Page 26 - 2022 Sustainability Report
P. 26

COMPANY OVERVIEW



        Other Low-Carbon Transition Risks and Opportunities

        The Company’s businesses are dependent on reliable sources of energy and fuels. The Company could incur increased
        costs or disruptions in its operations if the price or availability of energy or fuels or other materials used in its operations is
        impacted by climate change regulation or severe weather. These and other climate-related risks, such as a downturn in
        the construction sector due to harsh weather, significant precipitation or other changes in weather, also could impact the
        Company’s customers, which could lead to reduced demand for the Company’s products. The Company may not be able
        to pass on to its customers all the costs relating to these risks.

        Notwithstanding the foregoing risks and uncertainties relating to climate change, there may also be opportunities for the
        Company to increase its business or revenues, both in terms of the physical impacts of climate change and market
        opportunities associated with the transition to a low-carbon and climate-resilient economy. For example, warm and/or
        moderate temperatures in March and November allow the construction season to start earlier and end later, respectively,
        which could have meaningful positive impacts on the Company’s first- and fourth-quarter results, respectively. From a
        regulatory standpoint, as noted above, the recently-passed IIJ Act provides billions of dollars in new funding for roads,
        bridges and other major infrastructure projects which require aggregates and cement for construction. New public transit
        and clean energy projects that address climate change may also result in increased demand for our products. Other
        opportunities are likely to result from the passing of the $1.2 trillion IIJ Act, the Cornyn-Padilla Amendment that allows
        $104 billion of unused COVID-19 dollars to be directed to infrastructure projects, and $23 billion of voter-approved state
        and local transportation-related 2022 ballot initiatives, all of which will fund infrastructure growth, repair and
        development.

        In addition, the Company’s magnesium hydroxide products are used to increase fuel efficiency in various industries,
        including both coal- and gas-fired electricity generation, which has a direct impact on reducing energy use and GHG
        emissions by more GHG-intense companies. Finally, the desire for sustainable building solutions has led to greater
        recognition of the benefits of concrete construction in the effort to move to a circular economy through innovative
        products, longevity and recyclability, and increased demand for green construction projects would have a direct impact on
        the Company’s cement and concrete business.

        Resilience


        We review physical and transition climate risks and the impact on the business of various climate scenarios and
        opportunities. Our resilience analysis is qualitative and focuses on what is technically feasible today from a climate impact
        perspective and what may be possible as technology advances, particularly with respect to our carbon intensive cement
        business. We engage in meaningful conversations with our shareholders and industry groups to assess risk and
        opportunities arising from these scenarios including gaining a better understanding of external factors that may impact
        our business. We intend to further develop our scenario planning as we refine our climate strategies and consider setting
        and verifying reduction targets under the SBTi framework. We monitor leading industry developments and look to
        implement those developments that contribute to risk reduction strategies that will benefit our company and its
        stakeholders and contribute towards our 2030 targets and our ambition of being Net Zero by 2050.
















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