[CemExec] Howard Klee, WBCSD (Part 1 of 2)

In this first of a two part Feature series, CemWeek is talking to Howard Klee, WBCSD Cement Sustainability Initiative (CSI) Program Director.  The World Business Council for Sustainable Development (WBCSD) is a CEO-led, global association of some 200 companies dealing exclusively with business and sustainable development.

The Business Council provides a platform for companies to explore sustainable development, share knowledge, experiences and best practices, and to advocate business positions on these issues in a variety of forums, working with governments, non-governmental and intergovernmental organizations.

The CSI is a global effort by 18 leading cement producers, with operations in more than 100 countries. Collectively, these companies account for about 30% of the world's cement production and range in size from very large multinationals to smaller local producers. The purpose of the CSI is to explore what sustainable development means for the cement industry; identify actions and facilitate steps cement companies can take, individually and as a group, to accelerate progress toward sustainable development; provide a framework for other cement companies to become involved; and create the content and context for further stakeholder engagement. To date the CSI remains one of the largest global sustainability programs ever undertaken by a single industry sector.

CemWeek: First of all, thank you for discussing the Cement Sustainability Initiative with CemWeek, offering a personal as well as professional perspective on the group's activities. To start with, could you tell us a bit more about yourself and how you arrived at your current position?

Howard Klee: I have a doctorate in chemical engineering from MIT. I spent most of my professional career in the private sector in the energy and chemical business, first with Chevron and then with Amoco (acquired by BP).  Most of this time was spent in the United States, although there were several assignments elsewhere, including two years in China in the mid 90's.  My work covered a variety of responsibilities from engineering design and construction in early years, to running part of a large refinery, to business development work in China, to managing environmental regulatory affairs in Washington DC.

We moved to Switzerland ten years ago, when my wife was recruited for a position with the United Nations office in Geneva.  I joined the World Business Council shortly after we arrived, to help manage the Cement Sustainability Initiative which was just getting organized at that time.

CW:  Please describe the objectives of WBCSD for the cement industry, its history, objectives and how far towards your objectives you have progressed.

HK: The overall focus of the WBCSD is to help our member companies understand and manage the challenging environmental and social aspects that go along with being a successful business today.  The Cement Sustainability Initiative is one of several industry sector-based projects that the WBCSD has managed in the last dozen years.  They have covered forest products (still very active), electric utilities (also active), mobility, mining and minerals, etc.  The cement program is probably the longest running of these.  These programs are initiated by the companies and the work agenda is set by them.  In the early years of the cement program we focused on identifying key sustainability issues the industry would be facing in the next twenty years, tried to assess the then current performance on these issues, and identify what might be done to help make the industry more sustainable going forward.  We also developed a set of key performance indicators that could be used to track future performance, and the companies all agreed to report on these indicators.  The program has always had a long-term focus.

In the next phase, the company CEOs reviewed the results of our early work, and made a set of commitments to address key issues, both as individual companies and as a group sharing a common purpose.  These included items such as employee safety, quarry restoration practices, emissions, climate change, alternative fuels, and communications.  We set out a series of objectives in each area, and have been following through to meet them.

I want to emphasize that the bulk of the work done with and by the CSI is done by the member companies who participate in a number of separate task forces.  Over the years we have had the direct involvement of more than 100 company representatives in various aspects of the CSI work program.

We quickly moved our focus from identifying problems during the research phase to building solutions.  For example, we are developing better training materials to improve driver safety (where 50% or more of the industry's accidents take place) and contractor management.  We established guidelines on the responsible use of fuels and materials.  We have devoted a good deal of time to addressing climate change.  Collectively, we have built tools to help manage data and analyze policies such as the CO2 monitoring and reporting protocol, so that all companies measure and report emissions on a consistent basis. Individual companies have set their own greenhouse gas emission reduction goals.

CW:  To help our readers with a baseline, can you provide some key comparative statistics for CO2 and other emissions by country or region? What is the key driver of the differences between regions?

HK: There are indeed regional performance differences for a variety of key performance indicators.  The differences are driven by a variety of factorsÔÇöfuel cost and availability, age of kilns, technology, use of clinker substitutes, etc.    The CSI has looked at data from more than 800 cement facilities around the world, and our database provides the aggregated results.  For example, if we look at the CIS countries, there are still a large number of wet kilns in operation that have relatively high energy consumption and therefore higher emissions (see figure).  On the other hand, many are fueled with natural gas, which has lower emissions than coal-fueled kilns. The Japanese have quite high energy efficiencies.  The Indian cement industry has some of the lowest electricity consumption globally.  Our website shows a number of these trends.  Currently global results are shown, but we will be adding regional data in the next few weeks (see www.wbcsdcement.org/CO2data for additional details).

CW:  What would you consider to be one of the CSI's greatest achievements to date?  For example, if you had to pick one project to tell our readers about, what would it be?

HK: It is difficult to select one project from the many the CSI has tackled over the years.  The CSI member companies have made significant contributions to managing climate change, to improving safety and to improving quarry rehabilitation practices to name three areas.  But I think the biggest benefit of the CSI is in the process of bringing together a global network of leading companies to give serious thought to, followed by serious action on, a number of current and future issues faced in their industry.  The geographic diversity of the CSI, the intense debates and discussions held, and the substantive work completed has helped ensure thoughtful and robust contributions to a more sustainable industry.  Our global database called ÔÇ£Getting the Numbers Right (GNR)ÔÇØ is one contribution.  Our climate policy modeling work is another.

At the same time, we agreed at the beginning of this program, to make as much of our work as possible available to the rest of the industry and encourage its use.  For example, the CO2 accounting protocol mentioned earlier is now used by 80% of the global cement industry.

CW:  What are the different areas within the cement sector that you consider priorities from a sustainability perspective?

HK: Our initial work identified six key areas that were likely to have a strong impact and where we could begin work immediately:  Climate Protection, Fuel and Raw Material Use, Employee Safety, Airborne Emissions (SO_x, NO_x, dust and micro-pollutants), Quarry rehabilitation and management, and communications. We developed a set of key performance indicators so we could track our progress in the first five of these.  They are available on the website, www.wbcsdcement.org and in our most recent progress report, www.cisprogress2007.org.

While much of the initial work focused on understanding and reducing the ÔÇ£footprintÔÇØ from cement making, we are now starting to add a focus on the sustainability contributions concrete can make as a construction material.  Our first work in this area was a recent report on recycling concrete.

CW:  There has been a lot of positive activity recently in the emissions debate. Tell us how you have shaped the debate and what the next steps are.

HK: The CSI's work has helped define key measurement and reporting systems which the members believe all companies should follow to provide an accurate, transparent record of their environmental performance.  These apply to greenhouse gas emissions (the CO2 Protocol mentioned above) where we have provided reliable data backed up with economic modeling work to help policy makers think about the impacts of different policy choices.  We have worked with regulators to help identify specific control measures to minimize dioxin emissions, as another example.

CW: Can you tell us more about the work to minimize dioxin emissions and how you are approaching the effort?

HK: Our work on dioxin emissions began, as many of our projects do, with collecting and analyzing current cement industry performance data.  For many years the industry has heard concerns about high dioxin emissions from cement kilns, particularly those burning alternative fuels.  Our data clearly showed this was not the case, for well-designed, well-operated cement kilns.  In nearly all cases (more than 1500 data points reviewed), dioxin emissions are below current European limits, which are themselves half of the current limits in the United States.  The emissions bore no relationship to the kind of fuel usedÔÇöa fact now recognized by a many regulatory agencies including those in the UK and the US

We worked with the United Nations Environmental Program (UNEP) that had been charged under the Stockholm Convention with developing guidelines to prevent or reduce the inadvertent emission of dioxins from a variety of sources including cement plants.  The CSI served with a panel of experts that helped UNEP shape control guidelines for minimizing these emissions.  These were ultimately issued by UNEP for global implementation.

CW:  Tell us a bit about WBCSD's latest research and how your thinking has changed as a result?

HK: The latest CSI research work has focused on an analysis of different policy options that might be adopted when the current phase of the Kyoto Protocol expires in 2012.  We think a Sectoral ApproachÔÇöthat is an approach which combines international cooperation with nationally appropriate mitigation actionsÔÇöis a way to help industry move more quickly and at greater scale to combat climate change.  We developed a model of the global cement business and used this to help assess which policies might be the most practical and effective.  Details are available at www.wbcsdcement.org/sectoral.  We started this work because the concept of organizing climate action around individual sectors had some appeal but we really didnÔÇÖt know how it would workÔÇöcould it actually impact emissions.  The results clearly showed this approach could have positive impact.

CW: In relation to the global business model, can you give a few examples of which policies you are currently assessing?

HK: The biggest global issue faced by all cement producers today is dealing with their CO2 emissions and their impact on climate change.  This is an issue that affects every company in every country, as the world begins to grapple with building a low carbon economy.

The CSI has put much of its recent efforts into building a suite of management tools: CO2 inventories; a global database of cement kiln energy and emissions performance; and a new Clean Development Mechanism (CDM) methodology for projects in developing countries (now being reviewed and hopefully approved by the CDM Executive Board in Bonn).  As discussed briefly above, we have also developed and proposed a new approach to international policy to tackle global warming, called a Sectoral Approach.  We think this Approach could help the cement industry, and other energy intensive industries make a more efficient and more rapid response to managing their emissions.

CW:  It has been great to learn more about your and the WBCSD initiative's efforts to further Sustainable Development. These are such important efforts and it is clearly going to be a central topic for the industry going forward. CemWeek looks forward to presenting the second part of the discussion in our next CemExec feature.