Our ability to be successful and profitable is inextricably linked to the health and prosperity of the communities in which we operate.
We have continued to make progress this year on sustainability, particularly as a result of our focus on our 10 sustainable development priorities and the development of a group-wide method of collating performance data. Our 2007 Sustainable Development Report provides more detail on our social and environmental performance, but it is mainly our economic success which continues to make a real improvement in how people live in our communities.
A study by the Bureau for Economic Research, conducted for SAB Ltd, detailed the company's contribution to the South African economy, including the direct impact of our operations and the relevant economic multiplier effects. At the time of the study, SAB Ltd employed 8,600 workers directly, 73% of whom were from previously disadvantaged groups. The study found that our operations supported an estimated 46,000 jobs at first round suppliers and more than five times that number in the wider economy. In all, 362,000 full-time jobs (or 3% of total employment in South Africa) can be directly or indirectly traced back to the production and sale of SAB Ltd's products.
Our business success has resulted in a contribution of US$4,529 million in taxes and excise duties this year to local and national governments and authorities in the countries in which we operate. In addition, US$26 million has been invested in corporate social investment (CSI) programmes, over and above our funding of responsible drinking programmes. An important part of our CSI programmes is the effort to build wealth through encouraging entrepreneurs and supporting local businesses. Many of our operations run enterprise development programmes which create local employment and, in some cases, extend our supply chain. Overall, this wealth creation is important for the communities in which we operate, but it also enhances the market for sales of our products.
As well as our economic impact, we focus on the material opportunities and risks that arise from our environmental and social impacts. The growing consensus around climate change, the accessibility of sufficient quantities of safe and clean water, the social impacts of irresponsible drinking, poverty and HIV/Aids are all crucial considerations for how we run our business.
Sustainable development framework
|The 10 sustainable development priorities identified by the strategic review of our approach to corporate accountability are shown below and overleaf.|
|The need to discourage irresponsible drinking||
Promote responsibility in the use of beverage alcohol, as part of a healthy lifestyle, while at the same time endeavouring to prevent alcohol misuse and abuse, through targeted interventions aimed at underage drinking, drink driving and unhealthy patterns of consumption
Ensure that our commitment to responsible consumption is seamless across the company, while at the same time acknowledging cultural differences in different markets
Focusing on educational campaigns, self-regulation in marketing, consumer information initiatives and supply chain programmes
The SABMiller Alcohol Manifesto and Code of Commercial Communications guide our marketing communications
Liaising with governments and relevant bodies regarding the alcohol debate
Evolve the Alcohol Manifesto
Upgrade the fluency of targeted employees on alcohol matters
|The need to make more beer but using less water||
Manage our water footprint, particularly in areas of water stress, to include:
Operations in the USA, South Africa, India and Uganda are collating information on water availability and quality in the context of future requirements
Continuing to improve operational efficiencies within our facilities
Working with farmers to use water more efficiently in the production of raw materials
Operations in India, Tanzania and South Africa support CSI projects to provide water to local communities
Develop a watershed mapping tool in conjunction with our Europe region to evaluate the risks and opportunities associated with community water requirements, water availability and water quality issues
Become more water efficient whilst identifying new ways to deal with waste water which benefit our breweries and the local community
Work with suppliers to understand and improve their water footprint
Direct CSI to improve access to reliable water supplies in communities where we have facilities
|The need to reduce our energy and carbon footprint||
Reduce energy consumption
Reduce carbon dioxide emissions
Explore opportunities for renewable energy, including the use of biogas
Assessing fuel types used and their impact on CO2 emissions
Evaluating boiler efficiencies
Encouraging operations to use renewable energy, for example by extending biogas production. India is already using coconut and rice husks and Honduras uses sugar cane off-cuts as fuel sources
Develop a carbon footprint methodology with Miller Brands UK to facilitate understanding and management of emissions throughout the value chain
Further evaluate renewable energy options to offset traditional energy sources, particularly through an expanded roll-out of biogas recovery
Improve measurement of greenhouse gas emissions, including transport emissions
|The need to have a vibrant packaging reuse and recycling economy||Reduce, recycle and re-use packaging to cut environmental impacts (for example, landfill and litter) and costs (packaging, landfill and regulatory)||
Lightweighting packaging materials where possible - examples in many operations such as in South Africa, Italy and Angola
Using recycled materials, for example nearly all Miller's aluminium cans are made from recycled materials
Evaluate where packaging materials can be substituted with improved alternatives. Our global packaging team will conduct trials on new materials such as biodegradable shrink film in Poland
Map and compare the lifecycle environmental footprints of different packaging materials
|The need to work towards zero waste operations||
Reduce environmental impact and cost of waste disposal by focusing on five areas:
Re-using organic wastes such as spent grain, trub and yeast - e.g. sold to farmers, used to produce biogas
Recycling glass cullet, paper and board, plastics and metals
Installing new CFC-free fridges
Introducing joint waste management agreements with suppliers
Review best re-use and recycling options for selected brewery waste streams, initially with Miller in the USA
Explore the feasibility of achieving a zero-waste to landfill brewery
|The need to have supply chains that reflect our own values and commitment||Encourage understanding, ownership and improved performance on sustainable development issues throughout the value chain||
Conducting supplier workshops
External study which assessed the economic impact of SAB Ltd in South Africa
Working with small-scale farmers in Uganda, Zambia, Zimbabwe, Tanzania and India
Incorporate Responsible Sourcing Principles into supplier contracts
Extend the coverage of our supplier engagement workshops to at least two other regions
Field test our good practice agriculture principles with SAB Ltd in South Africa and SABMiller Africa and Asia
Involve suppliers in carbon and water footprinting initiatives
|The need to have respect for human rights||
Respect the diverse national cultures and differences in laws and traditions in countries where we operate
At the same time seek to abide by the values of the international community, notably the United Nations Universal Declaration of Human Rights
Embedding our human rights principles within our global operations
Incorporating the human rights principles within our work with suppliers
|Ensure that all group companies have embedded the human rights principles in their local human resources policies|
|The need to bring benefit to the communities we serve||To improve the quality of life in the communities in which we operate, with a particular emphasis on enterprise development, water and HIV/Aids||
KickStart programme launched in a third market - Colombia
Other enterprise development programmes in the Czech Republic, Hungary, the USA and Africa, including South Africa
Community-led water programmes in South Africa, India and Tanzania, and HIV/Aids community programmes in Uganda and Zambia
Ensure every operation has a formal CSI strategy including management, monitoring and measurement
Improve the measurement and recording of indirect community investment of our operations
SAB Ltd in South Africa to increase employee involvement in community volunteering through its Outreach programme to 65%
|The need to contribute to the reduction of HIV/Aids within our sphere of influence||
Focus on operations with a prevalence rate of more than 5%
Undertake awareness and educational campaigns in potential 'at risk' operations with lower prevalence rates
Existing infections managed through voluntary counselling and testing, early diagnosis and managed healthcare, including free anti-retrovirals
Aim to reduce and prevent new infections through effective education programmes, incorporating a behavioural change component
In operations with a prevalence rate greater than 5%, running programmes which cover employees and their families, the local community and suppliers
Improve the percentage of spouses and dependents on treatment
Introduce awareness initiatives in two further operations outside Africa
Run education workshops for community organisations and suppliers in Tanzania and Zimbabwe
|The need to be transparent in reporting our progress on these sustainable development priorities||Aim to improve our reporting in response to stakeholder needs, consistent with leading benchmarking criteria||
Communicating through our Sustainable Development Report and updates on 'Our responsibility' pages of www.sabmiller.com
Working with relevant stakeholders across the globe on our sustainable development priorities
Individual reports on sustainability issues by our South African, Czech Republic, US, Colombian and Canary Islands operations
Producing group level reports on individual priorities - water and HIV/Aids
Increase frequency of internal reporting by operations to every six months
Encourage the production of local sustainable development reports which inform progress against the 10 priorities
In 2006 we introduced our sustainable development framework based on the 10 sustainable development priorities most material to our business. Having a clear framework has provided a consistent approach for all operations under our day-to-day management control of SABMiller companies. At the same time it has given operations a degree of freedom to focus on the particular issues most relevant to them. Whilst all operations focus on responsible drinking as a top priority, other priorities such as HIV/Aids, water quality and availability, CSI and human rights will have different levels of relevance for different operations.
More information on our 10 sustainable development priorities is given in our Sustainable Development Report 2007 which can be found on www.sabmiller.com/sabmiller.com/en_gb/Our+responsibility.
Given our experience in emerging markets, we are in a strong position to contribute to the debate regarding sustainable development issues. We work in partnership with governments, non-government organisations and other partners to share knowledge and best practice on these issues.
We have developed a self-assessment performance management tool (sustainability assessment matrix – SAM). We use a 'stairway' concept to identify the level at which each business sits between level 1 (minimum standard) and level 4 (best practice) for each priority.
All operations where our group companies have day-to-day management control must achieve level 1 on the stairways. Operations which fall short of level 1 must have mitigation plans in place to achieve this standard as soon as possible. Where operations have achieved level 4 already, they provide case studies and learnings for other parts of the business. In addition, to encourage operations to engage in level 4 projects, we have also committed to long-term scenario planning for the key priorities of water, carbon and HIV/Aids, to assess the business needs and current and potential future thinking on these issues.
For next year we will extend our programmes to encourage enterprise development to new markets, focus on meeting the challenges of water stress and expand our HIV/Aids programmes in our Latin American, African and Asian operations.
One of SABMiller's five values is that our people are our enduring advantage and our aim is therefore to be a global and local employer of choice. We have a strong culture of performance management and employees at every level are empowered and accountable for achieving clear goals. In this they are supported with world-class training and development. Being a learning and self-refreshing organisation is one of the priorities for the business.
In pursuit of this learning culture, we have developed a Global Action Learning programme involving the leadership team which consulted with over 300 organisations and stakeholders in a six-week programme. This programme is designed to hone the strategic and leadership skills of senior managers.
The SABMiller 'Ways', a set of tools, common terminologies and processes developed centrally but applied locally, are intended to deliver a consistent approach to manage and integrate core disciplines. They will provide a platform for exchange of knowledge which will result in rapid and ongoing improvement of performance.
Each company has employment policies which are appropriate to its business and markets and which attract, retain and motivate quality employees.
In the last year we employed an average of almost 67,000 people and total remuneration amounted to US$1,955 million.
Continued investment in formal and on-the-job training and development has resulted in an average of 4.3 days training per employee across the operating companies. This figure dropped from 4.9 last year, mainly owing to the inclusion of data from our operations in Colombia, Peru and Panama for the first time.
We believe in employing the best people, whatever their backgrounds, and we value and respect diversity. Many of our operations have an employee diversity policy covering ethnicity, gender, age and disability. Within these policies we recognise that diversity is applied differently in different countries because of cultural norms and legal frameworks.
Of total group management, 22% are women and 22% of the total workforce are women.
In South Africa, Asian, black and coloured representation in executive and management grades increased to an average of 48% (46% in 2006) and was 74.5% in the total workforce (73.5% in 2006).
As a result of industrial action, 138 days were lost, the majority of which were attributable to our operations in Peru.
We aim to ensure that working conditions are as safe as possible for our employees worldwide. Twenty five of our reporting operations have formal joint health and safety committees comprising management and worker representatives.
In total there were 1,091 industrial injuries in 2007 (1,360 in 2006 and 640 in 2005) and it is estimated that the business lost 21,426 days through work-related injuries. Most regrettably, during the year three employees lost their lives in work-related fatalities, two in Zimbabwe and one in Central America.