SUSTAINABILITY REPORT 2018 - Carlsberg Group
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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
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
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.
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.
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.
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.
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.
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
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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