Climate Policy Engagement Analysis
Climate Policy Engagement Overview: Alcoa appears broadly supportive of action on climate change and has engaged positively on specific regulations in the US and Australia, although the company has disclosed limited information regarding its engagement with climate policy.
Top-line Messaging on Climate Policy: Alcoa has expressed support for the goals of the Paris Agreement and the need for an "urgent global response" to limit temperatures to below 2ºC in its 2020 Climate Change Policy. In the same document, Alcoa also appears to support government policy to respond to climate change, but generally favors market-based mechanisms with flexibility for emissions-intensive trade-exposed (EITE) industries.
Engagement with Climate-Related Regulations: Alcoa's 2020 Climate Change policy states that a cap and trade system is the best way to address climate change as "it pre-defines the emission reduction outcome within the trading period". The company's 2018 CDP submission states it has actively engaged on schemes in the US, Canada, Europe and Australia, although no further details of this engagement is provided. From 2017-2020, Alcoa has also been active in the development of fuel efficiency standards such as CAFE in the US. Alcoa's 2019 Sustainability Report states that the company has engaged with the Australian government regarding changes to the Safeguard Mechanism and the company appears to support the changes made to the policy in March 2019, which weaken the Safeguard Mechanism through increasing baselines to reflect current production levels.
Positioning on Energy Transition: Alcoa appears generally supportive of the transition of the energy mix. In a 2019 consultation on Australia's National Hydrogen Strategy, Alcoa appeared to support low emission technologies to increase the uptake of renewables in the energy mix. However, in 2020 Alcoa directly advocated for US regulators to lower utility rates in response to the Covid-19 pandemic, reducing the funds available for clean energy programs.
Industry Association Governance: Alcoa has links to two industry associations that have actively opposed meaningful climate change policy: the Business Council of Australia and Chamber of Minerals and Energy WA. However, Alcoa does not disclose a full list of its industry association memberships and indirect climate-related lobbying activities, nor has it published a full audit disclosure of its industry links.