Climate and Energy

Climate Strategy

The Company is mitigating climate change risks across its operations, aligning with national and global policies and commitments such as Nationally Determined Contributions under the Paris Agreement and the United Nations Sustainable Development Goals. ACC’s climate strategy emphasises on reducing carbon footprint, enhancing resilience, integrating climate considerations, and striving for Net Zero emissions. Initiatives include increasing renewable energy use, conserving water, reducing waste, and implementing energy efficiency measures.

Climate Risks

Climate Governance

ACC has a comprehensive Climate Change Policy that mandates managing climate risks and adopting global best practices. Oversight is provided by the Corporate Responsibility Committee (CRC), which reviews progress quarterly. The ESG team develops the ESG agenda and supports implementation at the Company level. The Risk Management Committee oversees sustainability and ESG risks, reflecting the increasing importance of climate risks in enterprise risk management.

TCFD Disclosure

ACC adheres to the Task Force on Climate-Related Financial Disclosures’ (TCFD) framework and International Sustainability Standards Board (ISSB) S2 climaterelated disclosures. The Company has undertaken comprehensive Climate Risk Assessment for all its plants. Based on identified risks, scenario analysis is undertaken. The risk mitigation and adaptation strategy is designed to protect interests of stakeholders and business operations. ACC’s TCFD disclosure includes disclosing climate-related governance, strategy, risk management and associated metrics and targets.

Climate Risk Management

ACC conducted a comprehensive climate risk assessment study for all its plants and conducted Shared Socioeconomic Pathways (SSP) scenario analysis for the identified risks. Anticipated financial risks at both site-level and organisationlevel were studied. Based on these findings, climate strategy and actions were designed to mitigate the negative impacts of climate change and enhance business resilience.

Physical Risks

Physical risks fall under acute and chronic physical risks – acute risks arising from climaterelated hazards like temperature extremities, pluvial flooding, coastal flooding, fluvial flooding, drought, cyclone, water stress etc. and chronic risks from changing weather patterns and rising mean temperature and sea level etc. These can cause damage to assets, supply chain disruptions and other impacts. Detailed analysis of physical risks is carried out for all plants of the Company.

Physical Risks

Aligned with the TCFD framework, ACC considers the following risks:

• Policy and legal
• Technology
• Market
• Reputation

Climate Related Scenario Analysis

ACC conducted scenario analysis on Shared Socioeconomic Pathways (SSP) to assess climate risks. These scenarios, ranging from SSP1-1.9 to SSP5-8.5, help understand various possibilities and levels of risk, uncertainty, and volatility. The goal is to ensure assets and operations can effectively manage climaterelated risks and capitalise on emerging opportunities.

Risk Mitigation

ACC implements a range of measures to mitigate climate risks. These include routine inspections, emergency response plans, health and safety protocols, and effective communication strategies. Annual weather forecasts inform global supply chain decisions to prevent delays. Measures against heat waves include scheduling minimal outdoor work during peak summer, offering flexible hours, and conducting mock drills. Adequate insurance coverage protects against asset damage or material loss due to extreme weather events.

Internal Carbon Pricing

Internal Carbon Pricing (ICP) plays a vital role in ACC’s strategy to reduce GHG emissions and manage financial impacts from climate regulations. By quantifying risks at each site and aggregating them, the Company assesses lowcarbon investments and selects energy-efficient technologies for new projects. With an ICP calculated on the basis of per metric tonne of CO2 (tCO2) reduction, ACC allocates funds for renewable projects and energy efficiency measures, aligning with stakeholder expectations.

Greenhouse Gas Emissions (GHG)

The Company monitors and reports carbon emissions from all manufacturing locations, including integrated cement plants, mines, grinding units, and bulk cement terminals, aligned with IPCC, CSI and GHG Protocol greenhouse gas accounting standards. The direct GHG emissions of cement plants almost entirely consist of CO2. The contribution of other non- CO2 greenhouse gas emissions is almost negligible. investments in new, more cost-effective filters and by improving the efficiency of operating plants.

Net Zero Commitment

ACC is at the forefront of climate action and sustainability within its sector, aiming to significantly contribute to India’s net zero emissions goal. Committed to achieving net zero emissions by 2050, the Company’s near-term targets for 2030 are already validated by the Science Based Targets initiative (SBTi) in line with a well-below 2°C trajectory. While awaiting validation for its 2050 targets, focusing primarily on Scope 1 and 2 emissions, which constitute approx.. 90% of its total emissions of its total emissions, ACC also aligns with the Global Cement and Concrete Association (GCCA) Roadmap for Net Zero Concrete by 2050.Commitment to SBTi.

The Science Based Targets initiative (SBTi) mobilises companies to transition to the lowcarbon economy. It is a partnership between CDP, the United Nations Global Compact, the World Resources Institute (WRI) and the World Wildlife Fund (WWF).

ACC Limited is Committed to SBTi. The Company’s 2030 targets are duly validated and approved by the SBTi and can be referred at https:// sciencebasedtargets.org/targetdashboard. Its targets are in line with a well-below 2°C trajectory.

Decarbonisation Levers at ACC

Scope 1	Scope 2	Scope 3
Energy efficiency improvement Use of alternate fuel Thermal Substitution Rate (TSR) improvement Development of new lowcarbon products, i.e. low clinker content Maximising use of supplementary cementitious materials like fly ash, slag, and waste gypsum Higher use of waste heat	Decarbonisation of electricity - Use of renewable energy - Use of green energy – waste heat recovery systems (WHRS)	Decarbonise supply chains Supplier engagement Procurement policy and choices Operational policies Business model innovation
Future Initiatives Pilot on carbon capture and utilisation/storage with GCCA Green hydrogen: Exploring pilot project for green ammonia firing in cement kiln

PAT Scheme to Reduce Specific Energy Consumption

Perform, Achieve and Trade (PAT) is a regulatory instrument in India to reduce specific energy consumption in energy intensive industries. It has an associated market-based mechanism to enhance cost effectiveness by certifying excess energy savings which can be traded.

Under PAT, industries having high specific energy intensity are identified as designated consumers within certain key sectors, which must file energy consumption returns every year and regularly conduct mandatory energy audits. The essential tasks in the mechanism are to set the specific energy consumption norms for each designated consumer in the baseline year and in the target years, devise a verification process for specific energy consumption, find ways of issuing the energy savings certificates, operationalisation of the trading process for energy savings certificates in addition to the compliance and reconciliation process for energy savings certificates. The outcomes are in the form of energy savings and subsequent carbon savings.

Renewable and Green energy

ACC is investing in renewable and green energy to mitigate its carbon footprint, reducing dependency on conventional electricity sources. The Company plans to increase its green power share to 60%, a significant expansion in the industry. Major investments are directed towards solar and wind energy, along with Waste Heat Recovery Systems (WHRS). This strategic move aligns with ACC commitment to environmental sustainability and reducing greenhouse gas emissions.

This ambitious target reflects the Company’s determination to reduce its carbon footprint, promote clean energy practices and contribute to a more sustainable future. These initiatives are pivotal parts of a broader vision which will help ACC to achieve the leading share of renewable and green energy among its peers.

Alternative Fuels (Co-processing)

ACC takes a sustainable approach to managing industrial, agricultural, and municipal waste. Leveraging co-processing technology, the Company has access to preprocessing and co-processing facilities across India, each equipped with waste storage areas, feeding arrangements and laboratories. Through these advanced facilities, the Company efficiently manages large volumes of waste, ensuring the recovery of energy and recycling of waste materials.

As part of its commitment to sustainability, ACC is scaling up investments to modernise and upgrade its pre-processing and coprocessing facilities. Expert teams continue to offer solutions to likeminded customers across diverse sectors, facilitating the utilisation of higher volumes of waste in the manufacturing process.

The state-of-the-art pre-processing facilities play a crucial role in converting highly heterogeneous waste streams into a homogenised mix through sequential operations such as blending and shredding. This process ensures that the waste is transformed into an alternative resource, reducing reliance on traditional fossil fuels. Through sustained upgrades to the waste management infrastructure, ACC has continued to increase its dependence on alternative fuels. In the reporting period, 0.52 million tonnes of alternative fuels were consumed. These efforts underscore ACC’s commitment to sustainability and responsible waste management practices.

Quantity of Co-processed Waste

Green Products

ACC stands as the industry leader in producing and distributing blended cement, renowned for its eco-friendly properties with significantly reduced clinker content. By incorporating materials like slag and fly ash, ACC not only contributes to environmental preservation but also facilitates the construction of robust and enduring infrastructure nationwide. Currently, the Company’s portfolio comprises green products, constituting 96% of its offerings. The green products of the Company are duly certified by GRIHA.

Air Emissions

In addition to greenhouse gas emissions, the combustion of fuel during operations produces air pollutants such as nitrogen oxides (NOx) and sulphur oxide (SOx), contributing to the environmental impact of the industry. Furthermore, business activities contribute to particulate emissions through fuel combustion and vehicular movement.

ACC has implemented air pollution control measures, including Electrostatic Precipitators (ESP) and bag filters for both flue and process emissions. The Company has installed closed conveyor belts for material transfer. To manage dust, dust suppression methods such as water sprinkling on the roads is implemented. Continuous Emission Monitoring Systems (CEMS) have been installed at all plants to constantly monitor SO2, NOx, particulate matter, and any other significant emissions from kilns/raw mill stacks. The results are digitally displayed across all monitoring locations.

Water Management

Water is a scarce natural resource and plays a pivotal role in the SD 2030 plan and is a key material topic and a fundamental pillar. While cement manufacturing primarily employs a dry process, the Company judiciously uses water for cooling, dust suppression and human consumption within its operations. It has already achieved a water-positive status that is nearly twice its water consumption and is working towards increasing this to 5x by 2030.

Furthermore, the Company has gained international recognition for its leadership in water security by CDP. Recognising the critical importance of responsible water management, the Company has instituted a robust water stewardship policy. The overarching goal is to safeguard and conserve water resources, prioritising ACC’s operations and its communities.

Objectives of Water Stewardship Framework

Water Withdrawal and Consumption

While the Company’s operational sites depend on various water resources, it acknowledges the significance of reducing its impact on shared water sources. Continuously assessing and refining its water withdrawal processes, the Company strives to adopt efficient and sustainable water management practices. Through proactive measures, ACC ensures responsible and judicious use of water resources.

Water Intensity

ACC Cements has undertaken an ambitious target to reduce the intensity of freshwater utilisation per tonne of cement produced. Water intensity has significantly improved over the years, and the Company is likely to achieve its target much ahead of time. These achievements underscore its relentless pursuit of water efficiency and responsible resource utilisation.

Waste Management and Circular Economy

ACC works towards sustainable resource consumption, waste reduction, and circular economy principles. The Company prioritises waste management by surpassing regulatory standards and implementing industry best practices to minimise negative environmental impacts. Compliance with applicable environmental laws ensures responsible waste handling across operations.

Waste Generation

ACC undertakes several waste minimisation practices. Waste generated across its operations undergoes collection and segregation at the source, distinguishing between hazardous and non-hazardous categories. These waste types are then stored separately in designated yards. Moreover, the Company maximises the utilisation of waste as alternative raw materials, diminishing reliance on mined resources and averting their disposal into the environment.

Following types of wastes are generated by the Company:

• Plastic waste
• E-waste
• Bio-medical waste
• Construction and Demolition waste
• Battery waste
• Other hazardous waste
• Non-hazardous waste

Waste Management Measures

The Company prioritises waste minimisation by emphasising recycling and reuse initiatives. Proper disposal of e-waste, bio-medical waste, and scrap is ensured through authorised recyclers registered with regulatory agencies. Most plants employ co-processing of plastic waste and used oil in cement kilns, eliminating waste disposal to landfills. Some key waste management initiatives include:

• Plastic waste is mainly disposed through co-processing by the Company and a very small quantity like burst bags through authorised scrap dealers
• Bio-medical waste is disposed through incineration of biomedical waste at authorised Common Bio-medical Waste Treatment Facilities
• E-waste and battery waste is recycled through authorised recyclers
• Hazardous waste (used oil) is reused at plant and or is coprocessed in cement kiln and the quantity which cannot be co-processed is sent to common incinerator
• Scrap is sold to authorised vendors
• Mining overburden is repurposed and used for backfilling within the mines

Being Plastic Negative

The Company has proudly embraced a ‘Plastic Negative’ ethos which has resulted in it removing 7x times more plastic waste from the environment through co-processing, than what is added through the use of plastic packing bags. This has resulted in a minimising plastic pollution.

Key Aspects of the Company’s Biodiversity Management Plan

• Improving degraded habitats across sites through targeted habitat management plans
• Working closely with the community and government bodies to adequately manage the planted and rehabilitated areas
• Partnering for the management of any other adjoining offset areas
• Turning regenerated areas into natural habitats by adopting new forestry practices
• Carrying out mining operations and raw material transportation only during the daytime near protected areas
• Providing mine tippers with a multi-cap covering system and covered