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Chairman and CEO Statement
The worldwide economic crisis presents Alcoa and our customers with unprecedented challenges. While the duration or severity of the crisis is uncertain, one thing is clear: Alcoa’s strategy is to emerge stronger than ever when the economy recovers. That strategy includes a continued emphasis on sustainability.
At Alcoa, sustainability is a core value. We believe that financial success, environmental excellence, and social responsibility are totally aligned. You’ll see how this relationship benefits our communities, customers, and shareholders throughout our online 2008 Sustainability Report.
During 2008, we traveled to many Alcoa locations and witnessed the significant strides we’ve made in integrating sustainability into all facets of our business operations. Our commitment to sustainability is alive and well.
In these tough times, as we focus on conserving cash and reducing costs to meet our commitments to our shareholders, we also are reaffirming our commitment to our core values—living by the highest standards of ethics; protecting the health and safety of our people every minute of every day; preserving the well-being of the environment and natural resources; striving to grow as an inclusionary, high-performance workplace; and making meaningful contributions to the communities where Alcoans work and live.
In the pages of this report, you’ll see our values come to life. We’ll highlight several areas that show our progress, and a few where we have more work to do.
Areas where we made progress in 2008 include:
- Ethics: The Covalence Ethics Index ranked Alcoa sixth in ethical reputation among all companies worldwide and first in the Resources category;
- Climate Change: Thanks to ongoing efforts by our Global Primary Products Group, we continued the reductions in our greenhouse gas emissions in 2008. We now have achieved a 36% reduction from a 1990 base year—a 44% improvement over our target reduction of 25% by 2010;
- Waste: Landfilled waste was 52% below the 2000 base year, putting us in position to achieve our 75% reduction target by 2010;
- Safety: We ended the year with 75.9% of our locations having zero lost workdays and 44.4% of them with no recordable injuries;
- Stakeholder Engagement/Community: 90% of our worldwide operating locations now have community programs, putting us on schedule to reach our target of 100% by 2010. In 2008, Alcoa and Alcoa Foundation invested more than US$50.6 million in the communities in which we operate worldwide; and
- Employee Engagement: We improved worldwide employee engagement scores by two percentage points in our Global Voices Survey, and 24% of our global employees participated in community service projects during our annual Month of Service.
Despite these advances in our sustainability initiatives, we fell short of our high standards in the area of health and safety in 2008. We had five fatalities—five more than is ever acceptable to us.
Our principal safety shortcoming was in Russia. Following the fatalities at our plant in Samara, Russia, we immediately dispatched to the site an intervention team representing a combined 200 years of Alcoa safety experience. The team analyzed the underlying issues that contributed to the fatalities and further diagnosed the broader fatality prevention situation across all of Alcoa. Team members found that 4,118 fatality risks had been eliminated since Alcoa had acquired the Samara facility, and they identified further risks that now are being addressed.
We take a death in the workplace personally, and we have re-emphasized to our leaders, employees, and contractors that Alcoa’s safety standards are non-negotiable. Those who fail to adhere to those standards will not remain at the company.
In our progress toward the long-term goals outlined in our 2020 Strategic Framework for Sustainability, there are two other areas where we need to increase the pace of improvement.
Although we reduced mercury emissions by 23% against our base year 2000 level, we came short of our objective to achieve an 80% reduction by 2008. It is now clear that we will not be able to achieve our target of a 90% reduction by 2009. While disappointed with our progress to date, we are leading the industry’s efforts to address mercury, which occurs naturally in the bauxite ore that we mine. We remain committed to finding practical solutions.
We improved our reduction in freshwater usage during 2008, reaching a 28% reduction against base year 2000 levels. However, we will fall short of our target to achieve a 60% reduction by 2009 and a 70% reduction by 2010.
During 2009, we will review these and all of our 2020 goals and either establish new targets for goals already met, recommit to achieving existing goals, or reevaluate the timing or the scope of the goals not met. We knew when we developed the goals that they were aggressive and may not be achievable, but our aim was to stretch our people to think differently and to reach beyond incremental improvement. We will maintain that philosophy as we reassess our targets.
As we continuously improve our internal processes to reach high standards of sustainability, we are also producing materials that dramatically improve sustainability around the globe.
In a world where the dominant trends are population growth, urbanization, and growth of energy demands, aluminum is an ideal material. Strong but lightweight, it is an essential component of green buildings in fast-growing urban areas. It improves fuel efficiency and emissions reductions in all modes of transportation. Because it is totally and infinitely recyclable, it is the perfect packaging material to reduce waste in overtaxed landfills. Alcoa’s product—and the sustainable ways in which we provide it—will continue to play a key role in the sustainable life and health of our planet and its people.
Our shared commitment in 2009 and beyond must be to not merely maintain, but also to enhance our sustainability efforts.
We are interested in hearing what our stakeholders think about our sustainability performance and reporting efforts—and how we can improve both. Please email us with your thoughts and suggestions.
Alain J. P. Belda
Chairman
Klaus Kleinfeld
President and Chief Executive Officer
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Alain J. P. Belda
Chairman
Klaus Kleinfeld
President and Chief Executive Officer
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