Kevin McKnight

Chief Sustainability Officer and Vice President of Environment, Health, and Safety

 

Chief Sustainability Officer Statement

 

Driven by a transformation strategy of building our value-add portfolio and creating a globally competitive commodity business, we strengthened our sustainability leadership and innovation in 2014 while embarking on a new journey to redefine the sustainability value we deliver to customers, consumers…and the world.

 

The dramatic reshaping of our upstream operations isn’t just making us more competitive, it is also serving to significantly reduce our environmental footprint. This is best exemplified by our 2014 greenhouse gas reduction of an additional 6.8% (3 million metric tons).

 

While we continued relentlessly to improve our environmental footprint, we also began working in earnest during 2014 to develop credible ways to measure and talk about the sustainability value of our midstream and downstream businesses. Our lightweight, multi-material, value-add innovations are helping solve some of the world’s most pressing problems in the areas of climate change, urbanization, and natural resource scarcity.

 

Throughout 2014, we introduced important new contributions to a sustainable world:

  • The world’s lightest heavy-duty truck wheel, the Ultra ONE™, which can help save up to 1,400 pounds per rig, improving fuel efficiency and helping move goods in a cleaner way;
  • Disruptive innovations like the Alcoa 951 bonding technology, which is helping aluminize the automotive industry starting with the new Ford F-150 truck; and
  • The revolutionary Micromill™ technology, which is transforming aluminum rolling processes.

 

To continue our journey to more deeply integrate sustainability into the design thinking of our organization, we initiated an important review in 2014 of our long-term sustainability metrics. We’ll continue to reduce and measure environmental impacts, and thereby reduce our footprint. Beyond that, we’re working to more effectively measure the positive, sustainable value we create by solving customer and societal problems in the use phase of our products. This “handprinting” initiative, which will continue throughout 2015, will likely lead to refreshed targets to better reflect a transforming Alcoa.

 

We strive to move toward a net-positive state and to ultimately become a truly restorative light metals innovation company, delivering net-positive benefits to the environment, communities where we operate, employees, and shareholders.

 

As we move toward this ambitious vision, we made significant progress in 2014 against some of our material sustainability issues:

  • Our operating performance was the strongest since 2008, driven by the solid results of all three of our business groups. Engineered Products and Solutions delivered US$6.0 billion in third-party revenues and its highest-ever adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin. Global Rolled Products increased third-party revenues to US$7.4 billion, with an adjusted EBITDA per metric ton consistent with its three-year (2010-2012) average historical high. Global Primary Products generated US$10.3 billion in third-party revenues, moved down the global alumina cost curve to the 25th percentile, and maintained its position on the global aluminum cost curve at the 43rd percentile.
  • Our days away, restricted, and transfer safety metric improved by 8.6%.
  • We had 100% of our locations around the world report progress against the Alcoa Community Framework, which was revised in 2014.
  • We finalized our first location biodiversity action plan for our significant biodiversity issues. This will serve as a template for others that are in progress.
  • We deployed a comprehensive and rigorous ethics and integrity system—Advancing with Integrity—to every Alcoan across our more than 180 global locations in 30 countries. The system is available in 10 languages.
  • We received recognition globally for our sustainability leadership, including being named the World’s Most Active Company for the second year for our wellness initiatives, receiving the Human Rights Campaign’s Corporate Equality Award, and being named Dow Jones Sustainability Indexes’ leading aluminum company for the 4th straight year.

 

The progress we continue to make demonstrates that we live our sustainability value every day, with a goal of leaving a positive impact everywhere we operate and in every market where we compete. The people of Alcoa are dedicated not only to enhancing shareholder value, but also to advancing the world through Alcoa innovation, creativity, and passion.

 

Kevin McKnight

Chief Sustainability Officer and Vice President of Environment, Health, and Safety