Beer is made of people

If you thought that beer was made of barley, yeast and hops, you would be only partially right. The real ingredient in beer production is people. At least, that's the story at MillerCoors, and with the recent release of the company's "Great Beer, Great Responsibility" 2014 Sustainability Report, you can understand why.

Opening up with the story of the Phoenix team that provided 37,000 safe rides to prevent drunk driving on New Year's Eve, the report follows with the story of Brooke from marketing and the campaign she created with Harley-Davidson to promote safe biking. Enter Steve, who created a community entrepreneurship campaign, and Jay, who drives talent development. Fernando Palacios, Executive Vice President and Chief Integrated Supply Chain Officer then takes the floor to explain supply chain efficiency and Tyler Shannon, environmental health and safety specialist displays pvc strips that are routed for recycling at MillerCoors' Golden brewery in Colorado. Kate goes on to deliver her philosophy on supplier diversity and Judy Jolly, an agronomist in the southern Colorado region, talks about best management practices around water conservation in agriculture and collaboration with MillerCoors. 

While all of this reads a bit like a series of inspirational press releases, rather than data-based case studies in a sustainability report, the intention is clear: get to know the people behind the beer, and reinforce the message that beer is made of people. 

This was my insight after I talked with Kim Marotta, Director of Sustainability at MillerCoors. Passionate about her role and the headway made so far, Kim was generous enough to spare me some time to tell me about how MillerCoors is doing in sustainability and what's been important to her in advancing the company's efforts and reporting on sustainability performance. Here are her insights:

Your record on sustainability strategy? 

We have two parent companies, SABMiller plc and Molson Coors Brewing Company, and they both have an influence on our sustainability programs. But, we are all operating off the same sheet, in line with the same broad strategy. When SABMiller or Molson Coors sets global targets, we play our part to contribute to those targets. We track our performance and report our progress to both our parent companies. However, as the U.S. joint venture, we are focused on the issues that are material to our stakeholders in the U.S. For example, for SAB-Miller, support relief for victims of HIV/Aids is a major part of their program. For the U.S., this is not as material to our stakeholders. We prefer to work on things that are more directly related to important issues in our own market and relevant to our local stakeholders. 

Your record on reporting? 

We are always considering ways to do things differently in order to get the message across more effectively. In this report, the main difference is that we have devoted much more attention to the people in our business and telling their stories. The reason we are successful is our people – they have a strong desire to make things happen, we wanted to tell their story. We wanted to help others learn about our people and get a glimpse of their world view and how that supports our organizational goals, understand the daily pressures and challenges. In this report, we have tried to bring this out much more than in the past. 

Also this time, we aligned our reporting with GRI G4 disclosures, though we did not specify core or comprehensive level. We had already done the work on materiality, so G4 did not pose a significant challenge. 

Your record on water conservation? 

The initiative that makes me the most proud is our water reduction achievement. We had set a goal in 2008 to reduce water consumption by 15 percent. After a couple of years, we weren't seeing as much progress we had planned. In 2008, we were using more than four barrels of water to make a barrel of beer, and in 2009 and 2010 it was roughly the same. A group of leaders within our integrated supply chain traveled to SABMiller’s plants in South America, which were doing well in this area. Their water consumption was much lower. After a week learning the processes employed there, they came back and immediately started to make changes. They set up war rooms and solicited ideas from everyone in the brewery on how best to capture water savings. This really helped change the culture. In total, we’ve saved 1.1 billion gallons of water since 2012. In 2013, we further reduced our water use by 9.1%. At the end of 2013, we were at 3.48 barrels of water to make one barrel of beer. After getting every single one of our breweries engaged, we hit our 2015 goal early at the end of 2013. This was an incredible process. 

Your record on waste diversion? 

One of the things that distinguish us as beer producers is our record on zero waste to landfill. Six of our eight major breweries achieved zero waste to landfill. We expect that to be eight out of eight in the not too distant future. I don't think that too many companies can attest to zero waste to landfill. We are delighted with the progress our teams have made to deliver this result. 

Your record on drunk driving? 

The work that we do to promote responsible drinking and preventing drunk driving is a core part of our sustainability efforts. We have reached 12 million people in our safe ride program. We have partnered with several organizations around the country and created many opportunities for people to order safe rides or get a free safe ride home. For example, Miller Lite is the exclusive sponsor of 1-800-TAXICAB, a national dispatch service that connects passengers to locally owned cab companies. During 2013, more than 700,000 calls were placed to 1-800-TAXICAB. We have ramped up the amount of people taking a pledge to be a designated driver. We pay for public transportation in certain cities for major holidays and events. All in all, we are making a big difference in helping people stay safe and avoiding injury to others caused by driving drunk. Ultimately, it's about enabling people to have fun and keeping them safe. 

Your record on supplier diversity? 

Supplier diversity has been an important objective for MillerCoors. Supplier diversity helps us grow and be a better business. We have invested more than two billion in contracts with diverse suppliers, and this includes partnerships, mentoring relationships, funding educational opportunities and more. We have one person in a full-time role just looking after our supplier diversity program, identifying and advancing opportunities. We work together collaboratively with diverse suppliers, it's not just about compliance. For our purchasing people, this has become a regular way of doing business. Our CEO maintains a personal interest and commitment, personally reviewing the numbers and progress toward our goals.

The MillerCoors 2014 Sustainability Report is nicely laid out in a friendly-design hyperlinked PDF. The Materiality Map is prominently positioned and identifies 8 high priority issues for MillerCoors.

Following the introductory people story section, the report splits into five areas of progress in 2013, each starting with a 2015 goal and recording progress made in 2013. In each area, overall policy is described and examples of practice are provided. While this is a look-good-feel-good type of report, providing little context beyond the specific activities of MillerCoors, the company records progress across many fronts. Beyond water and waste management, as mentioned above, highlights include:

• GHG emission reduction 
• Strong employee safety performance 
• LGBT community support 
• Investment in education in the community 
• Watershed risk assessments 
• Packaging design environmental improvements 
• Sustainable agriculture and water conservation techniques 

Four external commentaries close out the report. They are also PR quotation material but also indicate that good relationships are in place. Overall, the generally positive nature of this report does not detract from the amount of progress in evidence. A little more balance and local context in future reports may add to credibility levels. 

The G4 content index is indicatively included for a selection of G4 disclosures – 21 general disclosures (about two-thirds of the 34 required for core level reporting) and 24 performance indicators, 14 of these in the environmental category. The actual disclosures in many cases do not meet the full requirements of the G4 Performance Indicators. A material case in point is G4-EN8 – water consumption. MillerCoors reports a water-to-beer ratio but no absolute data for water consumption or water withdrawal sources, as required by the indicator.

However, the GRI Content Index serves to help match disclosures with stated material issues – and this, after all, is one of the main purposes of the index and one of the main goals of G4: aligning disclosure with stated materiality. 

And if you were thinking of giving feedback – MillerCoors will make it worth your while. Unobtrusively positioned at the end of the report is an invitation to take part in a feedback survey. Here is the link: https://www.surveymonkey.com/s/MCGBGR2014. After taking a look, I realized that, in return for completing the survey and leaving my contact details, by, I could win a tablet! So, if you need a tablet, telling MillerCoors what you think of their report might just be the way to get one. I confess to being skeptical about these types of survey, and their true value in helping understand what stakeholders want. In the worst case, at least MillerCoors will know who wants a tablet. 

It's always good to read a report and talk to the folks responsible for developing it. Reporting is always an opportunity to engage and I was impressed with the way Kim at MillerCoors was happy to address my questions and provide a personal perspective. 

And this brings me back to a point I often make. Not only beer is made of people. So are sustainability reports.

elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via www.twitter.com/elainecohen   or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm

In Good Spirit: Smarter Reporting at Diageo

This second post in my series leading up to the Smarter Sustainability Reporting Conference in London on 5th February 2013 (read about Smarter Reporting at L'Oreal here) is all about Diageo, Smarter Reporting and Responsible Drinking. This is perhaps particularly relevant during the current season which usually sees a significant hike in drinking-related road accidents and fatalities.

 

 Recently, I took the opportunity to chat with Carolyn Panzer, Director of Corporate Social Responsibility for Diageo plc. Carolyn is responsible developing and overseeing the strategy for community investment, external reporting, and alcohol in society - including, responsible drinking initiatives, responsible marketing and innovation, and alcohol policy. Carolyn is also the Chairperson of the Distilled Spirits Council's Code Review Board and has nearly 30 years of experience in the beverage alcohol industry, working across industry sectors in both the US and UK.

Carolyn will be talking about: "Participating in indices and rankings - how does this contribute to reporting best practice?" at the February conference.

 

"The reporting process helps me enormously. It makes us think about our data more and understand our impacts. Smarter Reporting for me is embedding the reporting process in the business - making everybody accountable. Actually, our people really appreciate hearing our story and participating."

 

"For me, one of the most challenging things about my role is that Diageo is a big company and keeping on top of everything that is going on in the business, keeping up-to-date with internal and external developments and having the headspace to keep on track, is a major exercise in time-management. This can occasionally make me feel vulnerable, I feel I should know everything about everything, but obviously that's not possible. My secret for keeping on top is to encourage others to know more detail. Not only does this help me, it empowers the organization to own sustainability. I don't make it easy for the business. I help them take accountability and own their role in advancing our sustainability and responsible drinking programs. This is now paying huge dividends."

Diageo is the world's leading premium drinks business with beverage alcohol brands across spirits, beer and wine including Johnnie Walker  and Bushmills whiskies, Smirnoff  Vodka, Baileys, Captain Morgan, Guinness and more. Headquartered in the UK, Diageo trades in 180 countries and employs around 24,000 people with net sales of almost GBP10 billion. Diageo manufactures and supplies its brands its brands in 43 distilleries, 16 breweries, 13 wineries, 19 packaging and blending operations, 9 warehouses and 8 other sites.

 

Diageo 2012 Report

Diageo has a long history of CSR Reporting and the company's latest report was published earlier this year: Diageo Sustainability and Responsibility Report 2012, Celebrating life, today and tomorrow. This is a GRI Application Level B+ Report, with a UN Global cross-reference. This year saw a shift in Diageo's reporting. Carolyn explains:

 

"This year's report has a lot more engagement - we pushed people to align more closely with GRI indicators. We also we did better on the materiality piece. We conducted a market pilot study and now we plan to take that forward and expand it. We ran three workshops on materiality. Also, we tried to use more everyday language and less "corporate-speak", and, in the presentation of the report, we tried to make it layered. We recognize that not one size fits all and that different stakeholders look for different things, so we opted for a five-minute-read approach as a short summary option for people who don't want to get into all the details. You can you go in and read different sections at a general level or dig deeper for more detail." 

This can be seen from the Diageo business case for sustainability rationale, which is readable and comprehensible for all lay readers.

The Diageo report this year demonstrated good performance achievements against a range of key metrics against several multi-year quantitative targets within the context of a well-laid out strategy. For example, water efficiency improved by 7.2% in 2012, on track to meet a 30% objective by 2015 against a 2007 baseline. Average packaging weight has reduced by 1.6%, on track to meet a 10% target over the same period, bringing the cumulative total to 4.8% reduction. Lost-time accident frequency rate reduced by 43% in 2012, overachieving a 40% target for 2010-2012 by 17%, showing good progress in embedding a safe working culture.  However, by far the most material issue for Diageo relates to the role of alcohol in society and Diageo's responsibilities to address alcohol misuse. Diageo's report states: "In all [stakeholder] workshops, addressing alcohol abuse and promoting responsible drinking was consistently the most important issue for stakeholders as well to us as a company."

 

A couple of months ago, Carolyn Panzer addressed a groundbreaking meeting of the International Center for Alcohol Policies in which the CEOs of 13 of the world’s leading beer, wine, and spirits producers announced a collective commitment to 10 targeted actions in five areas over the next five years, in order to reduce harmful use of alcohol.  

 

I asked Carolyn Panzer about how Diageo assesses the impact of its multiple activities in this area:

"Alcohol problems are not new and there have been many initiatives to address these. You can count thousands of initiatives by the alcohol industry, but the real question is what is effective? Where do you focus your resources to achieve the biggest impact? We want to tackle the issue of problem drinkers. Raising taxes on alcohol, for example, is not necessarily effective for problem users as there will always be a way around this."

A case in point is the situation in Keyna where it was estimated that about 50% of alcohol consumed was in the illicit sector. This was problematic, as such products were often made with harmful ingredients which caused illness or even death. Diageo redesigned its entire supply chain to create a new product made from locally sourced ingredients using innovative technology representing a first in the industry and significantly reducing costs for local supply of a safe, quality beer beverage called Senator Keg, costing one fifth the price of Diageo's mainstream beer. Since its launch, the brand has gained 40% of the Kenyan beer market. It's well worth reading this case study in Business Today about the Senator Keg story. This is a fabulous example of how Diageo can support changes in consumer behavior around alcohol. This is the true value of how an alcohol company can work with consumers and local organizations to understand specific issues and behavior patterns and help create breakthrough change which adds value to society and, of course, to the business.


In the area of problem drinking, Carolyn continues: "There are some things that we know work. First, screening and brief intervention demonstrates proven efficacy with problem drinkers. Screening individuals through a set of ten questions and engaging them in a conversation about risks helps people reduce problem drinking. We have provided grants to support this kind of activity. Second, high visibility enforcement of the law on drink-driving is effective. Not every country, for example, has a maximum drink-driving limit. We work to support introduction of legislation in this area in countries where this is not present. However, even where there is a legal limit, highly visible enforcement is key. For example, in Mexico City, we ran a campaign in support of the local law enforcement authorities, in which we contributed 50,000 breathalyzer kits. Drink-driving reduced by 30%. There is an important continuum that you need to follow to achieve change. We need to ensure the right regulations  as well as build general awareness. In the U.S., we spend 20% of our broadcasting spending on responsible drinking messages. We always try to work in partnership with other organizations and groups to ensure we have the best understanding of the issues and the best expertise on board to move forward."

Finally, all Diageo employees have a role to play in advancing responsible drinking behavior. Carolyn says: "We are always trying to connect our people with our CSR story, and we ensure they are involved and informed of our initiatives in this area. For example, over the Holiday Season, we campaign our employees with the need for extra vigilance and their role as responsible drinking ambassadors."

As it is still the Holiday Season, this is great advice for all the CSR Reporting Blog Readers. I am not much of a drinker myself, actually. Personally, I am more concerned with ice-cream rather than alcohol. If ever there are laws which limit ice-cream consumption prior to driving, I may have a bit of a problem.

Happy New Year, everyone!

Looking forward to seeing you at the Smarter Sustainability Reporting Conference in February 2013. Don't forget to drop me a line for your registration discount code!
 

 

 

elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz  (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

Heineken reporting: the parts it doesn't reach

Heineken commercials just have to be the funniest and most creative. Take this one:




(If you want more, see the top ten funniest Heineken commercials here).

While the Heineken Sustainability Report for 2010 doesn't quite reach these levels of creativity and humor, it is a good and thoughtful report, which I reviewed for CorporateRegister.com. You can find the full review here. Here are some of the review highlights:

Heineken is a Dutch Beer Company, with 250 brands, 140 breweries in 70 countries, employing 55,000 people and delivering a turnover of Euro 16 billion in 2010. The Heineken 2010 Sustainability Report starts out with a great introduction from the Chairman/CEO which is nicely balanced and gets to the key issues for Heineken. It's almost apologetic, referring respectfully to 14 fatalities in Heineken’s newly acquired Mexican business and other countries and loss of stardom in the Dow Jones Sustainability Index. However, it does set expectations with the Heineken "Brewing a Better Future" initiative, which is a "comprehensive and integrated sustainability strategy for the next decade. It increases the scope and scale of our work on sustainability and gives substance to our long-term ambition to be the world’s greenest brewer. It also allows us to balance our need for financial sustainability with the role we play in society." Clearly, deep thinking has been going on at Heineken, and a new model with 23 programs grouped into six initiatives: Green Brewer, Green Commerce, Engaging Employees, Heineken cares, Responsible Consumption and Partnerships for Progress lends a structure and a certain credibility to Heineken's way forward. The CEO statement is followed by an executive summary of the report content by the "Chief Corporate Relations Officer". This is an outstanding overview, including frank comments on shortcomings, for example, the fact that a 3.84 score out of 5 in a reputation survey for responsibility and sustainability is not good enough and needs work. So far, so good.

When thinking about beer production, you don't automatically think about agriculture. But key ingredients in beer production are barley, corn starch, hops and for cider, cider apples, and agricultural practices are a critical element of any brewery's overall impacts. Heineken owns half a million apple trees in the UK for example. I wonder how many they own worldwide? Heineken reports on initiatives to advance reduction of chemicals in agriculture and local sourcing wherever possible. Heineken also refers to several Economic Impact Assessments that the company has conducted in Sierra Leone, Rwanda and Burundi, with new assessments in 2010 for Egypt, Croatia and the Bahamas. Heineken maintain that in Croatia, 8,800 jobs are in some way related to Heineken while in Egypt, local sourcing of barley has resulted in up to 6,000 jobs. These are important numbers. It's a shame that the Economic Assessment Reports are not available to the general public (I couldn't find them on the Heineken website).

An interesting example of how sustainability has benefited Heineken is at the Elblag brewery, where the amount of non-segregated waste was reduced from 793 tons in 2006 to 55 tons in 2010. In 2010, Heineken's Polish branch sold its waste at a profit of EUR3 million. That's a huge figure, demonstrating once again that sustainability practices make good business sense.

Finally, with regard to responsible drinking, Heineken tells a nice story of the management team visiting a hostel for drink dependency victims and as a result, decided to delist Strongbow Black cider, a higher strength cider with an increased risk of irresponsible use.

Heineken's report is easy to read and projects strong credibility, reflecting good thinking about sustainability. It's well structured, comprehensive in scope and explanations, case studies and descriptions of issues are clear, easy to understand and balanced (including areas of challenge and sensitivity).

The real issue with this report is that it focuses on responsible practices but not on sustainability opportunities. Heineken's "Brewing a Better Future" is all about doing what Heineken does now more responsibly. I would have liked to see some progression toward a sustainable value creation type of model where sustainability is embedded in Heineken's core business rather than managed as a set of distinct initiatives. Notably absent is a description of material issues and an analysis and prioritization of those issues, which begs the question of how the 6 core initiatives were developed and using what stakeholder input. In this sense, Heineken's report doesn’t quite reach the parts that other reports reach (Heinken's advertising tagline for years has been that Heineken reaches the parts that other beers cannot reach), but it does do a basically good job of reporting key direct impacts in a nicely presented way.

And I can't resist leaving you with one more responsible drinking commercial from Heineken:




elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices   Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)