CORPORATE SOCIAL RESPONSIBILITY AT ALSTOM

Corporate Social Responsibility at Alstom

Alstom has involved in Corporate Social Responsibility Projects of repute a few of such projects have been presented here.

I)      “Environment, Health and Safety” (ehs)

Continuous Improvement

Through continuous efforts to improve employees’ health and safety, the number of work-related incidents has been greatly reduced (-35% for 2008-096 compared to the same period a year before).  The group is committed to pursuing its efforts on training and communication to improve employees’ awareness and to minimise risks.  In addition, as part of EHS / policy, a special emphasis has been put on CO2 reduction on Alstom sites.  Employee Sharing Programme following the success met by the previous programmes, a third employee stock purchase scheme was announced in January-2009 in 22 countries with the same objectives: encouraging employees’ contribution to the Group’s performance while enlarging and stabilising the shareholding base.  In line with past references, close to 30% of the employees participated into this programme. The number of additional shares represented around 0.4% of the Group’s share capital. The Board of Directors also approved a new Long Term Incentive Plan based on the grant of conditional stock options and the free attribution of performance shares, depending on the Group’s performance in 2010/11; this plan could represent approximately 0.4% of the share capital.

(Source: Website of Alstom)

II)     Alstom Foundation for the Environment

The Alstom Foundation, created in November 2007, will devote €1 million per year to support projects in the field of environmental protection. The Foundation has rewarded the first eleven projects this year. One of the most significant initiatives rewarded will establish a new conservation programme protecting the biodiversity in a national park of China’s Yunnan Province. Other selected projects promoted actions in Argentina, North Korea, India, Switzerland, USA, Indonesia, Malaysia, Philippines, South Africa and France.

III)   Sustainable Development and Corporate responsibility:

All people involved in economic development are becoming increasingly aware of the challenges related to global population and economic growth. Today, the Group’s customers and partners, along with government bodies and the general public, expect solutions that “meet the needs of current generations without compromising the ability of future generations to meet their own needs” (defi nition of sustainable development given by the Brundtland Commission in 1987). Future generations will face increasing scarcity of natural resources, particularly with regard to fossil fuels, and the need to manage emissions of gases and other pollutants with long-term effects on the environment and the world’s climate. Sustainable development is a natural part of the Group’s operations: Alstom develops power generation and rail transport solutions that are crucial to economic development and social progress around the world. These solutions optimise the use of natural resources and limit the emissions of greenhouse gases. The implementation of these solutions is local. Therefore, Alstom is by nature a local actor, providing a long-term commitment to local communities and striving to take on its responsibility as a leading multinational corporation wherever it operates. Alstom’s corporate responsibility policy aims to: offset the impact of its activities on the environment and preserve health and safety both for its employees and the people working in its sites; increase involvement in the life of surrounding local communities while taking into account the expectations of its partners and stakeholders; shape the company of the future along with the employees.  Alstom implements its sustainable development and corporate social responsibility (CSR) policy through a range of programmes combining the Group’s general goals with more specifi c targets managed by Sectors, while allowing ample scope for initiatives at the local level. This policy is outlined in subsections “Environmental information” and “Social Information”. The Group’s fi rst priority lies in implementing its policies and ensuring compliance with the relevant standards across the full range of its operations.  To strengthen its commitment, Alstom has teamed up with a number of leading bodies working to promote corporate involvement in an overall Sustainable Development: Alstom joined in 2008 the Global Compact, designed to encourage companies to commit to a set of key values spanning human rights,\ labour standards, environmental protection and non-corrupt business practices. Alstom is actively involved in this network.

The Group also joined in 2009 the World Business Council for Sustainable Development (WBCSD), which comprises 190 international irms campaigning to promote the three pillars of sustainable envelopment: economic growth, environmental balance and social progress.

Alstom Transport has signed the sustainable development charter drawn up by the International Association of Public Transport (UITP).

IV)    Power Sector: Sustainable Development Strategy

While current generations must provide power to over a billion people who don’t have access to electricity, future generations will need to deal with a booming population (expected to reach nine billion people by 2050) and the resulting demand for electricity.

a)      Emissions of carbon dioxide (CO2) and pollutants in electricity generation

More than 40% of the world’s CO2 emissions emitted by fossil combustion come from electricity production. CO2 is seen as one of the main greenhouse gases responsible for climate change. The past few years have witnessed a push from the international community to reduce greenhouse gas emissions, with the emergence of increasingly stringent regulations. Regularly held international conferences such as those in Rio de Janeiro in 1992, Kyoto in 1997, Bali in 2007, Poznan in December 2008 and Copenhagen in December 2009 enable progress in the search for much-needed global solutions In this context, the European Commission set out a three-pillar strategy in March 2007: cut greenhouse gas emissions by 20%, reduce energy intensity by 20% and boost the proportion of renewable energy in power generation to 20%. In order to provide the necessary technical support for these goals, the European Commission introduced a series of directives and in December 2008, it adopted its energy and climate package, designed to improve and extend the existing EU Emissions Trading Scheme (ETS) and set national targets for the growth of renewable energy. China has implemented for 2007 a strategy to boost the use of renewable energy to 15% by 2020. The United States announced in March 2009 its own renewable energy plan, entitled “New Energy for America”. As Alstom is a major contributor to these efforts and firmly believes that a full energy mix is a must to meet the needs in electricity generation, it offers a wide range of solutions with improved efficiency of power plants to reduce the use of fossil fuels and limit greenhouse gas emissions, developing technology to capture CO2 and other air-borne pollutants such as sulphur oxide, nitrogen oxides and mercury, and promoting non CO2 solutions such as hydro, wind and nuclear power solutions.

b)      Improving fossil energy efficiency

Coal discharges more CO2 than any other energy source but will remain a major source of power because it is widely available, easy to obtain and not expensive. Improving the efficiency of coal-fired facilities therefore has a direct impact on CO2 emissions: estimates suggest that a 2% gain in efficiency cut CO2 emissions by 5%. With regard to new equipment, energy efficiency means in particular finding ways to handle increasingly high temperatures in the steam\ cycle. The next step for these advanced cycles is to reach temperatures of 700°C, which would bring energy efficiency to 50% by 2020, thereby reducing CO2 emissions by over 40% compared with average global emissions from coal-fired plants currently in operation, which have an average energy efficiency below 35%. For existing plants currently in use, which are expected to remain in operation for a long time, a broad range of services and retrofits enables Alstom to significantly improve plant efficiency. This means\ more power from the same amount of fuel, longer plant life and major savings, coupled with a significant reduction in CO2 emissions. Improving energy efficiency also means upgrading gas-fi red power plants, with the objective to reach an efficiency rate of 60%.

c)       CO2 Capture

Alstom has pursued an intensive research and development programme over the past few years to meet the technological and economic challenges involved in capturing CO2 from electricity production based on fossil fuels. By 2015, Alstom expects to offer power plants able to capture a large portion of CO2 emissions. To capture CO2 emitted by a power station burning fossil fuels, Alstom is primarily concentrating on post-combustion and oxy-combustion\ technologies. These technologies have the advantage to be potentially used also in existing power plants. Pilot plants in the USA, Sweden, Norway, Germany, Poland and Canada are now testing the latest Alstom technology.

V)      Developing Renewable Energy

a)      Hydropower

To date, Alstom has provided 25% of the world’s total installed hydropower capacity and has supplied over 400 GW of the total installed capacity from turbines and generators around the world. Alstom Hydro supplies the full range of equipment (turbines, generators, control systems, valves and penstocks), with an output of between 5 MW and 900 MW, for all head types, whether for new facilities or for servicing and refurbishment needs. Alstom constantly strives to satisfy all of its customers’ needs, implementing= innovative solutions to better meet operational requirements. Breakthroughs include Alstom’s exclusive double-stage pump turbines, which greatly improve efficiency at high-head plants while reducing civil-engineering costs. Another example: the development of variable speed pump turbines, which provide extensive operating potential and meet specific grid needs in terms of flexibility. Alstom Hydro recently entered phase two of the Nant de Drance power plant in Switzerland, the embodiment of variable-speed technology.  Alstom Hydro works constantly to offer new solutions to minimise the environmental impact of its equipments. One example is the water-based solutions developed for turbine to replace conventional oil-based technology, eliminating risk of river pollution. Other innovations include ventilation technology to increase the oxygen content of water downstream from dams.

b)      Wind Power

Alstom gained a strong foothold in the wind-power market in 2007\ with the acquisition of Ecotècnia. Since then, the subsidiary has benefited from the Group’s international network and technological support to supply turbines with a power of up to 3 MW, for both local wind-power facilities and international operations. Ecotècnia also has a limited activity in solar power.

c)       Biomass Combustion

Alstom provides power plants that allow up to 20% biomass co-combustion, making it possible to use renewable energy sources and limit the use of fossil fuels. Co-combustion technology can also be incorporated into retrofits of coal-fired power plants.

VI)    Upholding Ethical Guidelines:

Alstom’s growth hinges on a culture of integrity and uncompromising ethical principles covering employees, shareholders, customers, suppliers and competitors.  The Group issues its code of ethics to all employees, providing guidelines on how to report any breach of rules and regulations. The Ethics and Compliance departments has now been given additional resources to help with publishing, updating and  checking application of all rules and procedures for business transactions and individual integrity.  The “Alstom  Integrity programme”  also provides training courses.  As part of its continuous improvement campaign.  Alstom opted to bring in an independent body to audit the rules and procedures it applies in all its dealings with consultants and business representatives.  The audit was carried out between September 2008 and March 2009 in partnership with swiss auditor SGS and a group of international experts.  Agency Ethic Intelligence International certified Alstom’s rules and procedures with respect to the Group’s relations with consultants and sales agents in March 2009.

VII)  New Employee Shareholding Plan:

To boost employee involvement in company performance and growth, Alstom launched a new programme in 2009, under which employees were given the chance to acquire up to 40 shares at special rates: “Alstom sharing 2009” is the third employee shareholding plan since 2004, in the wake of “Two for One” and “Alstom Sharing 2007”.  The offer was made available to nearly 70,000 employees in 22 key countries around the world.

Around 28% of employees on a permanent contract subscribed.  Alsotm aims to further boost employee shareholding in the future.  Moreover, in accordance with the programme “Awards for All”.  Alstom issued 12 free shares to all its employees in 2006.

VIII) Alstom University offers 80 Training Course:

In addition to training courses organised by the Sectors, the Group’s own academy, Alstom University, works to promote employees’ individual development while allowing them to better know the internal rules of the Group.

Alstom University offers 80 training courses in seven languages, ranging from management and leadership courses to specialist and advanced programmes in specific business areas such as purchasing, finance project management, sales and human resources.  The introduction of five regional campuses in Asia, Europe, India, Latin America and North America, along with the initial site at Group headquarters, will provide wider access to the university for all Alstom employees.

In 2008-19, Alstom University trained nearly 5,600 people through 360 courses, an increase of 60% over the previous year.  In addition to general training programmes, Alstome University has developed a range of practical courses designed by managers for their teams. Some of these courses are led or jointly run by Alstome employees.

IX)    Nearly 20% of R & D Expenditure Earmarked for the Environment:

Every Alstom Transport solution incorporates environmental aspects from start to finish, from manufacturing to recycling.  Nearly 20% of Alstom Transport R & D expenditure in 2008-2009 went towards protecting the environment.  Research efforts focus on reducing energy than a bus, eight times less than a car and 15 times less than an aero plane (km/passenger equivalent).

Alstom continues to develop trains able to run in hybrid or dual mode.  Reduced weight efforts have shaved 10-15% off the weight of high speed trains, regional trains and metros.  At equal length, the AGV weighs in at 70 metric tons, 17% less than its main competitors.

Alstom also pays close attention to noise reduction.  The AGV has benefited from this research: it maintains the same level of acoustic comfort at 360 km/h as its competitors do at 3000-320 Km/h, while the coradia’s self-ventilating engine significantly reduces noise in stations.