Best practices in sustainability - How to create value? The case of the Aluminium industry - Jerome Lucaes - Rio Tinto Alcan - Director ...

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Best practices in sustainability - How to create value? The case of the Aluminium industry - Jerome Lucaes - Rio Tinto Alcan - Director ...
27th February 2013
PE Symposium – Stuttgart

Best practices in sustainability - How to create value?

The case of the Aluminium industry.
Jerome Lucaes – Rio Tinto Alcan – Director, Aluminium stewardship
Best practices in sustainability - How to create value? The case of the Aluminium industry - Jerome Lucaes - Rio Tinto Alcan - Director ...
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Objectives & Agenda

1. Rio Tinto Alcan is committed in leadership practices in managing all environmental &
   social aspects as well as business ethics

2. Rio Tinto Alcan’s performance is based on a strong sustainability framework

3. Collaborative work with all stakeholders is increasingly important.
  •   The example of the Aluminium Stewardship Initiative (ASi)
Best practices in sustainability - How to create value? The case of the Aluminium industry - Jerome Lucaes - Rio Tinto Alcan - Director ...
About Rio Tinto

                  • 68,000 people in more than 40
                    countries
                  • Finding, mining and
                    processing mineral resources.
                  • Major products are aluminium,
                    copper, diamonds, coal, gold,
                    industrial minerals, iron ore
                    and uranium
                  • Main operations in Australia
                    and North America. Also in
                    Europe, South Africa, South
                    America and Asia.
Best practices in sustainability - How to create value? The case of the Aluminium industry - Jerome Lucaes - Rio Tinto Alcan - Director ...
The Environmental & Social context affects our business

   Key Business Drivers

                                      Threats & opportunities
       License                       Performance under
                                        Scrutiny by
       to grow                          stakehloders

                                     Regulation is increasing
    License to sell
                                     Competitive pressure
                                       (within peers or
                                       substitution)
   License to operate
                                     Products’ Environmental
                                        Criteria
  Business Performance
Best practices in sustainability - How to create value? The case of the Aluminium industry - Jerome Lucaes - Rio Tinto Alcan - Director ...
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    Industry is under increased scrutiny

From communities located around industry
    •     Local communities
    •     Environmental authorities
    •     NGOs,

From stakeholders involved with
the value-chain :
•       Consumers, thus retailers
•       Big brands who influence the entire supply-chain
•       Product designers, architects, Material specifiers

Both contituencies require increased
transparency
Best practices in sustainability - How to create value? The case of the Aluminium industry - Jerome Lucaes - Rio Tinto Alcan - Director ...
Aluminium contributes to solving some of the world’s most
challenging issues

                                       Lower GHG emissions through
                                       lighter vehicles and buildings and
                                       through its recyclability

                                Bringing electricity and energy efficiency
                                to users whilst powering the world

                                            Preserving food and medicines
                                            through its unique barrier
                                            properties
Best practices in sustainability - How to create value? The case of the Aluminium industry - Jerome Lucaes - Rio Tinto Alcan - Director ...
Potential impediments to growth

  Aluminium long term growth will depend upon its reputation
Best practices in sustainability - How to create value? The case of the Aluminium industry - Jerome Lucaes - Rio Tinto Alcan - Director ...
Sustainability at Rio Tinto Alcan

              Aluminium stewardship
              For internal use only   8
Best practices in sustainability - How to create value? The case of the Aluminium industry - Jerome Lucaes - Rio Tinto Alcan - Director ...
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We all know sustainability in principles

 Meeting the needs of the
 present without compromising
 the ability of future generations
 to meet their own needs
Best practices in sustainability - How to create value? The case of the Aluminium industry - Jerome Lucaes - Rio Tinto Alcan - Director ...
Introduction to Rio Tinto 2012

What this means for business and for RTA

  Traditional Business approach         More Advanced approach

  Comply with the law
                                        By connecting our activity to our
                                        environment and to the rest of the
  Respond to customer demand            world,
  Marketing opportunistic, (sometimes   And,
  greenwashing)
                                        through dialogue and collaboration,
                                        improve things in a way
  Reduce cost
                                        to contribute to a better world.
  Seek of environnemental and social
  performance within the perimeter of
  operations
Journey to Zero Harm by Choice
Strong and comprehensive commitments, deeply anchored
in the culture
15

             Delivering a responsible future
             At Rio Tinto Alcan, we are leaders in…

                   Low emissions energy: 94% of the power we
                   use in primary aluminium production is low-
                   emissions, mainly from self-generated hydro-
                   power
                   Carbon footprint: Our GHG emissions intensity
                   is the lowest in the industry
                   Best-in-class AP technology: Our smelting
                   technology can be configured to provide the
                   lowest energy and carbon footprint

10 February 2012
16

Delivering a responsible future
At Rio Tinto Alcan, we are leaders in…(cont’d)

• Biodiversity : By minimizing the
impact of our mining activities on
biodiversity, we strive to protect the
ecosystems on which we depend.

• Social commitment: We build active
  partnerships with our communities and
  other stakeholders based on mutual
  respect and sustainable benefit across
  generations.
Rio Tinto - Communities Diagnostic Workshop, Aluchemie, Rotterdam                                   17

Example of Framework & Assurance Architecture
(Community Relations)

                                       The way we work
                                       Communities Policy

                                               Standards
                                 •mandatory requirements
                                                                                                   Assurance
    Multi year                                                                              • site managed assessment
                                 • management                                               • risk assessment
 communities plans               • monitoring and reporting                                 • Rio Tinto site visits
                                 • global Socio Economic Target                             • independent audit
                                 • FPIC

     Reporting                                                 Guidance Notes
• annual workbook                      • multi year communities plans                   • compensation
• SD report                            • baseline community assessments                 • community assistance
• SEART                                • trusts, funds and foundations                  • social risk analysis
                                       • cultural heritage                              • social impact assessment
                                       • consultation                                   • site managed assessment
                                       • resettlement                                   • stakeholder engagement

                    Community Relations Competencies & Tools
18

Delivering a responsible future
At Rio Tinto Alcan, we are leaders in…(cont’d)

Operational excellence
We strive to continually improve with
priority placed on safety and quality.

 − Zero harm by choice

 − All Rio Tinto Alcan sites are compliant
   with the Rio Tinto HSE QMS and are
   ISO 14001 certified
28 September 2009

A way forward

                    Rio Tinto - Communities Diagnostic Workshop, Aluchemie, Rotterdam   19
Collaborative initiatives with the entire value-chain

Recent formation of the Aluminium Stewardship Initiative

                                       Societal trends require more transparency and better
                                       accountability on environmental and social footprints of products

                                           22.5

                                       Aluminium Stewardship initiative – a unique aluminium
                                       value chain initiative that will define and deliver the
                                       first standard for responsible aluminium
The Aluminium Stewardship Initiative
Develop a standard…

    •Credible
    •Transparent
    •responsible production, sourcing
    •Covers the Entire value chain
    •Worldwide

Encompasses
    •business ethics,
    •human rights, and social responsibility,
    •environmental performance

•Inspire improvements in industry practices
The Aluminium Stewardship Initiative
The Approach :

•Collective development with all value-chain stakeholders

•Balanced power of decision making

•Transparent process to ensure credibility

•Open membership (with conditions)

•Specific performance criteria for the value-chain

•Workable and credible chain of custody
The Aluminium Stewardship Initiative

• Current members :
      • BMW,
      • Audi
      • Nespresso,
      • Tetrapak
      • Amcor
      • Constantia / AMAG
      • REXAM
      • Constellium
      • Rio Tinto Alcan,
      • Hydro
      • Other players involved in the value-chain, pending confirmation

• IUCN : coordinator for the Standard setting process

• NGOs and governments will be proactively consulted after a complete stakeholder mapping

• Public consultation
Benefits - 6 reasons for Rio Tinto to co-found ASi
1. Build credibility and confidence for            2. Defend and promote aluminium
customers
                                                   • Help improve the sustainability performance of
ASI will bring credibility to                        the aluminium industry
     • Aluminium products that will be qualified
     • RTA’s sustainability performance claims     • Help to secure the Aluminium demand growth
         (if we qualify!)

3. Reinforce our performance in                    4. Reinforce our reputation
sustainability
                                                   • Be recognized as a proactive leader
•   Establish a credible pathway for further       • Get recognition for our sustainability
    improvements                                     performance
                                                   • Leverage our sustainability performance in a
                                                     credible way

5. Shape, influence, anticipate                    6. Learn, network, explore
Make sure that:                                    • Learn from NGOs, other industry’s experience
• our needs and specificities are understood and   • Be part of a group of leading companies
  taken into account                               • Better relations with customers
• The standard is relevant, applicable,            • Establish legitimate links with key aluminium
  meaningful, easy to implement                      users and improve our market insight
• We get ready when ASi comes into force           • Practice stakeholder engagement
Conclusion
For many years, Rio Tinto has been applying a leading
sustainability policy to advance the overall performance of its
operations,

While keeping a focus on continuous operating improvement,
industry-wide collaborative initiatives are also essential for a
leading sustainable performance.
27th February 2013

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