Context
Water scarcity and quality is becoming an increasingly urgent and politically sensitive issue and is of immediate relevance to SABMiller, given the water-intensive nature of the beverage industry, our reliance on water-intensive raw materials and the fact that some of our companies operate in water-stressed regions and countries. According to United Nations data, around 52% of our current production volume originates from plants operating in countries that have some degree of water vulnerability and this is expected to increase to 66% by 2025.
At the same time, there is increasing demand on these same water resources to meet the needs of growing world populations, especially in developing countries, where over 1 billion people still lack access to clean, safe water and 2.2 million people die each year from diseases associated with dirty water and poor sanitation. The urgent need to address these problems is expressed as part of the Millennium Development Goals: to reduce by half the proportion of people without access to safe drinking water by 2015. Many of the countries in which we operate will face both increasing water scarcity and increasing demand for water, particularly if this goal is to be met.
However, the issues of water scarcity is not confined to developing countries and will become more complex, and less predictable, as the impact of climate change is felt. Scientists anticipate that these climatic changes will bring about a number of changes in both the sourcing of water as a raw material and handling of wastewater at the end of the brewing process. In terms of supply, changing rainfall patterns could translate into reductions in river flows and/or the natural recharge of aquifers. Other factors likely to be affected are water quality, water temperatures, run-off rates and seasonality, all of which have the potential to affect the availability of clean water for both industrial and urban consumers. More importantly, climate change may also affect the ecological structures which keep the integrity of water systems intact.
Water scarcity will also bring about a change in the way business views wastewater. In the first instance, reduced water flows could result in increasingly stringent discharge quality regimes due to the reduced ability of water bodies to assimilate wastes. It will also increase the focus on wastewater as being viewed as a potential resource as opposed to a waste, with treated wastewater being either recycled into production facilities or sold on to agriculture or other industrial consumers.
In response to this it is expected that water prices will increase to reflect its true value. This price increase is more likely to be passed onto industrial consumers than communities. Water restrictions could also be more evident as communities and business compete for limited resources.
As such, we have a clear business imperative to take action in three specific areas. Firstly our operations need to reduce the amount of water they require to produce a unit of beer. Secondly our operations must consider the needs of the communities in which they operate to avoid any potential conflicts over water use. Lastly, but no less important, there is a case for engaging with our suppliers to research and gain a better understanding of our extended water footprint.
Objectives
The objectives of this position paper are:
- To provide a shared vision of SABMiller plc’s views, commitments and future outlook in relation to water resource management.
- To provide an overview of SABMiller’s water management strategy, the tool by which we will translate our views and commitments into action on the ground. This will include looking at SABMiller’s direct impacts through its own operations and the influence it can bring to bear through the value chain.
- To emphasise our pursuit of continual improvement in water performance to strive towards levels at or above international best practice.
- To highlight potential areas of value protection and creation through reduced exposure to risk and improved efficiencies.
- To provide a link to the SABMiller Sustainable Development strategy and overall Corporate strategy.
SABMiller commitments to water management
SABMiller is committed to the implementation of sound water management practices throughout its global operations in a manner that takes account of local geographical, environmental and social factors. On a case-by-case basis, we will also direct corporate social investment towards improving the access to reliable water supplies in the communities in which we operate.
Additionally, we have undertaken to engage with our supply chain partners to understand their use of water, in order to gain a better understanding of our overall water footprint.
We acknowledge that we are still some way in having a full and comprehensive appreciation of our overall water footprint throughout our value chain. We have made a commitment to constantly re-evaluate the targets we have set as our research progresses, to ensure they are in line with our understanding of our impacts and our sustainable development ethos.
Our approach to water management
An important aspect of the development of our approach to water management was to ensure that we have the right balance in terms of establishing a consistent approach across the group, while at the same time incorporating enough flexibility to allow our operations to adapt and respond to local conditions. The water staircase is our solution to achieving this balance.
Principles for water management
The SABMiller principles of water resource management have been developed through a series of consultations with our technical managers, external stakeholders and have also been informed by external published resources.
Water resource management initiatives are principally focused on four key areas where we believe the company and its individual business units can have the most progressive impact.
Plant water use and effluent management
SABMiller operations will:
- Manage internal water consumption efficiencies, optimising the amount of water used to produce a unit of product through effective monitoring.
- Consider rainwater harvesting as a possible supplement to brewery raw water supply.
- Ensure suitable treatment options are available for facility wastewater and, where possible, establish possible uses for the treated wastewater for reuse on site or within the local community.
- Ensure effluent quality, as a minimum, meets local legal requirements.
Watershed mapping
SABMiller operations will engage in watershed mapping to:
- Gain an understanding of water availability and quality now and in the future, based on projected population changes, farming demands, industrial usage changes and climatic changes.
- Understand their water usage/demand in the context of local supply. i.e. % usage against technically available water resources
- Identify potential areas for watershed protection through individual or collaborative actions.
Community relationships
SABMiller operations will:
- Place an emphasis on proactive community engagement in terms of water usage e.g. actively communicating with the community in question about the plants water use and conservation measures etc.
- Determine the interaction between the water needs of the local community and the water usage of the business.
- Evaluate potential areas for corporate social investment (CSI) in order to improve local water quality and availability.
- Evaluate opportunities to supply treated/conditioned water to neighbouring facilities
Supply chain relationships
Principles of water management, where possible, will be shared with supply chain partners in order to:
- Stimulate and support water conservation by a broader section of industry.
- Help supply chain partners can improve efficiencies while at the same time reducing risk and costs.
- Reduce the overall SABMiller water footprint.
Implementation
These principles will take time to implement but group companies need to commit to continuous improvement as demonstrated through the sustainability assessment matrix (SAM – a self assessment performance management system). Level 1 on the stairways represents the minimum standard which we would expect all operations to achieve. Companies will be expected to use the stairways to define their current position, identify actions needed to improve and measure progress. Levels on the stairways range from Level 1 to Level 4 which represents achievement of what is currently considered to be best practice in a particular field.
Accountability and responsibility
- The SABMiller Executive Committee (Excom) is the overall decision making body within the group and is responsible for ratifying any policies, position papers (etc) which reflect group views.
- Supporting the Excom, from a technical perspective, is the Global Technical Forum (GTF), a body consisting of the respective hub technical directors and group specialists. This group acts as an advisory body to the executive on issues such as environmental management and, in turn, sets overall policy on how environmental activities are conducted in all regions or countries of the world.
- At hub level, the respective country/operation technical directors are responsible for ensuring the hub technical director(s) is(are) aware of their stairway position and leads the process of communicating policy outward and collection of key performance indicators required to manage their stairway position.
- The SABMiller plc environmental manager will support both the hub and country/operational technical directors in facilitating the above processes.