FLE122 Annual Report 2018

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Business Sustainability

Environment

Our commitment is to protect the environment we work in and increase the use of environmentally sustainable practices across all of our operations, from extraction and manufacturing through to residential development and distribution. We have dedicated sustainability and environmental managers within many of our businesses, who regularly review the environmental impacts and risks of our businesses and progress mitigation and innovation initiatives to reduce our impact. Issues that are important to society are important to us. As such, we consult with our employees, stakeholders, communities, customers and suppliers to understand their needs and work with them to improve development and execution of a Fletcher Building-wide environmental strategy, to improve our performance across the Group. In doing so an important focus area will be the development of life-cycle goals, to ensure that for any change we make the overall impact is positive and that we are not simply moving the impact up or down the supply chain. EMISSIONS AND CLIMATE CHANGE Addressing climate change is one of the biggest challenges of this century. The board recognises that Fletcher Building needs an overarching sustainability strategy to inform how we work with Government, industry and the community to reduce emissions and support the transition to low-emissions economies in the markets in which we operate. The development of this strategy will be a focus in FY19, with the recruitment of a head of sustainability planned. our environmental performance. In FY19 we will recruit a head of environment, who will lead the

We voluntarily disclose our greenhouse gas emissions, climate change and water risks through the CDP (formerly known as the Carbon Disclosure Project) and the establishment of new emissions reduction targets and initiatives will be a key feature of the new sustainability strategy. In FY18 we undertook a number of capital investments across our concrete division to improve the environmental performance of our individual cement and concrete businesses, which collectively generate the largest proportion of Fletcher Building’s greenhouse gas emissions. At Firth we completed the construction of a new $30 million state-of-the-art masonry factory at Hunua, which opened in November 2017. The 4,900m 2 plant combines agile and sustainable manufacturing design. Automation has optimised how the plant runs. It recycles 100% of waste blocks back into the production line onsite and uses rainwater collected from the roof as its primary source of water. Raw materials come from the Winstone Aggregates

quarry next door, significantly reducing the distance raw materials travel and the new curing oven operates at much lower temperatures than the previous one, resulting in 22% less energy used per block produced. Our Golden Bay Cement (GBC) plant is progressing an alternative fuels strategy, and planning a new project that is jointly funded by the Ministry for the Environment, aimed at substituting a further 20% of GBC’s coal requirement through the use of end-of-life tyres. If successful, this project will help to address a major waste problem in New Zealand, while improving the sustainability of GBC's energy sources. As part of the project GBC would reuse up to 3.1 million disposed tyres per annum, which is up to half of New Zealand’s annual tyre waste, excluding stockpile. The use of tyre-derived fuel is also expected to replace 5,000 tonnes of iron-sand per year, a 40% reduction in iron-sand use at the plant.

Once fully operational the cement kiln would take up to 3.1 million shredded tyres per year, diverting up to half of New Zealand's waste tyres, excluding stockpile, from going to landfill. Using tyre-derived fuel would replace 15,000 tonnes of coal and 5,000 tonnes of iron sand. 3.1m Reducing the reliance on coal by around 20%

New Golden Bay Cement project would enable shredded tyres to be added to the fuel mix

46 Fletcher Building Limited Annual Report 2018

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