Sustainability in Beer - Part III: Community Investment, External Engagement and Collaboration
We're halfway there! The third part of this month's five-part briefing looks at the brewers' community investment programmes, external engagement efforts and collaboration moves in the environmental sustainability arena.
The centrality of water within the sustainability agenda, and in particular the reputational exposure that comes when companies are operating in water-scarce areas, means that water is often a prominent feature in brewers' community investment programmes as they relate to the environment.
Community investment around water may sometimes be primarily philanthropic, with accompanying reputational benefits, though in other instances community projects around water will help ensure water security. Investment in agricultural communities is likely to have a tangible business benefit in terms of improving the quality and security of supply, while also achieving desirable sustainability outcomes.
Notable community investment programmes
Among the most significant water-related community investment platforms is Diageo's Water for Life programme.
Water for Life is a "community-related water strategy that's mostly focused on Africa", says Diageo's Michael Alexander. He says Water for Life embodies a "holistic" approach to the issue of water, and comprises a broad range of community water projects, in a way that "wouldn't really apply" to other areas of sustainability such as carbon or to waste.
Carlsberg also sees water as an area of sustainability where community investment plays a strong role. Indeed, water is singled out in its environmental strategy as a particular focus of community engagement. "Increasingly, we are looking at how we can better engage with the communities where we operate and work together with our agricultural suppliers, particularly in relation to water management."
An example of Carlsberg's water-related community investment is its support of Care International's Janajatis Social and Economic Empowerment Project in East Nepal, which provides safe and clean drinking water to people living in extreme poverty.
Among its Better World initiatives, Anheuser-Busch InBev has launched a notable water initiative in Brazil called the CYAN Movement, which it describes as "a broad campaign for the mobilisation and awareness of conservative use of this precious resource".
A-B InBev's Bert Share says the CYAN Movement is "a great example of involving a wide variety of partners and stakeholders in a multi-component initiative" on water conservation. Another water-related initiative in the Better World programme saw the company donate US$150,000 to River Network to support river and watershed conservation projects in 12 US cities where the company has brewerise.
Molson Coors also takes a holistic, broad-based approach to engagement on water which goes beyond maximising water efficiency in its operations and extends into community engagement.
The results of watershed assessments for all its brewery locations undertaken in 2010 are being used to develop a watershed management programmes to be implemented company-wide. Watershed projects are to be modelled on the Clear Creek Watershed Foundation in Golden, Colorado.
While watersheds in water-stressed areas are to be prioritised, the company plans to extend the process to all brewery watersheds and then to its supply chains. Molson Coors says the programme will engage fellow stakeholders in watershed conservation projects, in order to preserve and enhance water quality and address local watershed challenges. In June 2011, Molson Coors (UK) held the first meeting of the Tadcaster River Wharfe Community Users Group in partnership with the UK Environment Agency.
SABMiller's community engagement on watershed issues through its Water Futures Partnership with the German government and WWF was already noted in the preceding section.
First established in 2009, its aim is "to facilitate local action to address some of the most pressing shared water risks facing SABMiller, surrounding communities and ecosystems". It set out "to prove the business case for private sector engagement in promoting sustainable water management".
Working with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), a government-owned organisation which supports the government in addressing its objectives in international development, and with WWF, the Water Futures Partnership engages with local stakeholders to assess water risks shared by SABMiller’s local businesses and the surrounding communities and environment.
External engagement and collective efforts
External engagement and collaborative activity on water, whether within the brewing sector, within the wider beverage industry, with other food companies, or with NGOs or governments, is a vital component in the major brewers' sustainability strategies.
Initiatives such as the UN CEO Water Mandate and the Water Disclosure Project, an offshoot of the Carbon Disclosure Project (CDP), have clearly been influential in shaping the brewing sector's response to water-related sustainability issues, and many more areas of external engagement and collaboration are being explored in relation to water, as with other critical aspects of environmental sustainability.
While there is significant scope for cross-sector collaboration on environmental sustainability issues, between brewers and food companies for example, the beverage sector has its own dedicated environmental sustainability forum in the Beverage Industry Environmental Roundtable (BIER).
Formed in 2006, BIER's membership extends to all sectors of the beverage industry, and all the six brewers featured in this report are involved, though SABMiller currently only participates through MillerCoors.
According to BIER director Tod Christenson, the organisation's primary activities are in qualitative and quantitative benchmarking around water and energy use, sharing best practice on environmental challenges and external engagement with "critical external stakeholders" such as the Carbon Disclosure Project. Described by Christenson as a "technical coalition" and quite specifically not an advocacy or lobbying group, BIER has made water, along with energy and climate change, its core dimensions.
Indeed, BIER was first set up with the aim of addressing water issues and it arguably remains the group's key focus. "BIER was founded on a water platform and it was in 2008 that we expanded our platform to include energy and climate change," says Christenson. "So in a large part water was part of our roots."
Christenson adds that water remains " a critical sustainability aspect" for the members "not only because of the of the need for fresh, clean water in the production process but because of the dependence on water in the agricultural ingredient supply chain".
Among its specific activities focused on water, BIER published A Practical Perspective on Water Footprinting in 2010, to guide beverage companies in the application of existing and developing water footprinting documents. The report provides clarification and consistency in the quantification of a beverage water footprint, and introduces a screening methodology to prioritise water impacts. BIER has also published a Practical Perspective on Water Accounting in the Beverage Sector, which is intended to be complementary to existing methodologies and technical guidance.
Among other examples of cross-sector collaboration and engagement, SABMiller stresses the value of engagement through the World Economic Forum, particularly in relation to water and the water-food-energy nexus. "We’ve been leading a lot of the work at the World Economic Forum on water and also on agriculture for a number of years," Andy Wales says, citing the recent formation of the World Economic Forum's Water Resources Group as a particularly important development.
Wales believes that cooperation and collaboration between companies and between government stakeholders is vital in addressing issues around the water-food-energy nexus. Joined up thinking by governments on water, agriculture, energy and related areas is now crucial, he says. "It’s critical we work with governments to encourage connected policies because of course as a business we’re already having to manage these things together."
One area which may require development going forward is industry-wide public engagement on environmental sustainability, whether specifically on the crucial water issue or any other area of environmental stewardship.
While trade organisations such as Brewers of Europe and the Beer Institute in the US have been active on the issue of environmental sustainability, particularly from a policy advocacy standpoint, the public profile these organisations give to the issue can be compromised by the necessary attention they pay to social issues related to alcohol consumption. The alcohol industry is of course rightly attentive to the latter area, but it is possible that the priority given to the responsible drinking agenda, and the noise created by public and political debates around alcohol misuse and alcohol policy, means that publicising environmental work at the industry level is relegated down the agenda.
Interestingly, this is not something that seems to happen at a company level. In communication terms, the corporate responsibility/sustainability platforms of the major brewers seem to strike an appropriate balance between the emphasis they place on environmental and social responsibility activity.
Carlsberg's Janda Campos for one would like to see Brewers of Europe give a higher profile to environmental sustainability. "It’s more the message rather than criticising their work as such," Campos explains. She believes Brewers of Europe can play a greater role in communicating what the industry is doing on environmental issues. "I think that’s the direction we are pushing for going forward, and they are open to that."
Brewers of Europe confirmed that there are plans to "put environmental sustainability higher on our priority list", including changes to its website which currently has no section on environmental sustainability. The trade body is also working on an environmental report which will include chapters on water, energy and climate change, secondary products, waste and wastewater, and packaging.
A subisidiary of the Indian division of SABMiller has released details of a marked loss in its latest fiscal year....
- Focus - Pernod's YTD Performance by Region
- Comment - Will We Understand the Language of Rum?
- Focus - Heineken's Q1 Performance by Region
- just On Call - Pernod shifts Scotch focus in China
- just The Preview - Pernod Ricard's Q3 & YTD
- CFO of Diageo's United Spirits stands down
- Pernod Ricard sees YTD recover as sales increase
- Remy Cointreau US head to step down
- BrewDog launches GBP25m crowd-funding attempt
- Africa "subdued" but Heineken sees Q1 rises
- Global Tequila insights - market forecasts, product innovation and consumer trends research
- Global rum insights - market forecasts, product innovation and consumer trends research
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review
- Bacardi Limited - Strategy and SWOT Report
- ALDI 2015: Radically transforming Anglo Saxon grocery markets