Ethical Corporation is now Reuters Events - LEARN MORE
Beer company SABMiller’s latest sustainability report is refreshingly brief, but lacks focus
Plenty of people can testify to the difference beer makes, especially the morning after the night before. SABMiller is responsible for much of it, through brands such as Grolsch and Miller Genuine Draft. Its 2008 sustainability report – subtitled “making a difference through beer” – hints that humour may, after all, be alive in the sustainability world.
One of the world’s largest brewers, SABMiller began life in South Africa and now has operations across the world. The company manufactures international and local beer brands in countries from Italy to Zambia, including traditional sorghum-based varieties in Africa. In some markets it also bottles and distributes major soft drinks.
In just 34 pages, SABMiller’s 2008 sustainability report gives a remarkably comprehensive view of its progress in tackling issues specific to the brewing industry. It is well written and illustrated throughout by a broad spread of country- and brand-specific case studies. It contains good data and graphics.
The report is available in three versions: print, website and pdf. The content of these is essentially the same, which is perhaps a missed opportunity to target different audiences. The company has fallen into the same trap as many others, by forgetting to explain what’s in each version at the entry point. This means the poor SRI analysts must read all three to be sure of not missing anything.
The website contains some additional material, including a few position papers and expanded case studies. It would have been helpful to readers had the pdf version contained links to the relevant web pages, rather than just the company homepage.
The company has identified 10 issues of greatest importance to its business – its sustainable development priorities – and has structured the report around them. This vividly illustrates the breadth of sustainability, from lager louts to economic development. But we are left to guess how the company has identified these subjects and why others have been omitted. Strangely, SABMiller’s employment issues (aside from human rights and HIV/Aids) are not included in its 10 priorities. Their status as the “odd one out” is emphasised by the fact they are discussed in a detailed, but entirely separate, report section. The liquor is strong but it’s badly packaged.
The chief executive identifies three key areas where SABMiller can be a global leader: discouraging irresponsible drinking, making more beer using less water and encouraging enterprise development in its supply chain. But his letter would benefit from a clearer explanation of the relationship between business strategy and sustainability strategy – where they coincide and diverge.
It is refreshing to read a report that fully acknowledges the importance of reducing water use, a frequently neglected issue. Appropriately for a company that began in Africa, the report provides a greater-than-normal focus on developing country issues such as HIV/Aids and small enterprise development. Its economic value added in South Africa gets a special mention in the chief executive’s statement.
Addressing climate change is also one of the company’s “priorities”. Brewing and distributing beer is necessarily carbon intensive and SABMiller states its carbon footprint as 2.3m tonnes. One may question how much priority the issue has received to date, given the target to “improve average energy efficiency”.
There is one substantial omission. Aside from the references to water consumption, the report pays little attention to the issues associated with growing the crops – including maize, sorghum and wheat – necessary for producing beer. Even though the company does not grow crops itself, it seems relevant to discuss this core component of its supply chain, given the environmental impacts of agriculture.
One SRI analyst told me “how to eat a report for breakfast”, by which he meant how to digest a whole corporate responsibility report in the cab on the way to the company meeting. He reads the chief executive’s letter, the data and the targets. If stuck in traffic he may take in a case study. On this harsh test, SABMiller’s report would not fare as well as it should. The double-page overview of progress at the beginning is a handy summary, but is text-heavy, and the targets are vague and short term.
To give our analyst a substantial breakfast, SABMiller needs to get the chief executive to better tackle the interface between business and sustainability and establish specific medium-term targets that set out the vision for what the company intends to achieve. The company could target a broader range of audiences by differentiating the length and style of communications between its three formats.
Follows GRI? Refers to GRI, self-declared B+. Cross-referenced table available online.
Assured? Yes – by Corporate Citizenship.
Materiality analysis? Little explanation of how material issues were identified.
Goals? Yes – but slightly hidden.
Targets? Yes – mainly qualitative and short term.
Stakeholder input? Yes – some stakeholder quotes, mainly positive.
Seeks feedback? Contact details are given.
Key strength: Brevity; covers most of the big issues; good case studies.
Chief weakness: Issue prioritisation and sustainability vision.
Pleasant surprise: Humour in the title.