SUSTAINABILITY REPORT 2018 - Carlsberg Group

 
SUSTAINABILITY REPORT 2018 - Carlsberg Group
SUSTAINABILITY
REPORT
   2018
SUSTAINABILITY REPORT 2018 - Carlsberg Group
CONTENTS
                                                                                                                                                    CARLSBERG GROUP SUSTAINABILITY REPORT 2018   2

INTRODUCTION                                                                       METHODOLOGY, SCOPE AND ASSURANCE                      ABOUT THE CARLSBERG GROUP

CEO foreword .........................................................3            This report covers the relevant and significant
Sustainable business ............................................5                 social, ethical and environmental issues for the
Together Towards ZERO....................................6                         financial year 1 January to 31 December 2018. It
                                                                                   gives our stakeholders an overview of our
                                                                                   performance in these areas, complementing our
OUR AMBITIONS
                                                                                   Annual Report, which primarily covers our financial
                                                                                   and economic performance.
          ZERO
          CARBON
          FOOTPRINT ....................................................... 9      The first section presents our strategy, along with
                                                                                   details of Together Towards ZERO, our global
          ZERO
          WATER                                                                    sustainability programme. The second section
          WASTE ............................................................. 16   describes our performance against our four
                                                                                   Together Towards ZERO ambitions, while
          ZERO
          IRRESPONSIBLE                                                            presenting selected case stories from across the
          DRINKING ........................................................ 20     Group. The third section provides supplementary
                                                                                   information under the headings: Responsible
          ZERO
          ACCIDENTS                                                                business, Economic contribution to society, and
          CULTURE ......................................................... 26     Data and assurance.

                                                                                   This report also serves as our annual
SUPPLEMENTARY                                                                      communication on progress to the UN Global
                                                                                   Compact and as the statutory statement on CSR
RESPONSIBLE BUSINESS ........................................... 31
                                                                                   in accordance with section 99a of the Danish
ECONOMIC CONTRIBUTION TO SOCIETY .............. 35                                 Financial Statements Act.

DATA AND ASSURANCE ............................................ 40
Data summary table ......................................... 40                    carlsberggroup.com      @carlsberggroup
Reporting process and scope......................... 47
Indicator definitions ........................................... 49
List of reporting sites ........................................ 56
                                                                                   @carlsberggroup         Carlsberg Group
Tax contribution principles ............................. 58
Assurance report................................................. 60
SUSTAINABILITY REPORT 2018 - Carlsberg Group
Introduction

                                        CARLSBERG GROUP SUSTAINABILITY REPORT 2018 INTRODUCTION          3

PROGRESS
TOWARDS
ZERO
Businesses have an increasingly                      with the more ambitious 1.5°C level of the
                                                     Paris Agreement.
important role to play in securing
a sustainable future. That is why                    The latest agreement reached in Katowice,
we are working hard to improve                       Poland, during COP24 was a good step in the
                                                     right direction. However, business leadership is
the financial and strategic health
                                                     also much needed to prevent irreparable
of our business and deliver on                       damage, so I was pleased to co-sign a letter
our ambitious sustainability                         from the Alliance of CEO Climate Leaders
programme, Together Towards                          calling for an ambitious climate deal.
ZERO.
                                                     At Carlsberg, we have embedded Together
                                                     Towards ZERO in our corporate strategy,
2018 was a good year for the Carlsberg Group.
                                                     SAIL’22, guiding decisions top down and
We delivered a strong set of results, accelerating
                                                     bottom up. Meanwhile, our commitment to the
top-line growth, improving margins, delivering a
                                                     UN Global Compact and Sustainable
strong cash flow and reducing debt even further.
                                                     Development Goals remains the global context
Taken together with the progress detailed in this
                                                     for our local actions. Across the world, we are
report, I believe this demonstrates that we are
                                                     proud to support the local communities in
living our purpose of brewing for a better today
                                                     which we operate.
and tomorrow, proving that successful business
is sustainable business.
                                                     Although 2018 was largely a year of progress,
                                                     unfortunately this was not true for all our focus
As I look back at 2018 and forward to 2019, I
                                                     areas. Despite reducing our lost-time accident
am keenly aware of our responsibility to act.
                                                     rate by 35% since our baseline year of 2015, I
Scientists warn us that the world is at a tipping
                                                     am far from satisfied with our health & safety
point. The planet is getting warmer and water
                                                     record. Keeping people safe must always be our
resources are becoming scarcer. Tackling
                                                     number one priority, and yet we suffered three
climate change is therefore critical for achieving
                                                     fatalities during the year. I am deeply saddened
a sustainable future. This is the reason why we
                                                     by this loss of life and extend my sincerest
have set our emission reduction targets in line
                                                     sympathies to the families involved. These
SUSTAINABILITY REPORT 2018 - Carlsberg Group
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 INTRODUCTION   4

tragedies underline the need for day-to-day          Our sustainability roadmap up to 2022 is well
vigilance to create a ZERO accidents culture.        planned and our 2018 performance shows that,
                                                     while we continue to make progress, significant
In 2018, we improved energy efficiency and           challenges remain for reaching our 2030 targets.
reduced relative carbon emissions across our         Solving these will mean innovating effectively,
operations by 5%, giving a total relative carbon     working with partners and preparing for a
reduction since 2015 of 20%.                         rapidly changing world.

Coal is the most carbon-intensive source of          We have always believed in the power of
energy, and we are making progress on our            science, and our Young Scientists Community is
commitment to phase it out by 2022, having           developing pioneering solutions to help us deliver
already reduced our usage by 78% over three          on our ambitious targets.
years. We will continue converting our remaining
coal-fuelled sites in China, India and Poland.       Our contribution to science and society has been
                                                     further strengthened by our main shareholder,
We also made strides in reducing carbon in our       the Carlsberg Foundation, which granted more
wider value chain, including sustainable             than DKK 500m for scientific, cultural and
packaging innovations such as our plastic-           societal activities in 2018. Ultimately, the better
reducing Snap Pack. Such innovations enable          our financial performance, the more support the
direct engagement with customers and                 Carlsberg Foundation can provide. In this
consumers on sustainability, while delivering        respect, I am pleased that, as a consequence of
less plastic waste and lower carbon emissions.       our strong financial performance in 2018, the
                                                     Supervisory Board is recommending a further
As for water, we maintained our relative water       increase in dividends and a share buy-back
consumption of 3.1 hl/hl. While we have              programme, returning DKK 7.2bn to our
reduced our usage by 9% since our baseline           shareholders.
year, we still have a long way to go to achieve
our 2030 target of halving our global usage.         In short, the strength of our financial results,
                                                     together with the continued progress against our
Consumers want to make informed choices, and         sustainability ambitions, is testament to growing
we are proud to tell them what is in our beers. In   both a successful and a sustainable business.
Western Europe, 86% of our packaging now
provides information on ingredients and              Cees ’t Hart
nutritional values, while 96% globally now           CEO, Carlsberg Group
carries responsible drinking icons or text to
discourage irresponsible drinking. I am also
pleased to see the continued growth of alcohol-
free brews, giving consumers more choice.
SUSTAINABILITY REPORT 2018 - Carlsberg Group
SUCCESSFUL BUSINESS
                                                                                                 CARLSBERG GROUP SUSTAINABILITY REPORT 2018 INTRODUCTION   5

IS SUSTAINABLE BUSINESS
We believe a healthy business takes care to ensure that profitability and sustainability exist
in harmony. Sustainability is therefore embedded in our corporate strategy, SAIL’22.
This aims to create sustainable value growth in optimising the balance between volumes,
margins, profit and cash. Here, you can see our strong 2018 financial performance
and our sustainability progress.
SUSTAINABILITY REPORT 2018 - Carlsberg Group
TOGETHER
                                                            CARLSBERG GROUP SUSTAINABILITY REPORT 2018 INTRODUCTION   6

TOWARDS ZERO
Never before have the global
issues of climate change, water
scarcity and public health been so
pressing. Building on our purpose
of brewing for a better today and
tomorrow, our response is our
sustainability programme
Together Towards ZERO.

Our four sustainability ambitions are: ZERO
carbon footprint, ZERO water waste, ZERO
irresponsible drinking and a ZERO accidents
culture. Each ambition is underpinned by clear,
measurable targets for 2022 and 2030. This
report updates you on our progress.

CREATING A MORE RESILIENT BUSINESS
Resilience comes through embedding
sustainability in our corporate strategy for the
entire Group, SAIL’22. Our ambitions continue
to drive our actions: reducing risks and creating
efficiency improvements while working in
harmony with local communities and the
environment.

We are building on our strong scientific            OUR PURPOSE
foundation and heritage of developing ground-       Some have to dig deep to find their purpose. For us, it has
breaking innovations that benefit our brewing       always been there. We pursue perfection every day. We
and wider society.                                  strive to brew better beers; beers that stand at the heart of
                                                    moments that bring people together. We do not settle for
                                                    immediate gain when we can create a better tomorrow for
                                                    all of us. We are brewing for a better today and tomorrow.
SUSTAINABILITY REPORT 2018 - Carlsberg Group
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 INTRODUCTION   7

                                         PARTNERING TO DELIVER OUR                             Meanwhile, irresponsible drinking remains a
                                         PROGRAMME                                             complex social problem that can have
                                         We know we cannot achieve our ambitions by            detrimental effects for individuals and their
                                         working in isolation. Our programme was               families. As brewers, we must continue to work
                                         devised with the support of experts using a           with governments and communities to move
                                         science-based approach, and we are                    society towards a healthier, more positive
                                         collaborating with experts to deliver it.             drinking culture.

                                         What is more, we regularly engage with our            IMPORTANT CONTRIBUTION TO THE
                                         stakeholders, listening to how they think we          GLOBAL ECONOMY
                                         can improve. Together, we can make faster             Our impact as a Group is broad and far-
                                         progress towards ZERO.                                reaching. With operations in more than
                                                                                               35 countries, and export and licence activities
                                         GLOBAL CHALLENGES                                     in more than 100 countries, we keep thousands
                                         2018 saw record-high temperatures in many             of people employed and support infrastructure
                                         parts of the world. And the latest reports from       through our tax contribution, which in 2018
                                         the Intergovernmental Panel on Climate                totalled around DKK 43bn. You can see more
                                         Change (IPCC) are alarming. It is clear that we       on pages 35-39.
YOUNG                                    must take faster action if we are to realise the
                                         aims of the Paris Agreement and limit the             FOCUSING ON THE AREAS THAT
SCIENTISTS                               significant and dangerous changes predicted by        MATTER MOST
COMMUNITY                                leading climate scientists if we do not. That is      The actions we take with Together Towards
                                         why our targets align with the Paris                  ZERO are aligned with the UN’s Sustainable
In 2018, we hired a group of             Agreement’s more ambitious aim of limiting            Development Goals (SDGs), as you can see on
postdoctoral researchers to join the     global temperature rise to 1.5°C by the end of        the next page. These priorities are based on a
Carlsberg Young Scientists               this century.                                         materiality assessment of the most important
Community. This community of                                                                   sustainability management topics, risks and
creative, innovative and forward-        At the same time, the water systems that are          impacts for our business. We expect to update
thinking young scientists from           fundamental to a growing human population             our materiality assessment in 2019 to ensure
around the world is tasked with          and keep ecosystems thriving are becoming             that our activities remain aligned with internal
helping us find or develop relevant      stressed. And this will only worsen with              and external stakeholders, and that we
technologies and ways to apply           changes in our weather patterns as a result of        maintain focus on the most important areas for
them in our business. Its work will be   climate change.                                       us and society.
crucial to the attainment of our
targets of ZERO carbon footprint         It hardly needs stating, but, to put it bluntly, no
and ZERO water waste.                    water means no beer. This changing world will
                                         undoubtedly have major implications for our
                                         industry.
SUSTAINABILITY REPORT 2018 - Carlsberg Group
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 INTRODUCTION   8

In the Carlsberg Group, we believe in             We focus our efforts on the goals and targets    MOST MATERIAL SDGs
establishing clear global ambitions, frameworks   that are material to our business and where we
and governance structures – all of which are      can create the greatest impact, and review
realised locally across our markets. Together     these every year. The diagram on this page
Towards ZERO is owned by our Executive            shows the goals most affected by each area of
Committee (ExCom) and overseen by the             Together Towards ZERO, as well as those that
Supervisory Board, but responsibility for         cut across all our activities.
implementing the relevant key performance
indicators (KPIs) is assigned to a network of     In the performance sections of this report you
area owners. In this way, the functions that      can also see the specific targets we are
have the biggest impact and capacity to           contributing towards under each goal – and
influence are empowered to create change.         some examples of actions we are taking.
                                                  Examples of our action for cross-cutting SDGs
Every quarter, ExCom receives an overview of      12, Responsible consumption and production,
progress on selected sustainability KPIs across   and 17, Partnerships for the goals, can be
the business. Many of these KPIs are built into   found on pages 12 and 19 respectively.
daily routines at sites across our markets.       Providing this granular detail ensures           CROSS-CUTTING SDGs
                                                  transparency and demonstrates our
TOGETHER TOWARDS THE SDGs                         commitment to the goals.
Taken together, the UN’s Sustainable
Development Goals (SDGs) form a blueprint for
a more sustainable world. They call on
governments, civil society, businesses and the
general public to act to end poverty, reduce
inequality and limit climate change by 2030.

Being interconnected, all the SDGs are
important, and within each goal there are a
number of targets and topics.
SUSTAINABILITY REPORT 2018 - Carlsberg Group
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 INTRODUCTION        9

                                     To reduce plastic waste and
                                     lower the CO2 impact of our
                                     multipacks, we have intro-
                                     duced our new Snap Pack.
                                     It uses glue technology to hold
                                     multipacks together, meaning
                                     you just snap the cans apart.

                                     Compared with traditional
                                     multipack packaging, the Snap
                                     Pack will cut plastic usage by
                                     up to 76%. Once fully rolled
                                     out, it is estimated that the
                                     Snap Pack will reduce our total

ZERO
                                     use of secondary plastic
                                     packaging by more than 1,200
                                     tonnes annually. A world first
                                     for the beer industry, the Snap

CARBON
                                     Pack took us three years to
                                     develop in collaboration with
                                     our partners.

FOOTPRINT
                                     LEARN MORE
                                     ON OUR WEBSITE
                                     www.carlsberggroup.com/
                                     sustainability/actions-towards-zero
SUSTAINABILITY REPORT 2018 - Carlsberg Group
ZERO Carbon Footprint

ZERO
                                                    CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO CARBON FOOTPRINT   10

CARBON
FOOTPRINT
Climate change is threatening
people’s lives and livelihoods
around the world. We are
committed to bold climate action
that progresses towards a ZERO
carbon footprint.

The Intergovernmental Panel on Climate
Change (IPCC) has issued critical warnings for
global warming of 2°C and more above pre-
industrial levels. Without urgent action, by the
end of the century weather will be more
extreme, sea levels will be higher and crops will
struggle.1

This is why we have designed our carbon
targets in Together Towards ZERO to reduce
our emissions in line with the more ambitious
1.5°C level of the Paris Agreement. We believe
it is possible for companies to significantly cut
emissions while still driving business growth.
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO CARBON FOOTPRINT   11

                                           ELIMINATING                                       ELIMINATING COAL
ZERO CARBON EMISSONS                                                                         We are acting fast to eliminate coal because it
EXAMPLES OF OUR SDG ACTIONS                BREWERY EMISSIONS                                 is a carbon-intensive, polluting source of
                                           2018 PERFORMANCE UPDATE                           energy. In 2018, we reduced our coal usage by
                                           In 2018, we reduced relative carbon emissions     28% compared with 2017, giving a 78%
                                           by 5% to 5.6 kg CO2/hl, from 5.9 kg CO2/hl in     reduction since 2015. We will continue the
                                           2017. This represents a 20% reduction since       focus on converting our remaining coal-fuelled
                                           2015, our baseline year. Our absolute emissions   sites in China, India and Poland on our journey
                                           remained at the same level as in 2017 due to      towards ZERO coal by 2022.
                                           country mix effects. Energy efficiency improved
                                           by 5% to 25.6 kWh/hl, compared to 26.9            RENEWABLE ENERGY
                                           kWh/hl in 2017.                                   In 2018, 46% of our total electricity
                                                                                             consumption came from renewable sources,
SDG TARGETS                                                                                  which represents an increase of 1% compared
                                           EFFICIENCY PROGRAMMES
7.2 By 2030, increase substantially                                                          with 2017 performance.
                                           We continued our mission to eliminate
     the share of renewable energy
                                           emissions with a drive towards world-class
     in the global energy mix.                                                               Our breweries in Western Europe use 100%
                                           efficiency, implementing best practice and
7.3 By 2030, double the global rate of                                                       renewable electricity, including 394,808 MWh
                                           searching for innovative ways to continuously
     improvement in energy efficiency.
                                           improve our existing processes.                   with renewable energy certificates in 2018.
                                                                                             Meanwhile, we use solar installations at
                                                                                                                                                    BIOMASS
EXAMPLES OF OUR ACTIONS
                                           To equip our breweries with best practice         breweries in China, India and Switzerland, and         IN SERBIA
    Increasing share of renewable energy                                                     in 2018 added a new 1 MW rooftop
                                           learnings from across the Group, in 2018 we
    Improving energy efficiency                                                              installation at our brewery in Utena, Lithuania.       A new biomass boiler at our
                                           implemented the Carlsberg Operational Manual
                                                                                                                                                    Čelarevo brewery, fuelled by wood
                                           (COM) globally. Progress in efficiency requires
SDG TARGETS                                                                                                                                         pellets, helped reduce relative carbon
                                           innovation and new thinking, and also the
13.1 Strengthen resilience and adaptive                                                                                                             emissions at the site by 22% in 2018.
                                           continuous maintenance of equipment,
     capacity to climate-related hazards
                                           particularly as it ages.
     and natural disasters.                                                                                                                         Combined with the pre-existing
13.3 Improve education, awareness-                                                                                                                  wastewater treatment biogas facility
     raising and capacity on climate                                                                                                                and the use of renewable electricity,
     change mitigation, adaptation,                                                                                                                 more than 55% of the site’s total
     impact reduction and early warning.                                                                                                            energy now comes from renewable
                                                                                                                                                    sources. This is an example of how
EXAMPLES OF OUR ACTIONS                                                                                                                             we are progressing towards
    Meeting our science-based target                                                                                                                eliminating carbon emissions at our
    Encouraging suppliers to reduce                                                                                                                 breweries by 2030.
    emissions
    Raising awareness of the need for
    action on climate change
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO CARBON FOOTPRINT          12

                                                 Sources of renewable thermal energy include
CROSS-CUTTING SDGs                               biomass and biogas. As of 2018, a total of 24
EXAMPLES OF OUR SDG ACTIONS                      breweries have biogas extraction facilities
                                                 and/or use biomass to deliver renewable heat
                                                 for breweries across our regions.

                                                 In total, energy from renewable thermal and
                                                 electricity sources, including biomass, biogas
                                                 and solar, has grown to 20%, compared to 18%
                                                 in 2017 and 15% in 2015, our baseline year.

                                                 As a member of RE100, a coalition of
                                                 influential businesses committed to 100%
SDG TARGETS                                      renewable electricity, we continue to advocate
12.2 By 2030, achieve the sustainable            the wider use of energy from renewable
     management and efficient use of             sources.
     natural resources.
12.5 By 2030, substantially reduce waste
     generation through prevention, reduction,                                                    EFFICIENCY GAINS
     recycling and reuse.
12.6 Encourage companies, especially large
                                                                                                  IN CHINA
     and transnational companies, to adopt                                                                                                          technology reduces energy consumption
                                                                                                  Nowhere has seen more impressive results
     sustainable practices and to integrate                                                       from our Group-wide efficiency drive than         significantly, using material that is ten times
     sustainability information into their                                                        our Chinese breweries. Since our baseline         thinner than traditional mineral wool to
     reporting cycle.                                                                             year of 2015, thermal energy efficiency has       create the same effect. On average, nano
12.9 Support developing countries to                                                              improved by more than 29%, electricity by         insulation cuts the energy use of our
     strengthen their scientific and                                                              almost 11% and water by 15%.                      packaging lines by 10%.
     technological capacity to move
     towards more sustainable patterns of                                                         The rapid progress has been a result of           Other benefits include the increased lifespan
     consumption and production.                                                                  factors such as implementing best practice        of up to 50 years, enhanced cleanliness due
                                                                                                  through the Carlsberg Operational Manual          to the stainless steel finish, and a more
                                                                                                  (COM), educating our people, and                  comfortable working environment for our
EXAMPLES OF OUR ACTIONS
                                                                                                  converting coal boilers to natural gas boilers.   workers due to an average 5-7°C lower
    Driving energy and water efficiency at
    our breweries                                                                                                                                   working environment in summer.
                                                                                                  One of the most innovative initiatives has
    Innovating packaging such as Snap Pack                                                        been upgrading 24 packaging lines to use
    Investing in new technology and                                                               new “nano insulation” technology. Originally
    research in production, packaging                                                             developed to insulate spacecraft, this
    and energy
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO CARBON FOOTPRINT    13

REDUCING OUR                                      2018 PERFORMANCE UPDATE
                                                  To measure progress towards our 2022 and
                                                                                                       PACKAGING INNOVATIONS
                                                                                                       At around 40%, packaging is the biggest source
                                                                                                                                                           ZERO, our commercial team worked with our
                                                                                                                                                           development and supply chain teams to
BEER-IN-HAND                                      2030 targets, we are carrying out in-depth           of carbon emissions in our value chain. Many        reassess the brand’s packaging, identifying
EMISSIONS                                         assessments of our beer-in-hand carbon               stakeholders are involved in its development        where more sustainable improvements could
                                                  footprint every three years. The next is due in      and use, so we are working collaboratively on       be made. These innovations are shown at the
It is not enough to eliminate our brewery         2020 to measure 2017-2019 progress.                  improvements.                                       bottom of this page.
emissions – we also need to tackle our value
chain emissions for the total carbon footprint    Meanwhile, we are building on our solid 2017         An example of our work in this area in 2018         Other improvements in 2018 included reducing
of our products. We call this our beer-in-hand    progress with several carbon-reducing                was the launch of several packaging                 the weight of Carlsberg glass bottles by 10%,
footprint and we have set targets to reduce       initiatives across packaging, refrigeration,         innovations together with the redesign of the       thus also reducing their CO2 impact.
carbon emissions in our value chain by 15% and    waste and recycling systems, and logistics.          Carlsberg brand. Building on Together Towards
30% in 2022 and 2030 respectively.                                                                                                                         PARTNERSHIPS
                                                                                                                                                           These innovations have only been made
                                                                                                                                                           possible by working closely with our supply
                                                                                                                                                           chain partners. Carbon is now an important
                                                                                                                                                           part of our supplier conversations, as we

SNAP PACK                                                           C2C LABEL INKS & COATING FOR REFILLABLE BOTTLES                        RECYCLED SHRINK WRAP
In 2018, we launched our new Snap Pack to reduce plastic            In 2018, we launched Cradle to Cradle CertifiedTM (C2C) silver         In 2018, we launched recycled shrink wrap containing 50-100%
usage in our multipacks by up to 76% with an innovative glue        inks on bottle labels to improve the future recycling potential of     recycled plastic – partly from our own production – for
technology. Less material also means less CO2 impact.               the materials where these inks are used. We also applied new           multipacks where Snap Pack is not available. With up to 60%
                                                                    coating to refillable glass bottles to make them attractive for        lower CO2 impact than virgin shrink wrap, it creates more
                                                                    longer, increasing reuse and thus decreasing CO2 emissions.            demand for recycling, closing the materials loop.
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO CARBON FOOTPRINT              14

                                                encourage all companies to be equally
                                                ambitious in their carbon reductions to help us
                                                reduce the total carbon impact of our products.        WHAT WE SAID 2017                                        WHAT WE DID 2018

                                                15 of our suppliers have committed to science-     Breweries                                               Breweries
                                                based targets – out of only 515 companies to
                                                have taken this step globally.                     ZERO carbon roadmap                                     Supply chain strategy updated to deliver
                                                                                                   Refine local ZERO carbon footprint roadmaps to          against 2022 targets at our breweries,
                                                                                                   achieve 2022/2030 targets                               including investments and action plans
                                                Aside from supplier partnerships, in 2018 we
                                                went further and initiated a partnership with
                                                                                                   Performance improvements
                                                Plastic Change, while deepening our                Implement best practice to reduce energy
                                                                                                                                                           Operational standards updated and
                                                                                                                                                           improved. ISO 50001 certifications
          We take reducing our                  partnership with WWF Denmark. With their           consumption and continue ISO 50001
                                                                                                                                                           obtained at 2 additional sites
          impact on the environment very                                                           certifications in Western Europe
                                                help, we are devising solutions to reduce the
seriously. In 2018, we took a further step in
                                                beer-in-hand carbon footprint of our products,
our commitment to eliminate carbon                                                                                                                         Procurement strategy updated to reflect
emissions from our breweries by 2030.           introducing circular packaging solutions and                                                               market developments, renewable
                                                                                                   Renewable electricity
Since 2015, we have reduced our relative        educating the public on the importance of                                                                  electricity types (solar and wind),
                                                                                                   Revise renewable energy procurement strategy
carbon emissions by 20%. I’m proud of the       recycling. We will make further announcements                                                              regulatory changes and available
                                                                                                                                                           instruments
teams in supply chain and across the            about this during 2019.
business who are reducing emissions and                                                            Carlsberg Young Scientists Community                    Six postdoctoral students assigned
innovating new technologies to reach our                                                           Establish a community of young scientists               specific research tasks at Carlsberg
target.”                                        LOW-CLIMATE-IMPACT REFRIGERANTS                    focused on developing solutions to achieve our          Research Laboratory within e.g. energy
                                                The ability to serve our beers cold from fridges   2030 carbon target                                      engineering and carbon reduction
Philip A. Hodges                                and draught equipment is a basic expectation
EVP Group Supply Chain                          of consumers and therefore core to our             Beer-in-hand                                            Beer-in-hand
Carlsberg Group
                                                business. Refrigeration makes up 9% of our                                                                 Some suppliers engaged in discussions
                                                                                                   Supplier engagement                                     related to ambitious carbon targets and
                                                value-chain carbon footprint, so we have a         Engage with suppliers with highest CO2 footprint        Science Based Targets Initiative. 15
                                                2022 target to purchase only 100% low-             to reduce shared emissions                              suppliers have science-based targets
                                                climate-impact cooling equipment using, for                                                                approved or under application

                                                example, hydrocarbon refrigerants while also
                                                                                                   Supplier relationship management
                                                meeting our standards for energy efficiency        Integrate CO2 in supplier relationship                  171 suppliers evaluated in 2017/2018
                                                and lighting.                                      management process to measure and follow up             on CO2 performance and other KPIs
                                                                                                   on supplier performance

                                                We are therefore pleased to report that in 2018    Market innovations                                      Several sustainable packaging
                                                88% of newly purchased commercial fridges          Develop and market innovations with lower               innovations introduced as part of
                                                and beer coolers lived up to our specifications    carbon footprint and material use                       Carlsberg brand reappraisal

                                                for low-climate-impact cooling. We expect to       Consumer awareness
                                                                                                                                                           Climate change and CO2 explicitly used
                                                                                                                                                           in consumer-facing communication
                                                further improve on this figure in 2019 as          Increase communication and engagement with
                                                                                                                                                           related to recycled shrink wrap, Snap
                                                                                                   consumers on climate change
                                                availability and service capabilities improve.                                                             Pack and other matters

                                                                                                                                                              Fully             Partially            Not
                                                                                                                                                              achieved          achieved             achieved
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO CARBON FOOTPRINT             15

INCREASING FOCUS ON WASTE AND                      LOGISTICS                                          our warehouses. This often means switching to
RECYCLING SYSTEMS                                  As logistics makes up 14% of our carbon            electric power as an alternative to diesel or
In all markets, we are closely following           footprint, we are always looking for more          liquified petroleum gas (LPG).                               ACTIONS
discussions around the circular economy, waste     efficient ways to transport our products. In                                                                TOWARDS ZERO 2019
and recycling. One market where we are taking      2018, we continued our long-term efficiency        AGRICULTURE                                            Breweries
a more active role is Russia, where Baltika        programmes: optimising route planning;             The Carlsberg Research Laboratory is
                                                                                                                                                             Implement actions from roadmaps to achieve
Breweries collaborates with waste operators to     improving load factors to put fewer vehicles on    continuing its work on new high-yielding,              carbon reductions, improve energy efficiency
help develop a separate waste collection and       the road; and, where possible, sharing delivery    disease-tolerant malting barley varieties with         and continue efforts to phase out coal
recycling system. Baltika and its partners have    loads with other businesses and industries.        special properties for brewing. The aim is to
provided more than 10,000 containers in over                                                          produce variants adapted for a broad                   Increase use of renewable heat and renewable
50 Russian cities for the collection of consumer   To go further, we are exploring new                geographical area, different climatic                  electricity by utilising biogas from new
                                                                                                                                                             wastewater plants, switching to biomass,
packaging waste. In 2018, around 79,000            technologies that can help us reduce our           environments and extreme weather conditions,           generating more on-site renewable electricity
tonnes of waste was sent for recycling. Baltika    logistics carbon footprint. During 2018, we        reducing the carbon footprint by improving             and using market instruments
will be helping to expand the initiative across    worked with two vehicle manufacturers to           yields, and thereby increasing profitability for
Russia in 2019.                                    explore the use of electric trucks for city        farmers.                                               Explore new technologies in energy generation
                                                                                                                                                             and usage
                                                   deliveries. We hope to run a trial at the end of
We will continue working actively with this        2019 with the aim of expanding this solution.
                                                                                                                                                             Beer-in-hand
agenda to increase recycling and reuse of our
packaging materials across our markets and         We are also working to identify and source the                                                            Refine approach to reduce scope 3 carbon
                                                                                                                                                             emissions, including carbon KPIs for suppliers
portfolio.                                         most efficient and practical forklift trucks for                                                          and the incorporation of carbon footprint in the
                                                                                                                                                             tender process

                                                                                                                                                             Engage with key suppliers to promote and
                                                                                                                                                             support their carbon emission ambitions
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO CARBON FOOTPRINT       16
                                           PU:REST is a crystal-clear
                                           pilsner brewed using purified
                                           wastewater, challenging
                                           consumers’ preconceived notions
                                           and demonstrating how
                                           wastewater technology can help
                                           solve future world water
                                           shortages.

                                           The wastewater used in PU:REST
                                           was purified at the Hammarby
                                           water treatment plant near to
                                           Nya Carnegiebryggeriet (New
                                           Carnegie Brewery), Sweden,
                                           where it was used together with
                                           organic pilsner malt, Spalter hops
                                           and Brooklyn House lager yeast.
                                           Devising and producing PU:REST
                                           involved a close collaboration
                                           between Nya Carnegiebryggeriet,
                                           IVL Swedish Environmental
                                           Institute and Carlsberg Sverige.
                                           The limited-edition beer sold out
                                           in major retailers within a week.

                                           LEARN MORE
                                           ON OUR WEBSITE
                                           www.carlsberggroup.com/sustainability/
                                           actions-towards-zero

ZERO
WATER
WASTE
ZERO water waste

ZERO
                                                   CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO WATER WASTE   17

WATER
WASTE
Current trends show that by
2025 two thirds of the world’s
population may face water
shortages and ecosystems will be
under stress.

To put this in context, only 3% of the world’s
water supply is fresh and safe for human use –
yet most is frozen in glaciers or otherwise
inaccessible. Today, with the impact of
pollution, climate change and other factors,
1.1 billion people worldwide have no access
to fresh water. For 2.7 billion people, water is
scarce for at least one month every year.2

This is why we have set targets to halve water
usage at our breweries and to partner to
safeguard shared water resources in high-
risk areas.

2018 PERFORMANCE UPDATE
If we used no water at all, there would be no
beer. It is an essential ingredient both in our
products and for cleaning during the brewing
process. Our 2030 water usage target of 1.7 hl
used for every 1 hl of beer brewed will enable
us to meet our ambition of virtually eliminating
water waste.
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO WATER WASTE             18

                                             At 3.1 hl/hl, we have made a 9% improvement        Achieving our 50% reduction target by 2030             However, in some markets we are facing
ZERO WATER WASTE                             in water efficiency since our 2015 baseline.       will require further innovation and                    regulatory challenges to taking full advantage
EXAMPLES OF OUR SDG ACTIONS                  This represents strong performance within our      development. This is a focus for our Young             of this method, which will be key to achieving
                                             industry and takes constant effort from our        Scientists Community, which you can read               our 2022 and 2030 targets.
                                             people to maintain and improve further.            more about on page 7.
                                             However, we are aware that a flat                                                                         MARKET PROJECTS
                                             performance in 2018 versus 2017 means that         WASTEWATER TREATMENT                                   In the UK, a new project involves recovering
                                             faster change will be required to reach our        Treating wastewater so that it can be reused is        used rinsewater from the cleaning of bottles
                                             2022 target.                                       an essential method for cutting water usage            prior to filling. After treatment, the water is
                                                                                                within the brewing process. With the right             used for pasteurisation, saving around 45,000
                                             ACTIONING OUR ROADMAPS                             equipment, it can be reused for cleaning or            hectolitres of water during the year.
                                             Much of our progress since 2015 has been the       safely discharged into the environment.
                                             result of a rigorous efficiency drive, which was
SDG TARGETS                                  reinforced during 2018 by a revision of our
6.4 By 2030, substantially increase water-   global operational standards for water. These
     use efficiency and ensure sustainable   reflect industry best practice, equipping our            WHAT WE SAID 2017                                         WHAT WE DID 2018
     withdrawals and supply of fresh water   breweries around the world with an
     to address water scarcity.              understanding of the minimum expected.
6.5 By 2030, implement integrated water
     resources management at all levels.     We have also refined our ZERO water waste             ZERO water waste roadmaps                               Supply chain strategy updated to deliver
                                                                                                   Refine local ZERO water waste roadmaps to               against 2022 targets at our breweries,
                                             roadmap, which sets out our investment and            achieve 2022/2030 targets                               including investments and action plans
EXAMPLES OF OUR ACTIONS                      action plan to achieve the target, with a focus
    Reducing water usage and optimising      on new technologies such as the current zero
                                                                                                   Performance improvements                                Operational standards for water updated
    wastewater treatment                     liquid discharge projects at four of our Indian       Implement best practice to reduce water                 to reflect our efficiency efforts and
    Working to protect shared water          locations.                                            consumption                                             promote best practice
    resources in high-risk areas
                                                                                                                                                           Six postdoctoral students assigned
                                                                                                   Carlsberg Young Scientists Community
                                                                                                                                                           specific research tasks at Carlsberg
                                                                                                   Establish community of young scientists focused
                                                                                                                                                           Research Laboratory within e.g. water
                                                                                                   on developing solutions to achieve our 2030
                                                                                                                                                           purification technology and advanced
                                                                                                   water targets
                                                                                                                                                           wastewater treatment

                                                                                                                                                              Fully             Partially          Not
                                                                                                                                                              achieved          achieved           achieved
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO WATER WASTE          19

                                                                                              Our Ritsona brewery in Greece reduced its           not solve water scarcity issues – particularly
CROSS-CUTTING SDGs                                                                            relative water consumption by 16% in 2018, by       around our high-risk sites. Consequently, we
EXAMPLES OF OUR SDG ACTIONS                                                                   implementing best practice from our Carlsberg       have committed to partner to safeguard shared
                                                                                              Operational Manual. Implemented solutions           water resources in these areas, and we are
                                                                                              included leak reductions on filling lines and       delighted to have entered our first such
                                                                                              optimisation of the process cleaning in brewing     partnership, with WWF Denmark.
                                                                                              and packaging.
                                                                                                                                                  We are currently working with WWF to develop
                                                                                              ISSUES AND RESPONSES 2018                           a strategy in this area, and we look forward to
                                                                                              Water samples obtained by a third-party             sharing more about this, and other specific
                                                                                              media centre in 2018 showed biological              projects, during 2019.
                                                          Scarce water resources and          oxygen demand (BOD) levels in the river
                                                          access to water are major           surrounding Gorkha Brewery in Nepal to be
SDG TARGETS                                      challenges facing the planet right now.
                                                                                              above acceptable levels. This prompted an
                                                 These are only being heightened by
17.16 Enhance the global partnership for                                                      immediate internal investigation into the
                                                 climate change and the resulting change
      sustainable development, complemented      in weather patterns. Action is needed to     efficiency of the brewery’s wastewater                        ACTIONS
      by multi-stakeholder partnerships.         protect nature and communities in high-      treatment plant, which concluded that it was              TOWARDS ZERO 2019
17.17 Encourage and promote effective            risk areas – both now and in the future.     not the source of the elevated levels, and that
      public, public-private and civil society   We look forward to collaborating with
                                                                                              the plant is meeting our requirements and local
                                                 Carlsberg to help deliver on this action.”
      partnerships.                                                                           standards.                                              Implement actions from roadmaps to achieve
                                                 Bø Øksnebjerg                                                                                        higher water efficiency and conservation
EXAMPLES OF OUR ACTIONS                          Secretary General, WWF Denmark               Our further, wider investigation identified
    Partnering with NGOs, such as WWF                                                         potential causes as the low rate of river flow
    Denmark, and suppliers to develop                                                         during low season as well as the distribution of        Explore new technologies for cutting-edge
                                                                                                                                                      water reuse and recycling
    innovations                                                                               wet spent grains to farmers near the brewery.
    Establishing the Carlsberg Young                                                          To improve river flow, we conducted dredging
    Scientists Community to conduct carbon                                                    and also changed the distribution of the wet            Conduct projects in water-stressed areas to
    and water research                                                                        spent grains to avoid the risk of nutrient-rich         protect shared water resources and improve
                                                                                                                                                      local water management
    Partnering with retail stores, bars and                                                   run-off reaching the river.
    restaurants to tackle underage drinking
                                                                                              Compliance and adhering to our operational              Ensure that wastewater discharge standards
                                                                                                                                                      are up to date to ensure compliance globally
                                                                                              standards is absolutely key. We constantly
                                                                                              strive to proactively improve our standards and
                                                                                              remediate any concerns or issues raised.

                                                                                              PARTNERSHIP WITH WWF
                                                                                              While we know that reducing water usage at
                                                                                              our breweries is an important step for
                                                                                              protecting local water resources, this alone will
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO WATER WASTE       20
                                              86% of Western European
                                              packaging now provides
                                              information on ingredients and
                                              nutritional values per 100 ml.
                                              Consumers have a right to know
                                              what is in our beers, and we are
                                              proud to show them, which is
                                              why we will continue to roll this
                                              out across all regions through to
                                              2022.

                                              LEARN MORE
                                              ON OUR WEBSITE
                                              www.carlsberggroup.com/sustainability/
                                              actions-towards-zero

ZERO
IRRESPONSIBLE
DRINKING
ZERO Irresponsible Drinking

ZERO
                                                   CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO IRRESPONSIBLE DRINKING   21

IRRESPONSIBLE
DRINKING
When people get together, our
beers are enjoyed in moments of
enjoyment and relaxation.
Sometimes, however, irrespon-
sible drinking takes place. While
the issues and causes are
complex, we are working with
partners to encourage a healthier
drinking culture.

Change is happening. The World Health
Organization (WHO) reports significant declines
in regular and risky drinking patterns in the EU
since 2002. These include prevalence of
drunkenness, early initiation of alcohol
consumption and binge drinking, with
improvements particularly noticeable in the
Nordics and the UK.3 However, major challenges
remain, and improving further will require joint
efforts from many different stakeholders.

While consumers make their own decisions
about how they consume our beers, we can
support them in making smart choices. Our
approach to this consists of enabling, informing
and encouraging responsible choice, as detailed
on page 22. We use campaigns to target the
biggest issues in each market. In some, drink-
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO IRRESPONSIBLE DRINKING       22

                                           driving is the greatest challenge; in others, it is   drink-drive and not to drink when underage or      appealing to minors and never placing ads
ZERO IRRESPONSIBLE DRINKING                underage or binge drinking. So by working with        pregnant.                                          unless at least 70% of the audience is of legal
EXAMPLES OF OUR SDG ACTIONS                local partners, we pinpoint the key behaviour                                                            drinking age.
                                           to change, and do this at point of sale, during       In 2018, we exceeded our 2017 commitment
                                           consumption moments and across our                    to include information on ingredients and          Digital platforms have never been more
                                           marketing communications.                             nutritional values on 80% of packaging in          significant, so in order to achieve our 2022
                                                                                                 Western Europe, reaching 86%. So together          target for responsible drinking messaging, we
                                           An advisory group of behavioural experts from         with other brewers, we are voluntarily listing     are implementing a new industry standard, the
                                           anthropology to health and psychology is              ingredients and calories per 100 ml in             Digital Guiding Principles (DGPs). These
                                           helping to design our activities to improve           accordance with general EU requirements for        principles extend marketing codes to digital
                                           effectiveness. In 2018, the group made two            foodstuffs. Consumers have a right to know         platforms, with particular focus on preventing
                                           proposals aimed at raising awareness and              what is in our beers, and we are proud to show     exposure of minors to alcohol-related
                                           measuring people’s choices by analysing the           them where they expect to find it – on our         advertising, using measures such as age-gating
SDG TARGETS                                effect of alcohol intake and the availability of      packaging. We will therefore continue to roll      to verify legal drinking age, preventing the
3.5 Strengthen the prevention and          alcohol-free options. We are reviewing these          this out across all regions through to 2022, and   forwarding of advertisements to minors, and
     treatment of substance abuse,         proposals and will implement related pilots on        hope that other brewers, as well as wine and       including responsible drinking messages across
     including harmful use of alcohol.     a market level while we document the effect of        spirits producers, will follow this lead.          brand channels.
3.6 By 2020, halve the number of           the efforts on behaviour.
     global deaths and injuries from                                                             Marketing communication                            In the first half of 2018, we participated in the
     road traffic accidents.               ENCOURAGING RESPONSIBLE                               Because compliance requirements vary across        second global independent auditing process of
                                           CONSUMPTION                                           markets, our own internal regulatory system        the European Advertising Standards Alliance
EXAMPLES OF OUR ACTIONS                    Packaging                                             ensures strict global controls for advertising     (EASA). It reported a steep rise in compliance
    Applying responsible drinking          96% of our products now carry responsible             placement and contents. These include never        for audited channels, from 13% in 2017 to
    messaging across our packaging         drinking messages advising consumers not to           using models under 25 years of age, never          around 60%. We subsequently accelerated our
    and brand communications
    Implementing standards on digital
    platforms to prevent exposure of
    content to minors
    Growing availability of alcohol-free
    brews
    Installing alcolocks in company cars
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO IRRESPONSIBLE DRINKING              23

                                                                                         efforts, ensuring that DGPs were in place for          Preventing underage drinking
                                                                                         approximately 85% of local channels for our            Our beers are for consumption by people above
                                                                                         global brands by the end of the year.                  the legal drinking age, so we are working hard
                                                                                                                                                to prevent sales to younger people. Our 2022
                                                                                         While we have made good progress in                    target is for 100% of our markets to run
                                                                                         implementing the DGPs, their infancy means             partnerships to support responsible
                                                                                         that much monitoring is required by our central        consumption. To this end, we are partnering
                                                                                         team to ensure implementation across our               with retail stores, bars and restaurants to
                                                                                         markets. We will continue to do this as they           implement our approach of informing, enabling
                                                                                         become established and second nature to our            and encouraging responsible drinking.
                                                                                         marketers.

                                                                                               WHAT WE SAID 2017                                       WHAT WE DID 2018

PREVENTING UNDERAGE BEER                                                                    Number of consumers (GBRD)
                                                                                                                                                   More than 70 million consumers reached
SALES IN UKRAINE                                                                            Reach 40 million consumers during Global Beer
                                                                                            Responsibility Day (GBRD)
                                                                                                                                                   through local market campaigns

                                                                                            Digital Guiding Principles (DGPs)
In 2018, Carlsberg Ukraine tackled           In addition, two leading psychologists                                                                DGPs implemented across
                                                                                            Ensure that the six standards within the DGPs are
                                                                                                                                                   approximately 85% of local channels for
underage drinking on Global Beer             mentored parents on how to talk to their       implemented across all our brand digital channels
                                                                                                                                                   our global brands
                                                                                            to safeguard people below the legal drinking age
Responsibility Day, 14 September,            teenage children about the importance of
targeting shop assistants and parents in     not drinking alcohol while underage. A
an effort to raise awareness of the issue.   Facebook page attracted more than 21           Concept initiatives
                                             million visits over a four-month period.       Develop and execute initial initiatives                Two concept initiatives developed to be
                                                                                            recommended by an independent advisory group           tested in the next two years
Over 1,600 employees visited 20,000                                                         to promote responsible drinking
shops to talk about the dangers of                FIND OUT MORE ON OUR
selling alcohol to young people.                  WEBSITE
                                                  www.carlsberggroup.com/
Campaigners wore T-shirts featuring
                                                  sustainability/actions-towards-zero/
retro audio cassettes with the headline
“Don’t know how it works? Sorry, no
beer for you!” Shop staff were given fun
gifts to prompt ID requests.

                                                                                                                                                      Fully             Partially            Not
                                                                                                                                                      achieved          achieved             achieved
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO IRRESPONSIBLE DRINKING   24

By way of example, an awareness campaign            attitudes towards drink-driving, the adoption of
by Baltika Breweries involved visiting and          legal measures and enhanced enforcement.4
engaging with staff at 90,000 points of sale,
while Carlsberg Ukraine covered 20,000 points       However, drink-driving remains a problem, and
of sale. This represents good progress towards      in some markets where there is no drink-
our target of year-on-year improvement on           driving stigma and sanctioning, it is an even
responsible drinking. Read more about this in       bigger issue. As in other areas, we are adopting
the case story on page 23.                          our “inform, enable and encourage” approach
                                                    through dialogue and engagement.
We also collaborated with the Danish
Partnership for Responsible Alcohol                 In 2018, we ran a number of initiatives across
Consumption. This multi-faceted partnership         those markets where drink-driving is a
with key Danish stakeholders promotes a             particular issue. In China, more than 200,000
responsible alcohol culture in Denmark, with        consumers engaged in dialogue about
specific focus on preventing underage drinking      preventing drink-driving with local police
and selling. We ran a trial using electronic IDs    forces, car dealers and the media. In
and awareness-raising, resulting in a 25%           Azerbaijan, a video campaign highlighting the
increase in employee confidence when                impact on two people’s lives of traffic accidents
requesting ID and a strong increase in refused
transactions due to lack of certified ID.
                                                    caused by drink-driving reached over 400,000
                                                    people through digital and traditional media. In
                                                                                                        BIRELL LAUNCHED IN BULGARIA AND
                                                    Belarus, on Global Beer Responsibility Day the      POLAND
Despite positive developments, particularly in      Alivaria brewery provided free minibuses to
some key markets, we are by no means                take home bar-goers who lived in remote
satisfied. We will therefore continue to focus on   areas.                                              May 2018 saw the launch of a new            Developed specifically as an alcohol-free
preventing underage drinking, as it is a crucial                                                        alcohol-free beer, Birell. Initially        beer, Birell delivers the same body,
area. While strengthening measures at point of      Also within our own organisation, we are            launched in two styles, Pilsner Lager and   mouthfeel, head and, most importantly,
sale is effective, a broader whole-society          making changes. Since introducing our car           Belgian Wit, the brand made its debut in    great taste that consumers expect from
approach is required to address this challenge.     policy in 2017, all newly purchased company         Bulgaria and Poland, ahead of a further     regular beer, just without the alcohol.
                                                    cars are equipped with alcolocks to prevent         roll-out planned for 2020.
PREVENTING DRINK-DRIVING                            staff from driving if they are over the legal                                                         VISIT BIRELL’S WEBSITE
For many years, we have been working                alcohol limit. So far in Western Europe, 24% of     The new AFB was developed in response             www.birell.com
worldwide with key partners such as the police,     our cars have alcolocks installed.                  to strong consumer demand following
bars and restaurants to raise awareness of the                                                          continuous category growth over the
issue of drink-driving.                                                                                 past 10 years. It meets the needs of
                                                                                                        aspirational consumers wanting a
In a 2018 report, the European Transport                                                                greater choice of alcohol-free options
Safety Council, a long-standing partner of the                                                          without compromising on taste.
brewing industry, announced fewer road deaths
attributed to alcohol, citing changing public
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO IRRESPONSIBLE DRINKING         25

                                            ALCOHOL-FREE BREWS                                  ENCOURAGING A POSITIVE DRINKING
                                            Alcohol-free brews (AFB) can offer a welcome        CULTURE
                                            alternative to traditional beers, particularly on   Our brands have an important role to play in
                                            occasions where alcohol is not an appropriate       shaping a better alcohol culture, which is why
                                            choice. A key target for us is 100% availability    we use their channels to run dedicated
                                            of AFB by 2022. That means we are working           responsibility campaigns for consumers that
                                            towards market-wide distribution, providing         communicate in relevant, targeted ways. Many
                                            options for consumers who want to enjoy a           brands do so already, with campaigns such as
                                            refreshing beer but, for example, want to drink     Tuborg’s “Drink With Respect” in Denmark,
                                            less alcohol or have to drive.                      Kronenbourg’s “Consommer Avec Modération”
                                                                                                in France and Carlsberg’s “Celebrate
          People want a broader set of      We are making good progress towards this            Responsibly” in Malaysia encouraging
          choices for different occasions   target. Availability is already over 80% in some    responsible choices during moments of
and to know what goes into our beers.
                                            markets, such as France, Switzerland and            consumption through dialogue and
That is why we are expanding our
portfolio of alcohol-free brews and have    Sweden, and we are seeing strong progress           engagement.
committed to providing ingredient and       where we have launched new AFB brands,                                                                            ACTIONS
nutritional information per 100 ml on our   such as Birell in Bulgaria, which you can read      Our activities are always grounded in the local           TOWARDS ZERO 2019
packaging.”                                 more about on page 24.                              context and challenges, so we need to be
                                                                                                flexible in our approach while staying on-
Jessica Spence
Chief Commercial Officer,                   Expanding our AFB portfolio and availability        brand. In Finland, for example, during                  Continue to implement and measure
Carlsberg Group                             gives consumers more options in all sorts of        “midsummer season” people enjoy our products            compliance with Digital Guiding Principles
                                            situations, not just when driving, but also when    – and in a country of a thousand lakes they
                                            cycling or sailing. In Denmark, for example,        often do so near water. With this in mind, the
                                            where cycling is the most common form of            Finnish team devised messages for the Karhu             Accelerate the formation of global and local
                                                                                                                                                        partnerships for responsible drinking
                                            transport, one in four bicycle-related accidents    brand, such as “Do not let Karhu turn your
                                            involves alcohol. So this has been the focus of     boat upside down”, to raise awareness of the
                                            an ongoing campaign to raise awareness              risks of combining alcohol with sailing and
                                                                                                                                                        Expand our global offering of alcohol-free
                                            among Danish consumers.                             swimming.                                               brews (AFB)

                                            In Sweden, Carlsberg Sverige commissioned an        Changing cultural norms does not happen
                                            “alcohol-free beer boat” to deliver alcohol-free    overnight. Our challenge is to ensure that our
                                            beers to sailors on the waters of the Stockholm     consumer messages hit the right tone. Rather
                                            Archipelago. The initiative raised awareness of     than sounding preachy and negative, they
                                            the risks of drinking while sailing by offering     should focus on nudging people to make
                                            consumers an alternative, great-tasting beer        responsible choices and foster dialogue.
                                            option. In addition, Sweden became the first
                                            country to launch Carlsberg Alcohol Free on
                                            draught.
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO IRRESPONSIBLE DRINKING      26
                                                    “Always follow work at height
                                                    procedures” is one of our five Life
                                                    Saving Rules. Having rolled out
                                                    training in the rules globally during
                                                    2018, this initiative has deeply
                                                    impacted our organisation.

                                                    LEARN MORE
                                                    ON OUR WEBSITE
                                                    www.carlsberggroup.com/sustainability/
                                                    actions-towards-zero

ZERO
ACCIDENTS
CULTURE
ZERO accidents culture

ZERO
                                                    CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO ACCIDENTS CULTURE   27

ACCIDENTS
CULTURE
Protecting the lives and health
of our people is a fundamental
value for us. We aim to achieve
a ZERO accidents culture by
making health & safety top of
mind at all times and by ensuring
compliance with our rules and
standards.

So how are we creating a lasting ZERO
accidents culture? It starts with leaders setting
an example. But it works best when our people
on the ground are trained to observe rules and
procedures, and empowered to continually
identify risks and propose solutions themselves,
thereby enabling us to prevent accidents and, if
they do occur, learn from them.

2018 PERFORMANCE
In 2017, we achieved a significant reduction in
accident rates – and in 2018 we sustained this
performance. We are focused on continuing to
reduce accidents year-on-year.

The Group lost-time accident rate (LTAR) in
2018 was 4.3. Specifically, the number of
employee lost-time accidents (LTAs) went
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO ACCIDENTS CULTURE   28

                                            down to 169 from 183 in 2017, while the
ZERO ACCIDENTS CULTURE                      number contractor LTAs was 42 in 2018.
EXAMPLES OF OUR SDG ACTIONS
                                            Despite the sustained accident rate, our
                                            performance in 2018 was not good enough, as
                                            we recorded three fatalities: a subcontractor in
                                            a construction accident, a brewery worker in a
                                            boiler accident and a sales employee in a traffic
                                            collision. We are deeply saddened by these
                                            tragic accidents, which underline the need for
                                            day-to-day vigilance to create a ZERO
                                            accidents culture.

SDG TARGETS                                 INCREASED OBSERVATIONS
8.8 Protect labour rights and promote       In 2018, we saw a significant increase in
     safe and secure working environments   observations reported by our employees, which
     for all workers.                       enabled us to implement a number of
                                            preventative actions. This is a positive sign of
EXAMPLES OF OUR ACTIONS                     improved engagement and progress towards
    Embedding a ZERO accidents culture in   making health & safety top of mind for all our      CREATING IMPACT THROUGH
    employees and contractors through       people, and also testament to an improved           REAL-LIFE STORIES
    communication and initiatives           safety culture. However, only a combination of
    Training leaders to model desired       leadership, consistent communication and
    behaviours, communicate consistently    safety routines will deliver progress towards       In Russia, the life of technician Denis     Association of Communication Directors
    and engage with teams on health         our ZERO accidents target.                          Smirnov was tragically changed by a         and Corporate Publishing.
    & safety
                                                                                                workplace accident at our brewery in St
                                                                                                Petersburg in 2004. The documentary         Real-life case stories and engaging media
                                                                                                Blade was created to tell his dramatic      content help to embed Together Towards
                                                                                                story.                                      ZERO and a ZERO accidents culture.

                                                                                                Released on the World Day for Health
                                                                                                and Safety at Work, Denis’s true story
                                                                                                creates awareness of the importance of
                                                                                                following health & safety rules. It was
                                                                                                named best health & safety video in a
                                                                                                competition run by the Russian
CARLSBERG GROUP SUSTAINABILITY REPORT 2018 ZERO ACCIDENTS CULTURE              29

                                              This is a day-by-day mission that is being        In 2019, the journey continues with additional          We have already reached over 1,500 leaders
                                              embraced by all levels of the organisation.       actions that will ensure consistent embedding           and we are targeting 1,200 more in 2019. This
                                                                                                of this programme in our ways of working and            will have an important impact on making
                                              LIFE SAVING RULES                                 a sustained level of compliance.                        health & safety top of mind and allow us to
                                              In 2018, we rolled out our Life Saving Rules                                                              deliver on our commitment to reach all leaders
                                              programme across the business. Built on           LEADERSHIP TRAINING                                     by 2020.
                                              industry experience, this programme focuses on    Our programme advanced significantly in 2018,
                                              the specific areas where we have learned that     preparing our leaders to better model desired
                                              people’s lives can be endangered if rules are     behaviours, communicate consistently and
                                              not followed correctly.                           engage with their teams on health & safety.

          Nothing is more important than      This initiative has deeply impacted the
          the health & safety of our people   organisation. We have rolled out a company-
and no task is so important that we
                                              wide training programme on the basics of the
cannot take time to do it safely. The
challenge is to build a ZERO accidents        Life Saving Rules. And we have started
culture across our business, whereby all      delivering detailed communication packages for
40,000+ employees are engaged to lead,        each of the rules to ensure that staff fully            WHAT WE SAID 2017                                         WHAT WE DID 2018
identify and eliminate risks and live our     understand the requirements and are equipped
safety practices.”
                                              to comply with them.
Philip A. Hodges                                                                                   Leadership
                                              LIFE SAVING RULES:                                                                                           More than 1,500 people managers
EVP Group Supply Chain                                                                             Continue to roll out the health & safety
                                                                                                                                                           trained in sales, marketing and supply
Carlsberg Group                               #1. Always follow traffic rules (on site and on      leadership training to reach all managers globally
                                                                                                                                                           chain departments
                                                                                                   by 2020
                                              the road)
                                              #2. Always follow lock out/tag out procedures        Life Saving Rules
                                                                                                                                                           Life Saving Rules initiative launched
                                              #3. Never remove, bypass or impair safeguards        Roll out the Life Saving Rules programme
                                                                                                                                                           globally. All relevant employees have
                                                                                                   globally, including communication and training,
                                              or interlocks                                                                                                received basic training and performance
                                                                                                   followed by a consistent compliance verification
                                              #4. Always follow work at height procedures                                                                  is consistently tracked
                                                                                                   process
                                              #5. Always follow confined space entry
                                              procedures

                                                                                                                                                              Fully             Partially            Not
                                                                                                                                                              achieved          achieved             achieved
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