At Norðurál, we strive to respect the environment, our community, and human rights. We work continuously to minimize the environmental impact of our activities and to use energy and raw materials more efficiently. The health, safety, and well-being of our staff are top priorities. We ensure all employees’ rights to equal opportunities and remuneration irrespective of gender, sexual orientation, religion, or national origin, and we remain committed to staff career development throughout our value chain. Further, we strive to undertake our procurement with integrity, in line with the company’s values.

Norðurál adheres to a strong internal risk management framework based on four categories of risk: strategic, financial, operational, and environmental.

Our operations are greatly affected by fluctuations in the market value of aluminum, energy prices and supply, payroll expenditure, and procurement costs of essential materials such as alumina and anodes. Salaries, taxes, and other operational expenses are in ISK, while the company’s revenue is mostly in USD. Adverse changes to any of these factors could have considerable impacts on the company’s operations.

Main strategic opportunities for Norðurál lie in the small carbon footprint of Icelandic aluminum, as well as the country’s location within a market area where demand for aluminum is high.

We work continuously to minimize our environmental impact through responsible use of energy and raw materials. We also aim to increase environmental awareness amongst our employees, encouraging staff participation in procedural reforms. Norðurál satisfies the requirements for its operating licenses and complies with environmental laws and regulations.

Norðurál’s ambitious climate target is a 40% reduction in greenhouse gas emissions outside the EU Emissions Trading System by 2030.

Environmental monitoring in and around Hvalfjörður consid- ers around 100 indicators for air quality, seawater and fresh- water quality, and livestock and plant health.
Such monitoring is undertaken by independent entities to ensure the company’s operations do not adversely impact our local environment.

Norðurál uses the accounting system through the Green Steps Program (Græn skref) to keep detailed records of all materials going in and out of the smelter. We aim to use materials as efficiently as possible and to maintain comprehensive reports of waste disposal.

We strive to conduct our operations and professional activities with respect for human rights. Norðurál ensures all employees’ rights to equal career opportunities and remuneration irrespective of gender, sexual orientation, religion, or national origin. The company aims for continuous improvements in these regards and complies with all relevant laws and regulations.

The health and safety of staff is of utmost importance. Em- ployees are trained in best practices and are informed of risks, ensuring work is not carried out in unsafe conditions. We emphasize active staff participation in accident prevention and improvements to workplace safety. Norðurál com- plies with all laws and regulations concerning health and safety.

Our company is part of a larger community that includes our families, our neighbors, and the local environment as a whole. We are proud of our community, and we hope the community will be proud of us.

Norðurál believes social responsibility includes sharing our expertise with the academic community and innovative industries alike. Through dynamic collaboration and cooperation, we hope to become more efficient in our operations and reduce our greenhouse gas emissions.

Norðurál undertakes all procurement with integrity, responsibility, and efficiency in mind. We take quality and environmental and health considerations into account when contracting suppliers and continue to make improvements in these regards. The company complies with all applicable laws and regulations on procurement.

It is our belief that there is always room for improvement. Rather than resting on laurels, we actively pursue opportunities for the company to evolve.

On October 5, the Confederation of Icelandic Enterprise announced Norðurál as the Environmental Company of the Year. The jury praised the company for setting clear and reasonable goals through a climate action plan with well-defined objectives.

While the carbon footprint of Norðurál’s aluminum products is amongst the lowest in the world, our aim is to achieve carbon neutrality. To this end, the company collaborates in re- search and development projects seeking innovative technical solutions to make this possible. We offer environmentally conscious consumers products under the Natur-AlTM brand, marketed as Icelandic aluminum. These products are traceable from cradle to gate through a life-cycle assessment carried out by an independent party. From the extraction of raw materials to delivery of consumer products, emissions per ton of Natur-AlTM aluminum are under a quarter of the global average for aluminum production.

In January 2022, ground was broken in Grundartangi for a new billet casthouse with a footprint of around 8200 m2. Construction of the building’s steel frame began at the end of the year. The new casthouse will enable Norðurál to take a further step in the value chain of aluminum production, meeting European consumers’ high demand for the aluminum billets used in vehicles, construction, and electronics. Production of billets is expected to begin in 2024 once the casthouse is complete.

The billet casthouse represents an investment of around 120 million USD (nearly 16 billion ISK) and received green financing from Arion Bank. Ístak and its contractors are responsible for construction based on engineering primarily designed by Verkís. Others involved in the project are the engineering and consulting companies Efla, Lota, Mannvit, and HSE.

Energy shortage

Due to unusually low water levels in reservoirs at the beginning of 2022, Landsvirkjun cut its electricity supply to customers — including Norðurál — for three months. This nationwide energy shortage had a major impact on our operations, including the amount of aluminum produced during the year.

In December, ten students graduated from the Norðurál School of Heavy Industry. Nearly two hundred students have completed courses at the school since it opened in 2012. The school supports value creation by strengthening the company’s competitive edge, improving workplace safety, and increasing job satisfaction.

The Norðurál School of Heavy Industry operates in cooperation the Centre for Continuing Education in West Iceland and the Comprehensive College of West Iceland. Courses are also taught by specialists from Norðurál.

For the second year in a row, Norðurál was awarded the Equality Scale from the Association of Businesswomen in Iceland (FKA). The award recognizes companies that have achieved a 40/60 gender ratio at the executive level.

As always, there was vim and vigor in Akranes at the Norðurál Tournament, where many young players take their first steps on the football field. The tournament began on June 16 with matches for eight-year-olds; there were 570 participants across 80 boys’ teams and 18 girls’ teams. On June 17, Icelandic National Day, the seven-year-olds began their games after a parade through Akranes, with 1150 boys competing. The total number of participants was around 1700, making Norðurál’s tournament one of the nation’s largest.

Norðurál has ASI certification for environmentally friendly and responsible production, an ISO 9001-certified quality management system, and an environmental and safety management system certified according to ISO 14001 and ISO 45001 standards. The company has been awarded the PwC Gold standard for equal pay according to ÍST 85:2012. Strategic management objectives are planned in accordance with GRI standards. In accordance with our focus areas in social and environmental concerns, we are also guided by four of the UN Sustainable Development Goals.

The ASI (Aluminium Stewardship Initiative) is an international association of leading producers of primary aluminum and raw materials, environmental organizations, and CSR organizations, together with producers of aluminum and aluminum alloy products. The organization aims to encourage corporate social responsibility and environmentally friendly practices in aluminum production and use, from primary raw material processing to final product and aluminum recycling. From mining companies to world-renowned brands in the beverage, automotive, and consumer electronics markets, the association brings together partners from all sectors and from all over the world.

In January 2020, Norðurál became the first aluminum company in Iceland to receive ASI certification. This certification confirms the company’s business practices and production are socially and environmentally responsible.

Norðurál uses an ISO 9001–certified quality management system, as well as an environmental and safety management system certified according to ISO 14001 and ISO 45001 standards. Certification extends to Norðurál’s production of aluminum and alloys.

ISO standards are based on the Plan-Do-Check-Act principle of continuous improvement and require an integrated management system designed to comply with conditions of the standards. Management systems are maintained through third-party audits as well as periodic internal evaluations. Our management system audits were first conducted in 2012 (ISO 9001) and 2013 (ISO 14001 and ISO 45001).

Norðurál has implemented the Equal Pay Standard ÍST 85:2012 and has received certification with the PwC Gold standard.

Much of our work is the result of cooperation and dialogue with our partners. Relationships with these parties are based on our commitment to honest and transparent communication — an integral part of the company’s continued success.

Many aspects of our partnerships, including the frequency of communications, are determined by the nature of different stakeholder organizations. Information is exchanged according to a communications plan, and project implementation is tracked through the company’s management systems. Suppliers and contractors are expected to uphold Norðurál’s environmental and safety standards as well as the company’s Code of Ethics. We value feedback from our partners and respond to all queries.

Partnerships are based on grounds for cooperation and common interests.