“Metrics of Corporate Responsibility”
Ken MartchekAlcoa Inc.
Sustainable Manufacturing, Production, and Competitiveness Workshop
Copenhagen21 June 2007
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Overview of Presentation
Global “Sector’ MetricsEncouraging More Sustainable ProductionLinkage of Metrics,Targets and Actions
Sector (ex. Aluminium)
Corporate Members (ex. Alcoa)
Member Individual Facilities (ex. Alcoa Fjarðaál )
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Aluminium Sector – Global Operationsbauxite mines
alumina refineriesaluminium smelters
4
Primary Aluminium Production by Region
1980(16 million tonnes)
Japan7%
Middle East1%
Others8%
China2%
CIS17% Australia
2%
Africa3%
Brazil2%Canada
7%
United States29%
Western Europe
22%
2005(31 million tonnes)
Others9%
United States10%
Africa6%
China22%
CIS14%
Australia6%
Western Europe
14%
Canada9%
Brazil5%
Middle East5%
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Aluminium for Future Generations Sustainable Development Metrics
ENERGY CONSUMPTION - Electricity used per tonne of aluminium;RECYCLING – Supply of recycled metal back to the industry million tonnes.GREENHOUSE GAS EMISSIONS - Perfluorocarbon (PFC) emissions per tonne of aluminiumEMPLOYEE SAFETY - Lost Time Accident Rate and Recordable Accident RateMANAGEMENT SYSTEMS - ISO certificationsEMPLOYEE HEALTH - Employee Exposure Assessment and Medical Surveillance ProgrammesWATER - Fresh water consumption (a) per tonne of aluminium and (b) per tonne of alumina produced LAND - Proportion of bauxite mining land rehabilitated annually
6
05
1015202530354045
1960 1980 2000 2020
RecycledMetal %
% Post Consumer and Customer Recycled Metalto Total Metal Consumed
Past, Current and Future Global Aluminium Supply Mix
Sector average recycle metal supply from outside our industry:
• has increased from 17% in 1960 to over 32% today;
• is predicted to increase to 37% by 2020.
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“Economic”Performance Metrics
Global primary aluminium and alumina production statistics;Use of aluminium (as consumption per head of the population);Contribution to GDP (measured as net-added value);Total direct employment (indication of the indirect employment multiplier effect);Level of investment (to include new assets, maintenance, environmental protection and research and development);The wages ratio (sector country wages as compared to the national average wages).
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The global percentage of plants with formal mechanisms for consulting the local community;Percentage of plants with workforce training/education schemes and youth employment programmes.(Trainingperformance/hour/person/year);Community Initiatives to improve health, education, environment and the local community;
“Social”Performance Metrics
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Quantitative Global Voluntary Objectives
1. An 80% reduction in Perfluorocarbon (PFC) greenhouse gas emissions per tonne of aluminium produced for the Industry as a whole by 2010 vs 1990;
2. A 10% reduction in smelting energy usage by IAI Member Companies per tonne of aluminium produced by 2010 vs 1990;
3. The IAI Member Companies will seek to reduce GHG emissions from the production of alumina per tonne of alumina produced;
4. A minimum of a 33% reduction in fluoride emissions by IAI Member Companies per tonne of aluminium produced by 2010 vs 1990.
5. A 50% reduction in the Lost Time Accident Rate and Recordable Accident Rate by 2010 vs 2000 by IAI Member Companies,
6. Implementation of Management Systems for Environment (including ISO 14000 or equivalent certification) and for Health and Safety in 95% of IAI Member companies’ plants by 2010;
7. Implementation of an Employee Exposure Assessment and Medical Surveillance Programme in 95% of IAI Member companies’ plants by 2010;
8. The IAI Member Companies will seek to reduce their fresh water consumption (a) per tonne of aluminium and (b) per tonne of alumina produced and will report annually on progress;
9. The IAI Member Companies will seek to continue to increase the proportion of bauxite mining land rehabilitated annually; the IAI will report annually on the proportion of area rehabilitated to area mined.
IAI = International Aluminium Institute
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Tracking Progress –Reduced Sector Electricity Consumption
16.1
15.3
14.514.414.614.815.015.215.415.615.816.016.2
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Meg
awat
t hou
rs p
er to
nne
of
alum
iniu
m p
rodu
ced
Voluntary Objective
-10% Reduction objective
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78% reduction in PFC emissions per tonne aluminium from 1990 baseline2010 goal is a 80% reduction in PFC emissions per tonne aluminium
Tracking Progress –Reducing GHG Emissions per Tonne
0.00.51.01.52.02.53.03.54.04.55.0
1990 1995 2000 2005 2010
PFC
Em
issi
ons
(t C
O2-
eq/t
Al)
0.96
2010 Objective: 80% reduction
0.88
Linkage of Sector to Corporate Members
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Alcoa Inc.2020 Sustainability Framework
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Alcoa Inc. 2020 Sustainability Metrics/TargetsSafety
Zero fatalities, zero lost workday injuriesZero incidents
HealthBy 2008 20% reduction in number of employees requiring protective measures against
Unacceptable noise levelsUnacceptable workplace exposure to chemicals
Community100% of manufacturing locations will implement the Alcoa Community Framework by 201040% of employees within a business unit or region volunteered in the community through ACTIOM, Bravo! Or Month of Service
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Alcoa Environmental Metrics/Targets/Progress
0 20 40 60 80
Greenhouse Gases
VOC
NOX
Mercury
SO2
Water Use
Landfilled Waste
2006 Actual Goal
Progress Towards 2020 Vision % Reduction from 2000 Baseline
Greenhouse gas 25% reduction vs. a 1990 baseline was achieved in 2001
2008 Goal
2008 Goal
2010 Goal
2008 Goal
2008 Goal
2008 Goal
2010 Goal
Zero non-compliance with Environmental laws & regulations!!
Trend
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Alcoa Iceland FacilitySustainability Assessment Initiative
Developed a framework to assess the performance of Fjarðaál and Kárahnjúkar against sustainability principles (in partnership with energy supplier Landsvirkjun. )
Three phase initiative:1. Development of sustainability objectives, indicators
and measures – input of Stakeholder Advisory Group2. Development of targets3. On-going measurement and reporting of progress
• Input of Stakeholder Advisory Group (30+)• Representative of the community• Balance between social, environment and economic
interests
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Facility Stakeholder Groups Academic Institutions
UniversitiesTechnical College
Business organizationsContractorCompanies
Iceland GovernmentLocal GovernmentEnvironment ngosInternational NGO –Conservation InternationalTourismUnionsChurch groupsLocal health organization
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BD: Gallup and VR surveysDP: Alcoa/LV
Alcoa/LV employee survey on workplace and job
satisfaction
3.1 Alcoa/LV employee
job satisfaction
3. Satisfaction with workplace
BD: Demographic data for East Iceland and National population from Stats Iceland
DP: Employee data to be collected by Alcoa
Proportion of men and women employed by projects
compared with the National workforce proportion in:
• Management• Clerical/administrative staff• Industrial/manual workers • Engineering/technical staff• Total employees
Ratio of male to female employee salary by job classification
2.1 Gender balance in Alcoa/LV workforce
2. Equality in workforce
BD: Data from Statistics IcelandDP: Statistics Iceland
Gender and age distribution in East Iceland
populations compared to National population
Total population in East Iceland
1.1 Demographi
cs in East Iceland
1. Changes in demographics in local community
Sustainability Objective: Respect and Protect People
Baseline DataMetricIndicatorIssue
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R a t i o n a l e f o r S e l e c t io n a s a n I n d ic a t o r T h e p i n k - f o o t e d g o o s e n e s t s i n t h e r i v e r b a s i n s o f J ö k u ls á á D a l a n d o f J ö k u l s á á F l j o t s d a l . T h e K a r a h n j u k a r p r o j e c t c o u l d h a v e b o t h d i r e c t a n d i n d i r e c t e f f e c t s o n t h e p i n k - f o o te d g o o s e p o p u l a t i o n in t h e s e a r e a s . D i r e c t e f f e c t s i n c l u d e t h e l o s s o f b r e e d i n g h a b i ta t f r o m c r e a t i o n o f H a l s l o n r e s e r v o i r a n d f r o m i n c r e a s e d h u m a n d i s t u r b a n c e a s s o c ia te d w i t h o p e r a t i o n o f t h e p r o j e c t . P o t e n t i a l in d i r e c t ( i . e . , n o t s o l e l y c a u s e d b y t h e p r o j e c t ) e f f e c t s i n c l u d e r e d u c t i o n o f h a b i t a t q u a l i t y o r d i s p l a c e m e n t o f i n d i v i d u a l s d u e t o i n c r e a s e d h u m a n a c c e s s to t h e h i g h l a n d s f a c i l i t a t e d b y p r o j e c t - r e la t e d r o a d s . N o n - p r o j e c t f a c t o r s a l s o i n f l u e n c e t h e E a s t I c e l a n d p o p u l a t i o n o f p i n k - f o o t e d g o o s e , p a r t i c u l a r l y t h e a v a i l a b i l i t y a n d q u a l i t y o f w i n t e r i n g g r o u n d s i n th e U n i t e d K i n g d o m . T h e p i n k - f o o t e d g o o s e i s a B e r n C o n v e n t i o n A p p e n d i x I I I s p e c ie s , m e a n i n g t h a t i t i s a p r o te c te d s p e c i e s i n n e e d o f c o n s e r v a t io n . R a t i o n a le f o r s e le c t i n g p i n k - f o o t e d g o o s e a s a n i n d i c a t o r i n c l u d e r e le v a n c e to p r o j e c t s ( d i r e c t a n d i n d i r e c t p r o j e c t e f f e c t s ) , a v a i l a b i l i t y o f q u a l i t y b a s e l in e d a t a , s e n s i t i v i t y t o c h a n g e , a n d t h e a b i l i t y o f t h e i n d i c a t o r to s h o w m e a n i n g f u l t r e n d s o v e r t i m e . M e t r i c N u m b e r o f b r e e d in g p a i r s o f p i n k - f o o t e d g o o s e i n th e J ö k u l s á á D a l a n d J ö k u l s á á F l j o t s d a l r i v e r b a s i n s . T h i s m e t r i c w o u l d b e m o n i to r e d d u r i n g t h e c o n s t r u c t i o n a n d o p e r a t i o n a l p h a s e s o f t h e p r o j e c t s . B a s e l in e T h e s to c k o f b r e e d i n g p i n k - f o o te d g e e s e h a s b e e n m o n i t o r e d i n t h e h i g h l a n d s o f E a s t I c e l a n d f r o m 1 9 6 0 t h r o u g h t h e p r e s e n t b y t h e I c e l a n d i c I n s t i t u t e f o r N a t u r a l H i s t o r y ( I I N H ) . T h e E a s t I c e l a n d b r e e d i n g p o p u l a t i o n h a s b e e n i n c r e a s i n g s t e a d i l y a n d t h e s t o c k i s c u r r e n t l y a t a n a l l t i m e h i g h . F r o m 1 9 8 1 u n t i l 2 0 0 0 , t h e n u m b e r o f b r e e d i n g p a i r s q u a d r u p le d t o r e a c h a to t a l o f o v e r 7 ,0 0 0 p a i r s i n th e y e a r 2 0 0 0 . O f t h o s e 7 ,0 0 0 p a i r s , 3 ,3 0 0 p a i r s n e s t i n t h e r i v e r b a s i n o f J ö k u l s á á D a l . O f th o s e 3 ,3 0 0 p a i r s , 5 0 0 a r e i n t h e a r e a t h a t w i l l b e d i r e c t l y i m p a c t e d b y c r e a t i o n o f H a ls l o n r e s e r v o i r . T h o s e 5 0 0 p a i r s r e p r e s e n t 7 p e r c e n t o f t h e E a s t I c e l a n d b r e e d i n g p o p u l a t i o n a n d 1 .6 p e r c e n t o f b r e e d in g p a i r s o f t h e e n t i r e b r e e d i n g s t o c k w o r l d w i d e . T h e R a m s a r c o n v e n t i o n d e f in e s a n a r e a o f i n te r n a t i o n a l i m p o r ta n c e f o r a b i r d s p e c i e s i f 1 p e r c e n t o r m o r e o f t h e s t o c k d e p e n d s o n t h e a r e a .
I n d i c a to r 2 7 .1 P in k - f o o t e d G o o s e
Number of Breeding Pairs of Pink Footed Geese In East Iceland Highlands
0
1000
2000
3000
4000
5000
6000
7000
8000
1982 1984 1986 1988 1990 1992 1994 1996 199 8 20 00
Year
Num
ber o
f bre
edin
g pa
irs
N u m b e r o f b r e e d i n g p a i r s o f p in k - f o o t e d g e e s e in E a s t I c e la n d 1 9 8 2 - 2 0 0 0
( S o u r c e : I I N H , 2 0 0 4 )
The End !!!