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Alcoa investors call for green agenda for aluminum production

Analysts and investors are pushing Alcoa Corp. (NYSE: AA). delivering on the promise of a greener future. Questions about green aluminum were therefore the focus of the company’s most recent quarterly conference call. This is reported by Joe Deaux today in an article for the Bloomberg Green platform.

FYI Resources could be the beneficiary

Alcoa, the world’s largest manufacturer of aluminum and aluminum oxide, seems to have realized that more has to be done for the climate. As a small contribution to this promise of more sustainable economic activity, the planned Alcoa involvement in the Australian high-purity Alumina start-up FYI Resources Ltd. (ASX: FYI; FRA: SDI) can be understood. The prospective joint venture would also give Alcoa access to a new growth segment that is primarily driven by applications in battery separators. Above all, FYI Resources opens up the possibility of using kaolin as an alternative instead of the traditional raw material bauxite to save around half of the energy used. That would clearly be a big green plus.

The largest US aluminum maker devoted much of its quarterly reporting to answering questions about its environmental, social and corporate governance efforts – particularly its promise to reduce greenhouse gas emissions.

Improve ecological reputation

Metal producers, including Alcoa, are working to improve their environmental image, with investor interest in ESG (Environment, Social, Governance) growing and customers such as automakers demanding less polluting supply chains. Chief Executive Officer Roy Harvey took the opportunity to explain his “green aluminum” plans as customers increasingly focus on the carbon footprint of raw materials.

Michelle Dunstan, global head of responsible investing at AllianceBernstein Holding LP, which manages $ 631 billion in assets, said: “Investors like us look at companies to make them better and we evaluate them based on their progress and include that in our decision-making process. “

While aluminum is recyclable and lighter than steel – meaning it makes fuel-efficient cars – it requires huge amounts of energy to make and is responsible for an estimated 1% of greenhouse gas emissions in the industrial sector. Alcoa and competitors such as the Rio Tinto Group and United Co. Rusal are beginning to label some of their aluminum as low-carbon because some of them use hydropower as an energy source.

Carbon intensity

The emissions from the aluminum industry have risen sharply in recent years. AllianceBernstein’s Dunstan said ESG-focused investors would need to do a lot of research to see if companies are taking steps that will lower their carbon footprint, improve working conditions, develop local communities, and improve corporate governance. She also said investment should not be limited to a handful of companies with a good track record as it could lead to overcrowding and it was unlikely to lead to overall positive change in all sectors.

“We actually need these producers in the world to survive, and instead of ignoring them, our philosophy is rather to force them to do it or to make them do better,” said Dunstan.

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