Case study: How Alcoa creates economic value for its stakeholders
Alcoa is a global industry leader in bauxite, alumina and aluminium products, built on a foundation of strong values and operating excellence. Creating sustainable value for all its stakeholders and the communities where it operates, is one of the three pillars of Alcoa’s sustainability strategy. Tweet This!
This case study is based on the 2020 Sustainability Report by Alcoa, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Alcoa seeks to generate value for its stakeholders, stimulating economic activity at the local and regional levels, by providing stable, fair-paying jobs, procuring goods and services from local suppliers when possible, paying income and other taxes, and investing in community infrastructure and initiatives. In order to create economic value for its stakeholders Alcoa took action to:
- create economic value for employees
- create economic value for suppliers
- create economic value for governments
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With this case study you will see:
- Which are the most important impacts (material issues) Alcoa has identified;
- How Alcoa proceeded with stakeholder engagement, and
- What actions were taken by Alcoa to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2020 Sustainability Report Alcoa identified a range of material issues, such as occupational health and safety, ethics, transparency and good governance, regulatory compliance, human rights. Among these, creating economic value for its stakeholders stands out as a key material issue for Alcoa.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Alcoa engages with:
| Stakeholder Group |
| Stockholders |
| Employees |
| Customers |
| Suppliers |
| Government representatives and regulators |
| Non-governmental organisations |
| Local communities |
| Media |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Alcoa conducted a survey of external stakeholders, including those representing customers, communities in which it operates, government, non-governmental organisations and industry associations.
What actions were taken by Alcoa to create economic value for its stakeholders?
In its 2020 Sustainability Report Alcoa reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- In 2020, Alcoa spent US$ 1.5 billion in labour costs. These include compensation and benefits for employee services rendered plus employee expenses for external training, transfer and relocation, expatriate costs, workers’ compensation, travel, recognition and rewards, medical expenses, meals, recruitment, transportation, education, work clothes and other employee-related expenses.
- Creating economic value for suppliers
- In 2020, Alcoa spent US$ 8.2 billion for procurement.
- Creating economic value for governments
- In addition to the economic activity it stimulates at the local and regional levels, Alcoa also contributes to the communities in which it operates through a variety of tax payments. Accordingly, in 2020, Alcoa paid US$ 169.4 million in income taxes.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
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References:
This case study is based on published information by Alcoa, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
https://www.alcoa.com/sustainability/en/pdf/2020-Sustainability-Report.pdf
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