SABMiller has commissioned Corporate Citizenship to provide it with external assurance and commentary on its Sustainable Development Report 2008. SABMiller’s management has prepared the report and is responsible for its contents. Our objectives were to review its content, to conduct selected checks to underlying documentation and corporate systems and to provide this assurance statement and commentary for which we have sole responsibility.
Corporate Citizenship is a specialist management consultancy advising corporations that seek to improve their economic, social and environmental performance around the world.
A note describing our relationship with SABMiller and the assurance processes we have adopted appears at the end of this statement.
Our opinion
In our opinion, the report provides a fair and balanced representation of material aspects of SABMiller’s performance for the reporting period. Where we believe significant gaps in performance data and stakeholder views on material issues exist, they are identified below.
In forming our opinion and making our comments, we have had regard to the principles underlying the assurance standard AA1000 (www.accountability21.net) notably concerning materiality, completeness and responsiveness. We have also had regard to reporting guidance for content and the principles for defining quality contained in GRI’s G3 guidelines (www.globalreporting.org).
Commentary
SABMiller has been reporting externally on its non-financial performance for nearly a decade. This year’s report reflects the step change made two years ago that put centre-stage the company’s contribution to sustainable development, focusing on ten priority issues identified by the board as its most important impact areas.
During the year SABMiller concentrated its efforts further by focusing on discouraging irresponsible drinking, on making more beer but using less water and on enterprise development. Also in 2007, SABMiller signed the CEO Water Mandate, an initiative of the UN Global Compact, showing a public, external commitment on a key topic.
In this report, SABMiller has systematically taken account of the feedback received on the Sustainable Development Report 2007. We single out three instances for special note:
-
the clear tabulation of the rationale for and progress on current and future targets for the ten sustainable development priorities;
-
engagement with stakeholders more fully covered than last year, with key topics outlined with negative as well as positive feedback;
-
global governance and local application of SABMiller’s sustainable development approach more fully explained; the case study on Backus in Peru is particularly helpful.
Materiality
Does the report include the information about performance that stakeholders need?
The report shows that SABMiller has a clear process for determining what is material and the 10 priorities form the basis for the report. In addition, the extra coverage this year on employees and products, reflecting feedback received broadens the presentation. With increased focus on responsible drinking, water and enterprise development, future years’ reporting should, we believe, provide relatively greater coverage to these three themes.
To make effective judgments stakeholders need examples and data. The examples and case studies in this year’s report are more comprehensive and balanced than in previous years. This welcome development reflects the embedding of the sustainable development priorities in the operating companies. We saw evidence of this in our assurance work, notably how the performance level system was being used across the business to drive improved sustainable development performance. We believe stakeholders would be more able to make informed judgments if this data was shared with them in future.
Stakeholders may also have other needs for performance data, which consultation would help establish. Some indicators, such as annual testing rates for HIV/Aids, have been added to the report; others, such as taxes paid by division and type, are no longer included. We believe stakeholders’ ability to make informed judgements would be enhanced if SABMiller’s targets for key indicators were also provided, along with relevant industry benchmarks. In addition, segmental breakdowns, including for the soft drinks business which accounts for approximately a fifth of operations, would help enhance understanding.
Completeness
Has SABMiller identified and understood all aspects of its performance?
The Sustainable Development Report is part of a wider suite of information available on www.sabmiller.com. For instance, the Report specifically cites the Annual Report, the on-line
GRI index and the UN Global Compact progress report as part of that suite. As a result, a complete understanding of SABMiller’s impacts relies on material outside the scope of our report assurance.
The Report does set clear boundaries for operations included. Given the structure of the brewing industry, we believe readers would benefit from a full explanation of why SABMiller chose that reporting perimeter. In the fast growing Chinese beer market, for example, SABMiller has a joint venture interest, whereby it gains economic benefits without exercising management control. To achieve completeness, SABMiller should signpost readers to coverage of the sustainable development aspects of companies not included in the Report.
The completeness of the Report has been improved this year by the clear exposition of the group’s business strategy. It could be further strengthened by including within the body of the report a succinct summary of how a typical brewery works and its economic, social and environmental impacts, along with a description of the variable nature of local beer markets and the global structure of the brewing industry.
The coverage of SABMiller’s work with governments, such as in Lesotho on national alcohol policy, is welcome. However SABMiller is so strongly impacted by regulation and with public authorities receiving the largest share of cash value added by SABMiller worldwide, we believe further disclosure of the company’s relations with governments and related topics would strengthen the completeness of reporting.
Responsiveness
How has SABMiller responded to stakeholder concern, policies and relevant standards?
This year’s report includes increased volume and clarity of coverage given to stakeholder engagement. The challenge now is for SABMiller to show how it has taken account of the feedback received, the difficulties and dilemmas it has encountered and the difference made.
Looking forward
We look forward to future reports showing more fully the interconnectedness of SABMiller’s separate priorities, building on this year’s presentation. This would demonstrate how the economic, social and environmental impacts of local operations and the group as a whole are contributing to a more sustainable world. The challenges and dilemmas that arise are at the heart of sustainable development reporting. This year’s report demonstrates clear progress towards that goal.
Corporate Citizenship
30 May 2008
www.corporate-citizenship.com
Our relationship with SABMiller
We have provided a range of advice and support to SABMiller on corporate accountability issues since 1999. In the last three years our work has been limited to assurance and commentary on the sustainable development report which has included advice on external reporting expectations, on effective development of data collection systems, and on corporate community investment, together with analysis of data returns made by SABMiller companies to Group Head Office. In addition, SABMiller is a member of LBG, the London Benchmarking Group (www.lbg-online.net) – an evaluation framework for corporate community involvement that we manage on behalf of its members and adherents.
The assurance process
As there are no statutory guidelines for social reporting, we have formed our judgments based on emerging best practice among other companies, the principles of the assurance standard AA1000, the approach of the Global Reporting Initiative, the stated views of principal stakeholders and our own professional expertise and experience. In particular, we have considered the availability of information, sufficiency of evidence, underlying systems and processes, internal assurance systems, adequacy of resources allocated and relevant legal and commercial constraints. We have judged materiality by considering significant legal, regulatory and financial impacts, business policies, the performance of peers and competitors and stakeholder views.
A team of three, led by a director, undertook the assurance and commentary process. A second director acted as adviser to the group. The team has a variety of professional and technical competencies and experience. (Further information about us, our key personnel and our clients is available on our website www.corporate-citizenship.co.uk). The work was commissioned in March 2007 and was completed in July 2007. The reporting period is the year to 31 March 2007.
Our work has involved the following elements
1. An analysis of best practice among other companies, the principles of the GRI and AA1000as, discussions with SABMiller’s sustainable development managers about reporting the company’s approach to sustainable development, policies, performance measures, benchmarks, stakeholder relations and future plans.
2. A review of national and international published sources of information about the views and opinions of external stakeholders, including inter-governmental and governmental agencies, academics and special interest groups.
3. A review of SABMiller’s stakeholder engagement activity.
4. Research to identify suitable benchmarks against which to judge SABMiller’s performance.
5. Making a judgment of the internal assurance process, notably the procedures adopted to consider responsiveness, completeness, materiality and data accuracy.
6. Checks on a sample basis of key elements of the report’s contents to underlying records, principally returns from business divisions related to consumer issues, employee data, environmental performance and community contributions. These checks focus on the correct statement of data in the report and on satisfactory explanations for trends in performance.
Our work did not extend to a complete audit of the report’s contents or independent verification of data beyond that cited above, nor to direct engagement with stakeholders to seek their views, beyond that mentioned above.
The opinions expressed in this external assurance statement and commentary are intended to extend understanding of SABMiller’s non-financial performance and should not be used or relied upon to form any judgments, or take any decisions, of a financial nature.