Carlsberg produces a report with merit, but the most material issue receives wholly inadequate acknowledgement
When you think about the corporate responsibility of companies that produce alcoholic drinks, what’s the first thing that comes to mind? Responsible drinking?
This is the single most material issue for companies in this sector. In Carlsberg’s fourth corporate responsibility report, the responsible drinking section is underwhelming. In an 88-page report, responsible drinking, number seven in a list of 17 material issues, amounts to two pages of text, two case studies and two targets (one of which is to develop targets). Contrast this with the environment section, which has seven pages, five case studies and 13 targets.
Alcohol abuse is a major problem for societies around the world. Statistics show that alcohol remains a leading cause of accidents in the home, on the road, in the workplace, and in public places. The World Health Organisation says the harmful use of alcohol causes 2.5m deaths a year, including 9% of deaths among 15-29-year-olds, and is responsible for many other “social and developmental issues, including violence, child neglect and abuse, and absenteeism in the workplace”.
As the fourth largest brewing company in the world, Carlsberg has a major impact on the way alcohol is perceived and used. Carlsberg’s report presents a value chain that includes impacts on consumers, and in the responsible drinking section, Carlsberg describes its sponsorship of the International Center for Alcohol Policies, and of the European Beer Pledge, so clearly responsible drinking is on Carlsberg’s radar.
Carlsberg also reports its continuing sponsorships of football, involving 60 markets around the world, and highlights the fact that 6.6 million consumers were exposed to “responsible drinking” messaging. In a year when Carlsberg was criticised for inappropriate marketing in Copenhagen airport and also in Danish schools, treatment of this issue does not go into enough depth in this report.
Changing behaviour?
It would be interesting to see Carlsberg going beyond disseminating “responsible drinking messaging” and finding more advanced ways to assess the impacts of how such messaging is changing behaviour around alcohol use. How effective is promoting responsible drinking at mass events where drinking is most prominent? Is this just a way to make advertising to Carlsberg’s potentially largest target consumer group a little more politically correct?
Of the 10 report “highlights”, five are environment related, showing the importance of environmental (and cost-efficient) performance to Carlsberg. Carlsberg reports an improvement in absolute carbon emissions (12%), primarily due to the purchase of renewable energy offsets covering energy use in western Europe, but absolute increases in energy consumption, total solid waste and water discharge, while maintaining or reducing consumption versus intensity at 2011 levels. Carlsberg is increasing biogas use from wastewater discharge to supply renewable energy, but this remains at a relatively low level of 3.5% of thermal energy consumption (which is 75% of total energy consumption).
Water consumption is a key impact for the brewery sector, and Carlsberg claims its rate of 3.3hl of water to produce 1hl of beer to be the most efficient rate reported by a global brewer. Despite this, and a commitment to addressing water risks throughout the supply chain and detailed risk assessment in 2011, Carlsberg did not initiate activities in this area “due to reprioritisation of internal resources”. Disclosures relating to water impacts, in a company where almost half of water consumption is via its own boreholes or surface water, are surprisingly minimal.
A nice aspect of Carlsberg’s reporting is the end-to-end life analysis tool, which shows that the largest proportion of carbon emissions is in the area of packaging. A new cradle-to-cradle project is being undertaken, which will enable progress to be made in this area.
Limited disclosure
The Carlsberg report is nicely presented, carefully drafted, cleanly designed and well written. It’s a pleasant read. The basis for reporting is clearly stated, with 14 pages devoted to the GRI index, assurance, reporting principles, definitions, and a list of company sites. A further four pages cover performance data for the years 2010-2012. Carlsberg also discloses the number of complaints levelled against the company in the area of marketing communications – a trust-building inclusion – and in many cases, Carlsberg does not shy away from reporting that targets were not achieved or improvement plans postponed.
However, for this large company, on its fourth round of reporting, is a self-declared C level report which discloses fully against only nine GRI-based performance indicators (actually, not enough for the required C level minimum) truly any sort of stretch? One page on responsible sourcing, for example, (and a short review of barley purchasing programmes) barely covers the vast implications for sustainable agriculture, human rights in the supply chain and supplier compliance advances that we might expect of a company such as this.
Most of Carlsberg’s targets are soft targets, and many are still to be developed in 2013. The year appears to be a pivotal one in which new objectives will be established in many areas. Hopefully, this will also include more comprehensive reporting.
Snapshot
Follows GRI? Yes, Application Level C+.
Assured? Yes, but limited.
Materiality analysis? Yes
Goals? Yes
Targets? Yes
Stakeholder input? No
Seeks feedback? Yes
Key strengths? Clarity
Chief weakness? Lightweight treatment of responsible drinking.
Pleasant surprise? Disclosure of complaints around marketing communications.
Elaine Cohen is a sustainability consultant and reporter at Beyond Business, and is a CSR blogger.