Page 24 - 2022 Sustainability Report

COMPANY OVERVIEW

Climate Related Risk Analysis and Management

In this report, and in our annual reports to the SEC, we continue to issue enhanced climate related disclosures, including
information about the physical and transition risks and opportunities relating to climate change. We believe our objectives
are consistent with the objectives of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and
Sustainability Accounting Standards Board (SASB) guidelines for the construction materials sector.
Policy and Regulatory Transition Risks

A number of governmental bodies, including the U.S. Congress and various U.S. states, have proposed, enacted or are
contemplating legislative and regulatory changes to mitigate or address the potential impacts of climate change, including
provisions for GHG emissions reporting or reductions, the use of alternative fuels, carbon credits (such as a cap-and-trade
system) and a carbon tax. For example, in the United States, the USEPA promulgated a rule mandating that companies
considered to be large emitters of GHGs report those emissions. The Company’s two magnesia-based chemicals facilities,
as well as its two cement plants in Texas, file annual reports of their GHG emissions in accordance with the USEPA
reporting rule. The primary business and operations of the Company, however, including its aggregates, ready mixed
concrete and asphalt and paving product lines, are not considered “major” sources of GHG emissions subject to the
USEPA reporting rule. Most of the GHG emissions from aggregates plant operations are tailpipe emissions from mobile
sources, such as heavy construction and earth-moving equipment.

President Biden also has taken a number of steps to make climate change a central focus of his administration, including
issuing a pair of executive orders and a presidential memorandum making climate change central to U.S. policy and
setting out several administrative priorities and undertakings. President Biden reentered the Paris Agreement in January
2021 and later announced the United States’ reduction commitments under the Paris Agreement, including a 50% to
52% economy-wide reduction in net GHG emissions from 2005 levels by 2030. More recently, President Biden entered a
pact with 103 countries and jurisdictions, known as the Global Methane Pledge, to reduce global methane emissions by
30% from 2020 levels by the end of the decade.

In November 2021, President Biden signed into law the Infrastructure Investment and Jobs Act (IIJ Act), which provides
billions of dollars in new funding for public transit and clean energy projects intended, in part, to address climate change,
including road, bridge and other major infrastructure projects. These projects, as well as new public transit and clean
energy projects, require aggregates and cement for construction and may result in increased demand for our products.
See Other Low-Carbon Transition Risks and Opportunities section below for additional information.

Although it is too early to determine the actions the federal government will ultimately take to implement climate change-
related orders, commitments and laws, or the full scope, timing or ramifications of such measures, it is clear that the
current administration has already begun to make, and intends to continue to pursue, a significant and sweeping push on
the climate front and, like other signatories to the Paris Agreement, intends to pursue a goal of a Net Zero GHG by 2050.
It also seems probable that the USEPA and other agencies will use their rule-making authority and procurement decisions
to further address climate change. Various states where the Company has operations have enacted or are considering
climate change initiatives as well, and the Company may be subject to state regulations in addition to any federal laws
and rules that are passed.

If and when the USEPA issues new regulations and/or Congress passes additional legislation restricting GHG emissions,
the Woodville, Ohio and Manistee, Michigan Magnesia Specialties operations, as well as the Company’s cement plants,
which release CO in certain of their processes and use carbon-based fuels for power equipment, kilns and the Company’s
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mobile feet, will likely be subject to these new regulations. The Company’s cement plants, like those of other cement
operators, require combustion of significant amounts of fuel to generate high kiln temperatures and create carbon
dioxide as a product of the calcination process, which is an unavoidable step in making clinker. Accordingly, the Company
continues to closely monitor GHG regulations and legislation and its potential impact on the Company’s cement business,

22 2022 SUSTAINABILITY REPORT