CRH, Climate change, Increased ambition and coverage of GHG targets

Details of engagement:

EOS have been engaging with CRH since 2016, with a focus on several climate change related topics. One issue that has been raised with the company at several engagements related to the ambition levels of its GHG emissions reduction targets. The ask was for the company to increase the ambition of medium-term targets from a 2°C trajectory to a well-below 2°C or 1.5°C trajectory, which are externally verified by the Science Based Targets initiative (SBTi). The emissions target should cover cement-related emissions as well as emissions from other activities.

First raised with the company at a 2021 engagement as co-lead for the Climate Action 100+ initiative, the company recognised our desire for increased ambition and SBTi verification. At the time, the company indicated that it was waiting for the industry to produce a suitable 1.5°C target before assessing the level of ambition. At a subsequent meeting that year, the company confirmed it would resubmit its carbon reduction plans to the SBTi to move sufficiently below a 2°C pathway, which was confirmed in its 2021 Annual Report. We continued to push the company for increased ambition levels in subsequent private and collaborative engagements from 2021 to 2024.

Outcomes and next steps:

The company has made significant progress on this topic over the years. At a meeting with the chair in April 2024, the company confirmed that its near-term emissions targets for Scope 1 and 2 are aligned with a 1.5°C scenario, for both cement and non-cement operations. It also has SBTi verified Scope 3 emissions reduction targets for purchased clinker and cement, which align with a 1.5°C scenario.

While the company has made significant progress in this area, there is still work to be done in order for the company to meet its targets, and there is room for the company to have longer-term emissions reduction targets and ambitions. We will continue to monitor the development and progression of these targets, as well as continue to request that the company sets ambitious targets for the medium and long term.

At time of publication CRH is held in our UK Equity portfolio.