Counting the Cost

The research finds that the combined cement production of 32 publically listed cement companies representing 46% of China’s total cement production was responsible for an external cost of $31,500m (RMB 195,400m) in 2013. On average, 67% of cement companies’ clinker and cement segment revenue and 43% of total company revenue could be at risk as the external costs of cement production become internalized through a range of drivers identified in this report.

This study demonstrates the usefulness of quantifying portfolio, sector and investment level exposure by using external cost accounting techniques alongside a framework that considers the internalization of these external costs through a number of different risk drivers. This can help the financial sector reduce its risk and identify opportunities to capitalize on the transition to a more resource efficient and sustainable economy.