WEBVTT

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If we understand sustainability
just for the good

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of the planet without having
a business case won't work.

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Hello everyone, I'm Rich Lesser

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and I'm joined here with
Dr. Dominik von Achten,

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Chairman of Heidelberg Materials.

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And we're here to discuss
insight from our recent report

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for the Alliance of CEO Climate Leaders.

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So Dominik, welcome.

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What are you doing at
Heidelberg around green growth

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to accelerate your own success
and to help your customers?

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First of all, thanks for having me, Rich.

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You know, for us, after decades

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and centuries of commodity
business, right now,

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this whole topic of decarbonization
sustainability is a real

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innovation and engine for
innovation and growth.

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Not only, you know, when we go all the way

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to carbon capture, so to near
zero and net zero products,

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but also the lower carbon
products come with a lot

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of innovation when it
comes around, you know,

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calcined-clay product, pozzolan products,

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so lower carbon products,

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but as Heidelberg Materials, you know,

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we made the breakthrough
to carbon capture.

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So we've got the first
plant in the world running

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at industrial scale that
basically produce near zero cement

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and net zero concrete.

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It's so exciting.

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And how have you worked
across the value chain

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to be able to turn green
solutions into really viable

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commercial propositions?

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Yeah, I think that's an
interesting question, Rich,

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because you know, historically
cement companies in general,

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I think we're very IP driven
and very inward looking.

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And the golden key I think

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for pulling these carbon
capture projects off is all

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about collaboration.

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You need to really collaborate
along the supply chain.

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You know, we do the carbon capture,

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but we need somebody who
does the transportation.

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We need someone who does the
storage. It doesn't end there.

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We need the regulator to
create new product categories

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because it's not the
traditional commodity anymore.

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And very importantly, we need
the right customers in order

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to buy these products in the end.

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Actually, that was one
of the things I wanted

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to really press on with you

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because it's not just enough
to develop green solutions.

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You need to be able to
convince your customers

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that the impact is real.

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But, you know, different
people will bring different

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standards, different labels,
different ways to communicate.

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How have you navigated that
challenge for your customers

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to understand that you are
delivering real value, obviously

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to them and their business,
but also as a viable,

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and honest and straightforward
green solution?

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That's a tricky one, and we've fought long

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and hard about that one.

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And we eventually came up
with a very transparent,

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clear definition of hurdle rates.

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We say, okay, the lower
carbon products need

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to at least have a reduction of 30%

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to get into this lower carbon category.

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We have now more than 1/3

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of our global products in that category.

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Amazing.
Yeah.

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And then we need to get
to the near zero cement.

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And there it's even more
tricky, there we have decided

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guys, this is very sensitive.

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So we decided to build a carbon bank

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that is very transparent, backed up

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by a blockchain technology

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and also verified by
a third party in order

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to be really strict on
the accounting standards

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because there is no standard
out there that's done

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by the regulator so far.

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So we basically also set our own standard,

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but we wanna do this in
a very transparent way.

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And how have you found customer acceptance

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around the ways you've approached this?

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I think, you know, when we first started,

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our team came back and
said, Dominik, you know,

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how much are the customers
willing to pay for this?

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I said, that's not the right question.

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What's the value we
drive for the customers?

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But to be honest, Rich,

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next to the innovation on technology,

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there's also innovation
on the commercial side

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because the commodity sales
force is not necessarily used

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to sell value products.

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So there's a big transformation
going in within Heidelberg

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Materials right now to really

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beef up our knowhow on commercial

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and really understand how we sell value.

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And the good news is there
are enough customers out there

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that understand that near zero cement

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or net zero concrete really
drive value for them.

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So you've innovated on green solutions,

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you've innovated on the commercial models

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and you've innovated
on how to set standards

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and communicate those to customers.

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If you had a piece of advice for CEOs

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and other business leaders looking

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to scale their own
participation in the green

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economy, what would it be?

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Look, I think we need to be realistic.

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Right now, it's not the
mass movement anymore,

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it's sustainability topic.

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So I think for a publicly listed company,

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there is only one key advice.

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Make sure it is a viable business case

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because in the end,

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I think if we understand
sustainability just for the good

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of the planet without having
a business case won't work,

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at least in Germany, at
least in the markets we

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operate, it is a dead end.

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You need to really fight
internally from a technology

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perspective, but also from a
commercial perspective to fight

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to make this a viable business case.

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And if you find a viable business case,

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I think we can sell it in
Europe, we can sell it in the US,

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we can sell it in all of our markets

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and sell it also to our stakeholders

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and shareholders in the end.

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So interesting about

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that story is it's not just
understanding your own business

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case, it's understanding your customers

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and putting yourself in their

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shoes and how they'll look at it.

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I just wanna say it's an incredible story

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and thank you for sharing it
and for being with us here.

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And Richard, it's a super
exciting journey for us

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as Heidelberg Materials and
for our employees as well.

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So thanks for having us.

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(bright upbeat music)