2013 SUSTAINABILITY HIGHLIGHTS

MATERIAL ASPECTS

Material aspects are a company’s most significant economic, environmental, and social impacts.

Using stakeholder input in accordance with the Global Reporting Initiative’s G4 guidelines, we identified our material aspects as greenhouse gas emissions, energy, health and safety, economic performance, environmental footprint (emissions & waste), local communities, and biodiversity.

ALCOA PRODUCTS AND MATERIALS ARE ESSENTIAL FOR THE INDUSTRIAL ECOSYSTEM

Through their light weight, high strength, durability, and recyclability, our products are inherently sustainable and improve the sustainability of our customers’ products.

PRODUCT DESIGN & LIFE CYCLE

We were the first aluminum company to receive the Cradle to

		Cradle CertifiedCM designation. We currently hold Silver certification for our primary metal, forged aluminum truck wheels, lithographic sheet, can sheet, aluminum bottle stock, and four product lines from our Kawneer architectural systems business.

TRANSPORTATION

Aluminum is the ideal material for transportation applications, helping reduce the overall weight of an aircraft, automobile, or commercial vehicle to improve fuel economy and significantly reduce emissions during the vehicle use phase.

In response to growing consumer demand for more fuel-efficient cars, increasing fuel prices, and stricter government

emission regulations, automakers are incorporating more aluminum to deliver lighter weight vehicles while meeting durability, safety, and performance requirements. The mass production of aluminum-intensive vehicles is significantly enabled by Alcoa 951 bonding technology, which we introduced commercially in 2013.

The commercial transportation industry is also facing stricter government regulations for vehicle fuel efficiency and emissions. Our portfolio of aluminum sheet, extrusions, and wheel products can be used to replace heavier metals for many truck components.		Ultra ONE wheels
For example, our new 18-kilogram (40-pound) Ultra ONE™ heavy duty truck wheel is 47% lighter than steel wheels of the same size.

BUILDING & CONSTRUCTION

We manufacture a wide array of aluminum doors, framing systems, curtain walls, and windows that help make buildings greener. We also have developed state-of-the-art framing and wall systems that are hurricane- and blast-resistant.

Aluminum’s highly reflective surface allows for efficient light management and lower energy consumption, and its light weight reduces transportation costs, vehicle fuel consumption, and related carbon dioxide emissions when being delivered to the construction site. In addition, architectural aluminum systems that use advanced thermal technologies can provide superior thermal performance without compromising structural performance.

INDUSTRIAL & ENGINEERED

We are the world’s leading producer of blades and vanes made of advanced nickel-based superalloys for the high-temperature environments in jet engines and industrial gas turbines. Our innovative products allow these engines and turbines to run at hotter temperatures. This improves overall energy efficiency and reduces noise, emissions, and the overall carbon footprint.

Fasteners

We are also a leading manufacturer of fastener systems made of aluminum, corrosion-resistant steels, titanium, and super alloys for the aerospace, automotive, commercial transportation, and industrial markets.

RECYCLING

Almost 75% of all the primary aluminum ever produced is still in productive use.

In 2013, the advanced recycling system at our Barberton, Ohio, USA, wheels plant was operating at full capacity. The first of its kind in North America, the Barberton process uses innovative technology to produce billet for new wheels from re-melted scrap aluminum wheels, many of which can be returned through scrap buy-back programs with our customers.

Efficient use of resources, such as water and energy, and effective control of emissions, waste, and land use have positioned us as an industry leader in minimizing our environmental footprint.

Our goal is to reduce 2005 levels of total carbon dioxide equivalent (CO2e) intensity in our Global Primary Products business (refining and smelting) by 30% by 2020 and 35% by 2030. Carbon dioxide is our largest component of greenhouse gases (GHGs).

Between 2005 and 2013, we reduced the GHG emission intensity of our Global Primary Products business by 25.5%. We reduced our absolute GHG emissions by 3.1 million metric tons from 2012 to 2013, and our total 2013 GHG emissions (CO2 equivalents) equaled 43.4 million metric tons.

Global Primary Products

Greenhouse Gas Emission Intensity

Metric tons of CO₂ equivalents per ton of production

We are committed to reducing the energy requirements for all of our operations and have set the following long-term strategic targets:

In 2013, GPP reduced its energy intensity by 0.6% compared to 2012 and 3.1% compared to the 2005 baseline. GRP had a 0.6% reduction compared to 2012 and 15% decrease compared to the 2005 baseline. EPS reduced its energy intensity by 2.4% compared to 2012 and 10.3% compared to the 2010 baseline.

Energy Intensity—Global Primary Products

Gigajoules per metric ton of aluminum produced

Bauxite residue and landfilled waste are two of our key strategic sustainability targets.

Bauxite Residue

A byproduct of the alumina refining industry, bauxite residue is stored in impoundments that are capped and re-vegetated when full. Our long-term strategic targets for the material, and our progress against them through 2013, are:

•   Recycle or reuse 15% of residue generated by 2020; 30% by 2030. Achieved 0%.   We have a comprehensive and ongoing research program aimed at continually improving residue storage practices to reduce potential

environmental impacts. We also have investigated ways to modify the residue to further lessen its potential environmental impact while enhancing its prospects of reuse.

Landfilled Waste

Our current strategic target is a 75% reduction in landfilled waste by 2020 and 100% by 2030 from a 2005 baseline.

In 2013, we achieved a 24% reduction in landfilled waste from the baseline. We again saw an increase in waste volumes from certain facilities that we permanently decommissioned in recent years.

Landfilled Waste

Thousands of metric tons

We have a strategic sustainability target for all of our locations with substantive biodiversity values and land holdings to develop biodiversity action plans by 2015.

In 2012, our global biodiversity team surveyed 40 select Alcoa locations around the world to acquire information on their ecological values. We identified 14 locations as having potentially substantive biodiversity values, five of which worked on developing their biodiversity action plans in 2013.

MINE REHABILITATION

During 2013, we continued to make progress in monitoring and reducing our collective mining footprint to the minimum required for efficient resource recovery.

Our strategic sustainability targets, initially developed in 2009, have been key drivers toward the minimum footprint:

We disturbed 1,463 hectares (3,615 acres) of mine lands during 2013, and we rehabilitated 1,140 hectares (2,817 acres). Our five-year rolling average for new active mining disturbance to rehabilitation is currently projected at 1.08:1.

WATER

Water is an important raw material for Alcoa, with our refining and ingot-casting processes requiring significant water resources.

Our total overall use of freshwater was essentially flat in 2013 versus 2012. However, our freshwater-use intensity (consumption per unit of production) increased by 3% in 2013 compared to 2012 because some production capacity was taken offline. We have reduced this intensity by 22% versus 2005 levels, approaching our 2020 goal of 25%.

Freshwater-Use Intensity

Cubic meters of water per metric ton of production

We place great value on our employees and suppliers and hold each responsible for working in a manner that adheres to the highest standards for human rights and is safe, responsible, ethical, and focused on sustainability.

HUMAN RIGHTS

Alcoa’s Human Rights Policy comprises policies related to children and young workers, freedom of engagement, equality of opportunity, compensation, freedom of association, and relationships with indigenous people.

We endorse the United Nations Global Compact with respect to human rights. The compact’s 10 principles provide that businesses should support and respect the protection of internationally proclaimed human rights and ensure that they are not complicit in human rights abuses.

We offer a human rights course to managers and professional employees to ensure they understand and adhere to our human rights principles. More than 5,800 employees have completed the course since its initial deployment in late 2010.

OUR PEOPLE

Our people are the foundation of our success throughout the world, and we foster a high-performance culture that attracts and develops talent and promotes teamwork.

A major achievement in 2013 was women comprising 20.8% of our global leadership, exceeding our goal of 19% by year’s end. We had a similar goal to increase U.S. minority representation in leadership roles to 16%, but we fell slightly short with 15.6% representation. For 2014, we raised the targets to 21.3% of women in global leadership roles and 16.1% of U.S. minorities in leadership roles.

In 2013, we received the prestigious Catalyst Award, which honors innovative organizational approaches that address the recruitment, development, and advancement of women in the workplace.

To ensure the integration of sustainability into our core business strategies, up to 20% of our 2013 variable compensation was tied to achieving significant aspects of our sustainability targets. Across the entire workforce, the targets focused on safety and carbon dioxide emission reductions. Our management-level employees had an additional target to improve the diversity of our workforce.

We continued to reaffirm our Values during 2013, launching a global Integrity Champion Network of high-potential managers to further embed a values-based culture of integrity and compliance at all levels of the company.

Each year, the entire Alcoa workforce is invited to participate in our Global Voices Survey, which is administered by Kenexa and measures 11 dimensions of the employee experience. From 2010 to 2013, our employee engagement score increased from 60% to 74% and was within 7% of the Kenexa best-in-class engagement level. We have seen year-over-year improvement in employee engagement since starting the survey in 2006.

Number of Employees

We are committed to reducing work-related illnesses and injuries while improving the overall health of our workforce.

In 2013, we had zero employee and contractor fatalities. We also achieved year-over-year declines in all three of our major safety rates in 2013:

At the end of 2013, 84.2% of our safety reporting units had worked 12 consecutive months without a lost workday, 49.5% without a DART incident, and 42.4% without a total recordable incident.

Incident Rates

In 2011, we established two critical health protocols—exposure assessment and hazardous materials management. Our goal is 100% of our locations receiving a “Good” or better internal audit score for both protocols. By year-end 2013, 95% of our locations achieved the goal for exposure assessment and 98% for hazardous materials management. These increased from 86% and 90%, respectively, in 2012.

We expanded the Alcoa Global Wellness Initiative to all of our global locations in 2013 following a successful U.S. launch in 2012. The initiative focuses on the most important issues for our employees—physical activity, nutrition, tobacco usage, and well-being.

The Global Corporate Challenge (GCC) was our first global activity challenge. More than 20,000 employees committed to a daily step challenge, taking a total of 28 billion steps. These results earned us GCC’s designation of “World’s Most Active Company” out of the more than 1,200 companies participating in the challenge.

Employees at Alcoa’s Suralco operations in Suriname participated in the kickoff of the 2013 Global Corporate Challenge.

Our 2013 Global Voices Survey gathered employee perceptions of our various wellness and culture of health activities. The

statement “The health and wellness activities at my location promote employee personal health” received an 82% favorable response rate from the respondents compared to 76% in 2012 and 72% in 2011. Our goal is 100% by 2020.

SUPPLY CHAIN

Sustainability within our procurement function means selecting materials and services that consider, among others, the environmental, social, and economic impact in evaluating total cost. It is building relationships with suppliers who behave in a responsible and sustainable manner and ensuring that our interactions with suppliers are carried out with the highest standard of integrity and in compliance with all relevant laws and regulations.

Our Global Supplier Sustainability Program focuses on our key suppliers and has four components—communicating expectations, assessing, developing and educating, and monitoring. The assessments evaluate the maturity of our suppliers’ sustainability programs and determine where improvements are needed. Suppliers are provided with one of four possible ratings based on the results of their assessments:

For suppliers that attain leading or active ratings, we will conduct reassessments every three years to confirm their continued focus on sustainability. Suppliers that receive emerging or lagging ratings are moved into the “develop and educate” and “monitor” phases of the program.

Of our key suppliers, we rated 78% as either leading or active in regards to their sustainability programs in 2013.

Supplier Assessment Results

Percent of key suppliers

We are committed to transparent and open engagement with stakeholders, as well as improving the quality of life in the communities in which we operate.

STAKEHOLDER ENGAGEMENT

The principal way we manage engagement with stakeholders at the community level is through a tool we developed called the Alcoa Community Framework. In 2013, 97% of our manufacturing locations were using the framework.

Examples of community and stakeholder issues that were raised during 2013 are highlighted below. A more complete listing is available in our online reporting.

We operate in many communities throughout the world. Our contributions to those communities, and to society at large, are significant and bring social and economic benefit to regions wherever we operate.

2013 Value Added

U.S. dollars