Boral's approach to environmental management including information on our management and review systems are discussed on Boral's website at www.boral.com.au/sustainability.

Boral is committed to pursuing and maintaining industry specific best practice in environmental performance. Audit and assurance programs are an important part of Boral's environmental management systems. In 2009/10, Boral's corporate Environmental Services team undertook 47 compliance and/or systems corporate audits, and 22 acquisition and divestment audits. Business-specific auditing also continued to take place across the Group.

During 2009/10, Boral incurred two Penalty Infringement Notices (PINs) related to environmental contraventions in Australia (resulting in $4,000 in fines). Both were issued in Queensland for minor technical non-compliances, being a contravention of a license relating to polluting of waters, and failure to report a monitoring exceedence in a timely fashion.

There were no infringements in the USA or Asia for environmental contraventions in 2009/10.

Energy use and GHG emissions
Boral's operations consume a significant amount of energy and some businesses are particularly emissions intensive. In 2009/10, greenhouse gas (GHG) emissions from Boral's wholly owned businesses in Australia, the USA and Asia totalled 3.14 million tonnes of CO_2e. In addition, approximately 0.17 million tonnes of CO_2e were emitted from Boral's equity share of joint venture businesses.

Boral's absolute GHG emissions in 2009/10 decreased by 12% year on year. This decrease in emissions primarily reflects lower production in the USA and in Australia. Emissions from Boral's US operations were down by around 23% on a comparable basis or around 43,000 tonnes of CO_2e, reflecting the continued housing market downturn and Boral's associated reduction in production. US brick and roof tile plants were running at an average utilisation rate of between 20-35% during the year. In Australia, emissions were down by a significant 382,000 tonnes of CO_2e or around 11%, primarily as a result of Boral's strategy to reduce clinker inventories. Clinker inventories reduced by 55% on the prior year which was achieved in part by lowering production volumes by 19%. In Asia, Boral's GHG emissions were broadly steady.

The distribution of Boral's energy use and related GHG emissions across Boral's businesses is summarised in Figure 14. Around two thirds of Boral's emissions were from Boral Cement (previously known as Blue Circle Southern Cement).

Approximately half of Boral Cement's emissions were from calcination, the chemical process of forming clinker from limestone at high temperatures. In addition to GHG emissions from calcination of limestone, some 2.1 million tonnes of emissions per annum result from Boral's electricity, gas, coal and diesel consumption.

In 2007, Boral set a climate change target to at least hold absolute GHG emissions steady and to offset any increase in emissions associated with market demand growth by reducing emissions per tonne of production. On a comparative basis, Boral's emissions in 2009/10 were 17% below 2006/07 emissions. We are currently developing a comprehensive energy efficiency strategy, which coupled with our focus on LEAN manufacturing, will lead to a quantifiable energy reduction target. This will support our goal of lower emissions intensive production.

While Boral's reduction in absolute emissions during 2009/10 was primarily due the market downturn and inventory reductions, Boral's businesses continue to undertake a range of projects to reduce energy consumption and GHG emissions. As markets recover and production increases, alternative fuel and energy efficiency improvements will deliver greater benefits. We have identified further abatement opportunities in the areas of energy efficiency, renewable energy, alternate fuels and alternate materials. The implementation and effectiveness of these initiatives largely depend on the anticipated cost of carbon in a trading environment, when compared to the costs of implementing identified abatement initiatives and available technologies. For a longer-term solution, we need to see the development of new technologies and fuel options.

Boral has been an active participant in voluntary energy efficiency and emission reduction schemes for more than a decade. Participation in these schemes generally requires Boral's businesses to establish improvement targets and develop action plans, which are audited as part of the program.

Boral is one of only seven elective benchmark participants in the NSW GGAS, a Baseline & Credit carbon trading scheme that generates Large User Abatement Certificates (LUACs) for reducing GHG. Based on a kiln efficiency upgrade project at our Berrima cement works, Boral has created more than 637,000 LUACs since 2004, saving more than 163,000 tonnes of CO_2e in 2008. While the abatement project would have created a further 160,000 or so LUACs in 2009, Boral chose not to register them as they were then surplus to scheme requirements. Boral also created around 83,000 NSW Greenhouse Abatement Certificates (NGACs) under the GGAS, and over 6,000 Energy Savings Certificates (ESCs) under the NSW Energy Savings Scheme (ESS) in 2009 for reducing electricity consumption at Berrima and generating renewable electricity at our landfill operations (Boral Waste Solutions) in Victoria. This latter initiative avoided the production of around 89,000 tonnes of CO_2e. Boral's ongoing strategy within GGAS is to increase our abatement/ renewable energy capacity at our landfill, and continue to seek efficiency gains at our cement kilns in particular.

Boral Waste Solutions uses landfill gas to produce renewable electricity which is exported into the national grid. Commissioning in 2009 of the third 1.1 MW generating module brought total electricity export capacity to 3.3 MW, which is sufficient to provide the electricity needs of around 3,000 homes. This process also generated just on 20,000 Renewable Energy Certificates (RECs) under the national Renewable Energy Target Scheme (RET) requirements, and these were sold to our electricity supplier.

In addition to reporting in this Sustainability Report, Boral reports externally on climate change risks through the Carbon Disclosure Project. Boral's response can be found at www.cdproject.net.

Other emissions
Data on pollutant emissions for 66 of Boral's Australian facilities was reported to the National Pollutant Inventory (NPI) for FY2010, as required under the NPI National Environmental Protection Measure. This data is available at www.npi.gov.au. In the USA, 14 Boral sites report their releases and transfers of hazardous and toxic chemicals on the annual Toxic Release Inventory as required under The Emergency Planning and Community Right-to-Know Act (EPCRA) 1986 and the Pollution Prevention Act (1990). This data is available at www.epa.gov/tri.

Water management
Boral recognises the need to sustainably manage our valuable water resources. Throughout our operations we rely on water for manufacturing and maintenance processes, to suppress dust, for cleaning and for sanitation.

We use water from a range of sources, including mains/town water, ground/bore water, surface water (including rainwater) and on-site recycled water (as shown in the 2010 Sustainability Data Table at www.boral.com.au/sustainability). Mains/town water usage is material to Boral.

A total of 2,270 million litres of mains water was used by Boral's wholly owned and controlled businesses in Australia, the USA and Asia in 2009/10. Mains water use was down 1% on a comparative basis on the prior year (as shown in Figure 15) due to lower production volumes, the increased use of rainwater, and water efficiency gains.

Since 2007, numerous Boral sites in Australia have participated in formal water conservation programs in partnership with governments and/or water authorities.

Waste, recycling and re-use
Boral Waste Solutions' landfill site at Deer Park in Victoria is one of the largest landfill sites in Australia. Deer Park received more than 700,000 tonnes of commercial and municipal waste in 2009/10. Of this, around 5% was green waste which was recycled or composted to produce manufactured topsoil.

Depending on the specific product manufactured, Boral recycles or re-uses between 40% and 100% of production waste. Our own returned waste materials re-used to produce the same product include concrete washout slurry, recycled asphalt pavement (RAP), plasterboard waste from production and building sites, brick bats and bricks from customers' sites, and green and cured masonry product.

Throughout our production processes we also use a considerable amount of external waste products or secondary resources to manufacture our products including: cementitious waste materials and by-products in cement, crushed demolition concrete in new concrete ("Envirocrete™") and granulated used tyres in LoNoise™ Asphalt.

Two types of Boral's businesses are based primarily on the utilisation of other people's waste – Boral Recycling in Australia and our fly ash operations in the USA and Australia.

Land management and biodiversity
Responsible land management starts with environmental due diligence before acquisition of new land assets or businesses, and continues through to divesting sites only when they are "fit for purpose". Key aspects of our land management activities are: complying with environmental and planning regulatory requirements; minimising Boral's "environmental footprint"; progressively rehabilitating our extraction sites; and maximising the sustainability and financial end use of our extraction sites.

Where practicable, Boral progressively rehabilitates its extractive operations on an ongoing basis. Landscape rehabilitation works improve the visual amenity of our quarry sites, enhance biodiversity and minimise erosion through planting of native trees and revegetation.

In addition to the already developed or proposed nature reserves at various Boral locations, Boral continues to develop quarry rehabilitation plans in greater alignment with current thinking regarding biodiversity, such as re-establishment of natural ecosystems relevant to the local area, rather than just addressing visual impact.

Boral's efforts in biodiversity enhancement and land management generally involve long-term commitments. Previously reported efforts which are still ongoing include protecting the Western Swamp Tortoise in the Swan Valley in Western Australia, the Striped Legless Lizard and Spiny Riceflower on the Basalt Plains west of Melbourne and the Grey-headed Flying Fox in New South Wales.

Some Boral locations are subject to Native Title claims and these are dealt with according to local statutory requirements. Boral is committed to working cooperatively with traditional land owners and where necessary Boral's businesses draw on the expertise of Boral's Indigenous Employment Coordinator who assists with indigenous cultural issues. There is currently ongoing dialogue with claimants with respect to one quarry site, in Western Australia.

Through the Boral Living Green initiative, in partnership with Conservation Volunteers Australia, we continue to support projects to enhance the habitat of threatened species. During 2009/10, Boral's Living Green projects included: planting koala habitat trees with the Mount Emu Landcare Group in Victoria; preserving the remnant coastal habitat at Brighton Beach in South Australia; maintenance of the walking track at the historic Newnes shale works in Mudgee, NSW to control access to this heritage site and habitat for many threatened species; continuation of our work on the Barron River project in Cairns in Queensland; and, work on the Moore River Nature Reserve north of Perth which has been chosen as a suitable site for the critically endangered Western Swamp Tortoise.