Overview from our board
Our progress and performance are overseen by the corporate accountability and risk assurance committee of the board (CARAC)
Generating inclusive growth
Around the world, we work to build strong local businesses that contribute to their local economies. We do this by producing high-quality products which consumers choose and enjoy every day.
Beer is a local business and the success of SABMiller is inextricably linked to the wellbeing of the communities in which we operate. Recognising that we are part of the fabric of society, we seek to generate ‘inclusive growth’ – in other words, to build value chains that drive economic growth and stimulate social development while using scarce natural resources efficiently. In this way, we can generate long-term returns for our business while also creating wealth for our local communities.
Our direct economic value creation during the year amounted to US$23,921 million, which, both directly and through economic multipliers, makes a significant contribution to livelihoods around the world.
Managing sustainable development
‘Constantly raising the profitability of local businesses, sustainably’ is one of SABMiller’s four strategic priorities. Sustainable development is therefore integral to the way we do business. Underpinning our approach are our 10 sustainable development priorities which inform how we focus our efforts and prioritise our resources. At a global level, we focus particularly on the three areas most material for our business: alcohol responsibility, water and enterprise development in our value chain.
Progress is measured through our Sustainability Assessment Matrix (SAM). During the year, the group’s average SAM score increased from 2.9 to 3.2 as our local businesses addressed the sustainable development issues most material to their particular markets.
This progress would not be possible without the talented and dedicated individuals who drive the business forward. Our people are our enduring advantage and SABMiller’s success is founded on our 70,000 employees across six continents.
The growing resource challenge
There are currently two billion middle class consumers in the world and the number could reach five billion by 20301 – much of the increase coming from emerging and developing markets. We see this trend as one of the main drivers of SABMiller’s future growth. This year, two of our fastest-growing regions were Africa and Latin America which saw lager volumes increasing on an organic basis by 13% and 8% respectively.
At the same time, this growth will place further demands on the world's finite resources. Business, government and civil society must therefore work together to develop practical, local solutions that generate inclusive growth while conserving water and energy and managing the use of land.
Businesses are well placed to innovate and drive efficiencies. SABMiller has extensive programmes in place to improve water and energy efficiency and reduce waste in our breweries. In 2012 our water ratio - the amount of water required to produce a hectolitre of lager - decreased from 4.2 hl/hl in 2011 to 4.0hl/hl, a 5% improvement. Our carbon ratio - the carbon emissions generated per hectolitre of lager produced - fell from 13.8 kg CO2e in 2011 to 12.4 kg CO2e, a 10% improvement.
But simply focusing on our internal operations is not enough if we want to secure adequate water, energy and agricultural supplies for our breweries. We have built a number of partnerships with governments, non-governmental organisations and academic institutions to tackle the sustainable development challenges we face – examples being the Strategic Water Partnership Network in South Africa and our extensive smallholder farming programmes across Africa and India.
Addressing societal challenges
Each day our beers are enjoyed by millions of consumers. There is, sadly, a small minority of consumers who do not drink responsibly and who pose a risk to themselves, their families and their communities. Alcohol abuse and associated societal issues such as violence, drunk-driving, underage drinking and the impact on non-communicable diseases are a cause of concern around the world.
We recognise that we, along with the wider community, have a role to play in tackling alcohol abuse. We uphold high standards in all aspects of alcohol production and consumption and work with partners around the world to encourage responsible drinking, remind consumers about the impact of alcohol-related harm and address the wider societal issues resulting from alcohol abuse.
The greatest contribution that we can make to the economies in which we operate is to run successful, profitable businesses that create jobs, pay taxes and stimulate local enterprise while making efficient use of limited resources.
The resource and societal challenges we jointly face with local communities are complex and interconnected. SABMiller does not have all the answers and we know that we will not find them on our own. Nevertheless, we have made progress and have built expertise in areas such as managing water risk. By sharing knowledge and working collaboratively with our stakeholders, we are confident we can deliver innovative solutions at a local level.
1The emerging middle class in developing countries, Homi Kharas, OECD Development Centre Working Paper No. 285, January 2010. ‘Middle class’ is defined as having daily per capita spending of US$10 to US$100.
Chair of Corporate Accountability, Assurance and Risk