly improving on our role and impact in transforming our ecosystem. To achieve this, we continually invest in extensive stakeholder consultations, also internally, by which process we have developed our own customised framework towards sustainability.”