Integrating Sustainability into Business Strategies
At Alcoa, sustainability is defined as using our values to build financial success, environmental excellence, and social responsibility in partnership with all stakeholders in order to deliver net long-term benefits to our shareholders, employees, customers, suppliers, and the communities in which we operate.
We integrate sustainability into our core business strategy using a multi-layered structure:
- Our chief sustainability officer (CSO) is responsible for developing a comprehensive strategy that integrates all of the company’s sustainability efforts;
- The executive-level Global Sustainability Steering Team is accountable for integrating Alcoa’s strategic sustainability initiatives into business strategies; and
- Our Global Sustainability Working Committee is an international, sustainability-focused group that implements the strategy and process developed by the CSO and the Global Sustainability Steering Team.
In late 2009, the Global Sustainability Steering Team developed a new set of long-term goals and objectives to drive progress in our businesses to 2020 and, for some areas, to 2030. We use these strategic sustainability targets to monitor our progress against key focus areas, such as energy efficiency, emissions, and waste.
We also use sustainability scorecards to measure progress against our near-term sustainability metrics and seamlessly integrate sustainability concepts into our business processes. The scorecards allow the businesses to both focus on key sustainability targets that align with their overall business strategy and facilitate dialogue between business and corporate leadership on progress against those targets. Each business reviews its scorecard with executive management at every Quarterly Business Review.
In addition to the scorecards, each business has developed a roadmap to achieve longer-term (2020) sustainability goals. The Roadmap to 2020 clearly lays out the process steps, business decisions, and technical improvements necessary year-by-year for a business to achieve its longer-term objectives.
Each roadmap identifies the known opportunities for progress and areas that need strategic planning in order to progress against the 2020 sustainability targets. 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 pay for performance to achieve specific sustainability objectives. During 2012, 20% of our variable compensation was tied to achieving significant aspects of our sustainability targets. Across the entire workforce, the targets focused on safety and carbon dioxide emission reductions through process improvements and improved energy efficiency. Our management-level employees had an additional target to improve the diversity of our workforce. See the Compensation section for additional details and 2012 results.
Additional information on how we are pursuing sustainability at the local level can be found on the following country and region update pages: Australia, Canada, China, Europe, Guinea, Iceland, Latin America (Brazil, Jamaica, and Suriname), and Russia.
We are committed to regularly reviewing our sustainability performance, and we have been setting goals and publicly reporting our results against them since 1993. Our objective is to be fully transparent with respect to our sustainability issues and progress and to provide significant information to all of our stakeholders.
As a result of our efforts, we were recognized for our sustainability efforts in 2012 through inclusion in the Dow Jones Sustainability Indexes for the eleventh consecutive time. (See other awards.)