Ball

Normalization

Since we published our first biennial sustainability report in 2008, Ball Corporation has reported environmental data in absolute and normalized terms. Absolute data provides an overview on the overall environmental impacts, while normalized data enables comparability of data over time.

In our different businesses, we produce a variety of products ranging from beverage cans to satellites. Within each business, we use a normalization factor that adequately represents the nature of the business and the way it operates. This allows for meaningful comparisons over time and for effective benchmarking of our manufacturing plants.

 
Business/Product Group Normalization Factor
Global Beverage Packaging per unit of production
Ball Aerocan - Impact Extrusion per unit of production
Ball Aerocan - Slugs per weight of product sold
Ball Tinplate per unit of production
Ball Aerospace per sales
Ball Corporation intensity index based on the above factors (see explanation below)

We strive to be as transparent as possible and will continue to report absolute and normalized data. We normalize metrics to align with business decision-making and to allow clearer communication of performance to stakeholders, enabling them to evaluate our performance in meaningful ways. This approach also aligns well with our Drive for 10 vision by providing flexibility for future business changes, as we expand into new products and capabilities.
 

Intensity Index

The business- and product group-specific normalization factors are also used to calculate a consolidated intensity index (II) for Ball Corporation for environmental metrics (see www.ball.com/data-center). The II accounts not only for overall changes in production over a period, but also for changes in production mix between business segments. It is set at 100 for a reference year, which typically aligns with our five year reporting window.

Intensity Index = (100*KPI total)/((P1*P1x)+(P2*P2x)+(P3*P3x)+(P4*P4x)+(P5*P5x) where:

  • KPI total = total input (e.g. energy) or output (e.g. waste) in target year
     
  • P1 = number of beverage cans produced (Global Beverage Packaging)
     
  • P2 = number of extruded aluminum containers produced (Ball Aerocan – Impact Extrusion)
     
  • P3 = pounds of aluminum slugs shipped (Ball Aerocan – Slugs)
     
  • P4 = number of steel food and aerosol containers produced (Ball Tinplate)
     
  • P5= sales of Ball Aerospace
     
  • P1x, P2x, P3x, P4x, P5x = weighting factors (input/output per normalization factor) of each business in base year

The index and related factors are reviewed and – if required – adjusted annually.
 

Normalization Per Net Sales

A common practice in sustainability reporting is the normalization per revenues or sales. While this normalization makes sense for our aerospace business, it can be misleading for our packaging businesses and Ball Corporation as a whole. For example, metals are among the top three cost components at Ball. They are subject to fluctuations in price and availability attributable to a number of factors, including general economic conditions, commodity price fluctuations, and the demand by other industries. Thus, metal prices can significantly influence our revenues and as a consequence the normalized sustainability performance in either direction.
 

A Look Back

In our 2008 and 2010 corporate sustainability reports, we initially normalized corporate environmental data on a consistent “per 1,000 units of production” basis. As long as our businesses and their product portfolios did not change significantly, this approach adequately described the relative performance improvements.

However, because our businesses and the products they manufacture change over time, which has led to various inconsistencies between the performance metric (such as electricity) and the normalization factor (unit of production). For example, we sold our PET business in 2009. That business produced vast amounts of units (bottles, preforms), while using an insignificant amount of natural gas. In 2010, we bought plants that manufacture aluminum slugs. The slug process is more complex than plastic bottle production, produces fewer units and uses significantly more natural gas per unit of production.

As a result, using different normalization factors for different businesses and product groups allows us to provide meaningful data aligned with how our businesses report data internally, and allows our stakeholders to adequately assess the progress we have made in our operations.