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CEO Statement
Our inclusion in the 2006 Dow Jones Sustainability Index (DJSI)—the fifth year we've been listed as one of the most sustainable companies in the world—is a great honor. It reflects our hard work and the value we place as a company on sustainability.
Sustainability is not a theoretical exercise, but one with a clear goal: to deliver net long-term benefits to our shareowners, employees, customers, suppliers, and the communities in which we operate.
While it's an honor to be part of the DJSI, I want to stress that it's not the media attention or public recognition that's really important. It's all about everyday performance in search of excellence. As with our Alcoa Business System and safety initiatives, we can't be satisfied with today's performance. We strive for continuous improvement. To paraphrase an old saying, "The price of a sustainable company is eternal vigilance." Sustainability, by its very nature, is a long-term commitment, and there is much more to do.
The key to performance is engagement—engagement at all levels, in all our communities, by each and every employee. We've seen it at work. In 2006, our board of directors reviewed our Alcoa/Landsvirkjun Sustainability Initiative in Iceland and also visited that country, which is a good example of where we've made progress. When Alcoa first entered Iceland in 2001, we faced mistrust and opposition. Today, we have earned strong support from a majority of Icelanders. By establishing an advisory group and working with community organizations, government leaders, and citizens, we achieved understanding and cooperation that's allowed us to bring new economic growth to the region while protecting the environment.
Also in 2006, three of our board members visited the new bauxite mine we are opening in the Amazon in Brazil. They engaged with leaders in the communities and authorities in the region and visited other projects in the area. These visits not only directly connect our board members with our stakeholders, they also underscore the importance the board places on sustainability issues.
In every location and project, we take great care to engage with all interested parties. And, as we learned in Iceland, success is possible, because engagement and partnerships lead to mutual respect and a common ground from which to move ahead.
We have made additional progress in our sustainability journey, as evidenced by the following 2006 highlights:
- More than 140 current and future leaders in the field of conservation and sustainability gathered in Brussels for the first Alcoa Foundation Advancing Sustainability Conference, which is part of the six-year, US$8.6 million Alcoa Foundation Conservation & Sustainability Fellowship Program.
- We held a global water summit attended by more than 40 Alcoa employees and several invited external experts in sustainable water management to raise the awareness of the sensitivity of fresh water availability in certain regions of the world, allow best practice sharing, and identify several projects aimed at reducing water use.
- 69% of our operating locations operated without any environmental non-compliance incidents, up from 68% in 2005.
- We posted the highest annual sales (US$30.4 billion) and income from continuing operations (US$2.2 billion) in our company's history.
- Between 2002 and 2006, the proportion of all recordable injuries that were ergonomic-related declined 44%; the proportion of lost workday cases due to ergonomic issues fell 22% during the same period.
- 82.3% of our reporting locations had zero lost workdays compared to 61.5% the prior year, while 45.2% of our locations had zero recordable injuries compared to 31.4% in 2005.
Although our lost workday and total recordable rates remain significantly below national averages, we remain disappointed in our efforts to eliminate fatalities. Two Alcoa employees and four contractor employees died at our facilities in 2006. This is unacceptable and inconsistent with our pledge to value human life above all else. We are managing our risks accordingly by increasing the level of global focus and attention we place on fatality prevention. Additional details about this and other actions taken can be found in the Safety section of our online sustainability reporting.
Another major initiative started in 2006 and announced in January 2007 was our joining nine highly esteemed U.S.-based companies and four leading environmental organizations to call on the U.S. government to quickly enact strong national legislation to achieve significant reductions of greenhouse gas emissions. Additional information on the U.S. Climate Action Partnership, including the partners' specific recommendations for U.S. climate policy, can be found on the Climate Change page.
Becoming a sustainable company is not easy, and it cannot happen overnight. It is about people and doing the right things—everyday and always—while continuously investing in the future. By remaining committed to continuous improvement, active engagement, and community partnerships, we are well on our way to achieving our strategic vision for 2020.
As always, we welcome your feedback about both our sustainability performance and reporting structure and encourage you to send an email to sustainability@alcoa.com.
Alain J. P. Belda
Chairman and Chief Executive Officer
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Alain Belda
Chairman and Chief Executive Officer
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