September 5-12, 2005

Alcan sets priorities for sustainability progress reporting

Throughout Alcan's 2005 Sustainability Report, the impact of the company's December 2003 acquisition of the Pechiney group is reflected in virtually every aspect of Alcan's environmental performance in 2004. The report, released on September 1, reviews the economic, environmental and social performance of the company's worldwide operations in the context of its progress toward sustainability.

AIMS, the Alcan Integrated Management System, is the tool through which the company is translating its commitment to sustainability into action. Introduced in 2004, AIMS is made up of three components which are being integrated an applied consistently across the company, regardless of business unit or geographic location. The components include value-based management, continuous improvement, and EHS First, Alcan's approach to environment, health, and safety.

In the latter half of 2004, notes the report, the company's sustainability steering committee, assisted by experts from within and outside Alcan, established eight priority areas for addressing sustainability: energy, climate change, environmental releases, natural resource stewardship, product stewardship, innovation and industry shifts, community development and well-being. Focusing on these areas throughout all Alcan operations will help remove geographic and business unit boundaries and enable a more integrated approach.

The company reports a total consumption of 415 million gigajoules (GJ) of energy by all of its operations worldwide; inclusion of its Pechiney acquisition accounts for the substantial increase in energy use over the 2003 total of approximately 294 million GJ. More than half the energy used (57%) is derived from hydroelectric power sources, an important consideration in Alcan's efforts to manage greenhouse gas (GHG) emissions.

The Pechiney sites also contributed to an increase in the company's overall total GHG emissions. Direct and indirect carbon dioxide equivalent (CO2e) emissions in 2004 were 41.2 million tonnes, up from 21.8 million tonnes in 2003.

The leading initiative through which the company is addressing GHG emissions is the Target program. Launched in 2001, Target uses a moving baseline to allow for a comparison of reductions to a reference year; it also allows for accurate adjustments to reflect corporate changes, such as acquisitions, divestments, facility upgrades or shutdowns.

On this basis, Alcan reports that its operations far surpassed Target's initial GHG emission reduction goal of 575,000 tonnes of CO2e for the first four years, achieving total reductions of 2.9 million tonnes of CO2e during this period.

The most significant progress was in reducing anode effects and the associated emissions of perfluorocarbon compounds (PFCs) from Alcan smelters, says the report. PFCs, including tetrofluormethane (CF4) and hexofluormethane (C2F6), are potent greenhouse gases, with one kg of PFC (CF4) equivalent to 6,500 kg of CO2.

Although these emissions (expressed as tonnes of CO2e) increased overall from 1.1 tonnes in 2003 to 1.8 tonnes in 2004, Alcan cites a number of examples, particularly in Quebec, where investments in equipment and computer hardware and software, along with the introduction of more efficient working practices and better monitoring of the pots have resulted in improved control of the smelting process and reduced emissions. The overall increase was again mainly due to the change in technology mix associated with the Pechiney acquisition.

While the number of (minor) environmental events increased from 256 in 2003 to 324 in 2004, the Alcan share totalled 180, a substantial drop from the previous year. Pechiney - which began incident reporting during 2004 - accounted for the higher total number of incidents.

Total hazardous wastes generated in 2004 from Alcan operations were 97,000 tonnes, with 40,000 tonnes recycled and an equal quantity landfilled; the remaining 17,000 tonnes were incinerated. Also because of the Pechiney acquisition, the total was higher than in 2003 but far below the 831,000 tonnes recorded in 2002.

The report highlights a number of sustainability milestones. In 2004, for example, Alcan:

* received a 2005 Globe Award for Environmental Excellence, in the corporate competitiveness category;

* joined the United Nations Global Compact, a voluntary international initiative for businesses promoting the development of a more sustainable and inclusive global economy;

* co-chaired the Working Group on Accountability and Reporting at the World Business Council for Sustainable Development as well as the World Economic Forum's Water Initiative;

* participated in the G8 Climate Change Roundtable;

* was selected as a member of the Dow Jones Sustainability World Index (DJSI World) for the fourth time in five years and named leader in its sector;

* created the $1-million (U.S.) Alcan Prize for Sustainability, an independently managed program whose first recipient (from nearly 500 candidates representing 79 countries) was the Forest Stewardship Council; and

* was named one of the top companies in Canada for corporate social responsibility by the Globe and Mail's annual ranking.

This year, Alcan is chairing the International Institute for Sustainable Development (IISD) and the Prince of Wales International Business Leaders Forum (IBLF). Both organizations contribute to sustainability by promote responsible business practices internationally and advancing policy recommendations bearing on international business.

The 2005 Sustainability report is available in print and on Alcan's Web site, www.alcan.com/SR05.

Meanwhile, one Canadian organization, Ecotrust and Ecotrust Canada, has made the short list of candidates for the $1-million (U.S.) Alcan Prize for Sustainability. The ten short-listed organizations, chosen from entries received from 59 countries, were announced in Montreal on September 8 (with a formal announcement the following day at The Sustainability Forum in Zurich, Switzerland.

The other nine short-listed organizations are: Aga Khan Planning and Building Services, Pakistan; Bioplaneta, Mexico; Global Nature Fund, Germany; Practical Action and Voluntary Service Overseas, both of the U.K.; Magic Bus, India; Rainforest Alliance, U.S.A.; and the Oasis Association and Roundabout Outdoor, both of South Africa.

As noted, the Alcan Prize for Sustainability is managed by the IBLF. The company does not have a voice in the assessment or selection of Alcan Prize applicants.

Since the closing date for entries, the IBLF has co-ordinated assessment panels in the U.K., Hungary, India, and Canada to review entries and select the short list. The adjudication panel, headed by Achim Steiner, director general of The World Conservation Union, and composed of international experts in sustainability issues, fully endorsed the ten short-listed organizations and the assessment process.

The Adjudication Panel will now conduct an in-depth review of the finalists and select the winner of the Alcan Prize and up to four recipients of Alcan grants. The $15,000 (U.S.) grants will allow a senior representative of each selected organization to earn a post-graduate certificate in Cross Sector Partnership from the University of Cambridge. The prize winner and grant recipients will be announced in early 2006.

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