In early 2011, Novelis laid out an ambitious vision aimed at strengthening the long-term competitiveness of our business through sustainability and innovation. Our intent was to transcend the incremental approach by radically transforming our company – and, in the process, lead the way in our industry. At the heart of this vision is our unprecedented goal to use 80% recycled aluminum in our products by 2020. When we achieve it, we will cut the embedded carbon in our products in half. Working toward this goal is requiring us to embrace an entirely new way of thinking and operating. We call it the ethos of disruption.
This new approach is driving changes in the way we source inputs, structure our supply chain, make capital investments, develop our products and engage with our customers. The scale of these changes is staggering, and we recognize that they present numerous challenges and risks for our company. Nonetheless, we are convinced they will ensure the long-term success of our business and enable us to offer more value to our customers and to society. In the long run, they are less risky than a business-as-usual approach.
In short, we are in the process of shifting our whole business model from a traditional linear one to a closed-loop one. Clearly, we cannot make this shift alone – and much of our success will depend on changes that are outside of our direct control. That is why we are focused, in particular, on those aspects where we can have the most positive impact. Our new approach minimizes natural resource inputs – most notably the primary aluminum we use to make our products, but also the energy, water and other resources we use to run our operations. It also means reducing – indeed, driving to zero – the waste we produce.
Striving to become a truly sustainable enterprise also means rethinking the fundamental design of our products themselves – and reengineering the processes to make them. And, it requires an unwavering focus on what we see as the foundations of being a sustainable company: operating ethically and responsibly, being stewards of the environment, protecting the health and safety of our people, developing our employees to ensure they have the skills and expertise we need, and contributing to the communities where we operate.
To underscore our commitment to sustainability, we signed on to the United Nations Global Compact in 2012. We remain committed to this initiative, and we are working to implement its 10 principles.
So what does this ethos of disruption look like in practice? In a word: evercan™. In 2013, Novelis introduced this first-ofits- kind, independently certified, high-recycled content aluminum beverage can sheet. The product is a packaging breakthrough that delivers sustainability benefits to our customers and end consumers. Nonetheless, evercan will not replace the traditional can overnight. There is still much work to be done to achieve our goal to bring to market the world’s first up to 100% recycled beverage can – pioneering the way to the circular economy.
In the automotive sector, it’s all about “lightweighting.” We are positioning ourselves to meet dramatically increased demand for aluminum, driven by the need to lightweight vehicles to improve fuel efficiency. We are also working closely with our auto customers to close the loop with them by taking back their production scrap and, in the longer term, end-of-life scrap.
We are still in the early stages of our sustainability journey, with many hurdles yet to overcome, but our efforts are already beginning to bear fruit: By the end of FY13, we had achieved 43% recycled inputs, up from 33% two years earlier. We have also improved our energy efficiency by nearly 20%, and reduced our water intensity by 16% and waste by 11%, since our baseline. This progress is being enabled by investments of close to $500 million to nearly double our recycling capacity by 2015. In FY13, we began operations at a new can recycling facility in Yeongju, South Korea, the largest fully integrated beverage can recycling system in Asia, and broke ground on a plant in Nachterstedt, Germany, that will be the largest aluminum recycling facility in the world.
We are proud of the progress we’ve made – and the path to 50% recycled inputs by 2015 is clear. To be candid, however, achieving the remaining 30% is less clear. It will test the limits of our company and require us to move even more aggressively toward a closed-loop model across all of our operations and products. For example, as we increase our use of recycled inputs, our waste generation increases. So, finding new technologies to process this waste will be critical to simultaneously reaching our 80% recycled content and zero-waste goals.
Our success will also depend on our ability to leverage the innovative capacity of our employees and enlist the efforts of our suppliers, customers and end consumers. For example, finding ways to increase post-consumer recycling rates is absolutely essential to enabling us to secure an adequate supply of scrap. However, our ability to influence consumer behavior on our own is limited.
I am confident that by bringing our industry-leading research and technology capabilities to bear, we will find the disruptive innovations required to get there. And, I am more firmly convinced than ever that our commitment to sustainability will be the key value driver for our company going forward. In the 21st century, there is no business as usual.
Thank you for taking time to learn about Novelis’ sustainability efforts. We welcome your feedback and partnership as we work to make our sustainability vision a reality.
Novelis is the
of aluminum worldwide
recycled metal inputs in FY13
President and Chief Executive Officer
“At the heart of this vision is our unprecedented goal to use 80% recycled aluminum in our products by 2020. When we achieve it, we will cut the embedded carbon in our products in half. Working toward this goal is requiring us to embrace an entirely new way of thinking and operating. We call it the ethos of disruption.”