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SAB Ltd and sustainability

19 August 2010

Corporations around the world are increasingly taking responsibility for the impact of their operations on the environment and communities within which they operate. This is both necessary and right.

Concerns about the future of the planet are well founded: there are physical limits to the impact of the consumption habits of six billion people on the availability of food to eat, water to drink and clean air to breathe.  Scientists are confirming our fears about issues such as climate change, declining biodiversity and the shrinking of rain forests and polar ice caps.

This reality underpins the efforts of many global and South African companies over the past decade to demonstrate more responsible corporate citizenship. The annual reports of most leading corporations show they are concerned about their impact on local communities, are working hard to reduce the energy they consume and the CO2 they emit into the atmosphere, and are taking care about environmental damage.

Further, businesses are playing a critical role in building economic growth, particularly around job creation. A well managed and growing business is good for wider economic development, leading to greater employment, more taxes paid and greater investment in local economies and communities.

The reality is that major corporations simply have to take responsibility for the impact of their activities on society and the environment. But increasingly, leading corporations realise that more sustainable behaviour does not only mean reducing risk and adding cost. A more strategic approach can actually reduce cost, open new opportunities and enhance competitiveness.

Globally there are five megatrends:

  1. There is a dynamic interplay between the reality of climate change and the future of energy markets. Many countries and companies realise that the only way to reduce carbon emissions will be to invest massively in renewable and alternative energy and new technologies.
  2. There is a growing recognition of water shortages. The growth in world population, accelerated urbanisation and the pollution of water sources will combine to become a major threat to the quality and quantity of water available to companies and people.
  3. The boundaries between what is regarded as public and private are becoming increasingly blurred. Corporations are now expected to be more transparent in their decision-making and more open with information.
  4. There is growing recognition of the importance of agriculture and biodiversity. The increasing demands for food will place pressure on the agricultural sector to expand activity but also to respect biodiversity.
  5. Finally, the sustainability agenda is increasingly recognised as a part of the corporate radar of innovation and differentiation. By looking at communities and the environment with new lenses, companies are developing new products, reaching new customers and uncovering new market trends before their competitors.    

All the above are also playing out in South Africa. Particular challenges of doing business here include how to create real and sustained value through black economic empowerment, how to contribute to a better system of schooling and skills development and managing the impact of HIV/Aids on the workforce and communities.

So how does a company deal with all these challenges? The South African Breweries (SAB) has a legacy of being deeply rooted in the realities of the country. It has a track record of social responsibility but is also keeping track of the rapidly evolving sustainability agenda.

SAB has made a long-standing contribution to South African society and the economy. A recent study by the Bureau for Economic Research (BER) showed that in 2006/7, the taxes derived directly from the production and sale of SAB's products amounted to R9,6-billion, and that 378 000 full time jobs (or 3% of total employment in SA at the time), could be directly or indirectly traced to back to the production and sale of SAB's products.

Water as just one dimension of how doing sustainable business will demonstrate the positive impact a company can have. SAB ranks highly on water efficiency during the brewing process and adheres to strict standards regarding discharging water at the end of the production cycle. For the past two years SAB has partnered with the World Wide Fund for Nature (WWF), and the Working for Water Programme to initiate a novel water neutral scheme. SAB aims to reduce its water consumption in the brewing process and then quantitatively offset the remaining water use by investing in projects that clear alien vegetation. This process releases similar volumes of water back into natural ecosystems. This project cleared sufficient alien vegetation to allow for the complete offset of water use at the Ibhayi Brewery in Port Elizabeth and the Newlands Brewery in Cape Town.

Enterprise development is critical, and a key contributor to the country's economic growth. SAB has for many decades focused on skills development to offer people a platform which empowers them and improves lives. One such example is SAB KickStart, a programme designed to inculcate a culture of entrepreneurship amongst South African youth. Launched in 1995, the programme has empowered more than 22 696 young entrepreneurs and enabled the establishment of over 3 200 small businesses. The Taung Barley Farmers project in the Northern Cape is another such example. Established in the early 1990's to encourage local barley production and reduce our reliance on imports, today the project spans 1,800 ha of land, and helps around 104 smallholder farmers generate an income from barley and maize in the Taung region.

It also helps to be part of a global group such as SABMiller plc which is committed to doing business sustainably and profitably. The group has a robust and transparent management framework in place which empowers SAB to earn its licence to trade from both the government and local traders and communities. It also assists us to keep track and eventually to lead in the changing tastes of our consumers and to address their growing concerns about the state of the planet.
 
As a proudly South African company, SAB is working hard to demonstrate the sort of societal leadership that will ensure that the company is seen as a trusted corporate citizen. We are also aware that the country will only succeed through the efforts of all South Africans. SAB aims to be a reliable partner to government, civil society and other corporations during this journey to a more sustainable future. 

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