Sustainable development review

Our ability to be successful and profitable is inextricably linked to the health and prosperity of the communities in which we operate.

 

Key achievements

• Introduction, group-wide, of a self-assessment management performance system across all 10 sustainable development priorities
• Reduction in carbon dioxide emissions ratio from 14.44 kg/hl to 12.74 kg/hl in 2006
• Energy use in our operations reduced from 163 mj/hl in 2006 to 146 mj/hl
• US$26 million, representing 0.9% of profit before tax, invested in corporate social investment programmes
• Water consumption ratio in brewery production reduced from 4.60 hectolitres to one hectolitre of beer in 2006 to 4.56 hl/hl, representing a notional cost saving of US$2 million
• Environmental management systems, based on the principles underlying ISO 14001 standard or similar, established for 84 sites
• KickStart, a programme encouraging entrepreneurship, launched in a third market, Colombia
• Signatory to the UN Global Compact in January 2007

 

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.
Priority	Objective	Actions	Future
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: Watershed mapping Managing internal water consumption efficiencies Engaging with suppliers Direct CSI to improve access to water within local communities	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: Waste generation and disposal Waste segregation and classification Waste disposal duty of care Upstream waste minimisation Emissions	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

 

The SABMiller sustainable development framework

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.

Measuring our performance

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.

Our people

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.

Training

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.

Diversity

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).

Days lost through industrial action

As a result of industrial action, 138 days were lost, the majority of which were attributable to our operations in Peru.

Health and safety

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.

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