Our Responsible Sourcing Program is a risk-based decision framework integrated into how we identify, select, contract and manage the goods and services that we procure.
Through key industry-leading ESG intelligence providers and a digital library in our enterprise resource planning system, we incorporate ESG criteria in our:
- supplier category strategies;
- tenders;
- selection process;
- contract key performance indicators (KPIs);
- performance management; and
- monitoring.
Our Responsible Sourcing Program is supported by the following KPIs:
- ESG risk screening of all of our suppliers and business partners;
- Further due diligence through assessment of all high-risk suppliers;
- Percentage of suppliers improving their ESG maturity rating year on year; and
- Average Alcoa supplier ESG maturity rating compared to the EcoVadis benchmark, which is a system that measures the quality of a company's sustainability policies and practices.
In line with the London Metal Exchange’s responsible sourcing requirements, we assess key direct and raw material suppliers to understand where material is sourced to identify any conflict-affected or high-risk areas (CAHRAs). All of our LME-listed brands meet the required performance criteria.
We provide training to our procurement team addressing our Responsible Sourcing Program and supply chain human rights. We also offer responsible sourcing and chain of custody training for our commercial organization.
Supplier ESG Risk Decision Tree (Three Step Process)
Our supplier ESG risk decision tree is designed to assist Alcoa teams in their efforts to source responsibly.
Step 1: Assess
- Screen all potential and contracted suppliers (and customers) through Ecovadis IQ
- Use Industry and Country ESG intelligence to drive category and sourcing strategy, tender questions and evaluation criteria
Step 2: Audit and Mitigate
Low / Medium
- Tender contains ESG questions for potential risks
- Strategic Supplier or Annual Spend >US$5M complete Ratings Assessment
- If assessment score <24, Supplier to complete Corrective Action Plan and reassess within 12 months
- If assessment score >24, Supplier to reassess within 2 year
High
- Tender to include ESG questions for risk areas
- Higher Risk Suppliers to complete Ecovadis Ratings assessment
- If assessment score <24, Supplier to complete Corrective Action Plan and reassess within 12 months
- If score below 24 on second assessment, review suppliers roles in category strategy
- High Risk Human Rights suppliers candidate for Onsite Audit
Step 3: Advance
- Targeted ESG Improvement - Human Rights, I&D, Waste Management, Tier 2 and 3 Procurement
- Measurement and Reporting of key ESG KPIs, emissions, waste, water, biodiversity, I&D and Human Rights