January 24, 2005

Alcan charts progress to sustainability in global operations

Alcan's investments in environment, health and safety (EHS) are estimated at $135 million in 2004 and $191 million in 2005, according to the company's 2004 Corporate Sustainability Report, released on January 14. This, notes the report, is in addition to expenditures of $221 million and $237 million, respectively, charged against income for environmental protection.

The report updates Alcan's progress in integrating sustainability into its global operations through a process it calls the Alcan Integrated Management System (AIMS). Within the categories of Value-Based Management, Continuous Improvement, and EHS First--Alcan's approach to environment, health, and safety-AIMS is intended to achieve the company's objective of maximizing value and the target of doubling value every five years.

For the company, this means linking its evolving sustainability framework into its business strategy and corporate culture, focusing on creating value rather than simply protecting value. The task of overseeing this transformation has been assigned to a Sustainability Steering Team (SST), created in late 2003. In April 2004, the SST held a direction setting session, inviting input from its various business units as well as participants representing Alcan customers, non-governmental organizations (NGOs) and academia.

This session helped the SST clarify how it should proceed in its task of integrating sustainability into Alcan's operations. Among the next steps listed as a result of the session were: defining critical sustainability issues and selecting areas of focus; developing and adopting goals and performance indicators for addressing these issues; and building a network of internal sustainability "champions," in addition to forging stronger links with key external sustainability partners.

Alcan began implementing its EHS First program during 2003; the initiative is aligned with both the ISO 14001 standard for environmental management systems and with OHSAS 18001, an international occupational health and safety certification standard. Company-wide goals for the first phase of the program's implementation include: certification to ISO 14001 and OHSAS 18001 by the end of 2004; zero accidents (setting annual lost-time injury/illness rates and recordable case rates for each business group); and a 0.5% reduction per year in direct and indirect greenhouse gas (GHG) emissions, relative to a two-year rolling baseline (e.g. the baseline for 2003 is 2001).

The company's Target program for GHG emissions reduction is an integral component of EHS First. The 0.5% annual reduction goal translates to a reduction of approximately 125,000 tonnes of GHG emissions for 2003 and 190,000 tonnes for 2004 (including Alcan's new Pechiney facilities).CHECK THIS-WHAT IS PECHINEY

The report indicates that by the end of 2003, some 60% of its operations (pre-Pechiney) were registered by ISO 14001 and 44% to OHSAS 18001 (81 out of 184 sites), and the remainder were well on the way to certification by the end of 2004. Newly-acquired facilities, it points out, will have two years to comply. Pechiney had 31 of its sites certified to ISO 14001 by the end of 2003, representing more than 55% of insured assets; this puts it well on track to meet the 100% certification deadline of April 2006.

Reducing GHG emissions is one of Alcan's most important strategic initiatives. The report cites separate objectives and results for Alcan overall and for Pechiney, as their GHG reduction programs have been set up differently. Unlike the 0.5% per year reduction target for Alcan, Pechiney has established an umbrella commitment to reduce its direct GHG emissions by 15% by 2012 from 1990 levels, while aiming to double its aluminum production.

Since 1990, Alcan has reduced its absolute direct and indirect GHG emissions by more than three million tonnes of carbon dioxide equivalent (CO2e). During the same period, Pechiney has reduced its direct GHG emissions by 1.7 million tonnes of CO2e, while increasing its primary aluminum production by 0.3 million tonnes (to 1.2 million tonnes). Replacement of old technology and improvements in process and energy control have contributed significantly to this achievement, notes the report.

An important factor in the success of the Target program has been Alcan's reduction in perfluorocarbon (PFC) emissions: in terms of CO2e, PFC emissions have dropped from 5.1 tonnes per tonne of aluminum in 1990 to 1.1 in 2003 (the same as in 2002). Reduction of PFC emissions was also the most important contribution to Pechiney's GHG reduction program, declining from 4.9 tonnes of CO2e per tonne of aluminum in 1990 to 2.0 in 2003.

The 2004 Sustainability Report includes other emission and resource consumption statistics based on business groups, which differ notably from each other in terms of which emissions are monitored.

Other highlights of the report include:

-Awarding of the first $1-million (U.S.) Alcan Prize for Sustainability to the Forest Stewardship Council for its work in forest management;

-Joining the World Economic Forum's Global Greenhouse Gas Register, an initiative to stimulate the disclosure and management by companies of their world-wide climate emissions.

-Confirmation of Alcan's participation in the United Nation's Global Compact, a voluntary international initiative for businesses promoting the development of a more sustainable and inclusive global economy, through its Aids Education Program in Cameroon.

-Selection of Alcan as a member of the Dow Jones Sustainability World Index (DJSI World) for the fourth time in five years; the company was also named leader in its sector.

The report is available in print and on Alcan's Web site, www.alcan.com.

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