In a world undergoing profound geographical and demographic upheavals, mobility needs are constantly increasing, while new constraints and requirements emerge. Building on a business model well-proven over its 90 years of existence at the service of transport infrastructures (1), Colas is transforming itself so as to propose infrastructures and mobility solutions of the future (2) while integrating the CSR/ESG (Corporate Social Responsibility/Environment & Social Governance) challenges specific to its activities (3).
1. A proven business model
Building an infrastructure is inconceivable without a maintenance system to ensure its long-term operability. In the case of transport infrastructures (roads or streets, rail tracks, airfields, etc.), the maintenance and conversion of existing infrastructures accounts for approximately 90% of the market, which translates into a very large number of small construction works (€140 K on average per construction work). To carry out these thousands of projects, Colas relies on a territorial network of nearby operating units.
It is also essential to have a large fleet of equipment of all types, both stationary and mobile, spread over all the operating areas. To ensure the efficient use and profitability of these costly assets, in each territory, Colas strives to secure a sufficient volume of activity within a medium / long term perspective.
Colas' activities require a lot of workforce, including a high proportion of blue collar workers; they currently represent 65% of Colas employees. Colas is committed to offering its employees, in all geographical areas, satisfactory working conditions that are also sufficiently attractive to future employees. Employee recruitment cannot be accomplished without proclaiming and effectively implementing key values such as ethics, safety and respect for human rights.
On the strength of these considerations, Colas has developed a business model that relies on the following principles:
- Conducting activities through local human size permanent facilities, all over the world.
- Enabling its operating units to adapt on a decentralized basis to local conditions, whether technical, human, climatic, etc.
- Offering its operating units and their customers the benefit of the shared know-how of a worldwide group.
Colas has enhanced this business model by developing complementary expertise and activities:
- Carrying out large-scale new construction activities requires “project” expertise (engineering, financing, management, execution, etc.), in addition to the standard know-how from Colas regular activities. These areas of expertise are consolidated in the Colas Projects entity, which provides support for the whole Colas network of permanent operating units. By carrying out such large-scale projects, Colas Projects also generates technical and organizational improvements, thereby expanding the network's capabilities.
- In order to offer its customers and users the best possible mobility conditions at the best possible price, it is essential for Colas to know and control the value chain upstream of its construction activities: this is how, over the years, Colas has acquired strong positions in the production of aggregates and in the distribution and processing of bitumen (asphalt cement) products. By leveraging its unique expertise in these two activities, Colas has built a long tradition of innovation. In addition, the integration of the aggregate, bitumen and construction activities has granted Colas an increased ability to control their impacts (for example, the carbon footprint).
- Finally, to optimize and perpetuate its presence in certain regions, such as insular or isolated areas, Colas also carries out activities that are ancillary to its traditional activities, such as civil engineering, utilities, environmental projects, construction, etc.
2 - Solutions for Sustainable Mobility
The construction and the maintenance of transport infrastructures meet an essential human need; however, it is inconceivable not to consider the environmental issues associated with such infrastructures: impact of combustion engine emissions, consumption of natural resources (aggregates, petroleum products, etc.), fragmentation of ecosystems, soil artificialization, etc. Fully aware of these challenges, which are more generally related to energy and ecological transitions, Colas is actively committed to conducting change in its activities accordingly. To this end, Colas relies both on its long-standing business model to address the specific issues of each region, and on its capability as a world-wide group to leverage positive feedback from experience and produce ground-breaking innovations.
Mobility issues are becoming an increasingly complex challenge for human societies, whether in terms of the interaction of the modes of transport, of the multiple functionalities of the infrastructures themselves or of the rapid shifts in users' behavior or expectations: the outcome is a social questioning of Colas' business lines. Without prioritizing one mode of transport over another, Colas' business is to serve them all according to the decisions of public decision-makers and to promote the most efficient and durable solutions. In doing so, Colas is gradually transforming and positioning itself as a global integrator of responsible mobility solutions, particularly in view of the smart road and sustainable city concepts. To successfully complete this development, Colas harnesses the collective intelligence of its teams and builds partnerships with players in the services or digital technologies sectors.
Colas' competitive landscape changes and becomes more complex. As a world leader in the Public Works sector, Colas competes with the French and European leading companies (Eurovia, the CRH group, etc.), whether in France or on the international market. Colas is also aware of the rising competition from companies in fast-growing emerging countries (Turkey, China, Brazil, ...), particularly in parts of the developing world. Finally, in new markets such as the sustainable city, we are witnessing the arrival of new players from the digital sector positioning themselves as actors in the transformation of the city, including living conditions and mobility.
3 - The CSR/ESG Challenges of Colas' Activities
Mobility infrastructures reflect the typical contradictions of sustainable development: on the one hand, they meet an essential need for the development of human societies, while on the other hand, they generate negative impacts for stakeholders. To reconcile these discrepancies, Colas focuses its efforts on several challenges specific to its activities:
- Optimizing the overall cost: for taxpayers or users, it is significantly cheaper in the long run to carry out regular maintenance of a transport infrastructure rather than rebuilding it after letting it deteriorate over the years; optimizing the overall cost over time generates additional benefits in terms of CSR/ESG criteria: energy savings, savings of materials, reduced rate of accidents, increased user satisfaction, increased efficiency of the transportation system, etc. As Colas generates most of its revenue from infrastructure maintenance activities, it also offers a range of solutions enabling infrastructure owners to reduce their overall cost of ownership or even to use their infrastructure as a service (“the road as a service”).
- Circular economy: the aggregates, rocks, sand and gravel are the most widely consumed raw material by human societies, at a rate of about five tons per year per person in the world; only the consumption of water for all human uses exceeds this figure. As a matter of facts, it is estimated that about half of this aggregate consumption goes into transport infrastructures. Therefore, saving materials is a major priority in Colas' activities. Such savings can be achieved by almost limitless recycling of dismantled infrastructures (concrete, asphalt, etc.) and also reuse of waste or by-products from other industry sectors: incineration bottom ash, steel slags, plastic waste, refinery bitumen (which replaced the gas plant coal-tar used in the last century), war debris, etc.
This contribution to loop of local materials saving and, more generally, to the circular economy, has positioned Colas as a world leader in recycling. Recycling is also a very important challenge in terms of energy: given the quantities of materials they require, Colas' activities are naturally energy-intensive in terms of extraction, transport and application while, recycling and planned maintenance, enables Colas to significantly reduce its energy footprint.
- Protection of Nature: although some of Colas' activities involve significant ground coverage (aggregate extraction pits and quarries), Colas is primarily concerned with the footprint of the linear infrastructures it builds or maintains. These are a source of fragmentation of ecosystems; in addition, they also enable human populations to access natural spaces, which they may later convert into artificial spaces. This phenomenon is a major challenge of sustainable development for our societies, particularly the less developed ones. Colas does not have the leverage to reduce the footprint of existing infrastructures, the maintenance of which constitutes the bulk of its activity: they are already artificialized and it is preferable to maintain them and improve their efficiency rather than create new ones. With regards to aggregate extraction sites, practically no country allows opening such sites anymore in valuable natural spaces; for Colas, the reduction of demand through recycling and the attention paid to surrounding biodiversity are nonetheless an essential obligation for the Colas social acceptance.
- Social advancement: in economies that are becoming increasingly complex, a growing social challenge is the access to and reintegration of low-skilled people into employment and the preservation of a “social ladder”. No society can achieve lasting consensus unless it offers its citizens opportunities to work and advance on their own. In this respect, Colas' activities are nowadays among the few that offer opportunities of integration and social advancement even to low-skilled people: to this end, Colas recognizes practical sense, teamwork and entrepreneurial culture, prioritizes local employment, invests in training and offers promotion opportunities. Colas thus makes a unique contribution to the “living-together” fabric of the societies in which it operates, particularly the less developed ones.
- Safety: Colas activities expose participants (Colas employees, temporary workers, subcontractors, etc.) to safety risks. Controlling these risks and reducing the number of accidents requires constant commitment and alertness. Colas must also manage the social challenge of road accidents in all countries. Year after year, Colas strengthens its efforts to improve the safety of its activities (training, prevention, audits, etc.) in order to make safety a fundamental component of its culture.
- Ethics and frugality: essentially, Colas activities depend on public procurement tenders or tenders by large professional corporations (highway companies, rail operators, mining companies, etc.): in such activities, competition is strong, especially since differentiation is limited by the tender specifications and by the almost systematic selection of the lowest bidder. The resulting low profit margins generate a genuine imperative for frugality, as well as high risks in terms of business ethics: corruption, favoritism or anti-competitive practices. As in the case of safety, Colas is determined to make ethics an essential pillar of the company culture. Moreover, Colas pays careful attention to its operating costs, not only to preserve its competitiveness, but also to maintain the capacity to allocate budgets for innovation and development.