Sustainability & Alumina
Alumina Limited believes that a direct link exists between the existence of a sustainability strategy that is imbedded into business planning and positive financial outcomes of AWAC’s operating performance. Decisions and actions on sustainability made today influence future economic, environmental and social outcomes, and determine long-term profitability and returns for our shareholders.
Sustainable development and growth is fundamental to AWAC, and we recognise our joint venture partner, Alcoa, as a world leader in corporate sustainable development.
Alumina Limited’s role is to support Alcoa in managing AWAC to achieve best practice in environment, safety, community and financial performance through strong, collaborative and informed governance.
We do this through:
- reviewng AWAC’s long-term sustainability strategies and objectives with managing partner Alcoa
- supporting the sustainability policies and practices that Alcoa implement in AWAC to ensure sustainable operations
- reviewing reports of non-compliances on human rights, environmental, labour or anti-corruption grounds..
Alumina Limited’s Board assesses any potential risks and opportunities for shareholders from AWAC’s sustainability performance. We do this at through using our own risk assessment processes that are reviewed and updated through the Board of Directors.
Alumina Limited’s operations
Alumina Limited is also committed to sound corporate and social policies within our business activities and strategy, the results of which are included throughout this report. Our activities are informed and guided by our Sustainability Policy.
Sustainability Roadmaps and Scorecards
In 2011, Alcoa as operational manager, introduced Sustainability Roadmaps for their Global Primary Products business, the business that incorporates AWAC’s alumina refineries and aluminium smelter. The Sustainability Roadmaps were developed to achieve long-term sustainability goals. They provide the direction, process steps, business decisions and technical improvements that are required to deliver long-term sustainability objectives. In some cases the processes to achieve long-term targets are defined, for others the target is established however the mechanics of achieving the target are yet to be worked out.
Sustainability Scorecards were also introduced for every site. The Scorecard is designed to facilitate the integration of sustainability targets with business strategy. The Scorecard also provides the means to measure progress against short-term objectives for strategic focus areas such as energy efficiency, emissions and waste and ensure that key sustainability targets align with overall business strategy. Alcoa developed its sustainability approach to include Sustainability Scorecards for every site, so that performance is reported quarterly against targets and key indicators.
In 2015, for AWAC employees, up to 20% of their variable compensation plan was tied to achieving significant aspects of our sustainability targets. Those targets included safety, diversity representation in our workforce, and reductions in carbon dioxide (CO2) emissions due to process improvements and improved energy efficiency. These targets were represented by the following percentages at the corporate level, Safety 5%, Diversity 10% and Carbon dioxide reductions 5%. 2015 payouts were 0% for safety, 13.3% for diversity and 4% for carbon dioxide emissions.
The AWAC facilities have implemented the scorecard processes which are reviewed by Alcoa’s executive management at Quarterly Business Reviews.
We full support this approach, which will embed sustainability deeper into AWAC and its everyday activities.
The processes used in the aluminium industry are energy and resource intensive and that presents sustainability challenges. AWAC is predominantly involved in the refining of alumina from bauxite and also has interests in an aluminium smelter. Refining alumina from bauxite requires significant energy in the form of heat and steam. Aluminium smelting requires significant amount of electricity to convert alumina into aluminium metal via a process of electrolysis.
While the production of alumina and aluminium generate substantial economic and social benefits, we are mindful of the need to balance these activities with responsible environmental stewardship to minimise negative impacts on local environments and neighbouring communities. In 2015 some of the major sustainability challenges for AWAC were:
- cleaner energy sources for an energy intensive business (AWAC's San Ciprian alumina refinery officially completed its transition from residual fuel oil as a major source of energy to cleaner more efficient gas)
- Improving energy efficiency - to conserve energy and reduce associated emissions
- Bauxite residue and storages – to reduce footprint and move towards alternative uses for residue
- Carbon emission reductions – to improve the emissions intensity and reduce absolute emissions
- Improve water management – to reduce freshwater usage.
Alumina Limited’s commitments for improving sustainability performance include:
- Supporting Alcoa’s approach to drive sustainability practice throughout the operations using Sustainability Scorecard and Business unit Roadmap initiatives
- Transitioning to cleaner energy sources and more efficient use of energy
Continue to investigate opportunities for new technologies for reducing greenhouse gas emissions and developing cleaner energy sources for discussion with Alcoa.