Sustainability of Operations

Sustainability of Products

Environmental   Life Cycle Assessment Product Design Social   Consumer Awareness Supply Chain Management Economic   Economic Value of Products

Sustainability of Resources

Environmental   Land Management Biodiversity Water Conservation Social   Purchasing Standards Conservation Investments Economic   Security of Supply Competitive Pricing

Sustainability of Operations

Environmental   Climate Change Energy Water Material Use Recycling Emissions & Waste Social   Health Safety Our People Wealth Generation Alcoa Foundation Community & Stakeholder    Engagement Economic   Financial Performance Capturing Growth

Alcoa is a worldwide, fully integrated aluminum producer with operations across the entire spectrum of the aluminum industry. We generate electric power through hydroelectric facilities and coal-fired power plants. We are a mining, refining, and smelting company, and we operate significant midstream and downstream fabricating facilities that range from large rolling mills to smaller building and construction and aerospace fastener facilities.

Each of our operations faces significantly different challenges as it evolves and deploys initiatives that lead to sustainability. Each also requires a comprehensive sustainability approach to operations to earn and sustain our license to operate every day.

Operational sustainability for our mining, refining, and smelting operations focuses principally on managing our carbon and environmental footprints. Production of primary aluminum is energy intensive, and while considering most forms of energy sources, we actively seek means for reducing the carbon intensity of our energy footprint. Approximately 50% of our energy needs globally are met by renewable sources, including hydro.

Current refining and smelting processes also generate carbon dioxide (CO₂) emissions and carbon waste byproducts. Existing refining processes also require significant quantities of water and generate bauxite residue waste. As the world moves in the direction of a fully reusable economy, we continue to work on technology innovation and work-practice improvements to reduce or, if possible, eliminate our use of valuable resources.

From a relative perspective, the environmental impact of the fabricating side of our businesses is significantly less than our mining, refining, and smelting businesses. Nonetheless, sustainability of these midstream and downstream businesses requires that we focus on reducing our water use, emissions, and waste generation.

Maintaining our license to operate in every facility and in every jurisdiction requires utmost attention to the health and safety of our employees and contractors, who are the backbone of our production organization. We also value the diversity that is inherent in our global workforce and ensure each employee has the opportunity to achieve success.

We respect every community in which we operate, and we engage early and often with all interest groups within those communities to build strong, interdependent relationships. We also strive to optimize the benefits to those communities through the jobs we create, the economic development our facilities support, and the volunteer activities our workforce conducts. We recognize that wherever we operate across the world, the roots of our businesses are deeply planted in the local community. Our ability to prosper and grow in these communities is fully dependent on the people we hire, retain, and develop; the suppliers with whom we partner; and all the other stakeholders with whom we engage to ensure mutual success.

The core of our operational sustainability is founded on our value system. This is the decision-making framework on which we base our commitment to integrity and transparency worldwide.

We understand the importance of the economic value we generate in the communities where we operate. The global financial collapse, which began in late 2008 and continued through much of 2009, put tremendous pressure on many of our operating locations throughout the world. We were forced to reduce staff at many of our facilities to ensure the long-term viability of our operations and our businesses. We also curtailed some of our operations altogether.

During 2010, we started on the road to recovery. We recalled staff at many locations and announced, in early 2011, the restarts of some of the locations that were curtailed during the crisis.

We are ever mindful that our local facilities are all connected to, and competing in, a global marketplace, where low costs and consistently high product quality are keys to survival. To remain sustainable in the long term, we must effectively and efficiently balance this global challenge with the significant role our operations play in the economic vitality of the local communities in which they are located.

Operations	Targets	Progress Achieved Through Year-End 2010
	From a 2005 baseline, 20% reduction in total (direct and indirect) carbon dioxide equivalent (CO2e) intensity in Global Primary Products (refining and smelting) by 2020; 30% by 2030.	22% go
	From a 2005 baseline, 10% reduction in the energy intensity of Global Primary Products by 2020; 15% by 2030.	3% go
	From a 2005 baseline, 20% reduction in the energy intensity of all other businesses by 2020; 30% by 2030.	6% go
	From a 2005 baseline, 10% reduction in average freshwater-use intensity in each business by 2020; 25% by 2030.	19% go
	Increase the used beverage can recycling rate in the United States to 75% by 2015 and the global rate to 90% by 2030.	United States: 57% Global: 69% (based on 2009 data) go
	From a 2005 baseline, recycle or reuse 75% of landfilled waste by 2020 and 100% by 2030.	29% go
	From a 2005 baseline, 80% reduction in mercury emission intensity by 2020; 90% by 2030.	Negative 16% go
	Zero fatalities.	Four fatalities in 2010 go
	Zero lost workday rate.	0.12 lost workday incident rate go
	A total recordable injury rate of 0.68 by 2020 and 0.19 by 2030.	1.35 total recordable incident rate go
	By 2020, achieve a sustained Alcoa Self Assessment Tool rating of 100% Good or better in the following: Fatality Prevention Confined Space Entry Mobile Equipment Safety Fall Prevention Lock/Tag/Verify Molten Metal Safety Combustible Dust/Particulate Safety Electrical Safety Contractor Safety Machine Safeguarding Combustion Safety	Fatality Prevention: 91% Confined Space Entry: 91% Mobile Equipment Safety: 94% Fall Prevention: 91% Lock/Tag/Verify: 94% Molten Metal Safety: 69% Combustible Dust/Particulate Safety: 79% Electrical Safety: 73% Contractor Safety: 88% Machine Safeguarding: 53% Combustion Safety: 88%
	Increase the closure rate for targeted fatality risks to 99% by 2020 and 100% by 2030.	93.8% go
	Institutionalize the use of human performance tools and processes across the business units/regions to reduce the deviation potential to equal to or less than 2% (98% compliance rate) by 2020 and equal to or less than 1% (99% compliance rate) by 2030.	Baseline for the metric is under development.
	From a 2010 baseline, 50% reduction in the proportion of employees required to use respiratory protection by 2020.	Baseline data and a targeted business unit strategy were initiated in 2010 and will be finalized in 2011. go
	From a 2011 baseline, 20% reduction in the proportion of employees required to use hearing protection by 2020.	Baseline data and a targeted business unit strategy were initiated in 2011.
	From a 2010 baseline, each location will have achieved a total average annual rate of new hearing shifts of less than 1% by 2020.	Locations initiated assessment and deployment of data-generation tools in 2010 to determine baseline data. go
	All significant ergonomic risks will have been identified, and at least 50% controlled, by 2020; significant risks not controlled will have action plans with costs and timelines for control.	Risk identification was initiated in 2010 and will be completed in 2011. go
	By 2020, each location will have an active and informed process to address questions about health issues arising from the community and other external stakeholders.	An ideal-state framework and metrics were initiated in 2010 and will be finalized in 2011. go
	By 2020, achieve a 100% favorable response rate to the following statements on Alcoa’s annual employee survey: I work in an environment that promotes safety. A culture of health exists within Alcoa We do not compromise EHS values for the sake of production or profit.	I work in an environment that promotes safety: 82% A culture of health exists within Alcoa: Statement to be added to the survey in 2011. We do not compromise EHS values for the sake of production or profit: 64%
	By 2010, achieve the following representation at Alcoa’s management level: Global women: 18% U.S. minority: 15%	Global women: 17% U.S. minority: 13% go
	100% of salaried employees receive annual performance feedback.	90% go
	By 2020, 100% of manufacturing locations will have implemented the Alcoa Community Framework.	95% go
	40% of employees within a business unit or region volunteer in the community through ACTION, Bravo!, or Month of Service.	ACTION: 16% Bravo!: 14% Month of Service: 49% go
	Debt-to-total capitalization consistently between 30% and 35%.	34.9% go
	No material weaknesses in the design or operation of internal controls over financial reporting, which are reasonably likely to adversely affect Alcoa’s ability to record, process, summarize, and report financial information.	Alcoa continued to meet the goal of no material weaknesses in the design or operation of internal controls over financial reporting. go
	At least 15% of Compliance Line closed calls result in a minimum of one process improvement.	22% go