Novelis
Our Sustainability Journey
NIRI meeting
April 2012
Building our Sustainability Agenda
Dialogue with stakeholders is key
Customers
NGOs &
Sustainability
organizations
Communities
Suppliers
Policy makers
Regulators
2
Employees
Debt holders
Our parent company
What Customers Say: Automotive
“The Jaguar XJ is an enlightened approach to the next generation
of Jaguar performance and sustainability. Lightweight aluminum
and aerospace-inspired methods of construction deliver optimal
strength and rigidity, not to mention gains in performance, fuel
efficiency and environmental benefit..”
Extract from Jaguar News, January 2012
3
Global Trends Point to Increasing Aluminum Demand
Economic
Development
Increasing
urbanization,
modernization of
infrastructure, and
global wealth
4
Material
Preference
Sustainability
Increasing
substitution to
aluminum from
other materials in
emerging markets
Growing awareness of
environmentalism
and demand for
recycled products
Global demand for rolled aluminium is growing
Thousands of tonnes
25,000
20,000
15,000
10,000
5,000
0
1950 1960 1965 1975 1985 1995 2000 2005 2010 2015
4% or 700 thousand extra tonnes per year until 2015
Source: Novelis Fact Base; CRU
5
Who is World-Class in Sustainability?
6
Main Related Issues for Novelis
Carbon footprint of our industry
• Process and Product
Primary resource availability
• Energy, metal, other raw materials and water
Developing Sustainability partnerships
along the supply chain
• Raw material to recycling
Regulatory & external stakeholders
perception of aluminium
7
The Novelis Sustainability Approach will…



Grow our long term profitability whilst we balance economic,
environment and social interests
Be aligned to our strategy and embedded across our organization
Offer innovative aluminum low carbon solutions while
providing society positive benefits across the application’s life
cycle
Economy
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Environment
Social
Novelis’ Sustainability Targets
1. Approximately double EBITDA by FY16
2. Increase global supply from recycled aluminum to 80%
3. Energy usage will be reduced by 39%
4. Total GHG emissions will halved
5. Water usage will be reduced by 25%
6. Zero land-filled waste
7. Recordable Case Rate of zero
8. All employees receive annual performance reviews
9. World-class leadership development programs
10. 100% of operations have local engagement programs
9
Profitability

[Mio US$]
We will approximately double our profitability from FY11 to
FY16
~$2
$1.1
FY11
10
FY16
EBDITDA (in billions)
Recycling [% on FRP sales]

Novelis will reduce the lifecycle
environmental impact of aluminum
products by increasing its global supply
from recycled aluminum to 80% by 2020
30%
Baseline
33%
FY'11
Pre-Consumer
Baseline average FY’07-09
11
80%
Vision 2020
Post-Consumer
GHG Emissions [million Tonnes of CO2eq.]

The total GHG emissions
will be almost halved


Scope 1 (fuels) and 2
(electricity)
21.0
20.2
Scope 3 (primary and
transportation)
11.1
Baseline
Scope 1
Baseline average FY’07-09
12
Scope 2
FY'11
Scope 3 (Prime)
Vision 2020
Scope 3 (Transp.)
Novelis Sustainability Advisory Council

Created in order to




critique our performance
help us apply external best practices to our program
improve our external dialogue and credibility
Members with experience from the following organizations:






13
Stuart Hart, Enterprise for a Sustainable World, Cornell University
Jeff Keefer, DuPont
Miguel Milano, Instituto LIFE, Brazil
Jonathon Porritt, Forum for the Future
Matt Arnold, JP Morgan
Novelis CEO, Chief Strategy Officer and Chief Sustainability Officer
Novelis Sustainability Report



14
First Sustainability Report
issued in 2011
Annual commitment to report
progress against our targets
Engagement process ongoing
with our key stakeholders
An Investor Perspective on
Sustainability
B. Scott Sadler, CFA
Spring 2012
© 2012 Boardwalk Capital Management
1. Sustainability -- Why it matters
to investors
Overview
2. Our approach, research and
resources.
3. The Evolution of ESG Investing
© 2012 Boardwalk Capital Management
16
1.Sustainability
Why it matters
© 2012 Boardwalk Capital Management
17
Why sustainability matters to investors
Scrutiny of environmental, social and corporate governance
(ESG) factors uncovers truly superior companies.
A portfolio comprised of ESG best-of-class companies has
been shown to outperform over time.
ESG worst-of-class firms have likewise underperformed.
Sustainability leaders more fully disclose risks, have a lower
cost of capital and give investors fewer negative surprises.
Significant benefits can accrue to society by favoring
companies with superior environmental and social standards.
© 2012 Boardwalk Capital Management.
18
You’re in good company
In the United States today, $1 out of $10 under
professional management employs an SRI process…
… and SRI is one of the fastest growing investment disciplines.
© 2012 Boardwalk Capital Management.
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ESG is not just “E”
Environmental:
 Emissions and climate change
regulation
 Resource and water use efficiency.
 Pollution penalties or litigation
 Energy consumption and trends
Social:
 Social and Labor Issues
 Supply chain management
 Community involvement
 Human and worker’s rights
Governance:
 Board independence
 Management diversity
 Corporate political contributions
 Executive compensation
 Accounting standards and oversight
 Bribery and corruption
Product
 Product safety and impact
 Product access for underprivileged
populations
 Safety issues and fines
When companies get these issues right, shareholders and society benefit.
© 2012 Boardwalk Capital Management.
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2. Our
Approach
© 2012 Boardwalk Capital Management
21
Boardwalk’s approach to SRI
Invest in best-of-class, financially-strong companies
Diversify by industry and country
Apply sustainable principles across all asset classes
Include non-conventional assets
Rebalance regularly to mitigate risk
© 2012 Boardwalk Capital Management.
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Global equity research methodology
Global Investable Universe
Sort
(3000+ companies)
Rank
Confirm
Engagement
Scrutinize
Construct
Customize
© 2012 Boardwalk Capital Management.
ESG and financial scoring on ~150 metrics
Best–of-Class
Performers
Portfolio Construction
Client customization:
Values-based, industry exclusion, special issues
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Asset allocation
A comprehensive sustainable portfolio:
 Core equity: Global ESG Titans
–
–
The world’s sustainability leaders
Diversified, large cap, global
 Supporting: Other equity
–
–
Commodities
And Metals
Specialist SRI managers
Sustainable ETFs and funds
 Satellite: Other assets
–
–
–
Commodities: Inevitable scarcity
Lifestyle (quality-of-life) muni bonds
Less liquid or alternative strategies
•
•
Impact investments
Microlending, private equity
© 2012 Boardwalk Capital Management.
Quality-oflife
muni bonds
Impact
Investments
Other
equity
Global
ESG Titans
Equity
Other
SRI
equity
Social
lending
Triple
bottom line
Private
Equity
24
3. Evolution
© 2012 Boardwalk Capital Management
25
Our SRI partners: (Fewer questionnaires for you)
ESG data and issues monitoring:


Nearly 20 years experience in market-leading SRI research.
Awarded 2010 Best ESG Research House.
Company ranking portal:

90+ different ranking sources across 65 countries, 5000 companies.
Portfolio analytics:

Backtesting, performance measurement, trading, proxy voting.
Corporate engagement:


Clearinghouse of investor concerns and engagement activity.
Alliance of investors with $20+ trillion in assets.
SRI manager platform:
 Extensive roster of SRI specialists and SRI “overlay” managers.
© 2012 Boardwalk Capital Management.
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-- One Source for ESG data
Governance Governance Governance Governance Governance Governance
Company Name
Group
Total Governance Governance Social
Average Rating
Group
Score
Group
Score
Average
Average
Social
Score
Social
Social
Environment Environment
Business
Business Public Policy Public Policy Corporate
Corporate Contractors Contractors
Group
Score
Ethics Group Ethics Score
Group
Score
Governance Governance & Supply
& Supply
Average
Average
Average
Group
Score
Chain Group Chain Score
Average
Average
Social
Customers
Group
Average
Johnson Controls Inc.
64.2
75.5
59.9
68.5
62.8
81.8
68.9
73.3
58.5
75.0
80.8
68.8
56.0
62.9
56.5
100.0
74.6
Aisin Seiki Co. Ltd.
64.2
66.7
59.9
53.6
62.8
63.1
68.9
80.2
58.5
55.0
80.8
75.0
56.0
47.1
56.5
46.4
74.6
Continental AG
64.2
69.6
59.9
65.6
62.8
69.3
68.9
72.7
58.5
65.0
80.8
75.0
56.0
63.8
56.5
53.6
74.6
Compagnie Generale DES
Etablissements Michelin SCA
Magna International, Inc.
64.2
68.3
59.9
59.3
62.8
69.7
68.9
73.3
58.5
55.0
80.8
68.8
56.0
60.4
56.5
100.0
74.6
64.2
65.6
59.9
67.2
62.8
62.0
68.9
68.7
58.5
73.0
80.8
75.0
56.0
60.4
56.5
75.0
74.6
Denso Corp.
64.2
65.1
59.9
52.9
62.8
68.2
68.9
70.3
58.5
47.0
80.8
75.0
56.0
52.3
56.5
89.3
74.6
Bridgestone Corp.
64.2
54.5
59.9
47.4
62.8
45.7
68.9
69.5
58.5
37.0
80.8
75.0
56.0
49.2
56.5
64.3
74.6
Fiat S.p.A.
63.7
83.9
59.4
80.3
63.2
87.8
66.3
83.4
57.1
70.0
76.5
68.8
56.9
91.7
65.1
95.8
65.0
BMW Group
63.7
75.7
59.4
57.3
63.2
90.1
66.3
76.3
57.1
52.0
76.5
56.3
56.9
61.9
65.1
100.0
65.0
Renault SA
63.7
74.9
59.4
67.7
63.2
78.0
66.3
76.7
57.1
65.0
76.5
100.0
56.9
61.9
65.1
83.3
65.0
Ford Motor Co.
63.7
74.2
59.4
75.5
63.2
71.5
66.3
75.2
57.1
70.0
76.5
68.8
56.9
81.7
65.1
100.0
65.0
Volkswagen AG
63.7
72.7
59.4
66.0
63.2
81.6
66.3
70.5
57.1
65.0
76.5
62.5
56.9
67.7
65.1
79.2
65.0
Toyota Motor Corp.
63.7
64.7
59.4
55.9
63.2
45.4
66.3
82.5
57.1
50.0
76.5
81.3
56.9
54.4
65.1
54.2
65.0
Honda Motor Co., Ltd.
63.7
64.4
59.4
59.9
63.2
55.5
66.3
72.8
57.1
65.0
76.5
75.0
56.9
51.9
65.1
50.0
65.0
Company Name
Johnson Controls Inc.
Environment Environment Environment Environment Environment Environment
Contractors
Products &
Environment
Contractors & Operations
Products &
Environment
& Supply
Operations
Services
Group
Supply Chain
Group
Services
Score
Chain Group
Score
Group
Average
Score
Average
Score
Average
Average
68.9
73.3
80.9
84.0
72.3
78.2
51.9
53.1
Aisin Seiki Co. Ltd.
68.9
80.2
80.9
84.0
72.3
89.2
51.9
53.1
Continental AG
68.9
72.7
80.9
84.0
72.3
77.3
51.9
53.1
68.9
73.3
80.9
84.0
72.3
78.2
51.9
53.1
68.9
76.1
80.9
100.0
72.3
79.1
51.9
53.1
Fiat S.p.A.
BMW Group
68.9
66.3
66.3
70.3
83.4
76.3
80.9
62.4
62.4
84.0
83.3
50.0
72.3
66.5
66.5
79.1
83.3
89.6
51.9
68.0
68.0
37.5
83.5
76.2
Renault SA
66.3
76.7
62.4
48.9
66.5
92.7
68.0
74.6
Ford Motor Co.
66.3
75.2
62.4
100.0
66.5
60.4
68.0
77.7
Volkswagen AG
66.3
70.5
62.4
58.3
66.5
77.1
68.0
70.0
Toyota Motor Corp.
66.3
82.5
62.4
84.4
66.5
72.9
68.0
91.2
Honda Motor Co., Ltd.
66.3
72.8
62.4
63.9
66.5
67.7
68.0
82.3
Compagnie Generale DES
Etablissements Michelin SCA
Toyota Industries Corporation
Denso Corp.
© 2012 Boardwalk Capital Management.
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Detailed Reports
© 2012 Boardwalk Capital Management.
28
-- ESG tools on the web
DATA SOURCES FOR THIS COMPANY
Asset4
Carbon Disclosure Project 2008
Carbon Disclosure Project 2009 Full Data
Carbon Disclosure Project 2010 Full Data
Carbon Disclosure Project--all respondents
CDP Water Data 2010
Copenhagen Communique
Corporate Knights Global 100 - 2011
Covalence Ethical Quotient
CR’s 100 Best Corporate Citizens 2011
Div50 2010
EPA Climate Leaders
Ethisphere
Glassdoor
Global 100 List 2010
Global Reporting Initiative 2010
Goodness 500
Governance Metrics International
Human Rights Campaign 2011 List
IW Financial
MSCI ESG Intangible Value Assessment
MSCI Global Compact +
NASDAQ OMX CRD Global Sustainability
Index
Newsweek Top 500 Global Green Cos 2011
Newsweek Top 500 Green Companies 2010
Newsweek Top 500 Green Companies 2011
Top 100 Military Friendly Employers
Trucost
UN Global Compact 2010
UN Office on Drugs & Crime Anti-Corruption
Vigeo
© 2012 Boardwalk Capital Management.
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Mainstreaming ESG Information
on Huffington Post.com
© 2012 Boardwalk Capital Management.
ESG Data on Bloomberg
30
Social Media is Increasingly Critical
© 2012 Boardwalk Capital Management.
31
Thanks for all you do
© 2012 Boardwalk Capital Management.
32
www.BoardwalkCM.com
404-343-2026
info@BoardwalkCM.com
Follow us on:
An investor initiative in
partnership with UNEP FI and the
UN Global Compact
Boardwalk Capital Management is a proud signatory
of the UN Principles for Responsible Investment.
© 2012 Boardwalk Capital Management
Boardwalk Capital Management is an active
member of the Green Chamber of the South.