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A group of institutional investors representing US$2 trillion in assets under management is calling on the cement industry to do better on their carbon emissions.

The Institutional Investors Group on Climate Change and investors in Climate Action 100+ called on Europe’s major construction material firms to commit to taking steps to achieve net zero emissions no later than 2050.

Cement is a significant source of carbon dioxide emissions, making up seven per cent of man-made carbon dioxide, noted a press release from the group.

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“Construction materials companies may ultimately risk divestment and lack of access to capital as an increasing number of investors seek to exclude highly carbon-intensive sectors from their portfolios to meet their own decarbonization plans,” said Vincent Kaufmann, chief executive officer of the Ethos Foundation. “Thus, investors expect construction materials companies to substantially increase the [research and development] budgets available for research into decarbonizing cement production.”

The IIGCC asked the heads of the cement companies to examine its published set of expectations for the industry, which outlines suggestions for the construction and materials sectors on the issue. The group noted climate change will expose the construction materials industry to both transition and physical risk, especially those companies that manufacture cement.

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Investors expect the industry to implement a strong governance framework, the group said. Further, it noted companies should take action to reduce greenhouse gas emissions within their value chains and improve disclosure so investors can assess how seriously companies are taking a range of climate change scenarios.

The Institutional Investors Group on Climate Change’s membership includes more than 170 global members, including the BBC Pension Trust, the California Public Employees’ Retirement System, the Environment Agency Pension Fund, the HSBC Bank Pension Trust, PensionDanmark and the Universities Superannuation Scheme.