working better together

our corporate and social responsibility report 2004

This is our second Corporate and Social Responsibility (CSR) Report, incorporating for the first time a full Environment, Health and Safety Report. IT COVERS THE PERIOD FROM JANUARY 2002 TO DECEMBER 2003 This report is for all our stakeholders. Shareowners, employees, special interest groups, investment analysts, consumers, customers, suppliers, business partners, governments, members of the communities in which we live and work – we invite you all to take a look at where we are and how we’re doing on our CSR journey. To help each of you find the information you want, we have provided two ways to follow the journey. If you like, you can take the quick route through the main illustrated pages to get the big picture of Cadbury Schweppes and CSR. Along the way, or straightaway, you can get more detailed information on specific issues, policies, key performance indicators and case studies from the booklets inserted in the report.

welcome In the following pages we map out our continuing journey in the world of Corporate and Social Responsibility Take a look at our four big challenges; find out why CSR matters to us, what we've achieved and how we’re going about putting it into practice throughout our business.

Manufacturing PeterArea Manager Todd

Cadbury ANZ content by chapter 1. our commitment the little book of big challenges 2. who we are 3. our value chain 4. what csr means to us our business principles 5. how we make decisions encouraging stakeholder dialogue 6. making it happen key performance indicators 7. our people Big Challenges 1.1 our people policies and principles Managing company 1.6change 8. our consumers 4.1 Our Business Principles Addressing obesity 1.11 our responsibility 11.1 Environment, health and safety policy Trading with care 1.16 to consumers 9.1 Human rights and ethical trading policy Economic responsibility 7.2 Equal employment opportunities and diversity policy 9. working 8.4 Quality policy with suppliers how we are working with suppliers 10. growing community value new topics in this report progress we are making Generating and sharing wealth around the world 9 Working with suppliers 1.16 investing in communities Sustainability key performance indicators 6.1 10.1 Growing community value around the world 11.12 Packaging innovation Stakeholder dialogue 5.1 11. environment, 6 Embedding CSR within the organisation Listening to consumers 8.1 health and safety 6 Working better together an integrated approach to the environment, health and safety; and responsible use of resources

12. the journey other challenges 6 continues Consistent global data collection and index Biodiversity 11.14 1. our commitment We are wholeheartedly committed to Corporate and Social Responsibility (CSR). From our key strategic goals to the individual actions of our people around the world everyday, it is central to who we are, what we do and the way we do it.

New horizons. Over the past two to three years Cadbury Schweppes has made great strides in embedding CSR under the leadership of my predecessor, John Sunderland, and Baroness Judith Wilcox, the Chair of our first CSR Committee. I look forward to continuing their great work. Todd Stitzer chief executive officer For all of us at Cadbury Schweppes, 2003 was a year of transition. John Sunderland became Chairman and I became Chief Executive, we undertook the largest restructuring in our history and we made and successfully began integrating our largest acquisition, Adams. Big changes accomplished in an atmosphere of challenging global economic, social and political conditions.

We have adopted five key strategic goals, one of which is to reinforce our good reputation with employees and society by building on our high standards of CSR worldwide. I believe passionately that our global team has the commitment and enthusiasm to deliver greatly on this and all our key goals.

The restructuring of our business and the integration of Adams require factory consolidation and a reduction in the number of employees worldwide. This challenge will be met with care and sensitivity and guided by our business values of integrity, honesty and responsibility.

These values are not just about maintaining a healthy workplace, where people love to work. They underpin our commitment to working better together to understand and find solutions to other challenges: the ethical sourcing of raw materials; the economics of sustainable business in a competitive and ey fast-changing world; and changing consumer attitudes to diet and active rn u o lifestyle. j

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t We now have frameworks to help us understand and manage these issues,

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f as discussed by my colleague Baroness Judith Wilcox (right). Looking forward, y

d the focus of the next two years is to embed these further throughout the

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e r business. We will train and develop our colleagues, build capability within our

g supply chain, strengthen our key performance indicators and data collection

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t t systems, and determine the role of auditing and external verification in our e g CSR reporting.

Sanjiv Sarin Commercial Director Cadbury Egypt Baroness Judith Wilcox non-executive director and chair of the Corporate and Social responsibility committee

Journey logbook. Throughout my career in business and public life, I have always believed that good business is conducted competitively but fairly, honestly and with benefits for all those involved. I have found those beliefs to be rooted in Cadbury Schweppes' traditions too. I am delighted to play an active role as we build on them, in every part of our business and in diverse cultural settings around the world.

We are halfway through a planned five-year This learning has been reflected in our Ethical programme to review, update and embed Sourcing Standards, which are underpinned our CSR commitment, while incorporating the with a system for supplier evaluation, training rich and varied CSR traditions that we have for our people and engagement with our inherited from the companies and brands suppliers. that now make up Cadbury Schweppes. We are building around five CSR pillars: human Another highlight is Growing community rights and employment standards; ethical value around the world, a global strategy sourcing and procurement; marketing, food to demonstrate the part we can all play to and consumer issues; environment, health assist local communities. We aim to invest and safety; and community investment. We one per cent of our pre-tax profits, and also publicly committed in 2003 to the have established guidelines to measure and principles of the United Nations Global manage our community investment activities. Compact. We are pleased that we continue to receive In the period covered by this report we have encouraging external feedback on our developed frameworks to enable us to deliver performance, including positive ratings higher performance in key areas. For in the FTSE4Good, Dow Jones Sustainability example, our Human Rights and Ethical and Business in the Community indices. Trading (HRET) committee has concentrated But the most important feedback is from on putting the detail of our HRET policy into consumers, employees, shareowners and practice. We learned much from pilot study other stakeholders, who continue to trust visits to five key countries: China, Ghana, us to create brands that people love with Indonesia, Mexico and Turkey. honesty, integrity and responsibility. p1.1 managing company change p1.6 addressing obesity p1.11 trading with care p1.16 economic responsibility, wealth generation and distribution

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c hallenges managing company change We have embarked on a programme of wide ranging changes that will shape Cadbury Schweppes for the future. These changes are driven by our desire to “deliver greatly” – in every sense, from great shareowner returns to great contributions to the communities we live Bob Stack and work in. We have set our sights Chief Human Resources Officer deliberately high. To continue to succeed in a world of more demanding customers, changing consumer tastes, increasingly global competition, mounting public scrutiny of the food and drink industry and rising expectations of the role of business in society – we must deliver greatly. To this end, we have carried out a fundamental reorganisation of the business and are focusing our heads and hearts on achieving five stretching and mutually reinforcing goals (see chapter 4). In the way we go about achieving our goals, as in everything, we will be guided by our values of integrity, honesty and responsibility and by our core purpose of working together to create brands people love. big challenges 1.2 regional operating units and six global units and operating regional ourselves give to functions in order possible structural the strongest costs, reducing for foundation and decision making streamlining together. better working builds on a history This reorganisation In recent of managing change well. successfully acquired we have years a number of and integrated and biggest is businesses. The latest the Adams completed We Adams. 2003 and are acquisition in March the world. it around busy integrating similarly big and bold other Two underway: also well are integrations Americas of our the bringing together businesses and the further Beverages As Beverages. of Europe integration of we continue on our journey to committed we are transformation, Science and Technology Americas Beverages Americas Beverages Americas Confectionery East and Africa Middle Europe, BeveragesEurope Finance Asia Pacific Legal Human Resources Supply Chain Strategy Commercial As our Chief Executive Officer Todd Chief Executive As our Stitzer of our said at the outset in 2003, “We need to reorganisation that define the change the processes that the technology work, we way in supports the organisation our work, in and the ways which we work, this But through which we work. supportive, change we must remain other. open and honest with each with on new challenges, work Take things do great to new people. Dare together.” out the reorganisation carried We In early 2004, and effectively. rapidly added as was Science and Technology at a new global function represented of the organisation, level the top the importancereflecting area of this We business strategy. our future for five around now organised are Operating units:Operating Global functions: together to create brands people love. It together to create brands people underpins our updated Leadership new Imperatives, particularly our three our values Imperatives: collaborative, living and growing our people. Working Better Together will be and incorporated into all new programmes and also into other existing key global Sales and regional initiatives, for example Operations Planning and Integrated be Portfolio Management. It will also delivered to all employees as an introductory leadership training session, followed by more detailed team/organisational training activities. As we roll it out and make it an everyday part of the way we go about our business, Working Better Together will help us to dare and do great things together to create brands people love. basis, how we can ratchet up our we can ratchet basis, how we can how innovate, capacity to - with society our reputation reinforce and in so greatly how we can deliver one of the verydoing become best the world. companies in

Working Better Together reflects and reinforces our core purpose: working Building on the success of Sharpening The Culture, in 2003 we launched Working Better Together. This core programme offers a wide range of tools to help all teams perform to a high level in the more cross-functional and networked business that we have today. Our Sharpening The Culture programme, to boost introduced in 1997, is designed our people the skills and capabilities of all in line with our Managing For Value discipline and our Leadership Imperatives, Aggressive especially the 3As: Accountable, and Adaptable. Case study Working Better Together We are looking to improve across the across improve to looking are We all our encourage We board. ideas on their contribute to employees together, better how we can work an organisation how we can develop itself on an everyday that can stretch making it a success and to doing it in doing to it a success and making the right way.

1.3 big challenges big challenges 1.4 are being offered. All concerned are All concerned offered. being are support with extensive provided job search including programmes activities, interview and cv counselling. and career preparation, understand to all our people want We listened engaged, feel to our strategy, with consideration. and treated to, uncertainty will recognise where We a clear sense of provide and it exists employee enhanced through direction Where communication programmes. particular affected, locations are all for our commitment remains Cadbury businesses to Schweppes and positive a continuing look for community role. Our first and foremost goal remains and foremost Our first shareowner superior deliver to performanceManaging in line with our we which to discipline, Value for committed. absolutely remain we are this goal, achieve To down our costs managing aggressively to strategy Growth for via our Fuel with competitive become much more a will reinvest our FMCG peers. We significant proportion savings of these in well designed and well executed plans as partgrowth of our Smart strategy. commercial Variety in achieving well advanced are We necessary demanding but two the reduce to targets: medium-term by in operation number of factories 10%. numbers by 20% and employee but we are an easy process This is not carrying and it out responsibly in consultation with our sensitively and in the world colleagues around of openness, line with our values the individual. for and respect fairness a certain attrition applies to Natural people and when we make extent, packages good redundancy redundant,

We have managed the impact of the managed the impact We have open and transparent changes by being to be done and by working about what has to do it in the right way. with employees employees in advance of We informed all hired a firm that the closure and large scale specialises in supporting firm devised a restructuring. The Professional Project, to programme, New employees coordinate the redeployment of in the most supportive way. The job programme included researching and vacancies with local companies wishes matching employees' capabilities, job and ambitions within the current market and business environment. at Alexandro Michelmann, who works has been Avenida, said: “In my opinion this made us a very instructive moment and has to the ponder over several issues related our life closing down of the factory and apply the from now on. Now we have to best, and things we have learned, do our always believe in our potential.”

To increase production, logistics and To increase production, logistics our distribution efficiencies and support we plans for growth and innovation, decided to consolidate the Avenida facility at production site into the modern in October Bauru. We began the transition July 2004. 2003 and aim to complete it by Estado While the closure of Avenida do new jobs involves the loss of 300 jobs, 212 will be created in Bauru. sites in Brazil Brazil produces Halls and Cadbury Adams well as chewing gum Vita-C drops, as Bubbaloo, Clorets and brands Trident, have three plants in Chiclets. We currently do Estado, Sao Paulo; Brazil: Avenida site in Cumbica, Guarulhos; and a modern Bauru. Case study production Consolidating

1.5 big challenges big challenges 1.6 agreed obesity based on scientific evidence. deterioriation in the body’s major in the body’s deterioriation organs. To complex. The causes of obesity are understanding, the medical increase and scientific communities are of, on the role engaged in research changed eating genetics, example, for changes in a habits, changed lifestyles, the diet, overall population’s the to of new ingredients introduction and the impact of the diet, in which people live. environment together to tackle and authenticated The rise in obesity is an area of The rise in For public health concern. considerable working now, we have been some time bodies governmental with our industry, how we stakeholders to see and other to address the can add to the efforts that we all work problem. It is essential In many countries across the world countries across In many decades the average two the last over gradually weight of people has been a This has now reached increasing. universally obesity, point whereby weight ratio defined as a height to greater a body mass index that gives the World than 30, is viewed by one of the as Health Organisation global health most considerable obesity is associated concerns. Chronic heart such as diabetes, with disorders of forms and other failure Trish Fields Consumer Impact Director addressing obesity addressing We believe we must focus on the real causes in order to We believe we must of a sustainable solution. contribute to the achievement Our chocolate products are products Our chocolate fats other cocoa, milk, predominantly soft sugar; contain sweets and sugar; form, in diet not when drinks, contain sugar – with the natural in many. sugar of fruit also present rise in consumption. Our products are products Our consumption. rise in as consumers by primarily viewed of our Some and refreshment. treats range gum product chewing extensive dental health benefits, and provide as Halls, provide such products, other relief. cold-symptoms brands Consumers trust us and our us with an and this provides a contribution. opportunity make to taking a holistic this end, we are To approach. taking action (and urging are We of do so) in the areas to others and education to information consume our consumers to encourage sensibly and in moderation. products ensure to particularly are keen We our enjoy learn to that children to and refreshment, as treats products and fully be consumed in moderation We want to play our part play in to want We these importantaddressing issues of However, lifestyle. and diet confectionery a and soft are drinks so our small part diet, of the world’s impact is a direct opportunity have to In countries such as the UK, limited. confectionery is consumption where with high compared relatively 1% just over it represents elsewhere, the last twenty and over of the diet, a significant been has not there years What is known is that the nature of the nature known is that What is has changed. More our diet food and pre-prepared “convenience” parts and in many is being consumed been a rapid has there of the world in out-of-home consumption. increase has is that there What is also clear shift a more been a gradual to sedentary Technological lifestyle. us to enabled have developments and in manual activity in work reduce also increased have the home. They via entertain ourselves our ability to such as TV and technology, interactive sport than by games, rather computer activity. or physical

1.7 big challenges big challenges 1.8 , Supporting parental/carer control Supporting parental/carer susceptibilities Recognising children’s differences cultural to Sensitive Supporting of the principles and consumption responsible balanced lifestyle Supporting social positive development which we believe reflects best reflects which we believe In some cases in the industry. practice what is generally we go beyond viewed as the most stringent regarding standards regulatory children. to marketing global code Our comprehensive all advertising is: ensures In support the we took of this stance, all from withdraw decision to at specifically advertising directed aged less children situations where majority of the form than 8 years viewers. a developed have In addition, we practice global marketing code of • • • • • guided by parental authority. We have We authority. parental by guided practice of marketing a specific code particularthat guides the attention marketing we insist on when and care impact on children. has any can be of products Our range the whole by enjoyed consumed and or for or refreshments as treats family parttheir functional benefits as of a firmly believe We balanced lifestyle. are carers and guardians that parents, the most important direct people to are as they consumption, children's influence in children's the key development. advertising our products believe We only is appropriate children to directly in an when it is conducted that supports the environment the child has and where role parental an age of cognisance and reached established which is generally reason as the age of 8. to directly Advertising our products when it is also appropriate children supports social development positive and nutritional understanding and consumption. responsible encourages We are working with both our both with working are We experts to and other science teams understand better overweight/obesity and the role in supportwe can play of solutions. We are helping to improve the improve helping to are We understanding of the issues overweight/obesity by surrounding and using our consumer research insights. We are creating new ways of using new ways creating are We our educate to labelling product and consumers on responsible in always balanced consumption, line with local labelling requirements. the pack the distinction between the distinction the pack single serve/occasion products and sharing or multiple eating for with occasions, consistent regulations. applicable labelling 6. Science 5. Consumer insight 4. Labelling We are investing in science and investing are We new develop to innovation greater create to formulations choice. our advertise and promote We within a global responsibly products (visit our website code of marketing www.cadburyschweppes.com). in labelling best practice follow We the decision to taken and we have clearly defining on towards work A STRICT CODE OF PRACTICE CODE OF A STRICT MARKETING AND REGARDING CHILDREN public and share recognise We impact the potential concern about young to of advertising directly include in this would We children. of of all forms the purchase outdoor, radio, advertising – TV, SMS and the use of posters internet, at – specifically directed texting aged less children situations where of the majority form than 8 years the audience. 2. Marketing 3. Portioning We are addressing the problem in the problem addressing are We too: ways, other 1. innovation Product choice and

1.9 big challenges big challenges 1.10 We are proud of our brands. They are They brands. of our proud are We or as treats enjoyment fun and give the around people all to refreshment at the are Our consumers world. heart to listen of our business and we listen them. We by and act responsibly to want they say they people when to and as in moderation our brands enjoy part and lifestyle. of a balanced diet and new innovations, offer variety We to on our products, plus information product help people choose the right them and the eating occasion. for responsible encourage will always We this is as we believe consumption to consumers continuing to central our brands. enjoy licensees, franchisees, bottlers licensees, franchisees, partners) and promotional in discussions with engaged are We business partners to our contracted our follow they recommend contractual where standards permit. arrangements engaged in education are We initiatives and other programmes support physical to increased activity. with a working actively are We in the of stakeholders range of guidelines development and balanced lifestyle promoting choice. informed our employees encouraging are We participate in community to better help encourage to initiatives building on our and lifestyle, diet history of community engagement. 7. (e.g. business partners Contracted 8. Education 9. Stakeholders 10.Community initiatives farming communities in developing communities farming will they believe countries. We in the role a valuable play continue to industry. though our is different, Our approach equally ambitious. As a aims are our supplies are cocoa user, volume and the market on the world traded the normal subject to price is always conditions of supply and demand. we look to that background Against farmers a fair return for their crops. Read crops. for their farmers a fair return meet the challenge how we continue to Cadbury Schweppes has a long and has a long Cadbury Schweppes West tradition of trade with honourable the well by care for Africa, underpinned families. farmers and their being of cocoa we look industry colleagues, Along with of cocoa to encourage the production manner that gives beans in a sustainable

our industry to the International Cocoa Initiative. our industry to the International of trading with care and about the broader commitment of of trading with care We share with Fairtrade a desire to a desire with Fairtrade share We the conditions of cocoa improve and admire communities growing cocoa with dedicated their work access to help provide to cooperatives commercial communications, better and a minimum infrastructure commodity price based on a long- we broadly, More relationship. term in bringing to applaud their work of the many attention consumers’ of issues concerning the prosperity

Ngawang Lobsang Global Procurement Director trading with care with trading

1.11 big challenges big challenges 1.12 supply chain of cocoa from the West the from chain of cocoa supply Today, of Sao Tome. African island our engaging with actively we are too, that the ensure to suppliers globally them are buy from we products is a challenging This ethically. sourced addressing which we are task but one as as many involve as it may robustly 40,000 suppliers. startsOur engagement with suppliers deliver with supplier colleagues who the around our operations to direct building processes and we are world right back along the chain, that work of the original growers to example for produce. agricultural trading ethical conducted have We Ghana, studies in China, pilot and and Mexico Indonesia, Turkey been helpful in building our these have continuing engagement processes. One clear lesson is that each supply and chain has particular characteristics that no single model of engagement every one. for works this new millennium, As we entered traditional our we rearticulated find ways to improve conditions for all for conditions improve to find ways million and a half the estimated Africa. West across smallholder farmers in Cadbury Ethical sourcing Schweppes deliver of the supply chains that Many Cadbury to materials essential raw businesses startSchweppes’ with small The chains are producers. agricultural with crops long and complex, both small growers the myriad by produced the poorest in some of situated areas These of the world. regions and little infrastructure have generally of thousands many be located may The gates. factory our miles from handled been frequently has produce and a number of middlemen, by markets. international through traded that human ensure Our aim is to are standards trade rights and ethical of our production at every step met including in our owned and process franchise businesses, in other operated holders and in our whole supply chain. century, In the early twentieth William Cadbury investigated allegations of labour abuses in the minimum labour standards; hours labour standards; minimum paid; working wages worked; and at work conditions; dignity at met are employees for respect the supply chain for of every step our brands. in our investment increased Through we sourcing of ethical programmes our that we live will demonstrate new in the and act responsibly values first of the twenty global economy century. Access to potable water is a basic human Access to potable water is a basic reduces need. Its availability dramatically health of the risk of disease, improves the villagers (especially children), and a minimises time to carry water for family’s daily requirements. We have recently begun a programme to dig wells to provide permanent supplies of clean, fresh water for cocoa farmers and their families in important growing areas of the western regions of Ghana (see page 10.15). We are also working with ActionAid and the Commonwealth Education Fund on education projects for the children of Our Working

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, published in five , published in

West Africa produces most of the cocoa used by Cadbury Schweppes and some 70% of the world’s supply. It is estimated that today there are some 1.5 million smallholders in West Africa who work their farms with family labour and rely on cocoa production for their living, producing on average less than one tonne a year. Case Study Ethical sourcing of cocoa, West Africa commitment to ethical trading. Our trading. ethical to commitment and Ethical Trading Human Rights policy (page 9.1) Universal the reflects core of Human Rights and Declaration Labour Organisation International This is supported by conventions. Business Principles with suppliers As in our own businesses, through suppliers closer engagement with our that decent ensure we look to languages to guide our procurement languages to worldwide. teams

1.13 big challenges big challenges 1.14 to Some Trailers on to assure to develop greater public 4,000 farmers in four countries have 4,000 farmers in four countries participated in these self-help training programmes to learn better husbandry; and the improved pest and disease control; labour on issues around responsible use of cocoa farms. Develop a certification process made consumers that products have been using responsible labour practices. Work with local radio stations. child labour have met with an initially encouraging response. An experimental shipment of wind-up radios is being distributed to help reach more farmers. Work with the International Labour Organisation awareness of the law; build local understanding of responsible labour practices; and protect young people at risk of exploitation. published and it is clear that some media and it is clear published scale of the problem were estimates of the the findings have exaggerated. However, and a range of other led the industry on a number of priorities: donors to focus farmers’ groups Create and manage to market their cocoa more enable farmers results indicate that efficiently. Early better prices for produce farmers receive sold through these groups. Establish Farmers’ Field Schools. migrant parents in Ghana’s farming parents in Ghana’s migrant communities. coalition was created A global industry ago at the time of media some two years labour practices on allegations of abusive cocoa farms. This some West African began working with industry coalition governments, non-governmental and other experts to organisations (NGOs) ensure that cocoa is grown responsibly. coalition With a number of partners, the of signed a Protocol under the leadership US Senator Tom Harkin and Congressman Eliot Engel. to The Protocol committed the coalition of a specific steps, including the formation Cocoa foundation (now the International Initiative) and development of a has certification system to ensure cocoa labour been produced without abusive taking a practices. Cadbury Schweppes is brings leading role in the coalition, which chocolate together the six largest global traders companies, cocoa processors and (together with their trade associations) with a range of donors and NGOs, the International Labour Organisation and, most importantly, relevant government agencies in cocoa producing countries. One of the coalition’s first tasks was to establish the facts around the labour situation on West African cocoa farms and a detailed independent survey was completed in 2002. The results have been

achieve quick results. I never expected the quick results. I never achieve practices put in results of the management could yield results so place on my farm all farmers to practice rapidly. I encourage for higher yields, all that we discussed a better way of living.” more money and ABINA FOBI Field School had come “If the Farmers’ I would have been earlier than now, has somewhere in the moon. The training a better motivated me to put my farm in of shape by managing the shade, removal The disease-affected pods and thinning. a very low blackpod attack has reduced to level in the farm. to keep I have bought four female goats from the proceeds of my harvest. done, Harvesting is still in progress. Well donors and trainers.” JANET YEBOAH a small staff to act as a catalyst and to a small staff to act as a catalyst a foster cooperation. It is also becoming best clearing house and a source of practice on this issue. This not-for-profit foundation is managed by a board with an equal number of cocoa and chocolate industry directors (including one from Cadbury Schweppes) and non- industry directors (from the labour movement, consumer groups, development NGOs and activists) who contribute their knowledge and experience.

“The Farmers’ Field School is simple and “The Farmers’ Field School is simple to practicable and encourages participants “The training has enabled me to “The training has cocoa agro-ecosystem. understand the to remove mistletoes and I have been able from my farm. I also unwanted chupons for adequate spacing and thinned my farm as discussed in the harvested the pods has Farmers’ Field School. The harvest I bought fetched me money from which window two packets of roofing sheets, put up a and door frames and blocks to in my new house. The practices conducted season. farm have prolonged the harvest carrying The trees are still flowering and pods. Long live Farmers’ Field School.” DORA OSEI What Ghanaian cocoa Ghanaian What to say farmers have

The International Cocoa Initiative’s role is to oversee and sustain efforts to eliminate the worst forms of child and forced labour in the growing and processing of cocoa beans and derivative products. Funded by industry, it is based in Geneva and employs International Cocoa Initiative: working towards responsible labour practices

1.15 big challenges big challenges 1.16 we provide the revenue for suppliers for the revenue we provide partners and their employees, pay to our reward in turn their suppliers. We human capital and their people for governments to revenue provide added is The cash value taxes. through on external interest pay also used to in the community invest borrowings; dividends. The shareowner and pay added element of the value remaining within the business for is retained growth. future technology are combined technology are combined with marketing skills to create brands with marketing skills so, we interact that people love. In doing around the world with many stakeholders economic impact who benefit from the of our business. As a food and drink manufacturer we and drink manufacturer As a food class raw materials. First add value to recipes and Just as social and environmental importantperformance are to in our CSR Report,measure so is the impact of our economic performance In groups. on these stakeholder statutory financial addition to the first time, we for reporting, here and how this show how we add value, our to added is distributed cash value stakeholders. By engaging in business, and paying goods, services assets, for and fixed Ken Hanna, Chief Finance Officer Economic responsibility, Economic and generation wealth distribution 1.17 big challenges Cash value added statement calculates the wealth Cash value added provides an easy to created in monetary terms by understand map of the wealth we deducting the cost of raw materials, create and how our stakeholders goods, services and fixed assets we share in our economic success. The buy in from our sales income.

Cash value added statement Cash generated 2003 2002 2001 2000 £m £m £m £m Turnover (income from sales) 6441 5298 4960 41 18 Payment for goods, services and fixed assets 4519 3562 3282 2599 Cash value added 1922 1736 1678 1519

Distribution to stakeholders Employees (wages, salaries and retirement costs) 1024 800 734 648 Government (taxes and social security costs) 320 308 254 228 Providers of capital – dividends to shareholders 246 235 201 213 – interest on borrowings to lenders 156 74 92 29 Community investment* 4 4 0 0 Total distributed to stakeholders 1750 1421 1281 1118 Cash retained within the business 172 315 397 401 Cash value added 1922 1736 1678 1519 Note: * The figures represent community investment through cash donations only. The figure for 2003 was £4.4m compared to £4.0m in 2002. big challenges 1.18 employees. That tax revenue pays for pays tax revenue That employees. vital public services in all these £4.4 million (0.2%) countries. Finally, in growing invested in cash was the world. around community value of community value An additional worth £1.6investment was million in staffdonated and company time facilities. and products year, to year vary from The figures is broadly of course, but the pattern consistent. Our Shareowners Our primary as a business is objective the over value shareowner grow to deliver to and we strive long term superior shareowner consistently returns. in issue, billion shares two Of the over accounts. in nominee the majority are The statement shows that in 2003, shows The statement raw million on we spent £4,519 goods, servicesmaterials, and fixed than that more This means assets. of the economic activity two-thirds takes sales product our by generated than chain rather place in the supply operations. in our own business benefit to The most significant group the added were the cash value from 55,000 plus Cadbury Schweppes 53% of who received employees of capital, our Providers this value. and financial institutions shareowners money which we borrow from £402 million, about 21%. received use in future 9% for retained We the business. paid £320 million (17%)We to in the world around governments our and social security costs for taxes We have engaged with these three engaged with have We CSR, supply to relating SRIs on issues recycling. bottle chain and beverage with them helps us Our engagement of current identify the significance to of any and our sector issues within with our particular associated risks activities. Among the biggest fiftyAmong the biggest shareowners Socially Responsible three are Fund (SRI): Morley Investors and Management, Insight Investment Management. Their ISIS Asset 43 approximately are combined shares million (2.2%). There are over 80,000 registered 80,000 over are There that include corporate shareowners Of these, shareowners. and individual than more have about 400 accounts about representing 500,000 shares shares. 84% of the total

1.19 big challenges p1.1 managing company change p1.6 addressing obesity p1.11 trading with care p1.16 economic responsibility, wealth generation and distribution

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c hallenges 2. who we are Americas A global company, we manufacture, Americas Beverages Confectionery market and distribute a variety of much 2002 2003 2002 2003 loved confectionery and beverages Turnover (£m) 233 871 brands. Our brands are sold in almost Turnover (£m) 1,982 1,814 every country in the world and our Underlying operating Underlying operating origins go back over 200 years. We profit (£m) 585 532 profit (£m) 15 95 are joint number one in chocolate, Employees 6,970 6,910 Employees 3,629 12,597 sugar and functional confectionery, we have major operations in: we have major operations in: a strong number two in gum and the USA, Canada and Mexico USA, Canada, Mexico, Brazil, world's third largest soft drinks company. Argentina In 2003 we reorganised into five key brands Clamato Dr Pepper Yoo-Hoo key brands Cadbury regional operating units (Americas 7 UP Canada Dry Halls Chiclets Beverages; Americas Confectionery; Snapple A&W Trident Swedish Fish Europe, Middle East and Africa Hawaiian Punch Sunkist Dentyne Sour Patch Kids (EMEA) confectionery; Europe Mott’s Dentyne Ice Beldent Bubbaloo Bazooka Beverages; and Asia Pacific) and five Clorets Mantecol global functions (Human Resources; Supply Chain; Commercial Strategy; Finance; and Legal). We added a sixth function, Science and Technology, in early 2004.

Globally 2002* 2003* Turnover (£m) 5,298 6,441

Profit before tax (£m) 830 564 Total employees 42,314 55,799 (average) Dividends per ordinary share (pence) 11.5 12.0

* GLOBAL FIGURES INCLUDE ALL FIVE REGIONS AND CENTRAL OPERATIONS Europe, Middle East and Africa (EMEA) Europe Beverages Asia Pacific 2002 2003 2002 2003 2002 2003 Turnover (£m) 738 937 Turnover (£m) 1,787 2,117 Turnover (£m) 548 692 Underlying operating Underlying operating Underlying operating profit (£m) 114 128 profit (£m) 280 308 profit (£m) 104 120 Employees 9,548 9,731 Employees 18,745 22,334 Employees 2,885 3,137 we have major operations in: we have major operations in: we have major operations in: UK, Denmark, France, Nigeria, France, Spain and Germany Australia, New Zealand, China, India, South Africa, Egypt, Russia,Turkey, Malaysia, Thailand, Japan, Indonesia Poland, Spain, Morocco, Lebanon key brands Pampryl Schweppes Trinarajus key brands Schweppes Trebor Cottee’s key brands Wedel Orangina Appolinaris Red Tulip Solo Cadbury Trident Oasis Gini Sportlife Spring Valley Trebor Halls LaCasera Vida Halls Sunkist Basset’s Stimorol Trident Wave Hollywood V6 Clorets Bournvita Poulain Dirol

where we operate OVER 1 MILLION CADBURY BARS ARE PROD ’S CRUN UCED IN THE UK EVERY DAY CHIE AT A RATE O F 1,200 BARS PER M INUTE

TOTAL BEVERAGES WE HAVE Suppliers PRODUCED IN 2003 LITRES INFLUENCE HERE 4,328,752,000

4 3 ,2 4 ) M (£ S E IC V R E buying S D N A

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E I L & testing P

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packaging marketing WE BUY AN EQUIVALENT OF 170,000 TONNES OF COCOA BEANS EACH YEAR

cadbury schweppes WE HAVE CONTROL HERE

chief checker distribution CAPITAL INVESTED PER EMPLOYEE £52,900 3. our value chain

super sales person

IN 483,6122003 CHOCOLATE CONFECTIONERY WE PRODUCED TONNES OF

consumers & customers WE HAVE INFLUENCE HERE

COST OF SALES (£M) 3,309 customers business partners PRE-TAX PROFITS PER EMPLOYEE £10,100

INVESTMENT IN RESEARCH AND DEVELOPMENT (£M) 53

Social ResponsibilityEliane Rossini Manager DISTRIBUTION COSTS Cadbury Adams Brazil (£M) INCLUDING M ARKETING 1,479 WE EMPLOY AROUND 55,000 PEOPLE 4. what csr means to us

CSR is and always has been fundamental to us. Our founders were well known for their fair treatment of employees and for philanthropy in the community. Now a global company, we feel this responsibility as keenly as ever. The nature of our value chain and the global economy in which we operate brings new issues and many challenges. Our CSR programme provides the framework to integrate our values into everything we do. why it matters Demonstrating strong corporate and goals priorities social responsibility is not only the right thing to do, it also makes good business sense. Shareowners, customers Deliver superior • Deliver annual contract and regulators are more likely to support our plans to shareowner performance • Execute Fuel for Growth grow our business because they trust us to make the right decisions and to manage our risks. Consumers are Profitably and • Integrate Adams more likely to buy our brands because they trust us to significantly increase our and beat the model provide safe, high quality products. Employees are more global confectionery share • Execute Smart Variety likely to join and stay with us because they trust us to treat them openly and equally, recognise and reward Profitably secure and grow • Integrate North their contributions and help them realise their potential. our regional beverages America Beverages share • Further integrate Issues of good corporate governance are at the forefront Europe Beverages of the minds of institutional investors, governments, the media and the public alike. Companies have to demonstrate Ensure our capabilities • Ratchet up innovation more visibly that they live their values and can act responsibly are best in class • Hone people and in this new economy, both at home and abroad. systems capabilities

We will continue to keep CSR at the heart of our company Reinforce our reputation • Motivate, develop and our brands. It is a fundamental part of living our with employees and and reward people Purpose and Values. It is explicit in our fifth strategic society • Continue high CSR goal and in the two supporting priorities we have set standards ourselves. The reorganisation of 2003 has given us a sharper focus. CSR will help drive our business strategy in the years that lie ahead.

Pierrick Kerjean Sales Representative Orangina Schweppes

the last ten years of our journey...1998

FIRST ENVIRONMENT 1996 REPORT PUBLISHED ASPERS SITE IN USA, BAD NEUENAHR OUR FIRST TO OBTAIN 1994 SITE IN GERMANY, ISO 14001 GUIDE TO OUR FIRST TO 1993 ENVIRONMENTAL OBTAIN EMAS MANAGEMENT CERTIFICATION ENVIRONMENTAL ISSUED POLICY PUBLISHED AWARDED A‘STRATOSPHERIC OZONE PROTECTION AWARD’ BY US ENVIRONMENTAL PROTECTION AGENCY Cadbury Schweppes is committed to the UN Global Compact UN Secretary General Kofi Annan first proposed The Global Compact at Davos, Switzerland, in January 1999. He called on business leaders to embrace and enact within their own corporate activities nine core principles derived from universally accepted agreements on human rights, labour and the environment. The nine principles include two on human rights, four on labour standards and three on environment. In 2004, a new principle against corruption will be adopted. The four labour principles reflect the International Labour Organisation (ILO)’s core labour standards, which our HRET policy commits us to. The three environment principles reflect the Organisation for Economic Co-operation and Development’s Guidelines for Multinational Enterprises. We will report annual progress to the Compact. www.unglobalcompact.org

1999 2000 2004 FIRST COMBINED 2001 NAMED ONE OF 2002 SECOND CSR REPORT ENVIRONMENT, 2003 THE WORLD'S 100 CORPORATE AND PUBLISHED FIRST INTEGRATED WITH HEALTH AND SAFETY BEST-MANAGED SOCIAL RESPONSIBILITY CSR REPORT INTEGRATION ENVIRONMENT, HEALTH REPORT COMPANIES FOR COMMITTEE ESTABLISHED OF ENVIRONMENT, AND SAFETY PUBLISHED OUR FOURTH SUCCESSIVE HUMAN RIGHTS AND HEALTH AND SAFETY LAUNCHED HUMAN BUSINESS PRINCIPLES EMBEDDING YEAR BY US MAGAZINE, ETHICAL TRADING RIGHTS AND ETHICAL MANAGEMENT, CSR PROGRAMME PARTICIPATED IN INDUSTRY WEEK POLICY PUBLISHED TRADING PILOT POLICY AND SYSTEMS LAUNCHED INAUGURAL BUSINESS STUDY PROGRAMME SUSTAINABILITY KEY IN THE COMMUNITY PERFORMANCE INCLUDED IN DOW CORPORATE INDICATORS ADOPTED JONES SUSTAINABILITY RESPONSIBILITY INDEX INDEX (RESULTS GROWING COMMUNITY ANNOUNCED IN 2003) VALUE AROUND THE WORLD STRATEGY LAUNCHED JOINED THE UN GLOBAL COMPACT p4.3 purpose & values p4.4 corporate governance p4.5 ethical business practices p4.8 employees p4.9 consumers p4.9 customers, suppliers and business partners p4.9 community activities p4.10 government relations p4.10 the environment

D E S I N I

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M our business principles INTRODUCTION

At Cadbury Schweppes, we take our responsibility and reputation as a good corporate citizen seriously. We are proud of our principles and their effect on how we do business. This booklet has evolved from our code of conduct and takes into account global standards – such as the International Labour Organisation conventions and the Universal Declaration of Human Rights – as well as cultural and legal best practices from our local markets. It clearly states our business principles. It shows their impact on everyone involved with Cadbury Schweppes, from the board, the businesses and employees, to consumers, suppliers and business partners.

It highlights our responsibility, as a group and as individuals, to: • promote ethical business practices • respect the environment and communities in which we operate • assure equal employment opportunities • value diversity in the workplace • provide healthy and safe working environments • respect human rights and trade ethically These principles should sit at the heart of our management processes and inform how we work, all over the world. Through them we can protect and perpetuate the ethical standards that make Cadbury Schweppes a great company – to work for and to work with. By working together we can ensure our company maintains its reputation for ethical standards and keeps its promises. The final part of the booklet describes your role in making this happen.

John Sunderland Todd Stitzer Chairman Chief Executive Officer 4.2 our business principles At Cadbury Schweppes we work together to create brands people love

We believe that good ethics and good business go together naturally to produce the best long-term results for all our stakeholders. Ethical business sits at the heart of Cadbury Schweppes. It always has. It is part of who we are, our heritage, our processes and the way we behave. Our business principles reflect and reinforce this. Through them we continue to play a positive part in society, grow shareowner value, attract and develop the best kind of people and, importantly, create brands people love.

Details of our “3As” and the behaviours they embody can be found in the Leadership embody can be found they and the behaviours of our “3As” Details (see page 7.6). Imperatives All this is encapsulated in three key behaviours which should guide everyone in Cadbury which should guide everyone behaviours key in three All this is encapsulated and aggressiveness. adaptability Schweppes: accountability, Through this we can take advantage of change, attract and retain committed people and committed and retain of change, attract advantage this we can take Through advantage. maintain a competitive In the way we work, we aim to reflect the principles of clear objectives, quality and simple of clear objectives, the principles reflect we aim to we work, In the way organisation. In our actions we believe in showing integrity, openness and responsibility, reflected in the reflected openness and responsibility, in showing integrity, In our actions we believe built up the company. we have way At Cadbury Schweppes, we are proud of our heritage and its relevance to our current to heritage and its relevance of our CadburyAt proud are Schweppes, we our how we behave, what we stand for, These inform the world. throughout values management. business and to to approach Our measure of success is the value we create for our shareowners. But we can only But we our shareowners. for we create the value of success is Our measure everyone of our stakeholders: to our commitment if we respect maximise this value communities in which we colleagues, suppliers and the customers, consumers, shareowners, operate. PURPOSE & VALUES PURPOSE purpose. This is our core love. people brands create to together work We

4.3 our business principles our business principles 4.4 audit: accounting, financial reporting and internal controls. audit: accounting, financial reporting and internal corporate and social responsibility: environment, employment practices, health and safety, practices, employment environment, and social responsibility: corporate and trading ethical community and social investment, equal opportunities and diversity, business practice. aspects of ethical human rights, and other service grants, option agreements arrangements, annual salaries, incentive remuneration: directors. the executive conditions for employment and other or new executive on appointing any the board to recommendations nomination: makes directors. non-executive • • • • Legal compliance our which apply to strict compliance with the laws and regulations to committed are We the world. business activities around Company records to laws and according with applicable in accordance must be kept and records All books This is in order and expenditures. all receipts reflecting fully accounting standards, proper external we use within the business or for the financial information sure make to and reliable. publication is accurate Company reporting of reporting. The published reports and openness in all forms to committed are We must organisations government agencies or other regulatory we supply to information misleading. and not be complete Corporate governance Corporate Board of directors non- The group. management of the the proper for is responsible of directors Our board of management. independent are directors executive deal with the following: sub-committees Board

Inside information outside Cadbury with others be shared must not Confidential business information and close family your You, or others. the personal gain of yourself Schweppes or used for material have or they if you shares buy or sell company acquaintances should not price. public and could affect been made our share that has not information Confidentiality confidential. This might information and group all company keep to employees expect We processes, manufacturing formulation, or sell businesses, product buy include plans to suppliers, customers, and development, research concepts, plans, advertising, marketing which is information and other matters, personnel and employment financial information, your of aware are that you sure make will the public. We known to generally not These disclosure. unintentional prevent to steps take to you obligations and also expect the company. including those who leave employees, all obligations apply to Matters relating to the group must not be discussed with representatives of the media with representatives be discussed must not the group to relating Matters communications corporate Our group unless specifically authorised as part role. of your questions to or responses announcements, statements, any department must co-ordinate information. sensitive price or commercially to the media, which relate from Communications special give will not with the public. We and accurately directly openly, communicate We about our performance and information Material individual or institution. any to treatment at the same time. the financial community to is communicated prospects ethical business practices ethical business dealings. in their all employees and courtesy openness from honesty, expect We human rights of the dignity and and respect way must act in an ethical This means everyone we do business with. colleagues and the people other

4.5 our business principles our business principles 4.6 Conflicts of interest with the best interests that conflict interests outside commercial have must not Employees be and not the benefit of the group act only for to all employees expect We of the group. business interests individual or other from result that may interest a personal influenced by contracts in trading in business partners, involvement shares personal or family example, (for a competitor, simultaneously for work not may In addition, employees with us, and so on). or supplier. customer should a question you have so if you be clear-cut, always not may Conflicts of interest department or legal department. or human resources manager, consult with your Fraud policy and guidelines alert the ways Our fraud fraud. management to tolerate will not We it. prevent to the best practices can happen and identify in which fraud Gifts and improper payments out below) must not than those set (other goods, services favours or other Gifts of money, or accepted. for be asked place you not do they provided be accepted hospitality may and reasonable Small tokens gift than be misconstrued. Any obligation and will not of more or hospitality under any You be accepted. if it may determine manager to your to must be reported value token that could damage our reputation. anything accept should not family and your receiving from you stop or made. This does not offered be must not payments Improper or entertainment. materials marketing products, business-related or giving reasonable Appropriate use of company resources While manner. and ethical in a responsible use our resources to employees expect We a manager, from be allowed with prior approval incidental or occasional personal use may we support the use of e-mail example, and encourage violation. For misuse is an ethical and standards formal have business, but services conducting company and Internet for risk. abuse and associated potential from the company protect to in order practices Competition but honestly, vigorously will compete We and open competition. free to committed are We we carry out business. and anti-trust laws wherever while complying with all competition If there is any question as to what constitutes a political contribution you should ask the you a political contribution constitutes what question as to is any If there or legal department. secretary advice of the group Political contributions been have political contributions unless they make and our subsidiaries will not We Political in certain and, shareowners. circumstances, of directors the board by approved include and benefits in kind, and in some cases may contributions include cash contributions donations, gifts and or sponsorships. Inventions and intellectual property These may while in our employment. conceived, inventions must disclose any Employees we will be applicable law, us. Subject to by employment normal duties or from arise from of them. use and exclusive the sole ownership to of charge entitled free Corporate opportunities personally opportunities discovered themselves are that for take not: may Employees property, or position; use corporate information property, the use of corporate through Employees with the company. personal gain; or compete or position for information when the opportunity interests its legitimate advance to the company owe a duty to do so arises. to

4.7 our business principles our business principles 4.8 employees and involvement Communications and of involvement two-way direct, encouraging of a long tradition have We participation obtain the fullest to of This is in order employees. communication with the local workplace within promoted is best and we believe and views energy everyone's the right to respect We locally-based procedures. and consultation through information union. join a legally-recognised trade Pay, benefits and working conditions according fairly remunerate the dignity and human rights of our people. We respect We industry competitive conditions. and local to skills and performance and with reference to hours. only reasonable work our people to expect We that under circumstances only children labour and will employ forced employ will not We on example, (for education and social development them and their rights to protect placements). work or experience educational work Health and safety seek to within our business. We the importance recognise safety of health and We in line with local laws, regulations environment and clean working safe a healthy, provide and report performance, as part appraise measure, of our We and industrial practice. who and everyone contractors of our employees, health and safety the commitment to on or visits our sites. works personal development Equal opportunities, diversity and and promote that we recruit Our policy on equal opportunities states and diversity the job without discriminating on grounds on the basis of their suitability for employees marital age, religion, orientation, sexual or national origin, gender, ethnic colour, of race, or mental physical sexual, tolerate will not the task. We to status, or disability unrelated of employees. harassment and culture enrich our company’s backgrounds varied from Employees diversity. value We for create that all employees the value recognise support success. We our commercial development. opportunities personal and career for the business and will provide

We recognise our responsibilities as a member of the communities in which we operate our responsibilities recognise We national or support through to community and social investment and commit resources and will also encourage in partnership We with others. programmes locally targeted in the educational and social leadership and provide in support efforts your be involved to live. of the communities in which you fabric COMMUNITY ACTIVITIES

& business partners the rights and for and with respect ethically will carryWe out our business honestly, with joint-venture relations expect of the people with whom we do business. We interests and will be mutually beneficial to partners, customers licensees, suppliers and trade continues. be upheld while the relationship to our principles and standards encourage Customers, suppliers Customers, suppliers

Advertising and promotions Advertising and in line with public communications will be conducted and other All advertising, promotions in that we communicate and openness. This will ensure integrity the principles of honesty, suggestion of exploiting any avoid to special care will take We and truthful way. an accurate or or judgement of parents undermining the responsibility or children of the inexperience carers. other consumers Product integrity which products wholesome high-quality, consumers with providing to committed are We regulations. safety food meet and, as a minimum, labelled clearly, truthfully, marketed are

4.9 our business principles our business principles 4.10 the environment and our responsibilities our environmental we recognise As a major multinational company policy and its management Our environment development. sustainable contribution to our manufacturing to issues connected the environmental only with deal not processes our which we derive from the ecosystems but also with protecting and facilities, processes chain, and distributing, selling and consumption management of our supply materials, raw of our products. Government relations Government national and authorities at local, support and government business We between dialogue and legislation, regulations relevant and implement promote to levels international and a healthy safeguarding while of all stakeholders the rights protecting agreements, business environment. competitive p4.3 purpose & values p4.4 corporate governance p4.5 ethical business practices p4.8 employees p4.9 consumers p4.9 customers, suppliers and business partners p4.9 community activities p4.10 government relations p4.10 the environment

M O R E I N S I D our E business principles 5. how we make decisions A new, simpler structure was introduced in February 2003 to clarify accountability and enable swifter decision-making. We now have five regional operating units supported by six global functions. The new leadership team of 11 key executives reports directly to the CEO. John Sunderland Todd Stitzer

The corporate and social responsibility committee, formed in 2001, drives the CSR agenda for Cadbury Schweppes. It is chaired by Baroness Wilcox, a non-executive board member, and includes the chairman, the chief executive, human resource and legal officers, and two other non-executive board members. The Committee oversees the management of all issues relating to our five pillars of CSR: human rights and employment standards; ethical sourcing; marketing, food and consumer issues; community investment; and environment, health and safety management.

The Global Leadership Team is around 100 strong. It includes the functional and regional heads and senior executives who report to them from regional and business units, in addition to the main board executive directors.

within the regions are business units, which include commercial, administrative or operational sites. They execute the strategies, while incorporating the insights gained through their interaction with our stakeholders. The units are supported by an increasing number of CSR and community champions, a network of people with specialisms such as environment, health and safety, and employee development.

the new organisation has provided immense opportunities to extend CSR across our business. The structure is providing value in target setting and communications; in process development, performance management, and in verification of the progress we are targeting.

Gabriela Rivero Communication and PR Manager Cadbury Schweppes Bebidas Mexico Bob Stack David Dr Wolfgang Thompson Baroness Berndt Wilcox

Roger Carr Rick Mike Clark Braddock Ken Hanna

THE MAIN BOARD IS CHAIRED BY JOHN SUNDERLAND AND CONSISTS OF FOUR EXECUTIVE DIRECTORS AND FIVE NON-EXECUTIVE DIRECTORS. THE BOARD IS RESPONSIBLE FOR THE PROPER MANAGEMENT OF THE COMPANY. SPECIFIC MATTERS ARE DELEGATED TO THE FIVE BOARD COMMITTEES AND CHIEF EXECUTIVE’S COMMITTEE.

The five regional operating units supported by six global functions (see page 4) give focus to our growth and efficiency and provide the strongest possible structural foundation. The leader of each function and region sits working on the chief executive’s committee (CEC). better The regions are responsible for developing together regional strategies to drive the growth of Cadbury Schweppes brands. Our Human Resources, Supply Chain and Commercial Strategy functions are vital in managing our five pillars of CSR.

our stakeholders

suppliers consumers government business shareowners partners employees p5.1 how we engage with stakeholders p5.6 what others say about us p5.9 what stakeholders say about our CSR reporting

N S I D E E I R

O M encouraging stakeholder dialogue listen to our people, many of whom are the main of whom are our people, many to listen our local communities. link to we engage with stakeholders matters, On broader Since publication of our way. structured in a more representatives met CSR report,have we previous the socially organisations, of non-governmental

what they say influences how we think and what we do. what they say influences governments and the local communities in which we operate – governments and the is crucial to of our stakeholders Dialogue with many our to every business, we listen our business. Like ensure all the time to and consumers customers and services. with our products happy are they engage daily with our buying teams Similarly, teams human resource suppliers and, internally, shareowners, employees, consumers, business partners and suppliers, shareowners, employees, approach to CSR. We have open and regular dialogue with approach to CSR. We Listening to and working with stakeholders is at the heart of our Listening to and working How we engage with stakeholders How we engage

5.1 encouraging stakeholder dialogue encouraging stakeholder dialogue 5.2 In 2003 we reviewed and responded to assessments In 2003 we reviewed and responded to Fund of our CSR prepared by our top SRIs: Morley Management and Insight Investment Management. on the lack In these assessments we were challenged how we of information in the public domain about supply chain. manage human and labour rights in the to give specific We subsequently met with the analysts have included details on our progress on these issues and in this a section on human rights and ethical trading report (see page 9.1). Another of our top SRIs, ISIS Asset Management, team and engaged directly with our environmental polyethylene packaging experts on the use of recycled terephthalate in beverage bottles. Case Study say What investment analysts about us, worldwide Investors and shareowners through ongoing dialogue with investors have We where programme investor ranging a broad and with investors meets management regularly the around centres analysts in the main investment in seminars investor held two In 2003 we world. our strategy communicate to London and New York and supporting the next goals and priorities over the opportunity also have Shareowners years. four performance and CSR related discuss company to meetings. general at our annual topics responsible investment (SRI) community, governments (SRI) community, investment responsible their understand better agencies, to and multilateral units also hold business of us. Many expectations dialogues on particular topics stakeholder formal them. to relevant that are We have therefore been developing responses and responses been developing therefore have We by of issues raised the range for information of which are – many consumer stakeholders obesity” section of this included in the “Addressing report 1.6). (see page Employees briefings to team regular Line managers deliver about the business and information communicate review opportunities our people to for provide departmental, and corporate local, regional In some business units, two-way strategies. locally place through communication also takes in the are surveys. We climate employment tailored be survey to a global climate of developing process in 2005. completed However, some themes are increasingly common increasingly some themes are However, as that on some issues, such and we recognise globally. respond we need to children, to marketing Consumers enquiries All our business units deal with consumer in hearing an interest on a daily basis and we have and service. many their views on our products For changing has tracked research our market years of Many patterns. and lifestyle consumer interests conduct consumer our business units also formally of such a wide range have surveys. We satisfaction one issues vary from that consumer-facing products another. business unit to We regularly respond to questions raised by analysts by questions raised to respond regularly We their feedback and SRIs on CSR issues and we use identify. that they gaps and risks the address to

5.3 encouraging stakeholder dialogue encouraging stakeholder dialogue 5.4 and to learn and to . A full description Ethical Sourcing Standards Ethical Sourcing Standards of their views and progress. of their views and progress. studies we engaged with suppliers and During pilot business partners countries: Ghana and Turkey in five in China and Indonesia in 2002 and Mexico in 2001, policy understand HRET 2003. This helped us better also team issues in those countries. Our buying 90 high priority a dialogue with over initiated countries, developing from suppliers, including many and complied with understood that they ensure to our on pages is detailed of this engagement process 9.4.-9.6. efficiency gains. We have engaged with suppliers to engaged with suppliers efficiency have gains. We (HRET) our Human Rights and Ethical Trading explain policy and Business partners and suppliers to closely with suppliers and respond work Buyers and on innovations example their suggestions, for Our commitment to respect the rights of respect Our commitment to unions labour join legally recognised to employees which managers and a channel through provides the business. to can discuss issues relating employees formal by covered 70% of our people are Currently, bodies including trade representation employee agreements bargain councils, collective unions, work meetings, or a combination of these. Regular local and many website the Group newsletters, with what date up to keep help employees websites and local, regional is going on within the business at levels. Group , which emphasise acting been developed through our community through been developed (see pages 10.5-10.6).programme Health also participated in the World We industry health and dialogue on diet, Organisation’s build consensus between nutrition, which aimed to of and industry tackle rising levels governments to inactivity. obesity and physical guided by we are In dealing with governments Our Business Principles officials and government with honesty towards in accuracy institutions and seeking truth and and communications. Any our representations sign to required with are consultants that we work codes of conduct. professional the relevant up to At Group level we often respond to government to we often respond level Group At consultations on issues that affect us. In doing so of how policies and examples show real we aim to impact on consumers, employees, regulations and the communities in which we live shareowners include our dialogue Recent examples and work. on the benefits of with the UK government Education, in which our expertise has Enterprise Government local and authorities at both government talk to We agencies. We international and to national levels, and of food in the direction only interested not are but also in wider business issues policy, agriculture a promote to and in social and education policy, environment. business and competitive healthy

5.5 encouraging stakeholder dialogue encouraging stakeholder dialogue 5.6 76 72 69 68 67 66 66 63 60 80 100% 47 43 42 37 Global food industry average Cadbury Schweppes score Best company in food industry DJSI scores 2003 Total score Total Social dimension dimension Enviromental Economic dimension 02040

We are included in the are We which FTSE4Good index, Since our first participation Dow in the Jones Sustainability Index What others say about us What others measures the performance that of companies measures CSR standards. globally recognised meet been included in the DJS we have (DJSI) in 2001, included In 2003 we were every year. Index World the which reflects Index, in the DJS STOXX making. we are progress 98 87 88 88 88 81 73 74 66 69 62 50 2002 0 20 40 60 80 100% 2003 Assurance and impact Integration Performance Management Overall score Performance in BitC’s Corporate Responsibility Index 2002-2003 Performance in BitC’s Corporate Responsibility Corporate strategy , due largely to our to , due largely We participated the in both We 2002 and the 2003 inaugural Business in the Community (BitC) Responsibility indices. Corporate CSR Integration programme to embed CSR within business practice, embed CSR within to programme reportthe publication of the 2002 CSR and our reporting. continued commitment to Significant progress was underlined by our improved underlined by was Significant progress for score Since 2002, our overall score has improved from has improved score Since 2002, our overall and forty-ninth overall ranked We 87%. 73% to sector. and processors producers second in the food

5.7 encouraging stakeholder dialogue encouraging stakeholder dialogue 5.8 we scored lower than average, as we average, lower than we scored Assurance have not yet engaged an independent group audit group engaged an independent yet not have of management systems or third-party verification currently are We and performance in all areas. to processes the most appropriate determining our CSR activities. audit and verify On the roll out of our the roll , where we did not have we did not , where Performance and Impact policies in the public domain on marketplace issues, policies in the public domain on marketplace key to our response now strengthened we have obesity page 1.6).consumer issues (see Addressing We continue to work on areas in which we can in which on areas work continue to We in example For further improvement. demonstrate Policy Development Growing community value around the world around community value Growing guidelines for measurement with its strategy, as did our score improved community investment, with new in management practice, improvements opportunitiespolicies on equal employment and and human rights standards. diversity On held separate focus groups with special interest groups focus held separate SRIs and and and NGOs, CSR professionals groups had made that we felt the groups analysts. Overall, that it in reporting CSR, noting on helpful progress Cadbury Schweppes in this sector”. “differentiated hoped that in future our stakeholders On content, information of factual see a fuller range would they areas and data on our CSR performance. Key trade and fair nutrition, ethical and included diet these issues and human rights. This report addresses and further is clearly signposted upfront information clear that future are the report. We throughout

We conducted email and telephone surveys with telephone email and conducted We operating regional our five across from employees also in the UK. We customers units and with key Our 2002 CSR report emphasised our commitment and changing the growing up to live to citizenship that good corporate responsibilities of CSR reports expectations demands. Audience changed since 2002. In preparation inevitably have audiences key report, the 2004 we consulted for seek views on the first report and to feedback for reporting and the for directions future on both the business. wider engagement of CSR within our CSR reporting What stakeholders say about What stakeholders

5.9 encouraging stakeholder dialogue encouraging stakeholder dialogue 5.10 This year’s design retains the Cadbury design retains Schweppes This year’s read a two-speed while introducing look and feel the main on and captions Pictures approach. up with more backed are double-page spreads meet to in the little books, information detailed the needs of specialist audiences. report of this year’s the readability improve To simplified the index, the contents improved we’ve navigation. the content and improved illustrations hence also made the report size smaller, We’ve welcome further We and carry. store easier to form. feedback via the feedback The design of our last report was well received and well received The design of our last report was stand out from to acknowledgedwas as an attempt that although felt a minority However, the crowd. of the design engaged nature the playful the reflect did not CSR, it to newcomers a suitable not and was seriousness of the topic, specialist audiences such as more for format groups. and special interest investors CSR reports must record social and environmental CSR reports must record a stimulate to debate performance and prompt of continuous improvement. cycle I found the I want to know design of the Has Cadbury about your emissions What are you doing 2002 report Schweppes signed up of greenhouse gases, about HIV in Africa?" to be very to any international particularly in busy" conventions?" transportation Non government organisation focus group Employee Non government Investors interest group SEE PAGE 10.9 survey organisation focus group SEE PAGE 11.21 SEE CHAPTER 4

what stakeholders said about our reporting and where to find our response

Investment analysts Investment analysts focus groups focus group Investment analysts SEE CHAPTERS 4 AND 5 focus group SEE CHAPTER 9 Your 2002 We want to know report was a I want to know more about major step in the about how you governance and right direction" are working key policies. How with your supply do you make chain decisions? We want easy I loved the style of access to Will your next the 2002 report, it Can the performance report be made me pick it up" report be information" independently more relevant verified?" to my job?" Investment analysts Special interest focus group focus group SEE PAGE 6.1 Special interest Employee survey focus group SEE CHAPTER 12

Special interest Employee survey Investment analysts focus group focus group SEE CHAPTER 1 SEE PAGE 6.1 Special interest group The 2002 report SEE PAGE 10.8 Address the big was great, I found We want more challenges, such it useful for factual data" The get active campaign as ethical trading training seasons and obesity was of concern for me, with my colleagues how have you responded to stakeholder concerns?" p5.1 how we engage with stakeholders p5.6 what others say about us p5.9 what stakeholders say about our CSR reporting

N S I D E E I R

O M encouraging stakeholder dialogue 6. making it happen

We committed to a five year programme in 2001 to understand and embed CSR further in our business. As we approach the second half of this journey, much has been achieved. We have a new Board level leadership structure; restated values and principles; sustainability key performance indicators (KPIs); and stronger processes to deliver on policies around human rights and ethical trading; environment, health and safety; food, diet and lifestyle; and community investment.

We will now build on these foundations, as we work to embed CSR deep within the business. The energy and creativity of our management teams and the development of a common understanding and shared responsibility for CSR will be key to the success of this agenda. We will: • build awareness and understanding through communication, training and development programmes for management teams and specialists • develop skills and capacity to implement CSR initiatives • evaluate regional CSR risks and opportunities and build these into local business planning • develop high quality stakeholder engagement • ensure efficient data collection, and clarify the role of auditing and external verification • measure and report on performance, using consistent KPIs

Raising awareness, building capacity, assessing risks We are engaging in a dialogue to cascade CSR to the regions, operating companies and business units, with the emphasis on raising CSR awareness, building capacity and assessing risks. This started with the Chief Executive's Committee and during the first half of 2004 involves regional and functional leadership teams in a series of workshops.

Meanwhile other teams, for example within supply chain and human resources, are introducing learning and development materials for specific functional groups and for wider employee engagement as part of the Working Better Together agenda. Leadership teams are responsible for rolling out the programme to business units globally, while building CSR into business and individual performance objectives.

Measuring and reporting against key performance indicators To benchmark, review and make more effective decisions about CSR, we need continually to measure our performance and compare our progress in relation to external best practice, where available. We have adopted a set of sustainability KPIs that draw on both the Global Reporting Initiative and the UK’s Food and Drink Federation guidelines. The indicators will be used both internally, to manage our risks and impacts and to communicate progress in social and environmental performance, and for external reporting.

We are introducing and/or improving data gathering systems for all the KPIs. We are working towards a simple but effective global measurement system which will help us manage our CSR commitment at a local, national and global level. This report contains the earliest results of the system (see the insert on the right). Future reports will reflect global data for all the KPIs. Jack Mathias Production Manager Cadbury Adams Middle East Our Sustainability 6.1

key performance indicators

EMPLOYMENT PRACTICES Composition of female and male • Board of directors ch.7 • Senior management p7.3 • Total workforce p7.3 Employees categorised by age band p7.4 Maximum number of hours an employee n/r is contracted to work for Proportion of employees represented by p7.10 independent trade union organisations, collective bargaining agreements or bona fide employee representatives Average number of training days per p7.5 employee per year

ENVIRONMENT, HEALTH AND SAFETY Proportion of manufacturing by tonnage with p11.2 an externally certified EMS (such as ISO 14001 or EMAS) Total energy use (kWh) in manufacturing per p11.10 tonne of product per year

Total CO2 equivalent emissions (kg) per tonne p11.10 of product per year Total packaging placed on the market per tonne p11.12** of product per year

Total water consumption (M3) per tonne of p11.18 product per year Percentage of total ex-factory solid waste p11.25 recovered/recycled per year Total solid waste ex-factory (kg) per tonne p11.25 of product per year COD (kg) discharged per tonne of p11.27 product per year

Wastewater discharge (M3) per tonne of p11.27 product per year Other significant air emissions by type n/r*

(kg) – NOx, SOx etc per tonne of product per year Number of notifiable accidents per 100,000 p11.6*** employees per year (RAIR) Lost Time Injury Frequency Rate p11.4, 11.6, 11.7 (LTIFR) per 200,000 manhours 6.2

HUMAN RIGHTS AND ETHICAL TRADING Description of policies and procedures to p9.1-6 evaluate and address human rights performance within the supply chain Evidence of consideration of human rights in p9.4-6 procurement decisions including selection of suppliers Proportion of Suppliers which follow n/r a recognised ethical trading code of practice

COMMUNITY Proportion of pre-tax profits invested in p10.3 the community Description of community investment in terms of p10.4 cash, time and kind donations Description of investments by key themes p10.4 Awards and recognitions received relevant to p10.16-18 community investment

ECONOMIC Pre-tax profits per employee ch.3 Capital invested per employee ch.3 Total production tonnage ch.3 • Beverages • Confectionery Stock market capitalisation (£ million) n/r Investment in Research and Development ch.3 Cost of all goods, materials and services purchased p1.17 Total wages, salaries and retirement benefits paid p1.17 to employees Distributions to providers of capital broken down p1.17 by interest on debt and borrowings and dividends to shareowners Sum of taxes paid to governments p1.17

Key: n/r not reported ch chapter p page

* Not reported because none identified as significant ** Data for Cadbury Trebor Bassett, UK only *** For 68% of manufacturing sites only 7. our people

We have a strong heritage of valuing and investing in our people stretching back to our earliest days over 200 years ago. Our challenge these days is to build on that heritage in line with changing employee expectations, workplace dynamics and business requirements. This means continuing to invest in our people, helping them manage change, reflecting and promoting true diversity in our workforce and helping colleagues realise their potential while achieving a good work/life balance.

OUR YOUNGEST EMPLOYEE IS 15 (AUSTRALIA) AND THE OLDEST 79 (USA).

CADBURY INDIA RANKINGS IN THE ’S INCREASINGLY HIGH ‘GREAT PLACES TO WOR‘BEST EMPLOYER STRENGTHENED ITS ABILITY TO ATTRACT AND’ AND ’ SURVEYS HAVE RETAIN TALENTED GRADUATES

WE AIM TO RECRUIT AND RETAIN THE BEST PEOPLE BY OFFERING REMUNERATION AND REWARDS THAT ARE COMPETITIVE IN LOCAL MARKETS. IN THE 1870S AT THEIR FAMOUS BOURNVILLE "FACTORY IN A GARDEN", THE CADBURY BROTHERS PIONEERED THE PROVISION OF HOMES, LEISURE FACILITIES, TRAINING AND EDUCATION FOR THEIR EMPLOYEES.

WE ARE WORKING WITH OUR HR advisor EMPLOYEES TO HELP THEM ACHIEVE A GOOD WORK/LIFE BALANCE. Kene Umeasiegbucadbury schweppes

34% CURRENTLY WOMEN CONSTITUTE OF OF OUR GLOBAL WORKFORCE, 25% OUR MANAGERS AND 11% OF OUR EXECUTIVE MANAGEMENT TEAM. 7. our people continued

WE HAVE AROUND 55,000 PEOPLE IN OVER 60 COUNTRIES AROUND THE WORLD.

WE ARE REGULARLY AMONG THE TOP TEN IN THE UK'S ANNUAL "MANAGEMENT TODAY'S MOST ADMIRED COMPANIES REPORT. IN 2003, WE WERE SECOND OVERALL AND FIRST IN THE MOST ADMIRED COMPANY FOR COMMUNITY AND ENVIRONMENTAL RESPONSIBILITY CATEGORY.

ury schwepp cadb es ‘THE PLACE TO BE ’ CADBURY WEDEL, POLAND WAS RATED THE 2ND ‘MOST ATTRACTIVE EMPLOYER’ IN THE FOOD INDUSTRY IN 2003

Karren Harker Corporate Communications Cadbury Schweppes

CHICLE ADAMS SA, COLOMBIA WON ‘BEST COMPANY TO WORK FOR’ IN 2003

OUR GLOBAL LEADERSHIP TEAM HAS AROUND 100 SENIOR EXECUTIVES

GLOBAL STAFF TURNOVER IS GENERALLY LOW: BETWEEN 2% AND 5% PER ANNUM. p7.1 helping to make Cadbury Schweppes “the place to be” p7.2 equal employment opportunities and diversity p7.5 learning and development p7.10 communication and consultation p7.12 rewards and recognition p7.13 well-being and work/life balance

our people

E D S I M O R E I N 7.1 our people Helping to make Cadbury Schweppes “the place to be” “The place to be” describes the big picture of working at Cadbury Schweppes, so that everyone pursuing or considering a career with us can get a clear sense of what it's like, what's expected of them and what they can expect in return. It's a place where you can be part of our world, make a difference, grow with us, gain from our success, and be yourself. A place full of opportunities, challenges and rewards. A place rich in stories.

So how do we bring this place to life across a changing business around the world? Through an integrated global approach rooted in our values.

Our People Strategy sets out the values and policies that underpin all areas of our people management. Together with our Human Resources Global Minimum Standards, it provides the foundation for managing and developing our people in line with our Purpose and Values and Our Business Principles. All our businesses are expected to operate within the minimum standards and guidelines while respecting the local legislative, cultural and social differences that inevitably arise. our people 7.2 educating employees on the value of diversity. on the value educating employees attracting and recruiting diverse candidates diverse and recruiting attracting the for selecting the best people available positions based on performance criteria use of the talents and making the most effective in the business, providing of people experience and realise them with the opportunity develop to potential their employment and equitable manner with acting in a fair and, as a employees and potential employees and in internally earning a good reputation result, the communities in which we do business ensuring legal compliance, locally and internationally the company-wide in line with operating framework and Human Rights Minimum Standards, of internal while taking account of policy, and Ethical Trading variations and cultural local societal 2. Purpose of the policy This policy supports Cadbury Schweppes in: • • • • • • •

Opportunities and Diversity at Cadbury Schweppes: status and disability. is complementaryDiversity EEO and builds upon to work an inclusive it. It is concerned with creating understand and respect to that seeks environment and cultivating By valuing, individual differences. the talents of all employees enabling diversity, will flourish and be within our organisation and organisational individual, team for leveraged success. national origin, gender, age, religion, sexual orientation, marital national origin, gender, OpportunityEqual Employment (EEO) is concerned employees and potential employees with treating race, of gender, regardless and equitably, fairly marital religion, origin, colour, or national ethnic social class disability, orientation, status, age, sexual and political association. environment. Introduced in 1993, it covers race, colour, ethnic or environment. Introduced Our Policy What we mean by Equal Employment 1. providing equal opportunities and engendering an inclusive working providing equal opportunities underlines the value we place on having a diverse workforce, the value we place on underlines Our global Equal Employment Opportunities and Diversity Policy and Diversity Equal Employment Opportunities Our global and diversity and diversity Equal employment opportunities opportunities employment Equal 65+

0.2% 60-65

1.8% 55-59

6.4% 50-54

10.2% 45-49

12.7% 40-44

Women make up 34% of our

14.6%

35-39 30-34

17.0% 17.0% 25-29

13.5% 20-24

5.8% 16-19 0.8% HR director at group level. Regional diversity level. at group HR director to team with the group together contacts work across and initiatives and implement plans develop diversity their own units develop the business. Local and, induction workshops, training, using strategies, support to our committees in some cases, diversity commitments. This diagram gives the age profile for our global workforce. We have been able to verify, as part of our global Human Rights and Ethical Trading Policy, that we employ no one under the local legal minimum age for employment. Women in the workplace – of executives. workforce, 25% of our managers and 11% Age profile 2003 2003 National Workforce Ethnic statistics are tracked regionally, consistent with the US regulation for federal contractors. federal for with the US regulation consistent American/Alaskan opportunities employment are to with respect practices * The company 1% – 3969 employees workforce ** Total 1% Afro-AmericanAsian Native 9% 2% 11% 4% CaucasianHispanic 75% 13% 73% 11% Group Demographics** Demographics Example: America Beverages workforce and Example: America Beverages workforce national demographics* Workplace statistics Ethnic diversity – in the process reflecting local ethnic groupings. We are of our local of collecting data to compare the make-up workforce with the local population. Accountabilities for equal employment Accountabilities opportunities and diversity regular receive Committee and its CSR The Board a senior by coordinated reports progress, on global The policy outlines the responsibilities of the group the responsibilities The policy outlines units in implementing and and local business help all guidelines to are There processes. reviewing the policy within their own business units adopt cultures. diverse

7.3 our people our people 7.4 Offer diversity training for all employees employees Develop a mentoring programme for new on diversity Organise diversity celebrations and exhibits to increase awareness and understanding Form female focus group events with senior management Organise a diversity essay/art contest for employees and their families we are founding members of the Employers’ founding we are of the also members and we are on Age Forum on Disability. Forum Employers’ and global conference European we attend with of information exchange councils, facilitating global and other developments international companies. Quarterly progress reports, including the challenges and opportunities to the diversity agenda, are shared with the regional leadership team. Case study Diversity in Americas Beverages different The Diversity Steering Committees of the formed in 2000. beverages business units in America were Beverages In 2003 a joint Cadbury Schweppes America under the Diversity Steering Committee was developed The leadership of the regional leadership team. of multiple Committee is made up of men and women American ethnicities including Asian, Caucasian, African different and Hispanic. The members also come from levels and functions within the region. been able to: In the past two years, the committee has • • • • • • • representation of all colleagues for example succession with retention plans, career pathways and as education and HIV/AIDS issues we are members by invitation of the Vanguard invitation members by we are of leading edge EEO companies. Group The strategy was developed in consultation with numerous stakeholders including a registered trade union. Progress and actions are monitored by regional equity forums made up of management and staff representatives, which in turn report to a national forum chaired by the managing director. Achievements to date include setting employment equity objectives and targets, implementing a career planning process and providing employment equity training for over 1000 employees. – training & development, including a leadership school, – training & development, including a leadership support talent – resourcing, to ensure fair practices and workshops – culture, promoting our values through initiatives such – social responsibility, through community Diversity in South Africa Diversity in South Africa Africa’s Bromor Foods is playing its part in South Strategy, emerging democracy. Its Employment Equity now has five established in 1999 and revised in 2003, themes supporting its HR vision: equitable – affirmative action measures, to achieve Case study • Keeping up with the latest developments Keeping up with legislation, best with new date up to Keeping industries and companies, in other practices is an and developments with new trends together to important our own approach part of refreshing this end: To EEO and diversity. Designed to boost Designed to A number of global We also encourage We 70% of units use this process for some categories of some categories for 70% of units use this process non-management staff. Examples of global training programmes Sharpening the Culture (STC) people. It focuses the skills and capabilities of all our apply the 3As of on helping individuals and teams Accountability, our Leadership Imperatives: Leadership (see box: and Adaptability Aggressiveness Imperatives). Global strategic programmes support to the company’s developed programmes agenda. These include Building Strategic strategic Capabilities, the Cadbury Schweppes manufacturing and Sales and Based Management, Value system, Planning. Operations International development which experience, and international cross-functional supports agenda as well as bringing our diversity individual and business benefits. development run international we have Since 1990 progression the career accelerate to programmes

Globally, to address the strategic needs of the the strategic address to Globally, consistent as a whole and ensure group across which operate application of the processes the company Individually, as part plans personal development of Individually, needs job and career meet to needs of the business unit or the meet to Locally, supportfunction, or to the implementation of projects • • • providing the motivation, time and personal dedication. personal dedication. motivation, time and providing the programmes learning and development In practice, on a number of levels: developed are offering support, encouragement and resources, and the individual and resources, and the encouragement offering support, commitment of both the company and the individual – the company and the individual of both the company commitment Developing the talents of all our people depends on the the talents of all our Developing Learning and development and development Learning Performance management processes are management processes Performance of staff – almost lower levels used for increasingly All units use a performance management process personal 70% have managers and over for are tools feedback plans. 360-degree development help people understand their also widely used to needs. and development strengths The number of days’ training our colleagues receive training The number of days’ it on the business agenda. Typically depending varies when, for and can be more days 3-15 from ranges on site. introduced is being a major project example,

7.5 our people our people 7.6 Provide opportunities share to Provide Accountable – taking responsibility for ensuring teams to collaborative and effective working with deliver results to succeed, Aggressive – having the drive and resilience opportunities constantly seeking out new value creating in Adaptable – being open-minded and flexible effectively approaching different situations, working with diverse ideas, business and cultures based on a Forward thinking – making sound decisions of the long-term view and a broad understanding business Motivating – inspiring everyone to take appropriate actions that add value to the business Growing people – actively working to build everyone’s capabilities to develop the organisation Collaborative – actively sharing knowledge and effectively working across teams and boundaries, locally and globally Living our values – putting our values into action in the things we do, to create maximum worth for the organisation and its stakeholders • • • • • • • • Leadership Imperatives define the We have eight Leadership Imperatives which for core behaviours all our people need to adopt part of the individual and business success. They are and performance management process for leaders in the managers, globally and locally, and are reflected 360-degree feedback process. The Leadership Imperatives are: Global conferences, functional forums and best Global conferences, practice groups personal knowledge and learning and develop modules. skill development as well as run networks 1997 from analyst to finance controller (UK) 1997 from analyst to finance controller US as part of 2000 senior business planner, Mott’s Inc, (IDP) the International Development Programme Cadbury Trebor 2002 Finance Manager – Impulse Sales, Basset, UK Kenya 2004 promoted to Finance Director, Cadbury Limited closely “My first role under the IDP involved working forecasts and with the Mott’s marketing team to develop forecast. consolidate them to evaluate the total business This was very different to my previous technical finance role and initially I found the commercial aspects of the role challenging. However, I realised I could add value to the business due to my knowledge of how the information was used at Group level. I was able to focus the team on the most important aspects, anticipate questions and thus improve the quality of information provided.” CASE STUDY Sarah Atherton of managers with three to ten years’ experience. years’ ten to three of managers with that participants in terms balanced ensure are We representation and ethnic geographic of gender, In 2003 we had their progress. monitor and actively assignments across managers on international 150 the group. “I studied geology at the University of Nigeria, graduating top of my class in 1998. For the four years following my graduation, I worked full time on the management boards of AIESEC in Nigeria, Estonia and Brazil and eventually at the Case study Kene Umeasiegbu global headquarters in The Netherlands where I was global headquarters in The Netherlands Sustainable responsible for AIESEC's global CSR and Growth Development Strategy, as well as the Africa had my first Network. It was during this time that I personal contact with Cadbury Schweppes at the 2000 Developing Leaders Day. I chose Cadbury Schweppes because of the company’s flexible approach in linking my personal goals to those of the company and willingness to create a role that would draw on my past experience. This has enabled me to draw from my AIESEC experience and networks, while being challenged to build new competencies”. Cadbury Schweppes Global Resourcing Director, Norma Boultwood Cadbury Schweppes Global Resourcing Director, Cadbury Schweppes. with AIESEC members currently working at – International – At AIESEC’s annual AIESEC’s – At trainee exchanges are at the heart are AIESEC’s of exchanges trainee Cadbury Schweppes activities. As a global partner, in a number of business 20 trainees has placed over since 2000. Participation the world in units around of a group us access to only gives the scheme not complements our individuals, it also talented and widens our global outlook. initiatives diversity Global Exchange Partnership Developing Leaders Day 500 of their members from to up for conference Cadbury Schweppes 15 80 countries, up to over colleagues join a consortium of their peers from learn leadership multinational companies to other day a training then design and deliver skills. They the 500 AIESECers. In this for these skills covering in is shared model behaviour learning and role way, while Cadbury groups, Schweppes multicultural and internal development, employee benefits from opportunities. networking and external AIESEC partner student organisation We international the working can benefit from AIESEC, so that they can develop with us and our managers directly take We experience. leadership and cross-cultural with AIESEC: part programmes global in two

7.7 our people our people 7.8 We have a workplace improvement a workplace have We programme for the factory staff. factory the for It is designed to programme including equipment areas build skills in multiple machinery processes, production operation, and safety food plant hygiene, changeovers, troubleshooting. factory on the both place takes The programme mostly are The trainers floor and in the classroom. example itself, for the factory colleagues from leaders and laboratory staff. team technicians, on some training staff the factory receive Typically every month. part of the programme of their very proud Our colleagues at Aspers are Best 10 in the top its ranking by plant, reinforced in 2002. in Pennsylvania Work Places to Getting everyone involved in step-by-step improvements support to designed to the journey programme It defines 20 practical “World Class Manufacturing”. products better make to methods and inter-related the The principle behind efficiently. more in a every employee factory involve is to programme improvement. continuous to approach step-by-step in the Sheffield adopted was The system the end of in the UK towards factory manufacturing in the success of the their critical role 2000. Given management team frontline the entire programme, equip them with the skills needed to to trained, was coach and support their staff. Aspers in Our last CSR report looked Developing skills for the factory staff The programme is now being rolled out across is now being rolled The programme Cadbury programme the trainer train Schweppes. A Our People Growing deliver to enable HR teams to EMEA Beverages, Europe for has been completed Asia to functions. It will be extended and the group during 2004. and the Americas regions Pacific plant in North beverages our largest Pennsylvania, training put in place a cross America, have Many managers feel they have improved their improved have they managers feel Many able to better coaching skills, and are and listening learning and development. their teams’ encourage introduced, was Nine months after the programme of MBA students carried out an evaluation a team confirm that as part The results of their coursework. and as highly relevant managers see the programme had of how they examples gave Many practical. deliver to programme apply the been able to people better through business improvement management. Examples of local training programmes Examples of local Growing Our People were (CTB) Basset at how Cadbury and Trebor close consultation to thanks successfully integrated, unions. management and trade employees, between a new culture create to build on this to CTB wanted is performance.based on maximising The result development – a three-day Our People Growing excellence. for help managers coach to programme The programme has seen an increase in has seen an increase The programme the over levels retention management trainee has rate the retention years ten In the last years. continued all trainees doubled and in 2002 the – an indication of with the company working in matching training effectiveness programme’s and business needs. The Cadbury Nigeria HR Director, Tunde Falase, addressing The Cadbury Nigeria HR Director, Tunde Falase, management trainees. After a rigorous selection process, successful selection process, After a rigorous join a 12-monthcandidates 6 months programme: on business and focused training classroom leadership skills and 6 months on the job practical application. After the scheme, trainees completing paths. career ahead with their respective move Developing the managers of tomorrow in Nigeria Developing the managers of tomorrow Cadbury long established graduate Nigeria has a the develop scheme that aims to recruitment year, managers. Now in its 27th future company’s 172 half of the scheme has attracted people – over today. still with the company whom are Since launch, the programme has delivered £1.3m has delivered Since launch, the programme business unit, a 45% the local for in cost savings in consumer complaints, and a delivery reduction performance UK that is one of the best in “the leader, the team to According confectionery. stronger grow allows the business to programme while of all its employees the involvement through and contribution of the achievement recognising individuals and teams”. Around 50% of the Sheffield plant workforce is Sheffield 50% of the Around plant workforce activities small group through involved now actively implementation. Benefits and and ideas generation their improve include the ability to employees to and so processes work simplifying by own workplace performance, of improved levels better deliver activities, and the small group through teamwork their skills. opportunity develop to

7.9 our people our people 7.10 . Our Business Principles In addition to other communication and other In addition to his leadership consultation channels, our CEO and to employees to presentations personal give team business messages. support key concerns report any our people to encourage We activity which might about any have may they with be inconsistent up in 2004 as will be set A confidential hotline any raise colleagues to for an additional option concerns.

operational context. effective on having rely relations Good employee the company, communication channels throughout in place, the right processes and on having particularly during periods of change, reorganisation has During 2003 the group and business integration. and a significant amount of change gone through open communication ensured these principles have with staff we know can be times of during what and uncertainty. anxiety communication network, depending on the historical and on the historical network, depending communication have worldwide 70% of our employees Around unions, works trade through representation formal bargaining. councils or collective unions, European forums and staff councils all form part of the local councils all form part forums and staff unions, European employees, both formally and informally. Partnerships with trade Partnerships both formally and informally. employees, We have a long tradition of open and honest communication with and honest communication long tradition of open We have a Communication and consultation consultation and Communication Case study culture of open Creating a in China communication of creating an environment Recognising the importance communication with all our of open and regular put in place an integrated set of employees, we have business updates and provide activities to communicate opportunities to raise questions. newsletters, a Communication channels include monthly employee questions and answers document, and an questions and hotline through which employees can ask a result, seek information about the company. As as they employees have become increasingly comfortable through these have openly raised questions and concerns of trust. channels, which in turn has enhanced levels indicators The local team has a set of key performance by all for communication: frequency of meetings with employees on site, employees’ satisfaction resolution time. newsletters and grievance response and Employees at an all-staff meeting addressed by the managing director. With duplicate commercial organisations, the integration With duplicate commercial Adams businesses in Egypt was a of the Cadbury and to major undertaking. What's more, the decision called for clear outsource sales and distribution functions our own communication and consultation with both employees and those of the distributor. everyone was The communication process ensured that integration and kept up to date with the progress of the to make ongoing employee feedback was encouraged In addition, sure all issues were addressed immediately. on change sales managers received training and support to support management so that they were well equipped their own teams through the changes. took place. A rigorous and open recruitment process positions, With the appointment of the sales supervisory by a series of for example, candidates were interviewed unsuccessful people and feedback was given to all. Some working in other candidates were retrained and are now advice and areas of the business. Others received career support with their job search. Managing commercial in Cadbury Adams integration Egypt Case study

7.11 our people our people 7.12 reward process for managers and the ‘grandfather’ for process reward and benefit changes to pay principle, which requires management at least two by authorised be formally With the senior beneficiary. the most above levels local HR, audit and treasury, of group involvement assess and minimise the risks business units identify, and benefit liabilities. with remuneration associated Share plans in own shares to employees encourage actively We work them to Cadbury motivate Schweppes, to shareowner long term create to together better Canada, France, in Australia, All employees value. Portugal, Netherlands, Mexico, Ireland, Germany, at discount shares offered are Spain, UK and USA to promoted plans are Share value. market to and about 45% of eligible every year employees participate. In the UK almost choose to employees in the scheme. enrolled are 70% of all employees remove to The policy is under constant review plans share employee extending barriers to worldwide. HR Minimum provide guidelines within which local provide

We have clear approval processes at the global, processes clear approval have We manage to local business unit level and regional These include formal and recognition. reward the of performance management into integration At the group level, we design and coordinate all we design and coordinate level, the group At and benefit plans, remuneration international and share policies and guidelines, including incentive and risk benefit plans. All plans, and retirement managers plans to businesses offer annual incentive have based on performance. Many are and awards staff. lower level for programmes pay variable businesses can develop their own variations, as their own variations, businesses can develop Our Human Rights and Ethical Trading appropriate. hours and remuneration that working policy ensures by those offered to and comparable reasonable are similar companies. Standards Our HR strategy is committed to delivering to is committed Our HR strategy the meet that both and rewards remuneration in local competitive needs of the business and are our on diversity, our approach Similar to markets. and framework global reward appropriately. objective of attracting, retaining, motivating and rewarding them motivating and rewarding attracting, retaining, objective of Regions and local businesses remunerate our people with the our people with local businesses remunerate Regions and Rewards and recognition and recognition Rewards It can be difficult to have a defined policy that It can be difficult have to of business the wide range addresses adequately so we veryactivities and individual needs and much with discuss the matter individuals to encourage identify the most appropriate their line manager to solution. survey that our business our recent know from We in which the ways expanding increasingly units are needs for employees’ to responding are they flexibility.

the business and the individual. the business local business units to this end we encourage To the which reflect own approaches their develop particular needs of their business activities. In shift patterns work environments, manufacturing and part options of flexible time hours offerrange a Our sales staff often from our employees. work for be can frequently work a home base. Administrative of - taking advantage way in a flexible organised using job sharing in technology, advances part and flexible time hours and arrangements, of home and office a combination sometimes based working. importantly, this is about finding solutions that work well for both solutions that work this is about finding importantly, practical ways to balance their lives inside and outside work. Most inside and outside to balance their lives practical ways We are very supportive of trying to help employees find options and to help employees find supportive of trying We are very Well-being and work/life balance and work/life Well-being

7.13 our people our people 7.14 Case study (UK) Fit for Life occupational health department Cadbury Trebor Bassett's to promote a motivating, fun developed this programme in the belief that health and healthy work environment influence on employee and fitness have a direct an increasingly serious issue, as performance. This is continues to physical activity both at home and work don’t take decline. Currently 70% of UK men and women health. enough exercise for it to be good for their the programme Following the pilot, we hope to roll out feedback in the to all UK sites, incorporating employee in 2004 focuses evaluation of the pilots. The pilot phase on three areas: in staff Healthy eating – a range of healthy options canteens. by Regular exercise – walk 2000, an initiative people to walk Birmingham City Council to encourage of 2000 2000 metres. Walk leaders mark out a number during lunch metre walks before and after shifts and breaks. on key Health promotion and education – seminars of on site activity and lifestyle issues; raising the profile sports or exercise facilities. % of business units % of business units che facilities/ è Short contracts term 11 Job sharingSabbatical leave 15 20 parental career breaks) career parental care) child (excluding breaks Career 26 28 Adoption leaveAdoption Part time work home from Working (cr Childcare 63 35 46 Paternity leavePaternity hours working Flexible 67 70 Type of benefitType leaveMaternity offering the benefit 100 The following flexible working benefits are currently benefits are working flexible The following available: p7.1 helping to make Cadbury Schweppes “the place to be” p7.2 equal employment opportunities and diversity p7.5 learning and development p7.10 communication and consultation p7.12 rewards and recognition p7.13 well-being and work/life balance

our people

E D S I M O R E I N 8. consumers

Brand Assistant Mumbi MubariCadbury Kenya

TO REGULARLY REVIEW AND BUILD ON OUR FOOD ISSUES STRATEGY , WE TALK TO A RANGE OF EXTERNAL STAKEHOLDERS . OUR GLOBAL POLICIES THEN INFORM LOCAL PLANNING AND PROMOTE BEST BUSINESS PRACTICE .

ER INSIGHTS -CLASS CONSUM OUR W ORLD , HELPED CADBURY ME, ALICE PROGRAM NEW ZEALAND SCHWEPPES AUSTRALIA ANDMARKET POSITION A STRONG BRAND. ESTABLISH OTHER EARTH FOR THE M millions of consumers around the world enjoy our chocolate, sugar, medicated and gum confectionery, our soft drinks and our food beverages. To continue to create brands people love, we listen and respond to customers and consumers, respect consumer choice and are committed to manufacturing, marketing and distributing safe products of the highest quality.

AS PART OF OUR ONGOING COMMITMENT TO MAINTAINING THE HIGHEST POSSIBLE PRODUCT QUALITY, WE HAVE INTRODUCED A NEW CADBURY SCHWEPPES QUALITY POLICY AND SUPPORTING QUALITY STANDARDS. p8.1 using consumer insights to help create brands people love p8.2 responding to consumer needs p8.4 the quest for quality

our responsibility to

consumers E

D

I

S N I M O R E Cadbury Schweppes Asia Pacific launched the ALICE Cadbury Schweppes Asia Pacific launched solve Insights programme in 2002 to help colleagues ALICE is a world- business challenges in the marketplace. and a common class five-stage process that offers tools focus on the language to align issues to strategy, increase target market, and identify potentially winning opportunities. and New ALICE has given Cadbury Schweppes Australia consumer-based Zealand (ANZ) deeper insights to many to identify and projects. For example, ANZ used ALICE within the establish a differentiated and ownable position Earth brand. nutritious snacks category for the Mother team from sales, This project involved a cross-functional at what the marketing, operations, etc., which looked consumers. product offering meant to customers and These findings were then shared among the team and used to determine the best opportunities and needs that the brand might satisfy. Case Study ALICE is the key to consumer needs

Alongside local consumer-focused activity, we also activity, Alongside local consumer-focused the all around the same some issues that are face our Food these through and we address world page). Consumer (see next Group Issues Strategy the to listen us to for way another are organisations and sector monitor We people who buy our brands. forums. via these industry raised issues that are Our customers work with us in selling our products work Our customers We them. the people who consume and enjoy to and this helps us every day deal with our customers also talk We understand consumer trends. better and have with our consumers on a daily basis substantial support functions at the business unit consumer queries and to and respond listen to level complaints. business success – it's something we do every day. – it's something business success Listening to customers and consumers is fundamental to our is fundamental customers and consumers Listening to brands people love brands using consumer insights to help create to help consumer insights using

8.1 our responsibility to consumers our responsibility to consumers 8.2 Case Study Sticking to our policy on genetically modified ingredients in gum, UK new The genetic modification of plants is a relatively the branch of biotechnology. While we recognise consumers have potential of any new technology, some unfamiliar. In reservations about anything so new and preferences, our response to local market and consumer has not contained confectionery in markets such as the UK genetically modified (GM) ingredients for some time. 2003 saw the acquisition of Adams Confectionery and the formulation of the new EMEA regional structure. In response to the consumer preference across Europe, a programme of work has just been completed to ensure that all our confectionery products manufactured for sale anywhere in EU are made from non-GM derived ingredients. The FISG is responsible for setting our global setting for The FISG is responsible to positively so that we can respond strategy the globe, taking across changes in our markets and of legislation, cultures account of the diversity in which consumer impact in all of the countries and sell. we manufacture

To enable us to increase our understanding of increase enable us to To appropriate the issues and develop food emerging a consumer needs, we have address to strategies our led by (FISG) Group Issues Strategy Food Officer (CEO), Chairman. Our Chief Executive Executive's members of the Chief selected and marketing science and technology, Committee, functions and the Consumer human resources support Consumer Impact him. The Impact Director the CEO, has who reports to Director, ensuring that the whole business accountability for steps. commercial up the agreed takes Research also plays a large role in our innovation role a large also plays Research opportunities new for agenda – helping us explore and products existing enhancements to products, checking that our always In addition we are packaging. our consumers. right for are and ingredients recipes Finding new ways to do things can be a lengthy to Finding new ways consumers to respond and we need to process this end, our science quickly and with confidence. To talk to affairs teams and external and technology and the lobbyists activists, food governments, anticipate academic community so that we can appropriately. and respond consumer trends future product quality and safety. product quality Food and diet are now high on the consumer agenda, alongside the consumer agenda, are now high on Food and diet Responding to consumer needs to consumer Responding Case study USA Snapple shines in schools, schools now Under a five year deal, all New York City juices and exclusively sell our range of Snapple fruit City recently water in their vending machines. New York available in decided to make healthier beverage choices Cadbury its schools and awarded the contract to Schweppes. The deal means we can encourage children to drink 100% natural juices, with no added sugar, and water at school, while also supporting greater participation in school sport and physical exercise. A similar deal has been agreed in Torrance, California, which will see our natural juices and water supplied exclusively across city schools. Negotiations are underway to replicate this successful partnership in North American cities. In line with their importance,In line with their accountability for policies is partimplementing the of our annual with senior process, contract business internal turning for responsibility a clear managers having also commission We business practice. them into guidance in scientific and nutritional external support our goals. of achieving It took less than six years for the Natural Confectionery It took less than six years for the Natural of Australian Company to secure a place in the hearts jelly sweets in consumers and become the most popular share, the the country. With an impressive 8% market and young products appeal to both concerned mums women who are drawn to the use of all-natural ingredients with no artificial colours or additives. The product is associated with the Institutes of Sport in both Victoria and New South Wales, to promote an active lifestyle alongside a healthy diet. Confectionery that makes a Confectionery that makes difference, Australia Case study To regularly review and build on our strategy, build on our strategy, and review regularly To This stakeholders. of external a range we talk to and respond understand better also helps us to Our global their opinions and expectations. to local planning and promote policies then inform best business practice. To support FISG's activities we have our Food Issues support our Food FISG's activities we have To is responsible FISA group. (FISA) Action Into Strategy the business and deep into the strategies taking for all to we deliver – making sure life bringing them to of our commitments.

8.3 our responsibility to consumers our responsibility to consumers 8.4 Quality Policy CadburyAt been an has always Schweppes Quality and who we are. part how we operate of integral create to together purpose of working Our core commitment to on a is founded people love brands quality in everything we do. the ensure management of quality is vital to Active our for of value the creation of our brands, integrity of the bond we the strengthening shareowners, our consumers and the partnership with share we with our customers. have quality reaffirms our commitment to This Policy standards quality the application of rigorous through in within our business and the wider environment which we operate.

Many of our factories have adopted the adopted have of our factories Many Analysis and Critical Control Hazard international Since our last report programme. (HACCP) Points a further 40 international facilitated in 2002 we’ve courses, implementation activities including training is audits. Progress system and factory workshops at each site. being monitored of our brands. and the whole supply chain The new policy covers while processes, manufacturing just our own not new ideas and the supporting integrate standards the company. colleagues across learning from best practice standards that maintain and improve the integrity and improve the standards that maintain best practice within Cadbury everyone up to Schweppes to It’s help us To every day. maintain our quality standards a new Cadbury Schweppes Quality with this there’s and supportingPolicy Quality Standards. Our operations continue to seek ways to integrate manufacturing continue to seek Our operations quality possible – that’s why manufacturing standards are critical. standards – that’s why manufacturing quality possible We want to make sure that our products are of the highest products are of the highest make sure that our We want to The quest for quality The quest Case Study quality, India Assuring product the beginning of the festive When India celebrates spending peaks as do season in October, consumer sales. In October 2003, as a Cadbury India’s chocolate began to make an impact and new advertising campaign reports that, seasonal sales looked promising, there were were infested. of a million bars sold in a day, one or two unhygienic Although the incident was the result of challenge of conditions at a retail outlet, we faced the was safe to eat. reassuring consumers that our chocolate line with Consumers were encouraged to call a toll-free in the their queries and advertisements were placed steps we were major daily newspapers to highlight the database taking. Hundreds of mothers on our “Bournvita” were also mailed. looked for a Working with distributors and buyers, we again. The long-term solution to stop this happening result was Project Vishwas, a retail education packaging, programme, and the creation of new product with a “purity which was launched in November 2003 of seal” to reassure consumers. The combination with information and action helped build bridges research concerned consumers and subsequent market to be restored. showed that confidence was beginning quality expectations of our consumers at the quality expectations and consumption points of purchase approved meet image, including our trademarks, commitment to our and reinforce standards quality. and trained appropriately are employees quality accountable for the policy that deliver quality targets measurable and meeting setting our quality policy compliance to partners drive to and systems meet our specifications and comply with local our specifications and comply meet requirements regulatory 3. of our Company that representations Ensure 4. in which a “right first time” culture Encourage 5. quality management systems audited Operate 6. Assign clear management accountability for 7. and business with our supply chain Work 8. policy regularly this and update Review 2. the to respond and regularly listen Actively We will: We 1. that consistently high quality products Market

8.5 our responsibility to consumers p8.1 using consumer insights to help create brands people love p8.2 responding to consumer needs p8.4 the quest for quality

our responsibility to

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E I N S I D E 9. working with suppliers

We turn many different raw materials into a variety of finished products. To this end we buy goods and services from agricultural produce to chocolate wrappers and paper clips, involving some 40,000 suppliers. Our current focus in working with suppliers is to address human rights and labour issues in the supply chain, a big issue for our stakeholders.

IN 2003 WE INTRODUCED ETHICAL SOURCING STANDARDS

IN 2000 THE BOARD ADOPTED A HUMAN RIGHTS AND ETHICAL TRADING POLICY .

Duncan Mwendwa WE HAVE MORE THAN 40,000 Corporate Social Responsibility Manager SUPPLIERS GLOBALLY Cadbury Schweppes OUR NEXT STEPS ARE TO ESTABLISH AN ONGOING ASSESSMENT OF OUR HUMAN RIGHTS AND ETHICAL TRADING POLICY, INCLUDING THE NUMBER OF SUPPLIERS THAT MEET OUR STANDARDS.

OF 40,000 SUPPLIERS, 96 ARE CATEGORISED BY US AS LEVEL 1 PRIORITY, ABOUT 3,000 ARE LEVEL 2 AND THE REST ARE LEVEL 3. RISK ASSESSMENTS HAVE BEEN UNDERTAKEN IN FIVE PILOT WE HAVE SO FAR COMMUNICATED OUR ETHICAL SOURCING COUNTRIES: GHANA, TURKEY, CHINA, INDONESIA AND MEXICO STANDARDS TO ALL LEVEL 1 AND 2 SUPPLIERS. MORE IN SID E how we working with are suppliers

p9.1 human rights and ethical trading p9.4 putting policy into practice HUMAN RIGHTS AND ETHICAL TRADING POLICY

Our Human Rights and Ethical Trading (HRET) policy is monitored by the HRET working group, which has representatives from legal, business risk management, procurement, external affairs, human resources and an external advisor, The Corporate Citizenship Company. The working group reports to senior management and the Board’s Corporate and Social Responsibility Committee, which has overall responsibility for HRET and is chaired by a non-executive director.

As a responsible corporate citizen, Cadbury Fair remuneration Schweppes plc aims to act in a socially • ensure that working hours and remuneration responsible manner at all times by: respecting are reasonable and comparable to those the economic, social, cultural, political and civil offered by similar companies rights of those involved in our operations; complying with all local human rights legislation; Diversity and respect for differences implementing programmes across our global • manage diversity to promote and capitalise on operations and with our supply chain partners. cultural and individual differences to create competitive advantage through new Core labour rights and dignity at work perspectives and local market sensitivity • preclude the use of forced labour • respect the rights of employees to join legally Opportunity for development recognised labour unions • recognise the value that employees create and • ensure that children are employed only under reward them with opportunities for personal circumstances that protect them from physical and career development risks and do not disrupt their education • provide employees with equal opportunities • not tolerate any form of harassment in the regardless of their gender, age, marital status, workplace sexual orientation, disability, race, religion or national origin. Health and safety in the workplace • create a healthy and safe work environment for each employee 9.2 Human rights and ethical trading how we are working with suppliers In December 2000 we adopted a Human Rights and Ethical Trading policy, which was supported by a series of pilot programmes to help us understand how the policy can be applied in different local settings.

In 2001 we carried out an initial risk assessment as a helped us develop our broad HRET Supplier key part of developing our HRET programme. This Communication Programme. review of global procurement activity included owned The visits were also useful in evaluating any risks and operated businesses in various countries around the world and as a result five countries were selected and envisaging how our HRET Policy would apply for in depth HRET pilot studies: China, Ghana, in different countries by experiencing the diverse Indonesia, Mexico and Turkey. The selection was based cultural contexts in which our local divisions operate. on the potential human rights issues associated with Additionally, discussions were held with a major the countries and the importance to our brands of the international commodity supplier to review its commodities sourced. Between 2001 and 2003 we approach to ethical sourcing issues and the made five pilot study visits and what we learned has management systems in place to deal with them.

Country pilot study profile Country Date Local business Ingredients & goods units contacted China September 2002 Cadbury Food Company Strawberries Trebor Wuxi Confectionery Ghana May 2001 Cadbury Ghana Cocoa Indonesia September 2002 Cadbury Indonesia Quinine Cocoa Mexico July 2003 CS Bebidas Mexico Sugar Motts Flavourings Cadbury Adams Packaging Turkey November 2001 None (trip was prior Hazel nuts to acquisition of our Vine fruit Turkish business) HRET working group members made the pilot visits, working in collaboration with local staff to visit 15 key global suppliers and engage in dialogue with 82 organisations locally. These ranged from local branches of international organisations and local government agencies to local non-governmental organisations (NGOs) and academics. the pilot studies were needed for the insight and the pilot studies were needed for the insight communication experience that helps develop a supplier programme and procurement training materials. suppliers thought integrating HRET questions into a suppliers thought integrating audit was the right way to proceed normal commercial for processing units who understand the dynamics dialogue with stakeholders labour in agriculture is particularly of issues such as child issue and valuable both for local perspectives on the sharing of Cadbury Schweppes' own policies was able the Mexican Human Rights Commission and trade to comment on issues in sugar farming the head unionisation in manufacturing (in Ghana, clear advice of the agricultural workers union also gave in the and guidance on child trafficking and labour cocoa regions) • • • • however, were identified at Cadbury Schweppes however, were identified and global suppliers and the businesses, or the local company visited. We learned that: independent bottling Stakeholder dialogue: President, Mexican Human Rights Commission, Dr Jose Luis Sobranes Fedz (right) with Cadbury Schweppes External Affairs Director, Neil Makin and Gabriela Rivero of CSBM. This was the last of a series of five country studies to This was the last of of our HRET policy. It focused on review local application confectionery, which was the focus beverages rather than to the visit in July 2003, desk in previous studies. Prior in the HRET policy research looked at the issues addressed Schweppes' and broader issues likely to impact on Cadbury Mexico operations. Cadbury Local business units were consulted and the visit by Schweppes Bebidas Mexico (CSBM) facilitated We visited setting up and participating in the meetings. distribution CSBM’s local suppliers, bottling plant and in Puebla; local centre in Guadalajara; a franchise bottler Cuernavaca; and and global suppliers in Mexico City and border. the Mott’s plant in Tecate on the US-Mexican own In addition to reviewing Cadbury Schweppes' the views of operations and those of key business partners national and other stakeholders, such as trade associations, were international NGOs and the Mexican government, The British sought at a breakfast meeting hosted by their views on Embassy. Participants were invited to share and challenges our approach to CSR and on opportunities Individual to implementing the HRET policy in Mexico. at Cadbury consultations were also held with managers Rights, Adams, the National Commissioner of Human International Labour Organisation, UNICEF and Ford Foundation. The dialogues suggested that there are potential labour- related concerns, particularly over workers’ rights, working conditions and migrant and child labour in agriculture and in other parts of the economy. These issues will be addressed as the business units take forward the HRET supplier communications programme. No concerns, Case Study Study Mexico Pilot

9.3 how we are working with suppliers how we are working with suppliers 9.4 In 2003 we trained our 111In 2003 we trained buying team regional CSR themes, broad covered members. The training in which ways and practical our HRET policy in detail, buy goods and services. to we can use standards purchasing regional for session was The first training communicating for responsible managers, who are a also invited We regions. in their the standards us understand how the roll help to major supplier, through our way then worked We work. out would the people who buy particular all train to the regions Category buyers discussing how to apply the toolkit for supplier dialogue at the continental Europe regional training. for suppliers, for Ethical Sourcing Standards

MD Niel Hyde, and Director Altan Bodur of Bond Commodities share their views on CS’ Ethical Sourcing Standards at a regional purchasing managers training session in May 2003. out our policy and standards to all suppliers. and standards to all out our policy studies, we pilot the findings of the five From developed practice. We started with high priority suppliers and are now rolling suppliers and are started with high priority practice. We helping us to turn our Human Rights and Ethical Trading policy into and Ethical Trading to turn our Human Rights helping us our business consistant with our HRET policy and on global based are principles. The standards of Declaration Universal such as the standards Labour Human Rights and the International on labour rights. We conventions Organisation to supplier relationships using the existing are provide and our buyers implement the standards, the important link in these relationships. A relevant and effective supplier communication programme is communication programme and effective supplier A relevant putting policy into practice policy into putting review process the buyers are in contact with are the buyers process review procedures and their practices evaluate suppliers to and identify gaps that need against the standards be closed. to ingredient (which includes the second level For been suppliers), the ESS have and packaging interactive a dedicated through communicated ongoing engagement. established for extranet and conditions outlined on all terms Elsewhere, the HRET to attention will draw orders purchase all suppliers, these terms, By signing up to policy. will confirm that level, including those in the third Category buyers at the continental Europe regional training in Paris, France. (ESS) have now (ESS) have Ethical Sourcing Standards The We have categorised suppliers into first, second or suppliers into categorised have We risk as well as perceived to according levels third how explains size. The communication programme the sourcing we manage the implementation of to A supplier toolkit each level. for standards suppliers’ and evaluate introduce help the buyers includes a practical compliance with the standards the issues outlined in the checklist of evaluation our through all buyers to It is available standards. intranet. procurement products and services. So far we have covered and services. we have products So far Asia Britain and Ireland, Great continental Europe, Americas and partPacific, Africa and Middle East of be covered of AME is due to (AME). The rest in 2004. suppliers. all our first level to been communicated started dialogue with 88% of these have We as the suppliers and we will engage the remainder is completed. buyers of AME regional HRET training in the supplier engagement This will equip buyers necessary supplier with the tools for exercise support. As part and of the continuing monitoring Third Rest of suppliers 36,000 In 2004 LevelFirstSecond of supplier Category High Priority packaging and Ingredients 3000 Total 3000 96 to Suppliers communicated 96 Suppliers’ risk profile

9.5 how we are working with suppliers how we are working with suppliers 9.6 suppliers will build HRET suppliers will build Where we can see that a supplier has the potential we can see Where with them and we will work improve, or capacity to support efforts. their pre-qualification the In future, selecting for process evaluation into the selection process. into evaluation Next Steps as part risk assessment conducted the Following assessments ongoing detailed studies, of the pilot being made in a further are 40 countries where will continue We operations. and/or have we source build on quality audits and environmental to integrate to assessment of suppliers and we plan chain global compliance the supply HRET into in 2005. process of group a regional Our plans include developing environment certified carry assessors to our quality, continuing to and HRET supplier assessments, and cascade the same chain to with our supply work report, their own suppliers. In our next to standards will also We we will describe further progress. in 2005, the impact of the HRET processes evaluate decision in December the Board's from years five the programme. implement 2000 to Overall performance is acceptable at present performance is acceptable Overall The supplier has a good record of The supplier has a good record Performance is not to standard, either in standard, to is not Performance no initial action required, but an annual review no initial action required, recommended. action should be taken within three, six or 12 within three, action should be taken with the supplier. months as agreed action to be taken by the supplier within one by be taken action to month. • Supporting suppliers assess and evaluate Supplier dialogue is designed to standards. the sourcing meet ability to a supplier’s identify any we hope to In the ongoing process help a specific support be needed to that may comply. supplier to • performance on the issues and has good in place. management and data systems Green but there are issues of performance or monitoring are but there time, but the over be addressed that need to do so. to supplier has the capacity and willingness • Amber Red or poor management of actual practice respect action is required. Immediate monitoring. Following their initial dialogue with suppliers, their initial dialogue Following checklists and complete category will review buyers using Red, Amber or Green an assessment grid rankings: they are fully aware of Cadbury fully aware Schweppes’ are they trading. in human rights and ethical expectations . We reviewed , the process Our Business Principles Ethical Sourcing Standards In 1998, Shulan restructured from a state-owned enterprise In 1998, Shulan restructured with the majority of the shares to a shareholder company management. In 2003, it was among owned by the plant’s producers in China. the top three caffeine the HRET training material and the implementation process the HRET training material and the implementation a thorough of the standards in November 2003. With the understanding of Cadbury’s needs and expectations, with agent translated the information and communicated feedback the factory on a number of occasions. Positive was received from Shulan’s top management. Evaluation are industry The suppliers that we work with in China in the last decade. leaders, with healthy growth and profits laws and In addition to being protected by insurances, with above regulations, the workforce is remunerated average pay and bonuses. and the Given China’s growing free market economy the three competition it faces in the global market, so far embrace suppliers with whom we have engaged helpful. Given Cadbury’s HRET policy and find the dialogue of China’s human the international community’s perception rights record, our suppliers view this as an opportunity to be proactive to avoid potential losses from mishandling HRET and environmental issues. The General Manager of Shulan, Dai Qian Li said, “We are glad to be working with Cadbury to meet the high global standards of HRET and be more competitive in the global market”. The engagement agent in Shanghai was introduced to Initially, the buying the HRET policy, toolkit. He was guidelines and supplier communication further company also referred to the corporate website for information including Jason Tang Role: Category Manager, Service, North Procurement Business America. Budget: Estimated annual spend about US$40m The training As a category manager for the Procurement Business Service, I attended the HRET Procurement Business Service, I attended in July 2003 in training for regional procurement staff a step-by-step the US. The training equipped me with suppliers: why, process to communicate and engage with to category when, who, what and how. It was of benefit Cadbury supplier managers as we are at the centre of the relationship and constantly manage it. The supplier China is a long Jilin Shulan Pharmaceutical Company in concentrate term contract supplier of caffeine, a flavour our own ingredient used widely in beverages including Dr Pepper beverage. in 1987 Shulan began to produce and export caffeine Being in the after Pfizer withdrew from the market. Jilin Province in northeast China and supported by the municipality, Shulan enjoyed lower operating cost and was able to expand and grow sales. Dr Pepper began to purchase caffeine from this factory in 2001 after the plant passed a facility audit in November 2000. The audit covered quality management, standard operating procedure and environmental standards etc. Case study standards in the Applying HRET supply chain

9.7 how we are working with suppliers how we are working with suppliers 9.8 The General Manager JSPC, Mr Dai Qian Li, talking to the Shulan staff about HRET and its application to their business and own suppliers. Challenge continues to grow the challenge As the Chinese economy the rising cost of raw materials, labour for suppliers will be need to meet more rigorous regulations and energy and the as well as social standards. in pollution control, Future plans engage with Shulan to review their We will continue to The factory is social and environmental performance. Protection currently working with the state Environmental to Agency and the local pollution control department process and upgrade the factory’s pollution control 5mRMB (about facilities. The factory is investing more than ISO 10000 £350,000) of capital expenditure to obtain certification including meeting the environmental standards, by the end of 2004. MORE IN SID E more working with about suppliers

p9.1 human rights and ethical trading p9.4 putting policy into practice 10. growing community value around the world Community investment helps to build prosperous, educated, economically sustainable and socially inclusive communities, benefiting the societies in which we live and work. It also brings benefits to our people, our brands and our businesses. Our community investment is made up of the time, expertise and money that we contribute to local communities.

IN 2003 WE CONTRIBUTED £2.2MTOUK COMMUNITIES, REPRESENTING APPROXIMATELY 3% OF UK PRE-TAX PROFITS .

OUR PEOPLE DONATED TWICE AS MUCH TIME TO COMMUNITY PROJECTS IN 2003 AS IN 2002, VALUED AT £722,350 WINNER OF THE 2003 CHAIRMAN’S AWARD FOR EMPLOYEE INVESTMENT IN THE COMMUNITY, KATHLEEN SYTHES HAS PERSONALLY RAISED SOME £0.3M FOR CHARITY.

CADBURY ADAMS BRAZIL IS RECOGNISED AS A ‘CHILD-FRIENDLY COMPANY’, FOR INVESTING IN CHILDREN’S WELFARE BUT NOT EMPLOYING THEIR LABOUR.

WE WON THE UK FOOD INDUSTRY AWARD FOR SOCIAL COMMITMENT AT THE 2003 FOOD INDUSTRY AWARDS IN RECOGNITION OF Wannapa Soonjakbhap ‘WINTERWATCH’, A PARTNERSHIP TO RE-HOUSE HR Manager AND REHABILITATE 11 HOMELESS PEOPLE Cadburys Adams Thailand WITH FOCUS HOUSING IN BIRMINGHAM. investing in communities M O R E I N S I D E

p10.1 why we invest in the community p10.2 how we invest in the community p10.5 education and enterprise p10.7 health and welfare p10.14 environment p10.16 rewards and recognition Being part of the school community for the day was the highlight of the regional meeting for the leadership team, who rated it as beneficial to the community, beneficial to their team skills and fun. Similar events will now be included in local business unit leadership meetings. aims is a global investment of 1% of pre-tax profits of 1% of pre-tax aims is a global investment ideas and and it includes guidelines as well as help our businesses to action suggestions for and manage their community investment. measure The day was planned with the school’s management who The day was planned with the school’s management The team allocated projects with clear goals and deadlines. turf on an entire tackled projects that ranged from laying and painting soccer pitch, to making classroom desks children learnt murals in relaxation areas. In addition, the and the school something about the supply chain process received donations of IT equipment. Laying turf at the school’s soccer pitch. is

To demonstrate the senior management team’s To demonstrate the senior management commitment to Cadbury Schweppes’ community senior investment, the Americas Confectionery first day management team meeting devoted the in of their three-day meeting in Costa Rica November 2003 to community action. This inaugural meeting was an opportunity to integrate a new management team and demonstrate the importance of CSR within the organisation. Their ambition: “a personal and professional journey connecting with our colleagues, the community, the business and ourselves”. The 85-strong team spent a day at the local República de Panamá Elementary School, San José. What our leadership team Rica learned at school, Costa Case Study our global strategy for how we interact with local interact how we for our global strategy builds on our core communities. The strategy the part and explains we can all purpose and values support to communities. One of the strategy’s play contacts and have fun. contacts and the world Growing community value around horizons, be challenged and develop skills, build community skills, build community challenged and develop horizons, be back to society, to gain new experiences and broaden their and broaden to gain new experiences back to society, Community programmes allow our people to give something people to give something programmes allow our Community Why we invest in the community invest in the Why we

10.1 more about the community more about the community 10.2 Business in the Community’s (BitC) Business in the Community’s London Club and the PerCent (LBG) to Benchmarking Group measure and manage our community investment. measure club which PerCent members of BitC’s are We than 1% of more includes companies that invest in the community. profits UK pre-tax also benchmark our community investment We model recognised using the LBG internationally Using the investment. measuring community for the world around LBG model, we ask business units the community. to their contributions calculate to report as well as gifts on cash, ask them to in We and time spent with and products, kind of resources including management community organisations, community programmes. time spent directing fully our global understand This enables us to community contribution. The value of our community investment 3% of was In 2002 our UK community investment us second in the UK This ranked profits. tax UK pre contribution of with a total and drink sector, food our £2.6m in cash, gifts also reported and time. We in the FTSE 100 2002 global community investment Growing community value around guidelines to measure and manage their measure guidelines to

health and welfare health and welfare environment. education and enterprise Benchmarking community investment such as with a number of UK groups, work We the world community investments. Local business units may expand on these areas of on these areas expand Local business units may depending on the particularinvestment, needs of also decide how them. They the community around skills or gifts time and will in kind they much money, using the invest, • • • As the needs of communities vary from region to region As the needs of communities vary from is investment our and country county, region to our the world, around However, prescriptive. not in principal areas three developed businesses have our community involvement: which we concentrate money are made by local businesses. money are the of money, can be a mixture Our investment giftstime and skills of our people and/or in kind. that can be of resources a wide range have We donations, use in kind. These include product given as well as facilities, and other rooms of meeting specialist materials. and other training access to business unit involvement. Decisions on how to spend time and on how to spend involvement. Decisions business unit Our community investment ranges from global initiatives to local from global initiatives investment ranges Our community how we invest in the community invest in the how we London 11% Sheffield 5% Bristol 2% Birmingham 14% Education and Enterprise 64% Environment 5% National 54% strategy meant business units strategy Growing community value Health and Welfare 25% Overseas 14% involvement 6% Employee community Cadbury Schweppes Foundation Grants 2003 by region Cadbury Schweppes Foundation Grants 2003 Cadbury Schweppes Foundation Grants 2003 by theme Cadbury Schweppes Foundation Grants 2003 re-organisation and Adams integration makes strict makes integration and Adams re-organisation comparison difficult. The launch of the around the world and manage prioritise, measure better to able were their community contributions and we saw a of community investment in the value rise marked in 2003 (see table). but occasionally on UK programmes, support employee community involvement areas such as offer regional engagement in key UK operating Birmingham, Sheffield and London. focus the majority of activities within education and enterprise, while activities within education and enterprise, focus the majority of and welfare and environmental projects supporting some health supports international programmes. Recently the foundationsupports international programmes. Recently has will represent around developed the Africa Aid initiative, which Africa Aid’s core areas of 15% of the foundation's funds from 2004. principal areas of global investment will be consistent with the three health and welfare, community investment: education and enterprise, and environment. Trustees include our chairman and other UK directors. The foundation Trustees include our chairman and other Principles of Corporate subscribes to Business in the Community's for support, we look Community Investment. In considering projects possible community benefit. for value for money in terms of maximum also seek to assess the value Although purely charitable in nature, we of community activities to the business. The foundation is primarily focused • • • In the UK, cash donations are channelled mainly through our registered are channelled mainly through our In the UK, cash donations to 1935. Schweppes Foundation, which dates back charity, the Cadbury The available funds totalled £700,000. In 2004, the foundation's is to: foundation's strategy Cadbury Schweppes Foundation Cadbury Schweppes In 2003, our global contribution to charities or In 2003, our global contribution to £6.03m or to amounted organisations equivalent 1.09% of almost an increase profit, of global pre-tax had been equal If 2003 profit the past year. over 10% 0.7% risen to have would 2002, our investment to of 0.65% in 2002, though the impact of a year from Giving List 2003 for the first time, and were ranked the first time, and were Giving List 2003 for with a contribution of 40 givers, top among FTSE’s profit. £5.6m or 0.65% of global pre-tax

10.3 more about the community more about the community 10.4 70,777 45,494 ,789,548 ,650,000 5,505,314 ££ ££ ££ 58,510 1,526,869 73,610 122,626 90,600 1 230,590 2 strategy is in its first year of roll out and many out and many of roll is in its first year strategy Growing community value around the world Growing community value around * The regions are not economically or geographically equal in size and so this is not a relative comparison * The regions are not economically or geographically equal in size and so this is not a relative Breakdown of community investment by region*Breakdown of community investment Middle East and Africa Europe, Asia PacificTOTAL 2003 2002 2,1 626,240 6,031,020 1 5,505,314 regions are only beginning to build community investment into their business strategies. A series their business strategies. into investment build community only beginning to are regions assist this process. to is planned of workshops Americas Confectionery Beverages Europe 2 Group FunctionsGroup Americas Beverages 1,1 1,55 1,470 1 Donations in kind, equivalent £Donations in kind, equivalent Donations in staff £ time, equivalent TOTALOur 722,350 865,490 32 1,187,80 1,53 1 1 6,031,020 5,505,314 Donations in cash 4,443,180 3,995,982 TOTAL by typeBreakdown of community investment 2003 2002 6,031,020 Health and welfareEnvironmentthemes) three Other (outside the personal in addition to participate community initiatives, in business-led our people to encourage We time in employee a significant rise outside the business. This has produced undertake may they initiatives 2002 and 2003 (125%). between donated 505,000 1,849,000 657,37 1 97 1,1 7 1 349,000 282,345 Education and enterprise 3,328,020 3,594,427 Breakdown of community investment by themeBreakdown of community 2003 2002 10.5 more about the community Education and enterprise Our priority theme is to encourage enterprise in education, as developing the skills and potential of people is the key to a prosperous society.

Education is the key to everyone’s future success. Enterprising communities generate employment By supporting education projects we help raise and skills. We invest in education and enterprise standards and develop skills. By building links with to unlock potential and create new opportunities. individual students, teachers and schools, we can Value that continues to grow long after our transform aspirations, support learning and help involvement ends. prepare young people for the world of work.

Case study Cadbury Kenya is a primary partner in the education Junior Achievement Kenya programme and was instrumental in launching JAK in April 1999. Today, Cadbury Kenya and the Cadbury Schweppes Foundation support the programme financially. Junior Achievement Kenya (JAK), like Young Enterprise in Locally, Cadbury Kenya provides leadership at the JAK the UK, is part of the Junior Achievement International secretariat as well as classroom volunteers. Our people movement. With a mission “to educate and inspire young give at least one hour a week for about three months to people to value free enterprise, business and economics to deliver school programmes, serving as role models for the improve the quality of their lives,” JAK forms partnerships young people. During the 2002/03 school year, more than between the education and private sectors. 4,000 students were taught JAK programmes. 10.6 more about the community

Case study 2005, 12,000 young people are expected to participate Enterprise in schools, UK in 1,000 clubs. The xl clubs build partnerships between schools, local We support a number of initiatives to promote enterprise companies and the community via activities that develop in schools, notably our work in partnership with the personal and teambuilding skills, such as forming their Prince's Trust and Young Enterprise in which we are own companies or fundraising committees. In addition investing £1m over six years. to our community investment, our people volunteer in clubs to share with students the experience of working We support the Young Enterprise Primary Programme, an for a major company. innovative way for employee volunteers and teachers to work together to equip students with a better and broader The Prince's Trust commercial director Carol Homden understanding of society and their place within it. said: “The Cadbury Schweppes Foundation has been an invaluable partner throughout the programme’s The programme supplements core elements of the development. The foundation has helped us to improve National Curriculum, particularly literacy, citizenship, and the content of the programme and increase its scale, personal, social and health education. Six modules reflect increasing the support we can offer to thousands of young the different class ages: Ourselves, Our Families, Our people at school in the UK.” Community, Our City, Our Nation and Our World. The modules include exercises to discuss and explain citizenship concepts such as voting and taxation and are an introduction to economic life.

A key element is the role of business volunteers, who deliver the programme. All volunteers are trained prior to working with teachers to plan lessons. In 2003, 30 employees helped to deliver the programme in schools around the country. The Primary Programme is now one of six core Young Enterprise programmes, which in 2002/3 reached 61,979 students against a target of 48,000 – nearly 30% over target.

We also support the Prince’s Trust xl clubs, a network that encourages students at risk of under-achievement or exclusion to realise their potential. There are 9,000 such young people in 800 clubs across 513 schools in the UK. By HRH, The Prince of Wales meets a Prince’s Trust xl Club. Two teams in the Chappies little league showcase their talent at the National Finals. Cadbury which centrally Schweppes Foundation, supportsin their African NGOs international (see page 10.3).programmes and increasingly than cure, better is always Prevention lifestyles and healthy active encourage we seek to theme. We as part and welfare of our health tackle on how to the debate we can add to believe balanced more promoting by of obesity, rising levels our community projects. through lifestyles participating teams and 138,529 players. Each of those participating teams and 138,529 players. during the 2003 teams played a minimum of four games played tournament, so at least 24,092 games were between April and September. 2005 edition The record entry will be registered in the researcher and of Guinness World Records. Chris Marais, adjudicator for Guinness World Records, commented that, “Guinness World Records are delighted to be associated with such a staggering achievement and are proud to award a new world record.”

As an industry leader with a strong heritage of social As an industry leader with a strong heritage to promote responsibility we are in a unique position a major cause of physical activity, the decline in which is rising obesity levels. We’re able to harness one of our popular brands to encourage debate to find new, more effective ways to address one of the biggest health issues to emerge in recent years. Cadbury South Africa sponsors the Chappies Little League, a national schools-based soccer development programme for under-12s. It has become the world’s largest football tournament, which in 2003 had an incredible 6,023 Case study Promoting active lifestyles, worldwide encourage initiatives that promote healthy lifestyle. initiatives that promote encourage ill we operate, In some of the communities in which our direct in society health and disadvantage Africa, for In community investment. to approach poverty and diseases such as Aids have example, of our African Many lives. people’s many devastated businesses support that provide local organisations needs of the the education, health and welfare for also them. Recently we have communities around within the established the Africa Aid initiative concerned with social welfare and inclusion. We particularly with social welfare and concerned We support health and medical charities as well as organisations health and medical We support Health and welfare Health

10.7 more about the community more about the community 10.8 O brand line to KaBoom!, a not-for- O brand line to KaBoom!, 2 groups, and an activity fund to enable community groups, and an activity funding for activity-based projects. organisations to access Snapple donates a portion of the In the United States, proceeds of the Snap profit organisation that builds skateparks and playgrounds profit organisation that areas. Over 200 Snapple and for children in deprived to build KaBoom!’s first Mott’s employees volunteered Bronx area. Skateparks in other skatepark in New York’s financial support, areas continue to be built with Snapple’s more young as part of the company strategy to introduce people to the benefits of physical activity. Snapple and Mott’s employees constructing skate boards for a Snapple and Mott’s employees constructing skate park in New York City. continued In the UK in 2003, Cadbury Trebor Bassett launched Get In the UK in 2003, Cadbury with the Youth Sport Trust (YST). It is Active in partnership lifestyle initiative to date, designed our largest health and more active. In its first year, Get to get more children teachers by the Active funded the training of over 5,000 schools. YST to improve the quality of activity in free sports More than 6,000 schools registered to receive token collection kit, for use by school children through a attended a scheme. In August 2003 nearly 14,000 people and their Get Active Day, which introduced children from street dance parents to new forms of activity ranging time to to table tennis. Our people also gave their promote physical activity in schools. token collection There was some controversy around the stakeholder scheme in the Get Active programme. Following the token feedback, we have decided to discontinue to the collection scheme but to honour our commitment more children wider programme and its objective to get more active. YST to promote In 2004, we continue to work with the The activity through our UK community programme. that fit with our programme will have three key elements resource pack wider community agenda: a free unbranded to all 6,200 schools that signed up last year; an employee training programme which will use the pack to enable our people to run activity days at schools and community Case study active lifestyles, Promoting worldwide 10.9 more about the community

Case study holistic medical care for the terminally ill, respite care, HIV/AIDS, South Africa counselling and support for those with AIDS and their families, as well as training for care-givers and heath workers.

Latest estimates put the number of infected people in Thembacare Centre, Cape Town South Africa at between 4.5 and 5 million, with one in five We support Thembacare, a hospice set up to provide men and women being HIV positive. medical care to children up to the age of 12 years who are terminally ill with AIDS. The South African businesses established a strategy to meet the needs of employees and their communities with Zimbabwe regards to HIV/AIDS. It includes: Our Zimbabwean business partner, Crystal Candy, • communication and education programmes for all recognises the magnitude of the problem of HIV/AIDS in employees the workplace and has approached it by providing • financial support for community programmes in areas education and information about prevention of infection as from which we draw our employees well as on diet and how to follow a healthy lifestyle. • access to professional, confidential healthcare providers • disease management systems and processes Zinc and Selenium supplements, which improve the • managing employee benefit schemes and maintaining immune system, are provided for employees at heavily business continuity. subsidised prices. The business has also introduced a comprehensive treatment program aimed at HIV positive Financial support from our South African businesses has employees and their spouses, which includes the provision been matched by the Cadbury Schweppes Foundation and of anti-retroviral drugs. goes to help the following community-based organisations in areas from which we draw our employees. In addition, employees may use the in-house clinic and medical aid scheme. The business also supports a suburban St Francis care centre, Gauteng clinic in the local community, funding equipment for the We are assisting with the provision of accommodation clinic and salary costs as well as providing working capital facilities for both children and adults affected by AIDS. to finance the purchase of medicines, which enables the clinic to charge prices affordable to local people. Hope Worldwide, Port Elizabeth We funded the purchase of a vehicle for Hope Worldwide to assist homecare support centres to offer counselling in the townships in and around Port Elizabeth.

The Dream Centre, Pinetown, Natal We are supporting renovations for the 42-bed palliative medical care centre that caters for adults and offers 10.10 more about the community As well as promoting active and healthy lifestyles, local business units support many projects that address the health and welfare needs of the communities around them. A number of these are summarised in the following table.

Local business unit community projects

Community Cadbury SchweppesActivity Community Cadbury partner business benefit Schweppes benefit Hispanic Dental Cadbury Adams, Trident oral care 1000 children of Brand reputation Association USA sponsors preventive low-income through the and the dental medicine families in association of American clinics in three Philadelphia sugar free gum, Dental cities; plus 20 received free Trident, with Hygienist Assoc US$1500 (over £800) dental care; dental care scholarships US$100,000 (approx. £60,000) donation A number of Cadbury Trebor Ready for Work, A vital step Of 22 clients homelessness Bassett provides short work back into on work charities placements for employment placements, previously homeless for the client five joined people the company Save the Children Mott’s Corporate As Corporate Over 200 Partnership funding Partner, Motts employees are has enhanced an donated actively engaged out-of-school US$600,000 with the charity nutrition programme, (over £300,000) Energy for Living in cash and products 10.11 more about the community

Local business unit projects continued

Community Cadbury SchweppesActivity Community Cadbury partner business benefit Schweppes benefit Special Olympics, Dr Pepper, 30 companies DPSU raised A win-win, as sports charity Seven Up participated in third largest builds teamwork for children with 2003 Corporate amount of and involves mental disability Challenge to US$4,570 employees, raise funds (approx. £3,000) families and friends Beijing Municipal Cadbury Schweppes, SARS outbreak Donation and Extensive media Government and China meant nursing encouragement exposure; adoption China Charity staff had no letters to medical of “Choose Federation time to eat and workers happiness, choose suffered from Cadbury” slogan low energy levels; distributed products to 7 SARS hospitals Cairo University Cadbury Egypt Refurbishment of Students able Support for the laboratory to complete potential employees facility for food experiments technology students and projects at the university for their studies 10.12 more about the community Case study Case study Clown Doctors, Australia On the ball in Brazil

Cadbury Australia embarked on a long term relationship Neighbourhood children of with Clown Doctors, an innovative and uplifting cause our Cadbury Adams plant at that uses the healing properties of laughter to benefit Guarulhos had for a long sick children in hospitals. time jumped over the perimeter wall to play Across the business, 120 of our people volunteered their football in an open field, time and talent to lead their site’s fundraising. They’ve which served as an extension contributed about 1,000 hours of company time and even to their backyards. In a more of their own time to plan and run workshops and deprived neighbourhood events, which showcased their talents, developed new where the open spaces are skills and made a difference in their workplace and not safe for children, parents the community. felt comfortable that their Local children taking part in the football programme children were playing in a Our total contribution to Clown Doctors in 2003 was with Cadbury Adams. A$280,000 (£114,000). This will fund eight Clown “company’s backyard”. Doctors programmes for one day a week each year, Rather than reinforce the wall and prevent the bringing another 40,000 smiles to sick children’s faces. children from entering the field, the local community We also participate in the Clown Doctors’ corporate was consulted on how access to the space could be fundraising scheme, which gives us the opportunity to made safer. In July 2003, we launched a programme work with other businesses. Plans for 2004 include of social inclusion to provide real community space and supporting Clown Doctors’ expansion to New Zealand, facilities. Activities offered include computer science where our people will also get involved. and citizenship classes and, for the children keen to play football, sports classes take place two hours a day, three days a week. An arts project has transformed the plant walls into murals.

Over 100 children and teenagers have been helped and the scheme has now applied to the city’s Child and Teenager Council to obtain government support. It meets the requirements of an independent body, Fundacao Abrinq, and as a result Cadbury Adams Brazil has been awarded the “Child-Friendly Company” seal. The project was also awarded the team prize in the 2003/2004 Chairman’s Award for employee community involvement.

Clown Doctors visiting a children’s hospital in Australia. 10.13 more about the community Case study La Casera, Spain

More than 2.5 million people in Spain have diabetes, half of them unaware that they have it. Between 2000 and 2003, Cadbury Schweppes Bebidas España contributed over €90,000 (£60,000) in money, products and employee time to support the Fundación para la Diabetes. The foundation aims to prevent the spread of the illness with information and education and finances holidays for diabetic children from low-income families.

One of the difficulties diabetics face is the limited choice of sugar free foods. Our local product La Casera is one of the few soft drinks that do not contain sugar. Our partnership with the Fundación therefore enables us to build awareness of diabetes through our brand as well as providing support for sufferers and their friends and families. more about the community 10.14 Mother Earth product packaging with the WWF logo. During the course of research into the trend for healthier During the course of research into the trend Zealand brand eating, we found that a 30 year old New brand and called Mother Earth was regarded as a healthy integrity. We satisfied consumers’ desire for product the opportunity acquired the brand in 2001 and with it a difference. to support consumers who want to make you, cares for Mother Earth’s brand promise, “Cares for a partnership the earth” is really being delivered. Through Mother Earth with Worldwide Fund for Nature (WWF), The WWF logo makes a donation for every product sold. Earth and website address appear on every Mother product, together with tips on how to reduce environmental impact. Case study with our Supporting ecosystems brands, Australia

Growing community value around the world Growing community value around

providing clean water in Ghana and India clean water providing “clean-up” activities. local environment public education programmes to promote to public education programmes awareness environmental We are also seeking opportunities partner are to We with linked in areas organisations environmental impacts of our operations. the environmental in the environment covered extensively These are section (see pages 11.1-11.28) • • • strategy encourages local business units to invest invest local business units to encourages strategy as a programmes, in community environmental engage with communities. to way constructive include: Recent projects that provide us with raw materials. us with raw materials. that provide The impact on local environments to the protection of the ecosystems the protection of the local environments to impact on Our community environmental interests extend from our direct extend from environmental interests Our community environment 10.15 more about the community Case study Water wells, Ghana

It is estimated that some Ghanaian children spend one quarter of their waking hours fetching water for their families. Besides the effect of lack of water on hygiene and farming practices, this lost time could otherwise be spent on education. In partnership with Kuapa Kokoo, a farmers’ cooperative, and now with the charity, WaterAid, we are working to help cocoa farming communities by building water wells.

The first well was built in 2000 at Sefwi-Kojina, in Ghana’s western region. Although it has little infrastructure, the region produces more than 50% of Ghana’s annual cocoa crop. A further 12 wells were dug in the first half of 2001. Increased Foundation funding and Cadbury International Ltd funding in 2002 saw 50 more wells dug in the western region. Village residents fetching water from a well dug through Cadbury Over 150 wells have now been constructed, giving over Schweppes donations. 40,000 farmers and their families safe potable water. Most of the wells have been funded at Group level to date but now our UK business unit Cadbury Trebor Bassett has developed a fundraising scheme that will enable our people to sponsor wells through fundraising events and individual contributions.

“The provision of this well has brought a lot of improvement… the water tastes better… we do not have to form long queues… children and adults do not suffer from water-borne diseases.” Nana Kofi Okyere Village Chief, Akim Koforidua

“It [the well] has improved the quality of the lives of the people, especially the schoolchildren.”" Miss Afoa Joana Headmistress Akim Koforidua Primary School 10.16 Rewards and recognition more about the community We want to celebrate success and we use award schemes to recognise outstanding contributions that our people make to the community.

The Chairman’s Award, established in 1999, activity whether support for a school, charity recognises outstanding examples of employee or other voluntary organisation, fundraising or community involvement. It rewards employees assistance with an environmental, sports, arts who have been involved in any community-based or other recreational activity.

Case Study Kathleen Sythes, Chairman’s Award winner 2003

Kathleen Sythes, a Cadbury Ireland canteen employee, has volunteered and fundraised for a variety of causes for more than 30 years. She has personally raised some £0.3m, an incredible track record.

After six weeks in India at the orphanage for which she fundraises, Kathleen visited Calcutta to volunteer with St Teresa’s Missionaries of Charity. She is also a volunteer ski instructor for blind and visually impaired people and has taken them on ski holidays for 25 years. She trains the Irish Kathleen Sythes (top right) with medal winners at the Special Special Olympics Alpine Ski Team and has brought teams Winter Olympics, Alaska. to the last two Winter Olympics. Toronto in 1997 saw Kathleen’s team of eight skiers win 12 medals and at Alaska in 2001, six skiers took home 10 medals. Kathleen “Cadbury employees have to be the most generous and is currently training a team for the 2005 games in Japan. giving group of people I have had the good fortune to know. Without this support the best fundraising ideas Kathleen has also climbed to base camp on Mount Everest would come to nothing,” says Kathleen. Presenting her in aid of the National Council for the Blind, assisting three with the award, Chairman John Sunderland commented blind people to climb with her and raising funds along the that he was especially, “impressed by the time and the way. She is incredibly giving of her time and energy degree of involvement Kathleen showed to each and every towards a large number of causes, but always remarks on cause she supports.” the generosity of her Cadbury colleagues. 10.17 more about the community WINNERS OF THE 2003 CHAIRMAN’S AWARD much or all of their free time to helping those Marjorie Jacobs, Cadbury South Africa: runs a soup less fortunate than themselves. kitchen for over 120 local children in need. Lina Abboud, Cadbury Adams Egypt: founded the Side The overall winner receives a cash donation of by Side charity for the socially excluded in Alexandria. $5,000 (£2750) for their cause, as well as the Surendra Lagu, Cadbury India: has spent three and a half decades fundraising for various educational and Chairman’s award trophy. The other winners each health causes. receive US$1000 (£555) and a certificate. All entries Shirley Olifant, Cadbury South Africa: runs a school are acknowledged by the judging panel and used feeding scheme for malnourished children. in company communications to share best practice Julián Rodriguez Peña, Cadbury Schweppes Bebidas de España: works with a charity supporting people and encourage others to get involved. with alcohol related problems. Cadbury Trebor Bassett’s Sanjiv Sarin, Cadbury Adams Egypt: volunteer teacher. annual Big Heart Awards Sherilyn Brodersen, Americas Beverages: founded a charity which helps Peruvian street children. are another great way to Ari Psillos, Crystal Candy, Zimbabwe: established recognise the effort that company programme to address effects of HIV/AIDS our people at CTB put in as volunteers. There are in the workforce. seven categories of award for which all UK sites Peter Todd, Cadbury Australia and New Zealand: Captain of rural fire brigade, leads 120 volunteers. can submit nominations. Prize winners receive certificates and a cash donation to charity.

Employees are asked to nominate colleagues who External recognition have shown outstanding commitment to their local Individual business units have been rewarded communities. The Awards, held every two years, are and recognised for their contribution to the an important opportunity to celebrate the amazing community by external bodies, but we do not work done by so many around the business. We currently collect this data at Group level. Our recognise the ideas, energy and enthusiasm our UK business has received the following awards people bring to the Community organisations they for community involvement: work with and the skills they develop which in turn Food Industry Awards 2003 Nestlé award for benefit our business. In 2003 we had 66 entries social commitment at the 2003 food industry that highlighted an impressive diversity of activity. awards. This was in recognition of the Among our people are volunteer fire officers, “Winterwatch” programme, in partnership with fundraising champions and those who dedicate 10.18 more about the community Focus Housing in Birmingham to rehouse and a 60% increase over prior year in dollars raised by rehabilitate 11 homeless people. payroll deduction and an 1 1% increase in overall employee participation. Food and Drink Federation Award 2003 Cadbury Trebor Bassett won the Gold Award for its The Northside Partnership Corporate Social “Community – you can make a difference” Responsibility Awards Cadbury Ireland received the programme at the FDF Community Partnership Overall Northside Partnership Award for Corporate Awards, 2003. Social Responsibility. This was in recognition of the company’s contribution to the Northside partnerships Management Today We came second in Education Trust which offers financial support for Management Today's 2003 poll of Britain's leading the education of students applying to join colleges businesses in a vote for the “most admired company outside of Dublin. for community and environmental responsibility”. Child-Friendly Company Seal Cadbury Adams BITC “PerCent Club” We reported community in Brazil has been awarded the Child-Friendly investment of 3% of UK pre-tax profits in the Company Seal by the ABRINQ Foundation for being Business in the Community “PerCent Club” Index a company that actively improves the situation of of corporate giving for year 2002. We ranked children and adolescents in their local community second in the food and drink sector in the UK but does not employ them. with a total contribution of £2.6m. Westchester Community Awards, US Snapple Solidarity Committed Company Award Beverage Group received the “You Make The In 2002 Cadbury Schweppes Bebidas España Difference Certificate” in 2003 for making a received a “Solidarity Committed Company” award difference within Westchester Community’s children from Ayunda en Accion for their support to school and homeless adults. We also received The Founders building in Ecuador. Award in 2003 for housing provided for our teens 2003 Heroes of Hope Honourable Mention throughout Westchester County. DPSU’s “Make your Caring Count” Campaign Great Strides Award, US In 2003 the Cystic was named Honorable Mention by United Way Fibrosis Foundation (US) awarded Snapple Beverage Metropolitan Dallas in its 2003 Heroes of Hope Group the Great Strides Award for their fundraising Competition. The campaign, which raised funds efforts, support and dedication to Cystic Fibrosis. for health and social services in Texas, resulted in more about the

community E D I S I N M O R E

p10.1 why we invest in the community p10.2 how we invest in the community p10.5 education and enterprise p10.7 health and welfare p10.14 environment p10.16 rewards and recognition 11. environment We have continued to improve environmental, health and safety performance, by integrating health and safety with our established environmental management systems and with the introduction of a wider range of key performance indicators. We report on this progress and on how we will face some of the bigger challenges of climate change, packaging and the emerging issue of biodiversity.

WE USED 167.8KG OF PACKAGING PER TONNE OF PRODUCT IN THE UK IN 2003.

FROM 1998 TO 2003 WE REDUCED CARBON DIOXIDE EQUIVALENT EMISSIONS PER TONNE OF PRODUCT BY 21%.

BUBBLES RE E ES A G TH G TIN EVEN ERA LA UR BEV CALCU E IN O IN XID DED DIO CLU N IN ARBO OUR C NS. EMISSIO

TO HELP REDUCE CARBON EMISSIONS , WE USE CLEANER FUELS WHERE WE CAN-FUELS. SUCH AS NATURAL GAS OR BIO RING BY ANUFACTU 32% OF OUR M TONNAGE IS CERTIFIED TO SITES INTERNATIONAL ANUFACTURING ALL M ENTAL STANDARDS ENVIRONM HAVE AN ENT MANAGEM SYSTEM

OUR BIODIVERSITY JOURNEY IS JUST BEGINNING AS WE TALK TO KEY STAKEHOLDERS TO DETERMINE WHAT ACTION WILL MAKE A REAL A BUSIN ESS NMENT DIFFERENCE AND TO IN THE ENVIRO KED US THIRD IN HELP DEFINE OUR SURVEY RAN OUR RATING RIN2003. PRIORITIES OUR SECTO VED SINCE THE SURVEY HAS IM PRO 1997 M 50% IN BEGAN FRO 2003. TO 88% IN

IN 2003 68% OF MANUFACTURING SITES STARTED TO REPORT AGAINST NEW HEALTH AND SAFETY INDICATORS AND RECORDED 819.5 NOTIFIABLE ACCIDENTS PER 100,000 EMPLOYEES.

AN INTEGRATED ENVIRONMENTAL AND HEALTH AND SAFETY POLICY WILL BE ROLLED OUT ACROSS THE GROUP IN 2004.

Narender Katoch GM, CorporateCadbury Affairs India an integrated approach to the environment, health and safety M O R E I N S I D E

p1 1.1 environment, health and safety policy p1 1.2 environment, health and safety management p11.6 health and safety p11.9 climate change p11.12 packaging and materials conservation p11.14 biodiversity ENVIRONMENTAL, HEALTH AND SAFETY POLICY

At Cadbury Schweppes, we see sound and responsible environmental, health and safety (EHS) management as an integral part of achieving our goal to grow the value of our confectionery and beverages businesses for our shareowners. We aim to ensure that in the course of our business activities we minimise our impact on the environment around the world; look after the health and safety interests of our employees; and seek opportunities to improve the local environment in the communities in which we operate. We believe that such an approach will generate and sustain significant environmental, social and financial benefits, contributing to our objective of long-term sustainability. We will...

1 Conduct our business in compliance with 6 Assess and eliminate or control the EHS risks environmental, health and safety laws and with of new and existing operations, and continually our global standards, and regularly assess the assess the environmental performance of our compliance of our operations against these products, seeking ways to contribute positively requirements. to their performance. 2 Maintain and continually improve systems to 7 Train and motivate our employees to manage our EHS responsibilities, establishing and understand their EHS responsibilities and to ensuring employee accountability for our EHS participate actively in our EHS programmes. performance at all levels of the organisation. 8 Work with our supply chain and business 3 Set clear targets for continual improvement partners to improve our collective EHS in our EHS performance and monitor these performance, to protect the ecosystems that targets to ensure that they are met. provide our raw materials and to minimise the impacts from transportation. 4 Strive to prevent pollution and to minimise the environmental costs and impacts of our 9 Communicate with our shareowners, global operations. employees, customers and other interested parties by regularly reporting on our EHS 5 Provide a safe and healthy environment for performance and maintaining an open dialogue. our employees, contractors and other visitors to our sites. 10 Review and update this policy regularly. 11.2 Environment, health an integrated approach to the environment, health and safety and safety management We have had an environmental policy in place for a number of years that commits Cadbury Schweppes to working with suppliers to improve our collective environmental performance and protect the ecosystems that provide our raw materials.

In October 2003 environmental and health and All sites are internally audited by Group personnel safety management were integrated at both Group and some have gone further and been externally and regional levels and an integrated Environmental, audited and certified to one of two internationally Health and Safety (EHS) policy will be rolled out in recognised standards: ISO 14001 or the Eco- 2004. We will then implement an EHS Management and Audit Scheme (EMAS). Management System, compliant with both ISO 32% 14001 and ISO 18001. 30% 30%

All sites have for some time been required to have 25% an Environmental Management System (EMS) in place – the elements of which comply with the 17% internationally recognised ISO 14001 standard: • structure and accountability • identification of environmental aspects • legal requirements • procedures • training, and 1999 2000 2001 2002 2003 setting and monitoring continual • Percentage of manufacturing by tonnage covered by an externally improvement targets. certified EMS. a 58.5% reduction in office paper use 1,860 kg paper saved 1,239 kg wastepaper recycled. The Guangzhou factory in China. With increasing government investment in environmental With increasing government investment a much projects, environmental awareness is gaining issued a total of higher profile in China. The Government which has 100,103 non-compliance sanctions in 2002, local spurred companies in China towards meeting regulatory requirements. further and The Guangzhou plant has already gone 2002, achieved ISO 14001 accreditation in November recognised with external certification by internationally the best audit accreditation company, TUV. The plant had in China in result of all the companies assessed by TUV an aggressive 2002. Other initiatives at the site include 14001 reduction in office paper use. Since ISO transferred to the certification, many processes have been intranet resulting in: • • • CASE STUDY initiatives support Environmental aims, China Government The success of these initiatives has encouraged our colleagues in Guangzhou to seek new ways to protect our natural resources and the environment. 50% in 1997. 88% in 2003, up from with an improved score of Schweppes third in our sector survey 2003 ranked Cadbury Business in the Environment Indicators and performance have been Indicators and performance have of the significantly influenced by the acquisition 2003. Adams is Adams confectionery business in to date Cadbury Schweppes’ largest acquisition mix. This and significantly alters the product performance affects our reported environmental generally as the manufacture of confectionery and energy per requires significantly more water To make tonne of product than for beverages. more future comparisons of performance data for all meaningful, we have included Adams was completed of 2003, although the acquisition only in March 2003. In 2003 we introduced a set of sustainability Key of sustainability a set In 2003 we introduced on work (KPIs) that draw Indicators Performance association, the Food the UK trade by undertaken A number of the indicators and Drink Federation. for collected have that we based on information are the first for on reported are others some years, time in this report.

11.3 an integrated approach to the environment, health and safety 11.4 an integrated approach to the environment, health and safety CASE STUDY Health and Safety focus reaps “We have learnt from each certification experience. After achieving ISO 9001 in 2002, we decided to apply our rewards, Italy learning to the safety aspect of the business. We adopted the same methods used for ISO, taking extra measures to achieve OHSAS 18001. We have now reduced lost time accidents to two in 2003 (18 lost working days) from 13 in 1998 (452 days), although obviously our goal is zero. In applying OHSAS, we investigate each accident thoroughly and discuss next steps with our engineering and production groups. We share our learning with colleagues, by posting an accident report on the intranet.”

“One of the benefits of compliance with the ISO/OHSAS systems is that they have forced us to be more organised and continually improve. As a result, Silvi Marina is safer, better for the environment, more efficient and better able to produce top quality products. Our objective now is to The Silvi Marina plant, Italy. maintain this momentum and build on our worldclass status.”

The plant at Silvi Marina, in Italy, has focused on environmental, quality and safety compliance for some 8.92 9.02 years, achieving ISO 14001 in 1999, ISO 9001 in 2002 and OHSAS 18001 in 2003. Our Italian colleagues summarise 6.81 how this has made the site more efficient and competitive:

“The important part is to have the right internal team to guide the plant and to follow the toughest industry standards. This will prepare your location for the journey 2.79 2.99 ahead. We used a Swiss consultancy with one of the highest reputations in the compliance field, who we knew 1.82 would challenge us. After our first certification to ISO 14001, we had the experience to move forward.” 1998 1999 2000 2001 2002 2003 Lost Time Injury Frequency Rate at Silvi Marina 1998-2003. 11.5 an integrated approach to the environment, health and safety CASE STUDY CASE STUDY Below average risk means above Seminars help share best average performance, practice, worldwide worldwide To share best practice, we hold two day environmental The investment community increasingly recognises that training conferences in three or four locations every year. responsible environmental management is a good In 2003 conferences were held in Australia, Germany and indication of a well-managed company, which is likely to Thailand with colleagues from Australia, New Zealand, yield higher financial returns. North American research Germany, Russia, Poland, Turkey, France, USA, China, company Innovest gave Cadbury Schweppes an AAA Japan, Thailand, India, Malaysia and Indonesia. EcoValue rating, ranking us first of 25 global food According to senior environmental manager Paul Flint, product companies. Innovest’s Rating Implication Report “The conferences have been running for 10 years and 2003 projects that Cadbury Schweppes will “out- are invaluable in bringing together people with similar perform the sector going forward” with “below average responsibilities from different sites, to help them find risk, above average environmental management capacity the best solutions to common issues. They include and above average engagement in environmentally presentations on all of the main environmental subjects favourable business.” such as environmental management systems, CSR, The Ethical Investment Research Service survey 2002 sustainability, achieving ISO 14001, legal trends, due noted Cadbury Schweppes’ commitment, environmental diligence, energy management and environmental policy and management systems had significantly reduced best practice.” our environmental impact, particularly in the areas of water use and waste.

A group training conference in Bangkok, Thailand. an integrated approach to the environment, health and safety 11.6 710.4 In 2003, 68% of manufacturing Lost time injury frequency rate(number of accidents resulting in someone being away from work per 200,000 person hours) Notifiable accidents per 100,000 employees (RAIR) 1.37 implementation of corrective action based on the implementation of corrective action based compliance audit results. To enable us to publish a consolidated set of Group set publish a consolidated enable us to To defined a set now data, we have health and safety Indicators Performance Key of health and safety must report In many against. (KPIs), which all sites local legislative countries, this will exceed requirements. the new KPIs sites had started to report against per and recorded 819.5 notifiable accidents Accident 100,000 employees (Reportable Incident Rate – RAIR). At an Americas Beverages safety conference in September, At an Americas Beverages safety conference EHS risk EHS managers were trained in the Group this process assessment process. We immediately applied 110in Mott’s, which involved training about employees and site. We aim to forming teams of trained people on each have a complete assessment of each site by June 2004. Our efforts have been rewarded with improved KPIs: •

external compliance audit of all applicable health and safety regulations at each site by local safety consultants documentation of procedures compliant to OHSAS 18001 identification and compilation of all health and safety regulations applicable to each site • • • CASE STUDY New system brings improved safety performance, USA a safety In 2003 we developed and implemented manufacturing management system (SMS) in all 10 Mott’s the Dr Pepper sites in the Americas and will soon include Seven Up (DPSU) concentrates plant in St Louis. The SMS includes: locally but operate to consistently high standards globally. high standards globally. operate to consistently locally but the data As an important on our CSR journey, step all global health and safety for gathering system report enable us to to is being improved indicators on the statistics. Local regulations Group-wide definition and type of accident reporting, for have This means sites varyexample, considerably. that are accident reporting systems implemented locally compliant. we not only continue to improve our health and safety performance our health and safety continue to improve we not only The roll out in 2004 of a new set of EHS standards will ensure that of EHS standards will in 2004 of a new set The roll out Health and safety Health 11.7 an integrated approach to the environment, health and safety

CASE STUDY incident management programme was implemented, Employee communication has with incident investigators trained to determine the dramatic effect, Africa root causes of incidents • there is follow-up and coaching of employees where an incident has been caused by a failure to follow safety 4.99 rules and procedures • tracking lost time accident trends from 2000 to 2003 showed that some employees were booked off at 3.47 almost the same time. These trends made the company suspect that there were some fake injuries, which on investigation proved to be the case. 2.08 • an employee booked off for more than one shift is now visited at home within 24 hours of the injury. This is principally for the welfare of the individual, but also deters employees from faking injuries.

2001 2002 2003

Lost Time Injury Frequency Rate at Cadbury Swaziland 2001-2003.

Cadbury Swaziland dramatically reduced its Lost Time Injury Frequency Rate in 2003 through a number of actions and a programme to actively manage accidents and incidents: • employees were constantly reminded of the need to work safely at all times • one-on-one interviews were conducted with all employees in 2003, and each received a set of “10 commandments” for safety • during 2003, most machinery was fitted with improved safety devices such as guards and safety switches Example of new improved • training in the 2001 Occupational Health and Safety machine guards on wrapping machine at Swaziland that have Act helped first-line managers to understand their replaced the original guards. safety obligations • following this training, a proactive accident and 11.8 an integrated approach to the environment, health and safety

CASE STUDY Quick fix that can save lives, USA

At some sites an enhanced level of medical training enables employees to provide a high level of immediate medical assistance, during the period it takes the public emergency services to arrive. One such site is the Cadbury Adams Rockford site in Illinois, which employs some 700 people engaged in the manufacture of chewing gum brands such as Bubblicious, Dentyne, Trident, Burst and Black Jack. An Emergency Response Team (ERT) was created, designed to respond to medical emergencies while waiting for an ambulance to arrive.

Twenty four employees have been trained and are now certified First Responders. They are able to triage medical problems, administer oxygen and use an automated external defibrillator. Team members are spread over all shifts, to provide round-the-clock emergency medical support. The site has benefited in a number of ways, most notably in 2003 when two colleagues suffered life- threatening emergencies. The First Responders were able to give vital help until the ambulance arrived. The ERT's prompt action and the support of health service staff means both colleagues have recovered and been able to return to work.

Colleagues discuss the use of the automated external defibrillator. 11.9 an integrated approach to the environment, health and safety Climate change Climate change is one of the greatest environmental challenges facing humankind. Cadbury Schweppes wants to play its part in supporting governments and international bodies to tackle the problem.

We support global initiatives such as the Kyoto To manage our emissions we have adopted DEFRA’s Protocol and national agreements such as that methodology for “Company Reporting on negotiated between UK companies and the UK Greenhouse Gas Emissions” for all our Department of the Environment, Food and Rural manufacturing sites globally. We have gone beyond Affairs (DEFRA). its recommendations and included the carbon dioxide (CO ) used to carbonate our beverage In 2002 and 2003 Cadbury Schweppes participated 2 products – on the assumption that the gas will be in the Carbon Disclosure Project. This survey of the released at some point in the future, when the world’s 500 largest companies aims to understand product is consumed. Our published CO emissions the potential risks and opportunities of climate 2 (below) include the following elements: change. The Carbon Disclosure Project has selected onsite emissions from fuel combustion in Cadbury Schweppes as one of the 50 global • boilerhouses and ovens companies to be part of their Climate Leadership offsite emissions (by power stations) that result Index. A summary assessment of Cadbury • from our use of electricity Schweppes’ position and a copy of our response CO equivalent of halocarbon refrigerant to this survey can be found on the project website • 2 emissions at: www.cdproject.net • CO2 used to carbonate beverages. an integrated approach to the environment, health and safety 11.10 187 172 192 212 232 238 equivalent emissions kg/tonne of product per year. equivalent emissions kg/tonne of product per 2 1997 1998 1999 2000 2001 2002 2003 CASE STUDY USA Energy use down 16%, Yoo-Hoo The Opelousas factory in Louisiana makes unit on the chocolate drink. Installing a heat recovery by 16%. boiler has reduced its energy consumption Opelousas has also reduced solid waste generation by 64%, after making improvements to filling and capping operations on the glass line. This drastically reduced glass breakage, the site’s main source of solid waste. 249 While we have investigated transport’s contribution transport’s investigated While we have gas emissions, emissions greenhouse our overall to significant much more are sites manufacturing from our programmes. of the initial focus and so are CO emissions, so 2 548 487 558 equivalents per tonne of per tonne equivalents 597 2 656 679 1997 1998 1999 2000 2001 2002 2003 700 Although Group energy use per tonne rose by 12.5% by rose use per tonne energy Although Group energy of more in 2003 (because of a higher ratio the following confectionery production intensive gas emissions greenhouse acquisition of Adams), as CO expressed our target is for all manufacturing sites to reduce to sites all manufacturing is for our target of use per tonne they the amount of energy the for at least 1% each year by finished product years. 10 next Energy use is the key driver of CO driver use is the key Energy Energy use kWh/tonne of product per year. production increased by only 8.7%. This is thanks to a to only 8.7%. This is thanks by increased production fuels carbon intensive switch from to programme cleaner fuels such as natural such as coal and oil to appropriate. use bio-fuels where gas, or to 11.11 an integrated approach to the environment, health and safety

CASE STUDY Home of world-famous Liquorice Allsorts, our Sheffield All sorts of ways to reduce site has implemented a programme to continually improve energy efficiency. Poster campaigns and energy use, UK briefings have been introduced as part of the Cadbury Schweppes manufacturing system (see page 7.8) to raise 2382 site personnel’s awareness of energy conservation. Systems are in place to monitor energy use across the 1947 1859 site so we can plan how to make the biggest energy savings. Natural gas is the primary fuel to produce steam for site processes. All parts of the steam-raising plant, from generation to distribution, have been thoroughly investigated.

Compressed air is one of the site’s major users of electricity. A number of improvements to compressed air generation and distribution have been made as part of an air compressor maintenance programme and site engineers now design process machinery to use 2000 2001 2002 compressed air equipment that operates at lower Energy use kWh/tonne of product at Sheffield. pressure to further reduce compressed air consumption.

Electric motors account for about 30% of site electricity usage, so high-efficiency motors are now bought as standard.

CASE STUDY Gas emissions down 30%, UK

The historic Bournville site has a boilerhouse originally constructed in the 1920s with four coal-fired boilers which are being replaced with new gas-fired boilers. The switch to less carbon-intensive fuel will reduce local greenhouse gas emissions by 30% and eliminate the need to transport coal and ash. 11.12 an integrated approach to the environment, health and safety Packaging and materials conservation For consumers our most visible environmental impact is packaging, which they come across every time they consume Cadbury Schweppes products. However, it is vital to protect and preserve food and beverage products throughout their production, storage, distribution, retail sale and use. Food and beverage packaging must meet necessary regulatory, safety, hygiene and consumer acceptance criteria.

Confectionery packaging typically includes plastics, soft drink cans, PET plastic and glass bottles has aluminium foil, paper and board and for beverages, been significantly reduced over the past decade metal, glass and plastic containers. Some products thanks to better designs, technology and materials are further packed into multipacks for point of sale, • using multipacks and lightweight secondary display and all products have secondary packaging such as packs and cartons cases, shippers, or shrinkwrap to transport them in • using returnable bottles in markets where the good condition. reuse of bottles is well established (although we have to consider the transport of the empty Our aim is to balance the environmental impact of bottle, and water and energy used in bottle packaging with the amount of packaging required washing) to maintain product integrity and function and to constantly seeking to innovate, through the use of continue to optimise packaging use. Examples • new materials. include: • developing lightweight packaging and reducing the In the UK we used 167.8 kg of packaging per amount of packaging material, while retaining the tonne of product during 2003. required structural properties. The weight of many 11.13 an integrated approach to the environment, health and safety

CASE STUDY: CASE STUDY Message in a bottle says recycle Research yields packaging and reuse, Germany innovation, Australia

Germany is Europe’s largest soft drinks market, and in Plantic™ is a new eco-friendly plastic made from a 2002 our soft drinks subsidiary Apollinaris & Schweppes biodegradable, non-toxic material derived from corn led the way and introduced a returnable plastic bottle – starch. It decomposes rapidly and dissolves instantly on ahead of legislation in 2003 that made this mandatory. contact with water. It’s already being used instead of the conventional plastic tray in Milk Tray packaging by our Our innovation didn't stop there. We designed not only Australian subsidiary. The main benefits for the the returnable bottle but also a revolutionary new crate - environment are: which meant that we had to create our own bottle and • the packaging is produced from a sustainable resource crate pool. By careful design of the new crate's (maize or corn – which is GM-free) rather than derived dimensions we made it more convenient to carry and from petroleum store, thus making it easier for customers to recycle or • even if littered, Plantic™ decomposes quickly without reuse their empties. polluting local groundwater systems. Additionally, more crates of the new design fit on to the Plantic™ materials are the result of seven years’ research standard German pallet enabling 600 as opposed to the at the Cooperative Research Centre for International usual 480 bottles to be carried, which reduces transport Food Manufacture and Packaging Science, with whom requirements by 25%. we have worked closely for many years. Cadbury The new bottles are colour coded to distinguish between Schweppes is the first company in the world to offer this mineral water and soft drinks and there is so much important innovation to customers. demand for the new-design crates that we are producing For further information, please visit www.plantic.com.au at full capacity even off-season and have opened an extra or www.cadbury.com.au production line.

The new Apollinaris (Blue Box) crate. an integrated approach to the environment, health and safety 11.14 A COMMENT FROM EARTHWATCH Companies such as Cadbury Schweppes, with an on good quality dependent presence international deal to a great can contribute products, agricultural conservationbiodiversity efforts. this in recognise see the company to like would We a strategic specific commitments and develop the company. implementing these across to approach of impact or include identifying major areas This would of the supply such as areas on biodiversity, reliance can best in which the company chain, as well as ways supporting contribution by a positive and make in partnershipworking with others. Hillyard Dave Development of Programme Director Earthwatch (Europe) Institute

we are at the start of this particular journey. we are at the start of and are play to a role we have recognise We organisations consulting with non-governmental such as Earthwatch establish the priorities. Over to with key we will work years two the next what actions determine to in this area stakeholders understand Our aim is to a difference. will make and document develop and be clear about our role, begin to actions and solutions and appropriate CSR reports. report on these in future in Cadbury Schweppes have a number of ad hoc projects underway, of ad hoc projects Schweppes have a number in Cadbury on of life the whole variety to refers Biodiversity Earth. It includes all species of plants and animals, of systems and the complex variations their genetic to part. restricted is not are Biodiversity which they species. Cadbury Schweppes or threatened rare to environment and healthy depends on a diverse such as cocoa, milk, sugar, materials raw source But our products. go into and the fruits that water be balanced with has to materials raw this need for sustain life. to biodiversity the need for concern and concerted international action is needed. While we action is needed. concerted international concern and an ever-increasing rate. The rate of loss is now a cause of serious of loss is now a cause rate. The rate an ever-increasing As a result of human activity our planet is losing biodiversity at planet is losing biodiversity of human activity our As a result Biodiversity 11.15 an integrated approach to the environment, health and safety case study Seeking sustainable sources of palm oil

Palm oil is a naturally occurring oil derived from the oil palm, a perennial tree cultivated in parts of South East Our UK suppliers are already committed to delivering palm Asia, South America and Africa. It is commonly used in a oil from sustainable sources. Elsewhere, our regional wide range of food and other products, including biscuits, procurement processes have identified a proportion of our crisps and chocolate confectionery. While our requirements requirements from similar sources and we are actively remain very small in global terms, our use of palm oil has encouraging others to adopt these standards. increased in recent years. This is because, with keener awareness of possible health concerns, we have phased out In December 2003 a socially responsible investment alternative transfats that had been used for taste and research study from ISIS Management recognised our flavour in a small number of our confectionery centre progress in the palm oil issue: “Cadbury Schweppes…has recipes. been able to source from suppliers that are known to produce in line with sustainable development objectives.” Concerns have been raised that recent increases in the We will continue to work with our supply chain partners development of large-scale oil palm plantations in to monitor and achieve everywhere the sustainable countries such as Indonesia have been at the expense of solutions our Ethical Sourcing Standards require. the environment, with the destruction of areas of rainforest, together with its natural wildlife, and the removal of local communities from the land. We share these concerns and have committed to seeking all our palm oil from sustainable sources. To this end, we have begun a process of assessment and consultation with our suppliers of palm based products. We will work in partnership with them to make sure they understand the sustainability issues and how they can meet our requirements. We support the work of the Roundtable on Sustainable Palm Oil to raise standards of sustainable production. This recently established multi-stakeholder group includes the World Wildlife Fund and other supply chain partners. an integrated approach to the environment, health and safety 11.16 crop products, over the long term, with an emphasis on crop products, over the long term, with farm rehabilitation and reclamation of deforested land delivers fair prices to farmers and quality products to end-users international markets CASE STUDY for cocoa Support network growers, worldwide supports a number of international Cadbury Schweppes of the Biscuit Cake initiatives. We are members Alliance, whose cocoa Chocolate and Confectionery aims to achieve, “sustainable yields research programme on of good quality cocoa without over-reliance projects on agrochemicals”. BCCCA also runs innovative enhanced breeding, integrated pest management, technology. agroforestry and agronomy, and post-harvest Tree Crops We are also involved in the Sustainable Cote d'Ivoire, Programme (STCP), which works in Ghana, the well- Nigeria and Cameroon. Its goal is to “improve development of being of smallholder farmers through the productivity, sustainable tree crop systems that increase use natural generate income, conserve biodiversity, resources sustainably, and offer stable development prospects and long-term economic incentives.” government and STCP is a coordinated effort by industry, agencies to research, development and conservation based on tree improve smallholder agricultural systems crops. With an agenda combining economic, STCP has five environmental and social considerations, main objectives: 1 of high quality tree maintain increased productivity 2 in the marketing chain, so that it improve efficiency 3 make African tree crop products competitive in 4 socio-economic situation of farmers improve the 5 conserve the natural resource base and biodiversity. refined and turned into milk chocolate. Marlbrook processes 180 million litres Cadbury Trebor Bassett’s Marlbrook factory at 97,000 Leominster produces tonnes of milk chocolate crumb annually. It supplies mainly Bournville and Somerdale, where the crumb is blended with cocoa butter, Swans in the Lagoons at Marlbrook. CASE STUDY scientific interest Site of special UK breeds respect, of fresh milk, 56,000 tonnes of sugar and 13,000 tonnes of fresh milk, 56,000 tonnes of sugar and crumb, and does of cocoa liquor each year to produce the Scientific so in an area designated a Site of Special Interest (SSSI) where biodiversity abounds. is a great Operating a factory in this environment the potential to responsibility and we are fully aware of is evident at pollute the local environment. Biodiversity treated and then the site. The factory wastewater is fully provided a enters the settlement lagoons that have almost 50 years. habitat for many species of wild fowl for a variety of Canada geese proliferate, but swans and and river ducks also breed in the margins of the lagoons bird species are Lugg (a tributary of the Wye). Many other regular visitors to our bird tables. These settlement lagoons were recently modified to improve flow and retention times and we took the opportunity to install a stepped “Chinese waterfall”. This not only cools the water but also aerates it – thus improving the quality of the water for the many species of wild fowl in the lagoons. We are privileged to have this natural abundance on our doorstep, and recognise our responsibility to maintain this ecologically important and beautiful area. an integrated approach to the environment, health and safety M O R E I N S I D E

p1 1.1 environment, health and safety policy p1 1.2 environment, health and safety management p11.6 health and safety p11.9 climate change p11.12 packaging and materials conservation p11.14 biodiversity 11. environment Our group environmental standards help us to manage issues such as water use, emissions and waste. While we strive continually to improve efficiency and reduce levels of waste to land, air and water, our challenge is to continue the journey towards long-term sustainable use of resources.

OUR FACTORIES IN , TASMANIA, AUSTRALIA USE CARBON NEUTRAL . HYDROELECTRICITY

Tomasz DemskiOperator WE REDUCED OUR W ASTE PER TONNE OF Cadbury Poland PRODUCT BY 6% FROM 2002 TO 2003 AND BY A TOTAL OF 37% SINCE 1998. WE RECYCLED OR REUSED 73% OF MANY OF OUR FACTORY PROCESSES OUR W ASTE IN 2003 GENERATE W ASTEWATER TREAT BEFORE IT IS RETURNED, W TOHICH THE W E NATURAL ENVIRONMENT . OZONE-DEPLETING CFCS IN LARGE EQUIPMENT SUCH AS PROCESS CHILLERS, COLD ROOM CHILLERS AND COOLING TUNNELS HAVE BEEN VIRTUALLY ORLDWIDE ELIMINATED FROM OUR OPERATIONS W

OUR MAIN IMPACT ON LOCAL IN 2003 WE DISCHARGED AIR QUALITY COMES FROM FLUE GASES 3.1KG CHEMICAL OXYGEN FROM BOILERS, REFRIGERANT GASES, DUSTS, DEMAND PER TONNE OF ODOURS AND EXHAUST FUMES FROM PRODUCT AFTER ONSITE TRANSPORT VEHICLES. TREATMENT p11.18 water consumption p1 1.20 air quality p11.21 transportation p11.23 soil and groundwater protection p11.24 solid waste management p11.27 wastewater

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M resourcesresponsible use of Water consumption, air quality, transportation, soil quality, waste management and effluent discharges are all areas we manage within Group environmental standards. We continue to invest in the necessary systems and facilities to maintain infrastructure and comply with our standards and regulatory requirements.

Percentage of capital spend in recent years

Other 4.4%

Water pollution 21.7% Energy/water 37.6% Air/odour control 24.6%

Waste management 4.6% Noise control 2.1% Storage/containment 5.0% responsible use of resources 11.18 3.51 3.29 3.99 4.81 /tonne of product per year 3 5.20 5.11 5.60 1997 1998 1999 2000 2001 2002 2003 The production of confectionery products requires of confectionery products The production and with acquisition of than beverages water more 2003. in use increased our annual water Adams, Actions that we take to reduce water consumption water reduce to that we take Actions use, minimise water include education campaigns to in water including recycling systems recycling water of water. and re-circulation cooling towers Total water use M

CASE STUDY Water use down 7%, USA Aspers produces applesauce and juice. Through the efforts of a water conservation team and cooling tower improvements, Aspers has reduced water consumption by 7%. over-consumption and from industrial and agricultural pollution. from industrial and agricultural pollution. over-consumption and precious resource and supplies are under pressure both from under pressure both and supplies are precious resource supply and quality Our business is dependent on the in conserving interest a direct and we have of water Water quality. water and protecting resources water so our products, of beverage is the main ingredient Both volumes. production to related use is directly businesses also use our confectionery and beverage during the production of water volumes large and rinse wash to cool and heat, and to process: of safe equipment and surfaces. The production the highest hygiene and drink demands food an important in this. plays role and water standards parts of the world could suffer droughts. Water is already a Water is already world could suffer droughts. parts of the experts believe that water shortages will increase and that more will increase and that water shortages experts believe The impact of climate change is difficult to predict, but many difficult to predict, but of climate change is The impact Water consumption Water . We have now replaced a CFC-based chiller with a . We have now replaced a CFC-based chiller 2 more environmentally friendly vapour absorption chiller, more environmentally friendly vapour absorption boiler. that runs on steam produced by the bagasse-fired steam turbine We have also commissioned a back-pressure energy savings. on the boiler, which has brought further Stock piles of bagasse used in the bagasse-fired boiler. CASE STUDY – air quality CASE STUDY – air benefits of Reaping the fuel, India agro-based crumb and evaporates milk. The Induri plant manufactures huge quantities of steam – 130 These processes demand used an average 12,000 litres a day tonnes at peak – that fuels, such as oil. Conscious of the of non-renewable fossil fuels, we decided environmental impact of burning fossil source. to shift to a non-fossil fuel from a renewable region, The factory is located in a sugar-cane growing A by- where a number of mills are run by co-operatives. a substance product of the crushing process is bagasse, for their own that the co-operatives use to generate steam with virtually no consumption. A carbon-neutral bio-fuel around 3% ash sulphur content, good “heat value” and enough to not content, bagasse’s exhaust gases are clean require complicated handling systems. has reduced the The installation of a bagasse-fired boiler tonnes a year and plant’s sulphur dioxide emissions by 250 tonnes of has produced total savings to date of 10,000 CO 1.9 1.8 /tonne of product per year 2.1 3 2.1 2.6 3.3 1998 1999 2000 2001 2002 2003 maximisation of condensate recovery from the steam maximisation of condensate recovery from distribution system avoid waste. working with employees to find ways to installation of water recycling systems in several areas installation of water recycling systems in of the factory The factory also replaced some water cooled with air- The factory also replaced some water cooled cooling towers. cooled systems and removed a number of was “Operation of the remaining cooling towers the environmental scheduled to maximise efficiency,” said manager, Daniel Pellot. • • • Cool air beats water, France Cool air beats factory in Blois, France, water At our confectionery of finished product has fallen by consumption per tonne has been achieved through a 46% since 1998. This management programme that comprehensive water includes: CASE STUDY – water consumption CASE STUDY – water Blois water consumption M

11.19 responsible use of resources responsible use of resources 11.20 converting to cleaner burning fuels converting to out dust filter installing equipment to and pollutants. • • in large (CFC) refrigerants Chlorofluorocarbon chillers, cold room equipment such as process been removed chillers and cooling tunnels have sealed room Small in virtually all locations globally. replaced being are air conditioners and refrigerators machines Vending at the end of their useful life. be to of CFCs continue with small sealed charges maintenance. during regular changed over

increasing the use of low or non-ozone increasing refrigerants depleting monitoring and reducing the quantity of pollutants the and reducing monitoring we emit old boiler equipment with energy replacing efficient low emission boilers usage measuring and minimising refrigerant • • • • contributes to global warming and ozone depletion. contributes to global hot generate boilers to Most of our plants have cooking, pasteurisation, used for and steam water are and heating. Refrigerants cleaning, sterilising to storage and for cool during processing, used to quality - particularly product importantpreserve in reduce to seeking are partshot . We of the world our impact on air quality by: odours into the atmosphere reduces local air quality and odours into the atmosphere is flue gases Our main impact on local air quality gases, dusts, odours and boilers, refrigerant from vehicles. fumes from exhaust Compounds, sulphur dioxide, nitrogen oxides, particulates and Compounds, sulphur dioxide, The release of gases such as refrigerants, Volatile Organic of gases such as refrigerants, The release releases and phase out ozone depleting refrigerants. phase out ozone depleting releases and Since 1991 we have had a proactive programme to control programme to control we have had a proactive Since 1991 Air quality 11.21 responsible use of resources Transportation Transportation, with its combination of fuel consumption and air emissions, is a key area in which we can reduce environmental impact.

Although manufacturing operations contribute and finished product distribution. The major more significantly to global warming, efficient tonnages of raw materials are cocoa, which is scheduling and planning of product distribution help brought to the UK by sea from West Africa, and to reduce both energy consumption and road sugar and milk, which are both brought to our UK congestion. An analysis of carbon dioxide emissions sites by road transport. from the Cadbury Trebor Bassett (CTB) UK supply It is clear that manufacturing is by far the largest chain has been undertaken to quantify the relative contributor to global warming, which is why we impacts of raw material sourcing, manufacturing have focused on it.

Annual emissions of carbon dioxide from the Cadbury Trebor Bassett supply chain in the UK.

MILK TRANSPORT 1.36% SUGAR TRANSPORT 0.88% COCOA SEA TRANSPORT 0.91% COCOA ROAD TRANSPORT 0.12%

FINISHED GOODS TRANSPORT 7.8%

MANUFACTURING 88.93% TRANSPORT 11.07% responsible use of resources 11.22 Cocoa arriving by ship in Liverpool, UK. Cocoa being loaded into barges in West Africa. The majority of cocoa bean and cocoa products are now The majority of cocoa Africa via sea-freight into Liverpool in imported from West rather than Tilbury in the the north-west of England reduces road freight south-east, which considerably mileage in the UK. beans and In 2001 we moved 52,000 tonnes of cocoa Felixstowe to products by road from ports at Tilbury and North Wales. This our cocoa-processing factory at Chirk in miles. involved 2,150 loads travelling over 500,000 beans and In 2002 we moved 47,000 tonnes of cocoa came from products into Chirk, of which 27,500 tonnes 1,800 loads Tilbury and 19,500 from Bristol. This involved (This reflects the travelling approximately 330,000 miles. now coming into impact of larger loads and some imports travelled to Bristol). There was a 33% reduction in miles supply Chirk compared to 2001. beans and In 2003 we moved 45,000 tonnes of cocoa came from products into Chirk, of which 35,000 tonnes involved 1,600 Liverpool and 10,000 from Tilbury. This is only loads travelling only 135,000 miles (as Liverpool There was a 40 miles from Chirk, plus larger loads). Chirk 75% reduction in miles travelled to supply compared to 2001. This is good news for the UK environment and represents a reduction of about 0.2% in CTB’s annual emissions of carbon dioxide from their supply chain. CASE STUDY take short cut to Cocoa beans factory gate Solid waste is mostly water, USA near The Mott’s beverage plant at Williamson generation Rochester was able to reduce solid waste sludge by 66%, after installing a centrifuge for from liquid dewatering. The process removes water value, sludge and returns it to the system for nutrient of sludge which significantly decreases the volume hauled to and spread on neighbouring fields. CASE STUDY

train staff in spill prevention and clean-up stafftrain in spill prevention techniques. install purpose-built hazardous materials storage materials install purpose-built hazardous and secondaryfacilities around containment individual tanks regularly monitor the quality of product water of product the quality monitor regularly that contain tanks storage underground replace such as fuel oil, materials hazardous potentially tanks with above-ground exercise a duty of care programme for all facilities, for programme of care a duty exercise supply and in water which includes best practice protection groundwater • • • • • how valuable water is as a resource. water is as a resource. how valuable supplies of water the integrity help protect To of we implement a range we operate wherever groundwater for minimise the potential to measures we: example, contamination. For sources in manufacturing facilities around the world, but realise just around the world, facilities sources in manufacturing We use water drawn from rivers, lakes, springs and underground drawn from rivers, We use water Soil and groundwater protection groundwater Soil and

11.23 responsible use of resources 11.24 Solid waste management responsible use of resources Waste minimisation is an important way to improve manufacturing efficiency which both reduces raw material consumption and use of landfill.

Waste is generated during the manufacturing process and from the final disposal of packaging, after consumers use products. A good waste management programme aims to reduce the amount of waste produced, maximise the proportion of waste that is usefully disposed of and, by reuse or recycling, to minimise the proportion that is sent to landfill.

Examples of waste generated by the production of our range of products. Outputs Outputs Inputs Wrapped chocolate products: • by product: cocoa shell treated as soil conditioner • effluents and air emissions cocoaInputs beans, milk, sugars, nuts and raisins, • solid waste to landfill packaging, water, energy • packaging for recycling

Process Sugar confectionery: • by-product: liquid wastes for animal feed sugar, glucose, starch, gelatine, flavours, • effluents and air emissions gums, packaging, water, energy • solid waste to landfill • packaging for recycling Process sugar, water, food acids, flavourings, Soft drinks in bottles and cans: bottles, cans, labels, shrink film, energy • effluents and air emissions • solid waste to landfill Process • packaging for recycling oranges, lemons, apples, cranberries, sugar, packaging, water, energy Fruit juices and fruit concentrates: • by-product: fruit pulps and sludges used as soil conditioner • effluents and air emissions • solid waste to landfill • packaging for recycling 73% 81% 79% 80% 82% 78% 75% 1997 1998 1999 2000 2001 2002 2003 waste we have gained a better understanding of gained a better we have waste impact, in particular landfill this environmental A number of depletion. occupation and resource the amount reduce enabled us to have initiatives the possibilities landfill and increase sent to of waste In many recovery. and energy reuse recycling, for after processing is still valuable waste cases, food feed as animal a second life and can have or fertiliser. that, items of waste a wide range generate We Typically, or recycled. can be reused if separated, plastic, paper crates, such as pallets, products at each site separately collected are and metals recycling. for Group recycling/reuse rates (%) 35.5 37.7 44.2 46.8 53.8 56.2 62.9 1997 1998 1999 2000 2001 2002 2003 Solid waste generation kg/tonne of product Sites measure their waste streams and many have and many streams their waste measure Sites generate the amount they reduce to programmes of monitoring better landfill. Through and send to There are fewer opportunities to recycle solid waste opportunities recycle fewer to are There sugar confectionery manufacturing. by generated solid the overall With the acquisition of Adams, in 2003. dropped rate recycling waste Some of our wastes – for example mineral oils, mineral example – for Some of our wastes classified as paints, flammable liquids – are dispose particular to care take and we “hazardous” of per tonne In 2003, 0.32 kg of them correctly. was produced) waste (0.9% of the total product – this is the first year waste classified as hazardous this information. reported we have

11.25 responsible use of resources responsible use of resources 11.26 CASE STUDY get to grips Local communities Australia with recycling, owned 50% of a packaging We have for many years raising awareness of recycling and recycling scheme that’s throughout South Australia. anti-pollution issues is a highly effective, mainly Statewide Recycling and plastic automated operation that recycles aluminium to landfill. containers – so reducing the amount sent throughout Ensuring that waste packaging from homes centre is a South Australia finds its way to the recycling Residents put chain that involves the whole community. that are collected their recyclable waste into wheelie bins throughout by the council and taken to one of 140 depots scout groups the region. Here council staff and local them, then separate out recyclable containers, compact recycling. Keep send them on to the Statewide centre for centre for South Australia Beautiful has an education to process schools at the centre. Not content merely new waste, Statewide Recycling is actively researching recycling and pollution prevention methods. Alain Sauvry inspecting drums for recycling. Statewide Recycling in Australia. The Orangina Schweppes factory in Nuits St Georges, near The Orangina Schweppes a range of juice-based drinks under Dijon in France, makes Many of the ingredients are delivered the Pampryl brand. come in metal or plastic barrels. by tanker, while others are not. Some of the barrels are returnable but others as cardboard These, together with other materials such bottles and used boxes, damaged wooden pallets, defective waste. plastic film, have to be managed as solid not very good,” “A few years ago our record was frankly a waste container says line leader Alain Sauvry. “Every day that we achieve was taken away. Now I’m pleased to say waste and the recycling rates of around 90% for solid I take a amount of waste going to disposal is minimal. of our wastes personal interest in the correct separation in the factory to and constantly work with my colleagues In fact, as make sure that we maintain our good habits. I frequently part of our process of auditing the suppliers the waste accompany the mixed waste container to anything slip transfer site to make sure we’ve not let through the net.” CASE STUDY anything is wasted, Now hardly France 2.11 1.83 2.05 2.4 ) per tonne of product per year 3 2.41 2.53 2.81 1997 1998 1999 2000 2001 2002 2003 This would typically reduce to about 1.0kg of COD about 1.0kg to typically reduce This would the to discharged actually of product) (per tonne municipal by after treatment environment plants. treatment wastewater Wastewater discharge (M

In 2003 we discharged 3.1kgIn 2003 we discharged of of COD per tonne (this is the first year treatment after onsite product has been reported). this information COD is a standard measure of the amount of measure COD is a standard – etc fats sugar, example loading – for organic in wastewater. The wastewater that is generated is usually sent to that is generated The wastewater plant, treatment the local municipal wastewater (such as pH pre-treatment with some onsite is fully cases, wastewater In other neutralisation). or rivers to released being before onsite treated to programme an active continue We lakes. necessary and where install minimise wastewater modern effluent the most appropriate and operate plant. treatment natural environment. natural environment. production during the we generate The wastewater flavourings, such as sugar, contains materials process seek to We acids, cleaning fluids, soaps and fats. (Chemical Oxygen and strength the volume reduce improved by Demand or COD) of wastewater Efficiency recycling. as well as water efficiency, starts with minimal use of water. wastewater, which must be treated before being returned to the before being returned which must be treated wastewater, Many of the processes carried out at our factories generate processes carried out Many of the Wastewater

11.27 responsible use of resources responsible use of resources 11.28 Cadbury Nigeria, located in the Agidingbi area of Ikeja Cadbury Nigeria, located has always had a far-sighted Local Government, Lagos, responsibility. Constructed in 1979, view of environmental treatment plant represented a the company’s effluent at the time. It was installed before considerable investment in Nigeria and environmental legislation came into force All factory internationally was way ahead of its time. “activated wash-down and sewage is treated by the into the sludge” process and final effluent discharged district. Odo-Iyalaro, a major stream outlet in Ikeja daily basis in the Effluent parameters are measured on a in-house effluent laboratory. plc won It is no surprise that in 2000 Cadbury Nigeria Friendly the LASEPA (Lagos State EPA) Environment Industry Award. CASE STUDY plant, Nigeria Water treatment p11.18 water consumption p1 1.20 air quality p11.21 transportation p11.23 soil and groundwater protection p11.24 solid waste management p11.27 wastewater

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resourcesresponsible use of 12. the journey continues

Corporate responsibility is a journey without an end. It is one of continuous learning and improvement for all of us at Cadbury Schweppes. Our journey will continue in a fast changing and less certain world – one in which we will need to be aware, adaptable and sensitive to changing circumstances, new challenges to our business values, and keener stakeholder expectations. We will engage and listen to all those who can help inform our future direction and priorities.

Our five pillars of social responsibility provide the environment, health and safety signposts for the next stage of our journey. • Support our new integrated Environment, Health and Safety Policy with EHS management systems, human rights and employment standards compliant with the international standards ISO 14001 • Continue to invest in the skills of our people – working and ISO 18001. better together. • Measure impact on the eco-systems from which we • Labour standards throughout the supply chain to meet derive our raw materials, and work collaboratively to the highest international minimum standards. develop solutions to protect biodiversity. • Confidential employee hotline to alert any concerns of breach of our business principles. community • Our first global employee climate survey to be • Build community investment into mainstream completed in 2005. business practice. ethical sourcing and procurement • Encourage the greater participation of our people; their energy, skills and ideas. • Extend engagement, dialogue and risk assessment both • Create community value around the world, with geographically and deeper within our supplier base. business units investing at least 1% of pre-tax profits • Integrate ethical sourcing, along with environmental in targeted programmes. and quality audits, into our supply chain global compliance process. We look forward to reporting progress in future • Understand better the parameters for sustainable reports, and on our website. Improvements are being supply of agricultural raw materials. Take a leadership built into our data gathering systems for all our role in raising standards, eg. in cocoa and palm oil. sustainability key performance indicators, and where appropriate we will establish visible improvement marketing, food and consumer issues targets, and benchmark with our industry peers. In 2005, • Hold responsibility at the heart of our brands five years after the adoption of our Human Rights and and within our consumer dialogue. Ethical Trading Policy and our new Board CSR Committee structure, we will undertake an overall • More research into the wider area of food and diet, impact analysis, and decide the role for ongoing and build findings into our policies and activities. independent verification. • Work with stakeholders to seek sustainable solutions to the issue of obesity and poor lifestyle around the globe, especially as it relates to more vulnerable groups in society, and opportunities for prevention. Where to find information on…

Air quality 11, 11.19-11.20 Awards 5.6-5.8, 10.16-10.18 Biodiversity 11, 11.14-11.16 Climate change 11, 11.9-11.11, 11.21-11.22 Community investment 4.9, 10, 10.1-10.8, 12 Corporate governance 4.4, 5 Consumers 4.9, 8, 8.1-8.5 Diversity 7.2-7.4 Economic impacts 1.1-1.20 Employees 4.8, 7, 7.1-7.14 Energy use 11, 11.10-11.22 Environmental management 4.10, 11, 11.1-11.5, 12 Equal employment opportunities 7.2 Food and diet issues 1.6-1.10, 8.2-8.3, 12 Health and safety 11, 11.1, 11.6-11.8, 12 Human rights and ethical trading 1.11-1.15, 9.1-9.8, 12 Lost time injury frequency rate 11.4, 11.6-11.7 Packaging 11, 11.12-11.13, 11.24 Palm oil 11.15 Purpose & Values 4.3 Recycling 11.3, 11.24-11.26 Stakeholders 5, 5.1-5.12 Suppliers 4.9, 9, 9.1-9.4 Training and development 7.5-7.9 Transportation 11.21 Waste management 11, 11.24, 11.28 Water consumption 11.18-11.19, 11.23 1. Please rate this report on a scale of 1 to 5. 4. Please rate what you think is Cadbury 6. Please tick if you would like to receive

POOR EXCELLENT Schweppes’ current performance in the the following: Overall 1 2 3 4 5 following areas of CSR based on this report. CSR Report 2002 Clarity 1 2 3 4 5 POOR EXCELLENT Annual Financial Report 2003 Credibility 1 2 3 4 5 Overall 1 2 3 4 5 Case studies 1 2 3 4 5 Stakeholder engagement 1 2 3 4 5 7. Optional Design 1 2 3 4 5 Employment standards 1 2 3 4 5 Name Usefulness of information 1 2 3 4 5 Ethical sourcing 1 2 3 4 5 Community involvement 1 2 3 4 5 Position 2. What information did you find most helpful Responsibility to consumers 1 2 3 4 5 Organisation in the report? Environmental management1 2 3 4 5 Address

5. Please tick the category that best describes you. Postcode Consumer NGO Telephone 3. What additional information would you like Supplier Government Email to see in our future reports? Investor Community member Employee Academic Other We would like to hear what you think of our 2004 corporate and social responsibility report. please return the form by post or fax it to us on +44 (0) 20 7830 5137.

Cadbury Schweppes Plc External Affairs Department 25 Berkeley Square London W1J 6HB UNITED KINGDOM questions information

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For more information on Cadbury Schweppes, see www.cadburyschweppes.com Annual Review and Summary Financial Statement 2003 Report & Accounts and Form 20-F 2003

Cadbury Schweppes Plc External Affairs Department 25 Berkeley Square London W1J 6HB United Kingdom

Consultancy, design and production by Corporate Edge. Photography James Bell Printed by St Ives Westerham Press to ISO 14001 environmental standards and using vegetable based inks, on 100% recycled paper.