Overseeing the integration of our sustainability approach into our core business strategy is a multi-layered structure:
- Our chief sustainability officer—a new position created in 2010—is responsible for developing a comprehensive strategy that integrates all of the company’s sustainability efforts;
- Supporting the CSO are our vice president of environment, health, and safety and sustainability and our director of sustainability;
- The executive-level Global Sustainability Steering Team drives accountability for integration of sustainability into our business strategies. This team consists of key executives who have accountability for Alcoa’s strategic sustainability initiatives across their various functional responsibilities; and
- Our Global Sustainability Committee comprises key sustainability-focused Alcoa resources from various regions of the world. It acts as the working group to implement sustainability objectives developed by the CSO and the Global Sustainability Steering Team.
In late 2009, the Global Sustainability Steering Team reviewed the goals and objectives of our existing 2020 Strategic Framework for Sustainability and developed a new set of targets to drive progress in our businesses to 2020 and, for some areas, to 2030. These new strategic sustainability targets, which were approved by our executive and business-unit leadership in early 2010, will continue to drive us toward measurable results against our key sustainability challenges, such as climate change.
During 2010, our CSO spearheaded an effort in partnership with our global businesses to seamlessly integrate sustainability concepts into our business processes so they become part of how we do business. Working with our business leadership, we developed a Sustainability Scorecard to align sustainability targets with business strategy across every business.
The scorecard provides a dashboard to measure progress against key near-term sustainability metrics. Each business reviews its scorecard with executive management at every Quarterly Business Review (QBR).
The value of the Sustainability Scorecard is twofold. First, it allows the businesses to focus on key sustainability targets that align with their overall business strategy. Second, it enables a dialogue between business leadership and overall corporate leadership on progress against objectives with respect to those key targets.
In November 2010, our businesses reviewed their Sustainability Scorecards for the first time with our chairman and CEO and key Executive Council members during our fourth quarter QBR. Our top leadership was encouraged by the significant step forward we have taken, and we will continue to refine our approach in 2011.
Another process headed by our CSO during 2010 was working with each business to develop roadmaps to achieve longer-term (2020) sustainability goals. The intent of the Roadmap to 2020 is to have each business lay out the process steps, business decisions, and technical improvements necessary year-by-year to realize the longer-term objectives that it had committed to deliver.
Each roadmap identifies both what is known and unknown (the gaps) to enable a business to continue to work on ideas to close the gaps and develop the full plan for achieving the longer-term commitment. In many cases, specific actions, investments, and other items were known and could be specifically articulated in the roadmap. In other cases, ideas or action plans to achieve the ultimate target were unknown.
To ensure the integration of sustainability into our core business strategies, our CEO has championed the linkage between pay for performance and the achievement of specific sustainability objectives. During 2010, 20% of our variable compensation was tied to achieving significant aspects of our sustainability targets. Across the entire workforce, the targets focused on improvements in energy intensity and safety. Our management-level employees had an additional target to improve the diversity of our workforce. See the Compensation section for additional details and 2010 results.
Additional information on how we are implementing sustainability at the local level can be found on the following country and region pages: Australia, Canada, China, Europe, Guinea, Iceland, Latin America (Brazil, Jamaica, and Suriname), and Russia.
We are committed to regularly reviewing our sustainability performance. We have been setting goals and publicly reporting our results against them since 1993 to be fully transparent with respect to our sustainability issues and progress and to provide significant information to all of our stakeholders.
We were recognized for our sustainability efforts in 2010 through inclusion in the Dow Jones Sustainability Index for the ninth consecutive time and being named among the top three companies in climate-related innovation and carbon management by Maplecroft-Bloomberg. In Brazil, we were named the sustainable company of the year by the leading business magazine, Exame. (See other awards.)
