1
COMMUNICATION ON PROGRESS 2017 UNITED NATIONS GLOBAL COMPACT 2
WE ARE A COMPANY OF PASSIONATE PEOPLE
WHAT DOES IT MEAN TO BE PASSIONATE?
To be passionate is to celebrate every success and to face challenges with the best attitude, inspiring our people, our clients and our community with our values. We devote each day with passion and joy, giving the best of us and enjoying what we do. 3 TABLE OF CONTENTS
01 08 15 22 LETTER FROM OUR CORPORATE GOVERNMENT ETHICS AND EXTERNAL VERIFICATION EXECUTIVE PRESIDENT Pages. 24-31 ANTI-CORRUPTION LETTER Pages 4-5 Pages. 69-85 Pages. 180-181 02 09 16 23 WHO ARE WE? COMMITTEES THAT EMANATE PEOPLE AND MANAGEMENT SUSTAINABLE DEVELOPMENT Page. 6 FROM THE BOARD OF DIRECTORS Pages. 86-108 INDEX Pages. 32-36 Pages. 182 03 10 17 24 OUR STORY OTHER COMMITTEES OCCUPATIONAL HEALTH AND GLOBAL COMPACT Pages. 7-10 Pages. 37-39 SECURITY PRINCIPLES INDEX Pages. 109-114 Pages. 183 04 11 18 25 MISSION / VISION EXCELLENCE AND SUPPORT SUPPLIERS GRI CONTENT INDEX Page. 11 CENTERS Pages. 115-124 Pages. 184 Pages. 40-50 05 12 19 VALUES CLIENTS RISK MANAGEMENT Pages. 12-15 Pages. 51-55 Pages. 125-130 06 13 20 cbc INTERNATIONAL CONSUMERS ENVIRONMENTAL QUALIFICATIONS Pages. 56-64 SUSTAINABILITY Pages. 16-17 Pages. 131-144 07 14 21 PORTFOLIO RELATIONSHIP WITH ALLIANCES AND PROGRAMS Pages. 18-23 INTEREST GROUPS Pages. 145-179 Pages. 65-68 4
LETTER FROM THE PRESIDENT GRI 102-14
We are a company of passionate people with big dreams. Over the last two decades, we have doubled the size of our company every five years. That same passion that we put into reaching outstanding results, we put into sustainable actions to contribute to a better world.
We are committed with the 10 Principles of the United Nations Global Compact and we incorporate them in our strategies. In the first instance, we respect Human Rights and they are a fundamental pillar of our company. Human Rights not only guide our decisions and are included in our Ethics Code; they are part of the compliance commitment that we require from our suppliers.
We also comply with the highest labor standards. We are a company where our collaborators can develop a career grounded in merit and driven by training and competence development opportunities, as well as technical knowledge. Our own cbc University offers the opportunity to increase technical and professional knowledge.
This year, we launched a Business Administration Master Program, together with the prestigious school of business INCAE. The content was jointly developed and offers the students – young people of different countries - the opportunity to strengthen their strategic vision, leadership and decision making process.
We promote conditions so that our collaborators can have the best experiences in an inclusive, collaborative and shared values environment and where women are every day more important, occupying significant positions.
We respect the right of our collaborators to associate and collectively negotiate. We have transparent and open communication with the union organizations that are part of our companies and we strive to always share a joint development vision.
We reject child labor and forced labor and we make sure that these are not part of our operations and the operations of our suppliers. That is why we include in our suppliers’ contracts specific clauses that demand the compromise to respect human and labor rights. We also carry out audits with specialized companies to guarantee the compliance of these clauses.
We strive to create a work environment free of labor or sexual harassment. We provide regular training to our collaborators, emphasizing the importance of respecting the values in our Ethics Code, and we have 5
Complaint Channels available to take any pertinent action when needed. network where they can exchange knowledge in a creative and innovative environment that allows them to take an idea and turn it into a sustainable business. We implement a host of actions against climate change and global warming. It is a shared responsibility among all society and is also of moral importance, beyond the compliance We believe in alliances with national and international entities so that the initiatives and of rules and laws. This shared responsibility includes dialogue, consensus search, and programs can have a major impact and, most of all, to build best practices. most of all, the building of bridges. We strive to help the ones most affected by natural disasters, the most vulnerable segments of our population. We listen constantly to the expectations of our key stakeholders and we develop actions that allow us to keep open communication and to develop innovative projects in order to Our production processes are technologically advanced. We have committees that take respond to such expectations. care of the efficient use and treatment of residual water. We also have mechanisms for energy saving, emissions reduction, gas reduction, and a firm policy of reuse, reduce and As an example of the latter, we can mention the development of an innovative portfolio recycle for our packaging materials. of functional and nutritive beverages that promote natural and healthy lifestyles. We consider it important to develop labels that can help our consumers make informed Our commitment goes beyond these actions. We also participate in initiatives that decisions with easy to comprehend information that includes information about our contribute to the recovery and conservation of water recharge areas, the promotion of commitment to sustainability. In the upcoming reports we will be informing of our an adequate management of solid waste and the construction of local governments, advances in this initiative. community leaders and women´s cooperatives for the development of environment programs. Reiterating our commitment to the United Nations Global Compact principles and with the Sustainable Development Objectives, we at cbc are assuming a compromise One of the most important challenges in Latin America and the world is the fight against to continue generating sources of employment and development opportunities in the corruption. It is the belief of cbc that private companies should implement the control countries in which we operate and to continue strengthening our sustainability actions. and prevention tools against fraud, bribery and extortion. We see the future with optimism and we will keep working with passion to have a positive In 2017 we had the advisory of Citizenship Action, Central American Chapter of The impact in our communities. Global Anti-Corruption Coalition and we advanced in upgrading the Anti-Fraud and Anti- Corruption Policy and implementing the Compliance Channel that allows us to minimize corruption risks and to have a documentation mechanism of the relationship of our Carlos Enrique Mata collaborators with public authorities. This relationship should be based on transparency Executive President and the criteria that the policy establishes and the respect of the laws of every country.
Moreover, in each contract that we subscribe with our suppliers of goods and services, there is an anti-corruption clause that adheres to all the principles and values in our Ethics Code.
Our contribution to a better world also includes the Sustainable Development Objectives of the United Nations. During this year we worked on reducing chronic infant malnutrition, on easing the access to safe water and on promoting quality education and environmental education.
We support young entrepreneurs because we consider of importance that they have a 6
WHO WE ARE GRI 102-2
We are a multi-Latin beverage company founded in Guatemala in 1885. We have the largest portfolio in the Central American region, offering our clients and consumers a beverage for every occasion and every lifestyle.
Our growth and development has been possible thanks to the talent of our people, the passion of young people of different nations that lead the operations in different countries, to our meritocracy culture, to a sustainable management based on process and to continuous improvement. We are especially indebted to our strategic partners: PepsiCo, Ambev and Beliv, who have transmitted to us their best practices. 7 8 9 10 11 MISSION VISION GRI 102-16 GRI 102-16
As competitive professionals our mission is To be the best beverage company in the to create solid relationships with our clients Americas, creating sustainable value and and consumers through the best value offering our consumers the best experiences proposition. with our brands and contributing to a better world. 12
VALUES GRI 102-16 13
GRI 102-16
WE DREAM BIG
WE BELIEVE THAT EVERYTHING IS POSSIBLE. We believe that everything is possible. We are as big as our dreams, that is why we dream big, demonstrating that we can achieve our goals. The passion of our dreams opens opportunities and helps us to confront difficult circumstances.
WE ARE OWNERS
WE COMMIT. We commit and exercise initiative, promoting the development of our business, our people and the utmost efficiency in the use of our resources, assuming total personal responsibility in our actions and the results we achieve.
WE ARE EXCELLENT PEOPLE
WE SHINE IN WHAT WE DO. We attract, recruit and develop the best talent, creating collaborative and highly competitive teams, searching for the best processes and results to maintain the balance that combines work excellence with quality of life. 14
GRI 102-16
WE ARE HONEST
WE STRIVE TO ALWAYS DO THE RIGHT THING. We live according to moral and ethical rules. We are transparent, timely and honest. We don’t take shortcuts and we confront our problems in real time to guarantee the company’s good reputation and integrity.
WE HAVE A SUSTAINABLE MANAGEMENT WE BUILD THE FUTURE. We guarantee sustainable results through complying with our processes. We learn and search new opportunities to make things better. We measure our results and we compare ourselves with the best practices in the industry.
WE ARE PASSIONATE ABOUT WHAT WE DO
WE ENJOY WORKING WITH OUR HEARTS. We work each day with passion and joy, bringing the best in ourselves and enjoying what we do. We inspire our teams, our clients and the community with our values. We celebrate each success. We humbly learn from our mistakes and we always persevere. 15 cbc IN THE WORLD GRI 102-3, 102-4, 102-6, 102-7
Corporate Oces
Oces
NORTH AMERICA New York Miami Me xico THE CARIBBEAN Puerto Rico Jamaica • The Dominican Republic +9,000 Collaborators
CENTRAL AMERICA Guatemala El Salvador Honduras Nicaragua Panama
Commercial Operations in 15 SOUTH AMERICA Ecuador Peru Countries Uruguay Argentina Colombia 16
cbc INTERNATIONAL QUALIFICATIONS 17
FITCH APOYO & ASOCIADOS GRI 102-12 GRI 102-12
Fitch Ratings Group, with operations in more than 30 countries, is one of the Apoyo & Asociados is the leading risk qualifier in the Peruvian market. It is global leaders in financial information and credit classifications. Fitch affirms that associated with Fitch Rating and applies its international standards to the Peruvian cbc is a stable company which maintains a solid position in the market and has market. adequate metrics, granting cbc a BB+ classification. Apoyo & Asociados granted cbc an AA- qualification. According to Apoyo & Fitch sees cbc with a solid position in its main market. cbc reflects its position in Asociados, cbc has a solid credit profile, a proven business model that is replicated the business as anchor bottler for PepsiCo with operations in Central America, the consistently in the markets in which it operates and strong growth characterized Caribbean, Ecuador, Peru and Argentina. The company has a diverse portfolio by energy and competitiveness over the last 10 years. cbc maintains a constant from PepsiCo and own brands that combined keeps its position in the market at geographic expansion, as well as strategic alliances that maximize its resources long term. efficiency.
(Extracted from the release published on October 10, 2017) (Extracted from the release published on November 2017).
MOODY’S INVESTORS SERVICE S&P GLOBAL RATINGS GRI 102-12 GRI 102-12
Moody’s Investors Service is one the leaders in credit, investigation and risk S&P Global is a global leader in credit qualifications, credit risk analysis, investigation qualifications. Moody’s is in 135 countries covering more than 11,000 corporations; and market perspectives, supporting the growth of markets with transparent 21,000 Public Finance Issuers, among others. debt and liquidity worldwide.
Moody’s gave cbc a Ba2 qualification, establishing a stable outlook for the S&P Global has granted cbc a “BB” qualification, based in its leader position in company. The Ba2 qualification reflects adequate credit metrics, liquidity, a the carbonated beverages market in Central America and the Caribbean and its solid position in the territories where it operates, a wide portfolio, geographic renowned portfolio as well as its distribution chain. S&P highlights the strategic diversification and its relationship with PepsiCo. alliance of cbc with PepsiCo and Ambev, projecting that cbc will maintain its strong credit metrics position. cbc has been able to maintain solid credit metrics nevertheless climatic adversities and the competitiveness in the markets in which it operates. The company (Extracted from the release published in January 19, 2017) maintains a solid position in Guatemala, Jamaica, Ecuador, Peru, Honduras, Nicaragua and El Salvador. The active involvement of PepsiCo in cbc strengthens different areas such as Corporate Governance and business and commercial practices.
(Extracted from the release published in January 18, 2017) 18
PORTFOLIO GRI 102-2, 102-6
We offer our clients and consumers a beverage for each occasion and every lifestyle.
Our beverages portfolio has worldwide renowned brands as well as locally loved brands.
The arrival of cbc, together with its strategic partners, to the countries in which it operates has given the consumers more and better options in all categories. 19 GRI 102-2, 102-6
PepsiCo is one of the largest food and beverage companies in the world with annual sales of more than 65 billion dollars. The company has important global brands such as Pepsi, Gatorade, 7up, Lipton, Frito Lay and Quaker.
We integrate important PepsiCo global brands to offer the most diverse beverage portfolio worldwide. We make our brands available to more than 650,000 clients in Guatemala, Honduras, Nicaragua, El Salvador, Jamaica, Puerto Rico, Ecuador and Peru.
We have been PepsiCo bottlers since 1942, and were recognized as the Best Bottler in the World in 2011. Our operations are among the best in PepsiCo, especially in the processes that guarantee sustainability. In addition, we are inspired by our Development with Purpose policy, which has allowed us to develop social and environmental programs together with PepsiCo. 20 GRI 102-2, 102-6
INTERNATIONAL NATIONAL
Thanks to our strategic alliance with Ambev from the AbInBev group, the largest beer company in the world, cbc brings its clients and consumers in Guatemala and other Central American countries a wide portfolio of beer brands. Among them are national brands such as Brahva, and international brands as Stella Artois, Becks, Budweiser and more recently Corona Extra, Modelo Especial and Negra Modelo. By doing this, the company is leading the Guatemalan market. 21 GRI 102-2, 102-6
Beliv is an important business unit of cbc that is focused in the development, production and commercialization of nutritious beverages, exporting its products to more than 35 countries around the world. This is one of the fastest growing companies in the region. Beliv focuses all its experience in creating products and brands by innovation and functionality to renovate or create new categories.
Beliv’s vision is to be the best and largest company of healthy and nutritious beverages in the Americas for consumers searching for health, wellness and happiness balance. 22 WHERE DO WE PRODUCE OUR BEVERAGES? GRI 102-4, 102-6
NORTH AMERICA EUROPE National Dry, Canada Cott, United Kingdom Brooklyn Bottling, New York San Benedetto, Spain IPP, Mexico Valle Redondo, Mexico Jaumave, Mexico Izcalli, Mexico THE CARIBBEAN Samba Brewery, Trinidad & Tobago Puerto Rico, Puerto Rico 13 Jamaica, Jamaica COPACKERS* CENTRAL AMERICA Mariposa , Guatemala Cuyotenango, Guatemala Livsmart, El Salvador La Nacional, Nicaragua La Reyna, Honduras
SOUTH AMERICA MEl, Colombia El Ordeño, Ecuador Machachi, Ecuador 17 Guayaquil, Ecuador PRODUCTION Tropical, Ecuador PLANTS Cuenca, Ecuador Milagro, Ecuador Machala, Ecuador Sullana, Peru Huachipa, Peru P&D Andina, Peru Lules, Argentina Chajarí, Argentina 23 EXPORT TO 3 CONTINENTS Especially the Beliv Portfolio GRI 102-6
NORTH AMERICA Canada United States (Florida, New Jersey, New York, Maryland, California, Texas) Mexico
EUROPE Spain Holland England
Trinidad & Tobago The Dominican Republic Puerto Rico Jamaica Haiti CENTRAL AMERICA Belize Guatemala El Salvador AFRICA Honduras Mali Costa Rica Senegal Nicaragua Gambia Panamá SOUTH AMERICA Guinea-Bisáu Colombia Guinea Conakry Ecuador Sierra Leone Peru Burkina Faso Uruguay Côte d'Ivoire Paraguay Ghana Chile Argentina 24
CORPORATE GOVERNMENT 25
CORPORATE GOVERNMENT
According to our policy, the Corporate Government model of cbc integrates the principles and rules that regulate the design, integration and functioning of the government organs of the company, such as the shareholders, the board of directors and senior managers.
The Corporate Government takes care of the adequate functioning of the government organs and the administration of the company, establishing an efficient use of the resources. The Corporate Government ensures the criteria independence of the members of the Board of Directors, securing that all members receive truthful information related to the company under transparency principles.
26
BOARD OF DIRECTORS GRI 102 -18, 102-22, 102-23
The Board of Directors has nine members, four GEMCORP representatives and three independent members with voice and vote and elected because of their professional experience.
The three independent members are selected through an evaluation process with international standards; this selection is made with support by an international talent search firm. The independent members are evaluated annually.
BOARD OF DIRECTORS
DIRECTOR DIRECTOR SECRETARY CHAIRMAN VICE-CHAIRMAN DIRECTOR DIRECTOR DIRECTOR DIRECTOR
INDEPENDENT PepsiCo GEMCORP MEMBERS 27
CORPORATE STRUCTURE GRI 102 -18, 102-22, 102-45
Pepsi Cola Pepsi Cola Puerto Rico Jamaica Bottling AmBev C.A. Mariposa La Reyna Nacional Mariposa Livsmart cbc Peruana Tesalia Springs Distributing (Beverages) (Beer) (Beverages) (Beverages) (Beverages) (Beverages) (Juices) (Beverages) (Beverages) (Beverages) Beliv
Puerto Rico Jamaica Guatemala Honduras Nicaragua El Salvador El Salvador Perú Ecuador Argentina
The Caribbean Central America South America
cbc Financial Statements includes all business units. The management system allows standardized operative process and management indicators for the companies that are part of the group.
This is a corporate level report. 28
BELIV ORGANIZATION CHART GRI 102 -18, 102-22
BOARD OF DIRECTORS
EXECUTIVE PRESIDENT CARLOS ENRIQUE MATA
CEO beliv CARLOS SLUMAN
VP COMMERCIAL DIRECTOR DIRECTOR LEGAL ISSUES NEW BUSINESS FINANCE COPACKING CITRIC GENERAL MARKETING VP R&D G&G MANAGER MANAGER DIRECTOR MANAGER MANAGER FRANCISCO MARIO CLAYTON ILLIA LUIS P. PHILLIP PEDRO FERNANDO IGNACIO PAGÉS BERTINI SANTOS RODRÍGUEZ VALLADARES HAGEN GUZMÁN FONG GONZÁLEZ 29
CORPORATE GOVERNMENT POLICY GRI 102-18, 102-22
The Corporate Government Policy dictates the guidelines Executive Committees: that allow cbc and its affiliated entities to comply, improve It is the responsibility of the vice-presidents, chiefs, and revise continuously their government policies, It is responsibility and the power of the Board of Directors managers and directors to make sure that their teams maximizing the company value in a sustainable way by to appoint the members of each Committee, to review its know and understand their functions and attributions, taking into account the shareholders’ interest, ensuring objective, authority, responsibility and reach. The Board according to the policies related to their positions. It the independence of criteria of the Board of Directors of Directors is in charge of defining the Chairperson also is the responsibility of the area bosses and managers and the respect for the internal regulations to comply responsible for coordinating the activities of each to guarantee that all employees under their charge are with the best practices of Corporate Government. Executive Committee. trained at least once a year in the policies and processes related to their positions. The Policy is directed to all the group’s legal entities, It is the duty of the Board of Directors to assign the areas joint ventures and businesses in which cbc participates responsible for defining the policies and compliance as a controlling entity. It is the responsibility of all cbc procedures and the areas responsible for guarding that executives to comply with the guidelines of the Policy the policies and procedures are obeyed. Regulatory according to their functions, roles and responsibilities. compliance standards are the ones that have to be complied according to law, regulations, fiscal and occupational requirements of the countries in which cbc Functions, faculties and obligations of the Board of operates. Directors: Also included are the internationally accepted practices • To direct the Organization’s general strategy. that must be complied as part of standard agreements of • To authorize the agreements and transactions in quality, food security, health and occupational security, benefit of the Organization that requires its approval among others. in virtue of the legal and contractual provisions. • To ensure the fulfillment of the agreements reached Corporate Policies: in the General Assembly. • To approve the annual budget and the annual The Board of Directors will designate the responsible of business plan of the Organization in general. defining and updating the policies and procedures that must be observed and applied in the companies of the The Board of Directors of cbc meets quarterly and when Group. convened for an extraordinary meeting as established in the guidelines of the shareholders’ agreement (SHA). The Board of Directors will also designate the areas responsible of defining and updating the operation It is an attribution of the Board of Directors to define the policies and procedures oriented to the company Executive Committees needed for the operation of cbc, to operate in a consistent and orderly manner. This defining the roles and responsibilities and verifying its responsibility has been assigned to the Excellence compliance. Centers. 30
CLUSTER DIRECTORS
Cluster Directors have one or several countries in their charge and they have the following responsibilities:
• They are responsible for the administration of operations in their countries.
• The alignment of day-to-day decisions and improvement plans with the strategies in order to reach the short-term vision.
• Comply with the company’s policies and procedures and ensure that they are met in all areas.
• Operational and collaborative efficiency to reach the results complying with the policies and processes.
• Align the need for resources.
• Implement and ensure compliance with the strategy.
• Recruitment and successors’ formation. 31
CLUSTER ORGANIZATION CHART
BOARD OF DIRECTORS
EXECUTIVE PRESIDENT CARLOS ENRIQUE MATA
MAGDA TÚNCHEZ CEO cbc INTERNAL AUDIT ZIAD NAHAS
SERGIO JOSÉ ANIBAL ESTUARDO ANTONIO TRAVIESO MEJÍA SANABRIA JUAN PABLO MATA MUJICA MAZARIEGOS (PLANTA LIVSMART)
El Salvador Puerto Rico Jamaica Guatemala Honduras N icaragua El Salvador Perú Ecuador 32
COMMITTEES THAT EMANATE FROM THE BOARD OF DIRECTORS GRI 102-22 GRI 102-18
The Board of Directors has the exclusive power of naming the members of the different committees, as well as setting its objectives, responsibilities and reach.
The Committees that report to the Board of Directors are:
01 People and Management 04 Risk and Finance Committee Committee
02 M&A Committee 05 Internal Audit Committee
03 Ethics Committee
These committees meet quarterly, before the Board of Directors Meeting, to which they report their activities. 33
INTERNAL AUDIT COMMITTEE
GRI 102-18, 102-22
This is an Executive Committee appointed by the Board of Directors to know and manage issues related with the Internal and External Audit processes. Its main objective is to provide advice and consultancy in things related to Corporate Government, information technology, risk management, compliance, financial information transparency and effectiveness of the internal control system of the organization. It also supervises the management of the Ethics Committee in terms of broadcasting the Ethics Code and the management of the Whistleblower Channel.
The Committee is presided by one of the external directors with wide experience in the area. The execution of the Internal Audit mandate is in charge of the Audit Executive Director (DEA) and is responsible for developing and directing the Corporate Audit strategy for the entire company.
ETHICS COMMITTEE GRI 102-18, 102-22
The Ethics Committee is responsible for the communication and training of the Ethics Code. It also has the responsibility of managing and ensuring the proper functioning of the channel to submit complaints and make consultations related with a non-compliance allegation of the Ethics Code from an official, collaborator or supplier of cbc. They have to facilitate investigations that allow corresponding actions to be taken and suggest to the different areas the applicable sanctions and recommendations.
The Ethics Committee reports to the Board of Directors through the Audit Committee and is managed by the People and Management Director.
MAGDA TÚNCHEZ AUDIT DIRECTOR 34
PEOPLE AND MANAGEMENT COMMITTEE GRI 102-18, 102-22
This Committee has the responsibility to review and suggest modifications in the structural organization to promote the ordered operation of the company. The People and Management Committee has the objective of strengthening the human resources management, focusing on reinforcing and maximizing the collaborators’ abilities in order to contribute to the healthy development of human talent and the formation of all collaborators.
The People and Management Committee is coordinated by the Director of People and Management.
MARÍA JOSE VILLANUEVA PEOPLE AND MANAGMENT DIRECTOR 35
MERGERS & ACQUISITIONS AND STRATEGY COMMITTEE
GRI 102-18, 102-22
The Mergers & Acquisitions and Strategy Committee is led by the Strategic Director and supervise the short, middle and long-term corporate strategic development. It identifies potential areas of growth, both inside and outside the company. It further develops mergers and acquisitions strategies together with a solid plan, making sure that the corporate strategy is implemented according to its objectives and the company’s plan in order to improve the competitive position of the company.
The Committee evaluates, analyses and negotiates the acquisition processes of other companies and assets, aligned with the growth and development strategy of the company, guaranteeing the generation of value for the shareholders. Supported by different areas, it leads the process of due diligence. This process must have the support of specialized consultants to develop a research and information gathering process, following the global policies of cbc and international best practices in order to identify financial or other risks. It also evaluates internal projects, identifying and evaluating the risks of strategic projects together with the Risks and Compliance Corporate area.
The Committee has to communicate and manage the company strategy, considering the security facts in the use and broadcasting of information, internally and externally, so that the different levels of the company, the employees, partners, suppliers and contractors understand the strategic plan and how the general objectives of the company are carried out.
KAREN HARO EXECUTIVE STRATEGY DIRECTOR 36
RISK AND FINANCE COMMITTEE GRI 102-18, 102-22
The Risk and Finance Committee has the objective to evaluate the reach of the established system to identify, evaluate and follow up the financial risks, as well as to support in the definition and establishment of control mechanisms that ensure the prevention and mitigation of the identified relevant risks.
The Risks Committee is managed by the Finance Vice-President and the Corporate Risks Manager.
RODRIGO ÁLVAREZ FINANCE VICEPRESIDENT 37
OTHER COMMITTEES 38
CAPEX COMMITTEE GRI 102-18, 102-22
The objective of the CapEx Committee is to evaluate and approve the planned acquisitions of fixed assets of all cbc operations.
This Committee is managed by the Vice-President of Finance, who elaborates the procedures required to comply with the Fixed Assets and CapEx policy. It is the responsibility of the CapEx Committee to define the criteria of the projects prioritization in order to present them to the Board of Directors for approval. Also, the CapEx Committee is in charge of looking after the updating of the policy and related procedures. The compliance with the company’s policy is necessary at all times and is the responsibility of all cbc employees according to its functions and position.
The Committee meets quarterly or when required for a specific case. 39 PURCHASING COMMITTEE GRI 102-18, 102-22
The Purchasing Committee is tasked with reviewing all strategic negotiations and those of major impact for the organization. The most important are the resolutions of conflicts of interest generated by negotiations between suppliers and employees, as well as making decisions about financial coverage.
The Committee is in charge of the Supplies and Purchasing Director. He has to prepare the required procedures in order to comply with the Purchasing Policy.
The Purchasing Committee meets quarterly. When required for specific case, it can have extraordinary meetings.
POLICIES AND PROCEDURES COMMITTEE
GRI 102-18, 102-22
The objective of the Policies and Procedures Committee is to guarantee that the policies of the company establish the guideline necessary to ensure compliance with the procedures of the organization. As well, it has to make sure that those policies and procedures guarantee the operability of the company, mitigating risks.
The Policies and Procedures Committee is responsible for ensuring that the policies and procedures are revised at least once a year or when the company goes through important changes. The compliance with the company’s policies is the responsibility of all cbc employees at all times, according to each one’s function and position.
The Committee is integrated by the Management Manager, the Risks Manager, the Legal Manager, and the Audit Director. They can convene with the COE Directors to validate any information concerning the processes under their charge. 40
EXCELLENCE AND SUPPORT CENTERS GRI 102-19
The Authority Delegation Policy defines the functions of the Excellence and Support Strategic Centers; these are oriented towards the elaboration and updating of policies and procedures which allow the company to reach its objectives in compliance with the Authority and Responsibility Delegation policy, the Corporate Government Policy, the Code of Ethics and the laws and regulations of every country in which cbc operates.
The Excellence and Support Centers have specific attributions; they must comply with the definition of the Role of the Center`s Functions of cbc (Roles and Positions Role Charters). It is the responsibility of every Excellence and Support Center to define and compile the policies and procedures. 41
CORPORATE AFFAIRS STRATEGIC CENTER GRI 102-20, 102-21
This center is responsible for the generation of suitable policies and procedures for the implementation of legal strategies and global processes that contribute effectively and efficiently to the external communication of the company, as well as the management of community relations.
It is also tasked with defining a policy of corporate social responsibility aligned with the United Nations Sustainable Development Objectives, generating the guidelines and reports of sustainability and environment to comply with the laws, rules and programs oriented towards the reduction of the organization’s environmental footprint.
Another function is to contribute to the ethical and transparent relationships with public entities through the work of our collaborators and suppliers who, in the name of cbc, make arrangements for different required authorizations, permits, licenses, etc.
To foster the attachment and promotion of the United Nations Global Compact Principles in the areas of Human Rights, Labor Standards, Environment and Anti- Corruption in all areas and business units of cbc.
Help cbc to reach proper recognition and strengthen its corporate reputation, one of the most important and valuable intangible assets of the organization.
ROSA MARÍA DE FRADE CORPORATE AFFAIRS DIRECTOR 42
PEOPLE AND MANAGEMENT AREA FINANCE AREA CENTER OF EXCELLENCE CENTER OF EXCELLENCE
Ensure the correct use and control of the assets assigned to the executives. This Generate the adequate policies and procedures for the effective risk includes the cash, fixed assets, investments, patents, brands, documents and administration through human, physical, financial and technological information needed for their activities. resources, in search of diminishing the economic impact that may occur because of those risks. Generate the adequate policies and procedures for the effective risk administration through human, physical, financial and technological resources, so as to diminish the Design and plan the human resources strategy, the policies and procedures negative economic impact which may occur due to those risks. of the entire organization, to ensure that the corporate, regional and human resources strategies are aligned with the company strategy. Elaborate the financial planning, financial risk management, prepare and present financial reports. Define the accounting policies and procedures. Handle the Ensure that human resources procedures and policies are aligned with the assignment of authorization levels for the acquisition of economic obligations and corporate guidelines. Define and update policies and procedures to ensure commitments, as well as tax obligations and optimization according to the laws of that the salaries, bonuses, commissions and any other incentive that cbc each country. It is responsible for verifying that the accounting of each transaction or collaborators receive are in compliance with the laws and regulations of process defined by any area of the company complies with the regulations, the laws each country. of each country and international accounting regulations. Perform and monitor culture and organizational climate evaluations in cbc. Generate policies and procedures needed for the correct design of the budget by Manage the human talent. the different business units, the plan provisions and deviations and the approval of extraordinary transfers or outside of the original budget. Verify and monitor the compliance of any employment and regulatory aspect associated with the human resources of cbc. Maintaining and updating the financial structures of the company and evaluating the risks corresponding to each area, in conjunction with the risks area. Manage and evaluate risks related with its area together with the URC.
Maintaining the liquidity levels necessary to comply with the short-term obligations It is the area responsible for complying with employment laws and in both normal conditions and in extraordinary conditions, without incurring in obligations. unacceptable loses or compromising the reputation of cbc.
Manage all cbc risks through the Compliance and Risks Unit.
It is the area responsible for complying with the tax laws and obligations. 43
LEGAL AREA CENTER OF EXCELLENCE
Generate the adequate policies and procedures for the effective risk administration through human, physical, financial and technological resources, in search of diminishing the economic impact that may occur because of those risks.
Generate the adequate policies and procedures for the assessment of legal risks. Create and implement legal strategies, policies, frameworks and global processes in order to support the company strategy, always complying with the laws and rules of every country. It also has to direct the external communications of the organization and manage the relationship with the community.
Legally represent the different entities of the organization in legal and administrative processes. The orderly and efficient maintenance of the books and corporate registers of the different legal entities of the organization.
Coordinate with the URC the documentation of the identified risks and manage them.
Is the advisory body of the group’s operations in legal matters.
OSCAR ARROYO VICE-PRESIDENT OF LEGAL AFFAIRS 44
MANUFACTURING CENTER OF EXCELLENCE
Generate the business value and growth through constant optimization and improvement. It is tasked with generating suitable policies and procedures to turn the corporate strategy into the strategic plans for the business.
Generate the objectives and key performance indicators for each country and cluster. Ensure high standards and quality service to the strategic partners. Generate the adequate conditions to increase performance in those countries where the general production and sales indicators are stable and improve the conditions in those countries where the indicators do not show what is desired by the corporate administration.
Create the policies and procedures that ensure best practices and manufacturing operational excellence. Create annual guidelines and the medium term planning strategy. Realize activities’ control by using integral dashboards. Ensure that operations have the needed tools and equipment. Realize comparative evaluations against the market and the industry. Supervise the Livsmart plan through the Manufacturing Excellence Center.
ALEJANDRO FERNÁNDEZ VICE-PRESIDENT OF THE MANUFACTURING CENTER OF EXCELLENCE 45
LOGISTICS CENTER OF EXCELLENCE
It is the area responsible of the compliance of the company environmental and quality policies. Create the policies and procedures to develop logistics strategic guidelines and processes, taking into account the manufacturing processes. Generate the logistics and storage strategy and establish performance objectives. Lead improvement strategies and projects. Guarantee operational excellence and develop a storage strategy.
Establish objectives and goals for the supervision of the centralized planning and prevision of the demand. Ensure the adequate guidelines for the primary and secondary distribution and the placement of coolers. Lead initiatives that facilitate the sales process, generating competitive advantages in the market, through the Logistics Excellence Center.
HAMLET TAVERAS DIRECTOR OF THE LOGISTICS CENTER OF EXCELLENCE 46
MARKETING CENTER OF EXCELLENCE
Generate the policies and procedures needed for the business execution and the administration according to the geographical space of the countries in which there are operations. Supervise the standardized and aligned exercise of the productive operations among the countries and the execution of the marketing activities delegated from the franchisers.
The Marketing Excellence Center is responsible of the design of Marketing campaigns that come from the franchised brand; this is why it has to create policies and procedures to translate the designs and strategies to be executed in the countries, guaranteeing that the brand guidelines are followed.
NATHALIE HASBUN MARKETING DIRECTOR OF FRANCHISED BRANDS 47
COMMERCIAL CENTER OF EXCELLENCE
Create the policies and procedures to develop guidelines and sales strategic processes, taking into account the manufacturing processes. Design and lead the annual sales strategy process, sales control, development evaluation and timely decision making, market research and benchmarking through the Commercial Excellence Center.
The Commercial Excellence Center is responsible of the strategies and commercial plans design for the cbc portfolio. It has to create strategies and ensure its execution in each of the countries, making sure of the operations excellence and best commercial practices that support the building of the annual sales plan.
The strategies to be developed include: the optimization of the clients’ register and standardized processes. The Commercial Academy, through the cbc University, develops the talent of the sales executives. The development of marketing by channel with differentiated portfolios and the development of information by point of sale permits to identify growth opportunities for our clients.
GUILLERMO SEGURA DIRECTOR OF THE COMMERCIAL CENTER OF EXCELLENCE 48
ROUTE ENGINEERING SUPPORT CENTER
The main objective is to provide direction and experience to the Route to Market Models, identifying the best practices and first level benchmarking. It supports new operations and those operations that require specific support in the commercial area.
Its first pillar is a specialized team of business experts that support specific projects, transmitting the cbc Culture and using tools such as PDCA Matrix, Diagnostics Matrix and Market Revision, as well as due diligence for each area.
Its second pillar is the Census, supported by the industry census, particularly for new operations where the clients’ data base may need a more robust platform.
It can be performed directly or through specialized providers previously evaluated and with a contract. It develops the geographical references to be included in digital maps, general data and specific requirements.
The third pillar is the Route to Market, where the following indicators are monitored: route productivity, S&D costs by model, best practices identification, updating of the distribution structure. They are in charge of the centralized register of the data base, the management and support of digital maps, the software to design new routes and territorial planning. With this information, it is possible to propose innovative and disruptive models that incorporate the technology to identify the trends and megatrends of the industry.
ERICK MELGAR DIRECTOR OF THE ROUTE ENGINEERING SUPPORT CENTER 49
TECHNOLOGY AND INFORMATION AREA SUPPORT CENTER
Ensure the correct use, safeguarding and control of the assets assigned to the executives in this area. This includes cash, fixed assets, investments, patents, brands, documents and information needed for the development of its activities.
Create the policies and procedures needed to ensure that the organization has the proper tools, according to the best practices of the technology services industry, that contribute to the development of the competitive advantages of the company. Supervise and evaluate the service, software and hardware quality, as well as it maintenance (TI Architecture). Ensure the integral TI strategy allows support and help at all levels. Develop and maintain the applications of the company.
Create the policies and procedures needed to guarantee the resources of data base management and information consolidation to be presented to the areas of interest. Generate the ideal conditions of Back Office activities administration, internal and external; to bring excellent service in the administration support activities, information management and centralized accounts register of the different systems of the company.
Manage the risks related to the area together with the Risks and Compliance Unit.
The area is responsible for safeguarding the organization’s information and the confidentiality of the organization’s communication.
RAFAEL BARDALES DIRECTOR OF THE TECHNOLOGY AND INFORMATION AREA SUPPORT CENTER 50
a redesign process of users and their access, analysis the INFORMATION INFORMATION minimal accesses for the users in each of the areas. Each user is assigned to the responsible person and from there SECURITY POLICY INTEGRITY AND the risks area monitors them.
SECURITY The client’s information is accessible only by those who need to have access. In the sales area, only one salesperson has access to the clients on his route; a supervisor has access to the clients of the routes that The Information Security Policy safeguards and protects report to him and so on. The SAP systems have an access In cbc we integrally use the SAP ECC, SAP SCM, SAP cbc information, keeping the confidentiality, availability control module that can apply to almost every object BPC, SAP Success Factors and SAP Ariba systems for and integrity of the data saved in the resources available. (fields in a database) to grant authorization at that level. the control and automation of all main processes in the The policy guarantees, through digital authentication, the business such as: identification of the collaborators that use the systems, and provide safe access to the network resources and the • Client Relationship Management proper tools for the exchange of information. • Supplier Relationship Management • Management of production, storage and distribution This policy establishes the collaborators responsibility in centers. the safeguarding of information. All collaborators that • Sales and Customer Support have access to one or several systems have to identify • Product delivery, invoicing and route settlement themselves through the use of a user and password. • Demand and Supply Chain analysis and planning The users must not reveal their passwords, which must • Human Talent Management comply with the characteristics established by the • Accounting and Financial Management security system. The user has to ask for these accesses when related to their activities and report any that do not We see in SAP and its products a strategic ally to safeguard correspond. the integrity of the systems and the information saved in them. We use the best practices in programming, Internet is a cbc work tool. All collaborators must follow database and operative systems in order to safeguard the security procedures. information integrity.
It is strictly prohibited to write any message that is The cbc transactional systems are available in the primary harassing, discriminatory or offensive, ethnic insults data center located in Guatemala City and are replied to or any other form of communication that may offend, online to a secondary data center located in Panama City. denigrate or shame others for their race, sex, disability, This process is audited by internal and external system religion, politics or other reasons. auditors who perform a disaster recovery plan (DRP) once a year.
To comply with the separation of functions, together with the audit and corporate risks area, we implement 51
CLIENTS 52
CLIENTS GRI 102-6
In cbc we serve more than 650,000 clients in Latin America and The Caribbean. Most of them are retailers or neighborhood stores whose business is the daily support of its families.
We make available to our clients a portfolio of leader brands that allow their growth in sales, developing a long lasting relationship and giving personalized, timely and high quality service. 53 MARKET SEGMENTATION Consumption GRI 102-6 outside the Home Store establishment Immediate Store Provision Modern Traditional Convenience Market Market
Consumption in the Fast Food establishment Family Entertainment Center Gyms and Sports Modern Traditional Center Market Market Other restaurants Food Carts and Kiosk
Wholesalers Shopping Clubs Modern Traditional Wholesalers Market Market
Institutional Institutions Educational Modern Traditional institutions Market Market 54
PASSION FOR SERVICE
PROCCESSES AND REVENUE MANAGEMENT COMMERCIAL ACADEMY
Is a discipline that has the objective to optimize the value of the portfolio To operate efficiently, we have designed standardized processes that optimize that we offer our clients. In cbc we understand that growth is based on our the work of our sales executives and maximize the service level. These processes leader brands, the best packaging and competitive prices. Our sales team has then are converted into training and evaluation materials and programs that business assessment abilities, which permits to identify growth opportunities guarantee the highest market standards. We seek the development of our Sales in each point of sale. Executives and their career plans. 55
TECHNOLOGY TRADE MARKETING We have a client database that allows us to rapidly identify growth opportunities. The technology lets our Sales Executives to present in each visit an integral The consumer has different characteristics in each country in which we operate. proposal of our portfolio, prices, categories and promotions and to respond fast Understanding these differences is the key to generating the winning strategies to the needs of our clients. for each distribution channel that will in the end help us promote our clients’ growth. The database is updated periodically through a Census that also lets us identify new clients. We offer different portfolios for every channel on the basis of a beverage for all consumption occasions and different lifestyles. We offer packaging that adapt External evaluations of customer service and market share are performed to the needs of our consumers. We execute with excellence in the point of sale, periodically in the different channels and categories. This allows us to identify which generates high preference for our brands. and take advantage of opportunities. 56
CONSUMERS 57
We are looking to satisfy the needs and expectations of our consumers.
In cbc we are always oriented towards the goal of consumer satisfaction.
This is why we develop a series of studies that periodically allow us to learn about their lifestyles, motivations, consumption occasions, as well as the latest consumption trends.
We follow an innovation process in a structured way and we reformulate our products according to the nutritional need of every country.
We work in offering in our labels clear information about the ingredients of each beverage to help the consumer in the decision making process.
We maintain the highest quality standards in our production and distribution processes to guarantee safety and harmlessness.
We also consider important to share memorable campaigns that transmit positive feelings and inspire change, such as the Guatemorfosis campaign. 58 CONSUMER INSIGHTS
In cbc we periodically develop studies to understand the needs, habits, trends, consumption occasions and different lifestyles, not only to develop new products but also to design the packaging and accessibility.
We perform different studies to understand our consumer and to help us develop strategies and brand experiences that satisfy their needs and exceed their expectations.
PROVEEDOR OBJETIVO BENEFICIO DEL CONSUMIDOR
Measure the development of our products: Monitor the respect for reference prices so as share, distribution, volume and invoicing to to provide competitive prices to the consumer the consumer
Measure the consumers trend in their homes Anticipate consumption trends and design innovations attractive for the consumer
Measure the health of our brands Generate strong connections with the consumer
Measure the potential of the innovations Create innovations that are appealing to consumers
Measure medium and long-term strength of Develop attractive brand plans for the the brands consumer.
Solve a brand or consumer problem Generate brand initiatives that solve a specific problem for the consumer.
Define the long term strategy of a product Develop a product line to satisfy the unmet category needs of consumers. 59
INSIGHTS ANNUAL CYCLE
Our annual insights cycle is fueled by primary and secondary sources of information.
CULTURAL BEVERAGE MEGATRENDS CONSUMPTION TRENDS
DEMOGRAPHIC CONSUMPTION LISTENING TOOLS MACRO CHANGES CATEGORIES TRENDS
The main objective is to anticipate the needs of our consumers 60
INNOVATION AND NEW LAUNCHINGS CYCLE
Our annual studies development cycle is robust.
FIRST
STAGE Define a long term vision POST-LAUNCHING 3 to 5 years forward MBA Methodology Future consumer trends 1 – 2 years forward Continuous Actual consumer studies Methodology, Retail Index, trends Kantar
Post-Launching Development Generation of Workshop Methodology monitoring: retail evaluation ideas index, Brand Audit, during calendar year EBES, COMMS Adjustments / Concepts Optimization of construction the proposal LAUNCHING
Develop and optimize a Qualitative Methodology of Concept proposal Recycling and Cuantitative Method- Finalize proposal LAST INTERMEDIATE ology Innoquest STAGE STAGE Evaluate concepts 61
LABELING
GRI 416-1, 417-1
cbc complies and respects the laws and regulations of labeling in every country in which it operates. Our strategic partners PepsiCo and BELIV place in the front of the labels the caloric intake of its products, even in those countries where the law does not require it.
We want our consumers to make healthy decisions for them and their families. That is why we include in our labels clear information about the ingredients we use.
We also consider important to include information about sustainability programs that we implement because we share our consumers’ concern for environmental protection. In upcoming reports we will be presenting our advances in this area. 62
BELIV
Beliv is a cbc division that was born with a challenging vision, to lead the growth of healthy beverages. Our passion in Beliv is to search for alternatives to evolve how we quench the thirst of every one of our consumers.
We are conscious that the world is moving faster and that the consumers have new needs. That is why Beliv wants to be the leading company Latin America in the innovation of healthy beverages.
Beliv is working on different fronts: • Consolidating and reformulating the current portfolio to bring each of our consumers the best products in the market. • Creating strategic alliances to develop products directly related to a better life. • Creating alliances and developing nutraceutical and functional products.
Beliv has amassed a portfolio of more than 25 brands in 6 beverage categories, which will only grow as we continue to innovate.
CARLOS SLUMAN BELIV CEO 63 QUALITY AND SAFETY POLICY GRI 416-1
Rules: Local People and Management Manager (plant, Roles and responsibilities: country or cluster): As a company that produces carbonated and non- carbonated beverages and syrups, we are committed • Plant Managers / Operations and Services. • Guarantee that the Safety and Quality Global Policy to guaranteeing the quality and safety of our products • Promote the commitment and compliance of the is included as part of the Inycie program of the by constantly improving our Safety Management politics, internal procedures, legal requirements and company. System, complying with all the legal requirements, client others established in every country of operation. • Guarantee that the Safety and Quality Global Policy needs and other exigencies, maintaining an effective • Promote the politics compliance with the proposal is included in the annual training plan that includes communication with all interested parties. and implementation of projects that minimize the all the plan and agencies personnel. safety and quality risks. • Guarantee that the Codification Policy is included Codification Policy: • Guarantee that the Safety Global Quality Policy is in the annual training plan of the personnel at the visible in the main access to the production plants production plants. The traceability of all our products has to be guaranteed and agencies. and we have to make sure that all our production and Corporate Management Manager packaging is correctly and legibly coded. The minimal Directors and VPs of CoEs: information of every production has to be verified hourly The Corporate Management Area has to guarantee that (lot, plant identification, year, day, production line and • Promote the compromise and compliance of the the policy is physically signed by the Vice-President of hour of production). In this process, the PepsiCo rules are policies, internal procedures, legal requirements Supply. One copy (physical, electronic or other) of the used as an international standard, complying with the and others established in each country of operation. signed policy has to be delivered to all the plants and code procedure of cbc and the commercial regulations agencies subject to the internal and external audits. of the products in each country. cbc Employees:
It is our policy that only correctly coded products make • Learn and comply the Safety and Quality Global it to market. Under no circumstance a plant can operate Policy. without proper coding processes. No plant will allow • Comply with all the procedures from this policy and the liberation of products that have not been properly the Safety Management System. coded. Employees of production plants: General Policy of the areas involved in the supply chain: • Learn and comply the Safety and Quality Global Policy. To guarantee that the market only gets verified products, • Learn and comply the Glass, Breakable Plastic and all employees in the areas involved in the general Ceramics Policy. process of manufacturing (Purchasing, Investigation • Learn and comply with the Codification Policy. and Development, Logistics, People and Management, • Comply with all procedures of the Safety among others) must stick to comply with the policies, Management System and Policy. procedures and manuals established in the Safety Management System, based on the responsibilities defined for each of them. 64
QUALITY AND SAFETY CONTROL GRI 416-1
The FSSC 22000 Rule (Food Safety System Certification) provides a scheme to effectively manage the responsibilities of the companies in relation to the safety of foods. Currently, FSSC 22000 is a scheme recognized by the Global Food Safety Initiative (GFSI), internationally accepted and based in existing ISO standards.
To receive the certification under this rule demonstrates that a company has a robust Safety Management system implemented and that it complies with the requirements of clients and consumer. Today, more than 17000 organizations in 140 countries in the world have the FSSC 22000 Certification, and cbc is one of them.
With a Quality and Safety Management System based on FSSC 22000 implemented in all our operations, we have achieved the certification in Guatemala’s two plants (Mariposa and Cuyotenango). We have also started the process to verify our plan in El Salvador to certify 100% of our plants and reinforce our daily commitment to deliver to our clients and consumers safe products with the highest quality standards. 65
RELATIONSHIP WITH GROUPS OF INTEREST 66 MATERIALITY GRI 102-40, 102-42, 102-43, 102-47, 103-1
About the report • Results revision • Follow up indicators: qualitative data to measure compliance cbc has been part of the United Nations Global Compact since 2013, presenting • Alliances and Programs revision Active Reports. In 2017 cbc delivers its Sustainability Report where it presents • Internal audits revision the performance of the company in social, economic and environmental • External audits revision matters for the period from November 2016 to December 2017. This advanced • cbc international qualifications reports Communication on Progress demonstrates cbc’s compliance with the 10 • cbc plant visits Principles of the Global Compact with its 21 corresponding criteria, using as a • Interviews and visit to different people reference the standards of the Global Reporting Initiative - GRI. • Publications • Videos External verification of the report Definition of the contents of the report A specialized consultant has externally verified the results presented in the Communication on Progress of the United Nations Global Compact in As a result of the activities performed, a list of the most important management sustainability. The letter is enclosed at the end of this report. aspects for the company and its interests groups was obtained.
Sustainability context Revision: The material aspects of the sustainability management of the company are the following: Sustainability:
In order to ensure the quality and content of our Communication on Progress at an advanced level, the following sustainability tools were used as references.
Revision of different materials such as:
• Global Reporting Initiative Standards – GRI • Sustainable Development Objectives • Ten Principles of the Global Compact
Sustainability Context Revision:
• GRI Standards review • Sustainable Development Objectives • Ten Principles of the Global Compact • cbc Ethics Code review • cbc Global Politics review • Review of specific policies of different cbc areas • Internal programs and processes revision • cbc developed actions • cbc corporate reputation index evaluation 67
MATRIX OF MATERIALITY
Stakeholder Needs / Expectations of our Stakeholders Actions to deliver the expectations
• Leader brand portfolio • Sales Executives giving advice for the growth and development of clients and the increase of sales 1. A portfolio of leader brands that allows their growth in sales, developing a long • Di erentiated portfolios and packaging according to every occasion and lifestyle CLIENTS term relationship and receiving a personalized and timely service. • Client segmentation to give strategic advice by type of client • Technological platform with information of every client to identify growth opportunities and to answer fast to its needs. • Avant-garde and e cient customer service systems
2. High quality beverages in convenient packages and at competitive prices, • Leader brand integral portfolio adapted to the needs of consumption and di erent lifestyles. • Safety and quality processes • Innovative portfolio developed for the need and expectations of the consumers CONSUMERS 3. Leader brands that bring memorable experiences and that allow sharing • Marketing campaigns and events that connect and bring memorable experiences sustainability and development objectives. • Environmental sustainability
• Talent Search Programs • Performance Evaluation based on competencies with development programs in areas of opportunity 4. Develop a career plan through a meritocracy system, training and a culture that • Cbc University and MBC at cbc for the knowledge and competencies allows a connection between personal dreams and the company. • Collaborative o ces designed as spaces of innovation and creativity COLLABORATORS • Organizational Health Surveys and Engagement Committees with the 5. Live the best experiences in inclusive environment o collaboration, equity and participation of the collaborators shared values. • De ned career plans • cbc CONNECT interactive system of performance training and interaction among di erent groups • Ethics Code and a Whistleblower Channel for consults and complaints
6. The opportunity to develop positive social and economic impacts programs that • Alliances for programs development COMMUNITIES generate value for the construction of an inclusive a sustainable model. • Knowledge and capabilities transfers • Sustainability reports 68
Stakeholder Needs / Expectations of our Stakeholders Actions to deliver the expectations
INVESTORS AND • Periodic reports 7. Promote a trust environment with transparent and opportune • On-line information and consults FINANCIAL ANALYSTS communication.
• Joint development and innovation 8. Long-term alliance construction. • Strategic planning 9. Transparency, objectivity and ethics in the suppliers selection process. SUPPLIERS • Bidding mechanism • Ethics code for purchasing processes
NATIONAL AND 10. Alliances to develop social, environment and economic projects that • Cooperation agreements INTERNATIONAL have a positive impact in vulnerable populations and that contribute to a • Sustainability reports NON GOVERNMENTAL sustainable and inclusive development model. ORGANIZATIONS
• Press conferences MEDIA 11. Promote a trust environment through transparent and timely communication and information. • Press releases • Response to information requests
CENTRAL • Public-Private cooperation agreements 12. Construct alliances based on transparency to contribute to the • Public reports of results and advances in alliances AND LOCAL sustainable development and wellness of the population. GOVERNMENTS 69
ETHICS AND ANTI-CORRUPTION 70
ETHICS COMMITTEE GRI 205-2
The Ethics Committee is integrated by five people of different departments of the company and has consulting and support functions for the broadcasting and enforcement of the Ethics Code. The members of the Committee are appointed by the CEO and are coordinated by the People and Management Manager.
The Committee defines the guidelines for the Ethics Code and the corresponding training of all cbc collaborators and others. It has the responsibility of managing and safeguarding the proper functioning of the channels that allow the collaborators or interested parts to make consultations or complaints of noncompliance with the Code.
It reports to the Board of Directors through the Audit Committee. Its functions also include conflict, controversy and faults evaluation, the establishment of sanctions and action plans to prevent violations to the Code of Ethics. Also, it is the Committee responsibility to review and promote policies and procedures that strengthen the transparency, anti-corruption and anti- fraud mechanisms.
GUILLERMO GAVIRIA CEO APEX 71
ETHICS CODE GRI 205-2
cbc Ethics Code contains the principles and rules of conduct for all cbc collaborators, including the Board of Directors, shareholders and senior management.
All our company’s business and professional activities are based on integrity and our performance is developed with honesty and transparency.
The Ethics Code specifies how each of our collaborators has to act in their relationship with coworkers, suppliers, clients and community in the countries in which cbc operates.
cbc Ethics Code provides our collaborators, suppliers and general public with an official document that specifies our commitment to responsible, ethical and respectful conduct and performance.
All suppliers that provide services or goods to cbc are obligated to adhere to the Ethics Code, its principles and rules of action. 72
RESPONSIBILITIES
The Code specifies how each cbc collaborator conducts itself in his relationships with co-workers, suppliers, clients and communities in which we operate.
The People and Management Department, the management and the directions of each area are responsible of promoting the knowledge and broadcasting of the Code and to respond to any consultation related to its interpretation.
ETHICAL RULES OF cbc GRI 412-2
Integrity and rules of conduct:
All business and professional activities are based on the principle of integrity. We act with honesty and transparency.
Inclusion and no discrimination:
We develop, without exception, business and labor practices that are inclusive and free of any kind of discrimination.
Equal opportunity of employment:
All our personnel selection processes are based on equal opportunities. Our collaborators develop a career plan based on merit and objective evaluations. We implement training programs so that our collaborators can acquire new knowledge that permits to improve their opportunities of professional growth.
JUAN PABLO MATA RECTOR OF THE GUATEMALA AND JAMAICA CLUSTER 73
RESPECT FOR HUMAN RIGHTS
PRINCIPLE 2
All actions are carried out under the strict respect for Human Rights included in the Human Rights Universal Declaration. We share that liberty, justice and world peace are based in the recognition of the dignity of people and the equal and inalienable rights of all humans.
In 2017, a training process of Human Rights was performed using internal communication mechanisms.
RESPECT FOR LABOR RIGHTS
PRINCIPLE 2,4
We respect labor legislation in each of the countries in which we operate and we work within the framework established by the different agreements of the International Labour Organization.
COMPLIANCE OF LAWS AND REGULATIONS
All cbc business and professional activities are developed with strict adherence to current laws and rules in each of the countries in which we operate. 74
ABOLITION OF FORCED CHILD LABOUR
We reject child labor and we demand from our collaborators and suppliers the strict observance of this principle.
All cbc suppliers sign their adhesion to the Ethics Code that contains this clause. Also, labor audits are performed periodically to guarantee the compliance with the laws and rules of each country and to verify that no forced child labor exists. 75
INFORMATION GIFTS, INVITATIONS AND CONFIDENTIALITY AND GRATIFICATIONS ASSETS PROTECTION
In cbc we do not accept gifts or attentions from clients and suppliers that may Confidentiality of personal information: compromise our objective commercial decision making ability.
We are committed to using the personal data of our collaborators exclusively for All invitations by suppliers to seminars, industrial fairs and technical meetings must the management of the lawful business activities of the company, in compliance be previously authorized by the Director or Vice-President of the corresponding with current law on the matter. department. When considering the invitations, the aggregated value of the knowledge to be acquired and the activities to be performed must be considered. Respecting the confidentiality the private information, at cbc we limit ourselves Also, it is evaluated that these invitations do not compromise the objective decision to the responsible and professional use of such information only when necessary. making ability and only the company`s interests are considered.
Assets protection: In some special occasions, cbc collaborators are allowed to accept gift whose value is not higher than US$ 10.00 (ten American dollars). We always seek the protection of cbc’s patrimony. This includes its goods, rights and information. The assets are used exclusively for the corresponding professional If a collaborator receives a gift with a value above that amount, he will immediately functions. direct it to the People and Management Department that will use it for benefit purposes. USE AND MANAGEMENT Invitations to lunch/dinner, trips and other activities are also considered gifts. OF FINANCIAL AND NON- FINANCIAL INFORMATION
All financial information and the results of the operation are registered according to legal requirements and generally accepted accounting principles, safeguarding its veracity, integrity, accuracy and precision. All collaborators are obligated to protect the private information of the company, and to not reveal it to any person outside the company. This includes financial information, commercial, patents, marketing plans, etc. 76
COMPLIANCE WITH LABOR RIGHTS MEASURES PRINCIPLES 1 AND 2
All our business and professional activities are developed strictly attached to the laws and rules in each of the countries in which we operate. We respect Labor Rights and the agreements of the International Labor Organization as established in our Ethics Code and our Compliance Policy.
All of our suppliers must sign a compliance commitment of the Labor Legal Requirement Manual for Services Suppliers of cbc. In this document, the suppliers commits to comply with the labor laws, as well as international agreements applicable in labor matters, declaring that their knowledge of the labor manual of cbc and authorizing cbc to realize any review or verification of compliance to the labor rules.
WE REPUDIATE AND DENOUNCE HARRASMENT
Ethics and integrity are our fundamental pillars. We repudiate and denounce any kind of mistreatment or harassment, especially sexual and workplace harassment.
We denounce workplace harassment as a way of repeatedly incur in hostile behavior or attitudes against the dignity of a collaborator, regardless of whether this behavior comes from a supervisor or a co-worker.
Complaints can be done through the Whistleblower Channel of the Ethics Committee, who is tasked with taking the corresponding measures, including denouncing it to competent bodies in the country. 77
CORPORATE SOCIAL RESPONSIBILITY
Community:
We are committed to act in a socially responsible way. We respect cultural diversity and the principles of the communities in which we operate. We also search to undertake activities that foster the economic and social development of those communities.
Environment:
We are committed to sustainable development. That is why the principles of environmental protection form an integral part of our processes.
We encourage environmental quality management while promoting economic growth and the national and regional competitiveness. We incorporate international best practices to prevent and minimize the environmental impact of our operations. We are always focused in the efficient use of our resources, reusing and recycling. We believe in the development that satisfies current needs without compromising the needs of future generations. We establish alliances with local communities and governments to promote an adequate environmental management. 78
CONFLICT OF INTERESTS
GRI 102-25
In cbc we have the commitment to carry out our business and activities in such a way that our decisions are objective and are not influenced by personal interests. A conflict of interest arises when the private interest of a person interferes with the compliance of his functions, as well as when personal interests negatively influence decisions, actions and the conduct of business.
A collaborator with a conflict of interest should refrain from passing judgment and taking decisions or actions, as this can damage the company’s performance, and can have legal and regulatory consequences.
It is the responsibility of all cbc employees to avoid conflicts of interest. Employees have to take the necessary measures to make sure that a conflict of interest does not arise.
Additionally, it is the responsibility of every cbc employee to evaluate if they confront a real or potential conflict of interest in the performance of their duties.
When a relationship does not comply with the policy, the person or people must immediate report this situation to their supervisors and the manager of the People and Management department by using the Form Declaration and consult about Conflicts of Interest, so that the pertinent evaluations can be done and actions taken. 79
COMPLAINT SYSTEM
GRI 205-2
Any collaborator or external person that has knowledge or suspects of a case of a breach of the Ethics Code has to inform his immediate superior or the People and Management Department, who have the responsibility to orient the collaborator so that he can report it through the Whistleblower Channel of the Company.
The complaints can be presented through e-mail, through the Whistleblower Channel or by using the internal and external phone numbers enabled for that purpose.
Anonymous complaints can be presented. Nevertheless, dialogue and trust will be promoted, so that the complainant may give his or her personal information. In any case, the necessary measures to evade negative consequences or retribution against the complainant will be taken.
Also, meanwhile an investigation is taking place all areas involved in the investigation will maintain strict confidentiality about the case.
cbc sanctions false complaints when the intention to harm is verified. Any action by the collaborators who have been investigated because of a complaint will be warned by the company that reprisals against co-workers, subordinates, clients, suppliers or any other person that the collaborator suspects made the complaint will not be allowed. Any reprisal against a complainant will be sanctioned with immediate dismissal. 80
CHANNEL USED COMPLAINTS GRAPH
49% 67 64 51% ACCUMULATED COMPLAINTS 48 Total cbc 44 Phone System 2016 2017 34 22 ANONYMOUS OR
IDENTIFIED COMPLAINT 17 8 7
49% 7 13 19 22 26 35 40 42 47 51%
Total cbc This graph represents the total complaints of all the companies that are part of cbc. The information is monthly except the last quarter since the results are presented on January 2017 to the Internal Audit Committee according to the Corporate Government Policy. Most of the complaints are from conflict of interest, noncompliance with the processes and management of the company’s resources. Anonymous Identified 81
COMPLIANCE POLICY GRI 205-2
This policy is directed to all affiliated operations and subsidiaries where cbc Free competition and anti-monopolies operates, as well as new operations and any business expansion, as well as any third person related to cbc, establishing the guidelines for compliance of internal cbc is committed to ensure the compliance to the laws and rules that regulate and external rules that regulated the development of cbc operations. competition and anti-monopoly practices. It is strictly prohibited to make any agreement with our competitors against this law.
cbc compliance rules We do not tolerate corrupt practices
cbc respects and complies with the laws and regulations of each country in Any corrupt practice by any of our partners, collaborators, suppliers or clients which it operates, and requires that its collaborators, suppliers and clients comply in the development of our labor and commercial relations will not be tolerated with the external and internal rules that apply to the operation. and will be denounced.
All internal rules are published on the intranet and are updated once a year. Environmental legislation The external rules are monitored in the related areas and communicated for its execution and compliance. Relevant laws and rules changes that affect the cbc complies the environmental laws. It is an obligation of all operations the business of the company must be monitored and published by the responsible design of policies and procedures that allow the compliance of these rules; this areas. includes the updating of processes and controls for its compliance whenever the environmental rules change. All cbc collaborators are obligated to comply with what is established in the Ethics Code as well as the internal and external rules. In no case shall the Financial information noncompliance of these rules and guidelines be justified. The suppliers of cbc have to comply with the Ethics Code; compliance with the Ethics Code should be Financial information and the operations results comply with the international monitored from the purchasing area. accounting standards and the requirements of local laws in each country. 82
ANTI-FRAUD AND ANTI-CORRUPTION POLICY
In cbc we aspire to be leader in our sector in the ethical performance of our business. We believe that ethics and success are complementary. To reach our vision of contributing to a better world, we base our performance in corporate values: dream big, we are owners, excellent people, integrity, sustainable management; we are passionate about what we do.
In 2017, we updated our Anti-Fraud and Anti-Corruption Policy with the advice of Citizenship Action (Acción Ciudadana), International Transparency Chapter in Guatemala. This policy aims to provide our collaborators, suppliers and public in general of a document that specifies our commitment with transparency, the fight against corruption in all its forms, including extortion and bribery, through acting with responsibility, ethics, transparency and respect.
The Anti-Fraud and Anti-Corruption Policy promotes an ethical culture of values that helps to prevent. Detect, investigate and remediate fraud and corruption events, and that guarantees transparency in the management through the Board of Directors and collaborators.
The Anti-Corruption Policy defines the limits where all cbc collaborators have to act according to the laws and internal policies. This policy is enunciative and not restrictive because it does not mention all circumstance to which a collaborator can be confronted, nevertheless, all collaborator must always act under cbc principles and values. 83
PUBLIC DISCLOSURE FRAUD RISK EVALUATION AND COMMITMENT
For cbc, ethics and transparency are pillars of its performance. Due diligence is carried out to avoid internal, external, mixed or accounting fraud. cbc makes public its commitment against corruption in its Ethics Code, its Anti-Fraud and Anti-Corruption Policy and in the consultation and complaint channels, broadcasting it cbc performs fraud risk evaluations, searching proactively to identify through training to all personnel, suppliers and the public in general through the web site and mitigate the organization vulnerabilities. It is the responsibility of www.cbc.co. the Compliance and Risks Unit (URC), together with the cluster directors and the directors of the Centers of Excellence to perform risk evaluations that allow to identify, document, manage and mitigate risks fraud. This evaluation is performed once a year.
The Ethics Committee investigates objectively and exhaustively all fraud elements reported thorough the Whistleblower Channel, and they are responsible of directing the cases to the competent instances according the event classification and considering the rules of every country 84
GENERAL RULES FOR THE GIVING OF DONATIONS, GIFTS, OR COURTESIES TO THIRD PARTIES. PRINCIPLE 10
Prohibitions: goods when they are oriented to benefit the community Contracts with public entities: and the established procedure is compiled and has the The Anti-Fraud and Anti-Corruption Policy establishes back-up documentation. All contracts that involve a public entity has to be submitted clearly that no donations, gifts or courtesies can be given previously to the approval of the Compliance Channel and to any government official whose entity has under his Product donation, especially water, can be done in case of the Legal Department, providing all relative information charge at that moment the management or permits, natural disasters to public entities responsible of helping in and the procedure used for it such as biddings, quotes, licenses or any other type of authorization that affects cbc those kinds of situations. The policy establishes the use of a direct purchasing and others and have to respect the laws in a direct or indirect way (for example, to family or friend Compliance Channel for the authorization of all donations. and rules of each country. of the official). Through this channel the applications are recorded and documentation is filed to prove the delivery of the goods It is not allowed to give a public official any type of in order to minimize any possibility of fraud or bribery. donation, gift or courtesy, tickets to events or invitations, when it is for the benefit of the official, his family or related Donations to Non-Governmental Organizations, people. International Organizations and other private entities:
The Anti-Fraud and Anti-Corruption Policy prohibits giving Donations to Non-Governmental Organizations, donations, gifts, courtesies, borrowing or rent furniture International Organizations and other private entities have and equipment, transportation media or any other type to comply several requisites, such as: of support to political parties, candidates in public charges and members of political parties in and direct or indirect Verify that it does not have any relation with officials or way. public entities; they have to have a social, community or humanitarian impact and be aligned with the development Donations for humanitarian purposes: objectives of cbc. Also, they have to have the back up of an agreement that specify the objectives and goals to reach Donations of the beverages that cbc produces can be with the donation. done for humanitarian purposes, as well as humanitarian 85
COMPLIANCE CHANNEL
The Compliance Channel is a tool that permits to verify the compliance of the requirements to grant donations, gifts and courtesies, as well as the compliance of the contract elaboration processes with public entities.
The compliance Channel is one of the controls that allow knowing and preventing the risks that can materialize for any transaction or activity as gifts, donations, conflicts of interest, contracts with officials and public entities, etc. This channel has to have the back up and follow up documentation.
The Compliance Channel procedure is oriented to confirm that all requests have all the required documentations and that the Anti-Fraud and Anti-Corruption Policy is compiled to prevent the occurrence of possible frauds, bribery or corruption.
All people that authorize donations, gifts or courtesies are obligated to use the Compliance Channel. 86
PEOPLE AND MANAGEMENT 87
Our dream is to be the area that delivers more value to cbc, being recognized by all our collaborators as a strategic ally to attract, retain, develop and recognize the talent by means of discipline, operational excellence and a highly motivated team. 88
PEOPLE AND MANAGEMENT PROCESSES
People and Management processes are oriented to the following objectives: • Incentivize the People and Management process to strive to be the best • Stimulate continuous improvement through execution excellence in the Objectives: processes routines in the area of People and Management • Create a health competence that inspires people to be the best in its area • Guarantee that all the People and Management team complies with the processes • Recognize sustainable excellence in means and results. execution in a standardized manner and in constant search of excellence to reach the results • Improve the results bringing the best practices known for each process
5 STRATEGIC PILLARS
ATTRACT DEVELOP RECOGNIZE RETAIN RETAIN
Exponentializing Search for Strengthening Intelligence Identify talents our talent excellence the heart of the team and e ciency
External Recruitment Organizational Management Processes Culture Engagement Technology 1. Trainee Programs Development 1. Excellence 1. PMO Engagement 1. Connect 2. Master in Business 1. Cbc University Processes 2. Wellness Program 2. Processes Administration Academy 2. Excellence Program 3. Remuneration Centralization Project (MBA) 2. RE definition of OPR (PEX) and Factory 4. Benefits 3. Delayering 3. Summer Interns 3. Successors Program Excellence Program 4. Assessments 4. Growth Project (PEF) 2.0 3. SW&G Belts 4. Goals (TSC) 89
TALENT DEVELOPMENT PRINCIPLE 6
Objective: Corporate Programs:
To place qualified and prepared people in vacant • Trainee: Develop young talents so that they can positions and to guarantee meritocracy, transparency start their professional careers in the company, in the processes and the possibility of growth to all preparing cbc for a sustainable development. collaborators. Among key competences that the programs search in candidates are: managerial and The recruitment and selection process is destined to negotiation ability, entrepreneurial vision, attract the best people to occupy the positions in the leadership capacity and advanced English. company. • Talent: Program destined to train people with It is a strategic process that has to anticipate to the profiles directed to a specific area of the company demand of vacancies, guaranteeing the less time to fill (commercial, logistics, people and management, the vacancies. finance, marketing and manufacture). Is a two months training program specific to the areas • Internal recruitment: The internal recruitment of destination. They can be people selected must always be a priority for all the positions that internally or externally. are in the Career “Trilha” of bands VII, VI, VI, IV, III and II. Only when the required profile is not available, • Internship Programs: Contribute to the formation the company can consider external recruitment. of young people allowing for a period of time All collaborators that wish to be candidates to fill to work in cbc. The program allows students to vacancies must have been at least six months in apply their knowledge in a work environment. their actual position. For management positions, The person that performs extraordinarily can be the collaborator should have been at least one considered in a selection process. year in cbc. • PCS Recruitment: Is the process destined to hire • External recruitment: The external hiring process people with disabilities. This process has flexibility must be followed exactly as the recruiting and in the vacancies profiles. personnel selection processes indicate. When outsourced, the company must be aligned and be empowered to select people according to the cbc profile. 90
EXAMPLES OF TRAINEES Young people have the opportunity to incorporate to cbc since they finish their university WITH MANAGEMENT AND education through the Trainee Program. Once they are incorporated, the go through a formation and knowledge process of nine months where they get to know all the areas DIRECTORIAL POSITIONS and decide the one they are more passionate about to initiate their professional career. As they strengthen their leadership, competences and results, they advance their career based on merits.
1. Estuardo Mazariegos 2001 – Ecuador Cluster Director 6. Raul Zibara 2008 – Corporate Affairs Manager 2. Karen Haro 2003 – Strategy and M&A Director 7. Rodrigo Cofiño 2015 – Mergers & Acquisitions Specialist 3. José Arquìmedes Saravia 1997 – Puerto Rico Cluster Director 8. José Morales 2005 – Primary Logistics and Planning Corporate Manager 4. Olga Amado 2012 – Innovation Key Accounts Manager 9. Rodrigo Cuellar 2008 – Trade Marketing Manager 5. Fernando Samayoa 2005 – Excellence and Development Manager 91
TECHNOLOGY PRINCIPLE 6
Success factors cover practically all People and Management processes in the cloud through Data Centers globally localized that allows the saving and management of all information.
This system allows users to have access on real time to the data base, applications and platforms of:
• Recruitment: It is a guide of all the phases of the selection process, easing the hiring of the best talents in a fast way.
• Onboarding: Helps to convert new hiring in compromised and motivated employees while easing the incorporation process of new talents.
• Learning: Improves the collaborators abilities, creating a knowledge culture with a flexible and open focus, providing a goals management mechanism.
• Performance & Goals: Improves continuously the evaluation process and increases the collaborators commitment.
• Compensation: Ensure the talents retention.
• Succession and Development: Helps to identify the talent and its successors to cover future need of the company. Analytic solutions in Success Factor.
• Workforce Analytics: Improves the decision making process helping the companies to find answers to key questions and providing orientation to help resolve them. 92
PRINCIPLE 6 GOALS PERFORMANCE
cbc Connect is a digital platform of management and interaction with cbc collaborators. It has 5 modules:
Goals: Module that administers the complete management of annual goals.
Performance: Module that administers the development evaluation through the nine-box grid platform. EMPLOYEE CENTRAL Employee Central: Module that administers the personnel and employment information of all of cbc collaborators.
Recruitment: Module that administers the process of recruitment and personnel selection for internal and external candidates.
Compensations: Module that allows managing the remuneration of all of cbc collaborators. RECRUITMENT COMPENSATIONS 93
EXCELLENCE PROGRAMS
GRI 404-2, PRINCIPLE 6
The Excellence Programs of Production and Operations and Services PEF and PEX are tools that can measure the performance of processes and key indicators that stimulate a continuous improvement through execution excellence, in addition to identify the best practices to then recognize and reward the best.
In the seventh cycle of the most important recognition program of our company, 11 plants and 68 agencies were evaluated in Guatemala, El Salvador, Honduras, Nicaragua, Puerto Rico, Jamaica, Ecuador and Peru.
During the 2017 Workshops, the plants and agencies with the best results during 2016 were recognized. The prize for first place in Factory Excellence was Cuyotenango in Guatemala and the second place was the plant of Machachi in Ecuador. The most stars were concentrated in the agencies of El Salvador, Honduras and Nicaragua, demonstrating that no dream is too big when we work with our hearts to make it a reality.
The Excellence programs evaluate, orient and motivate collaborators to comply with processes, measure performance, reach results, while long term sustainability is given to the operations.
The evaluations are performed by trained valuators to realize an objective process based on evidence. The teams of each plant and agency guarantee monthly self- evaluations, documenting the results, and the valuators make two visits per year, in the months of August and January, verifying and certifying results.
The winners of the Excellence Program in 2017 will be announces in the Annual Convention on March 2018. The winners will receive public recognition and a bonus for all the collaborators of the winning plants and agencies. 94
PEX AND PEF
The Excellence Operations and Service Programs PEX (Excellence Practices) and PED (Factory Excellence Practices) are the tools that allow measuring the processes and indicators that stimulate the continuous improvement through excellent execution of the routines and also to identify the best practices to then recognized and reward the best. 95
PEOPLE CYCLE GRI 404-3
Objective: Evaluate in an organized and objective manner all collaborators to identify future leaders and company successors. The pipeline of succession or career plan is a unique opportunity to define the trajectory, formation and development of the collaborator.
People Cycle: Process in which all collaborators of the company are evaluated through knowledge and results mapping according to the meritocracy model.
Annual People Cycle: The people cycle is performed all year through the analysis of the development of last year, the establishment of objectives and the development in the current year. The cycle is composed by an evaluation, the identification of a career plan, feedback and coaching from an immediate superior and the preparation of the collaborator based on and individual development plan.
Competence Evaluation: 360 Degrees Evaluation: Is the collaborator evaluation that is performed by its immediate superior, its colleagues, internal clients and direct reports. It is complemented by a self-evaluation.
270 Degrees Evaluation: Is the collaborator evaluation performed by its immediate superior, its colleagues and internal clients.
Colleagues: It refers to the collaborators that are in contact with the evaluated person and that have similar functions and hierarchy.
Direct reports: People that report directly to the evaluated person.
Self-Evaluation: Is the evaluation performed by itself of the competences in the company.
These evaluations are made confidentially and with the support of an external company with international prestige.
The collaborators with low performance have a six months period to recuperate, a period in which they will be coached by its immediate superior and receive training to reinforce the competences that need to be reinforced. 96
PEOPLE CYCLE AND OPR
Our people cycle has 6 steps in which we identify growth opportunities for all leaders and future successors of cbc. Unfolding of goals 1
Competencies evaluation 2 3 Meet People
Half-yearly feedback Individual Development 4 5 Plan Follow Up
Feedback and closing of 6 goals 97
CAREER PLAN
GRI 404-2
They are various career opportunities at cbc. They are not all the same. Each collaborator has different strengths and development opportunities that allow growing in different ways.
The career plan is based on a meritocracy system. 98
EXAMPLE OF A SUCCESSFUL CARREER PLAN
Ziad entered the company 10 years ago as Beer Regional Director for Guatemala and had the responsibility of launching and introducing Brahva Beer in the Guatemalan market. Then he moved to the Commercial Director position, being responsible of the entire portfolio in the metropolitan area and the eastern part of the country.
Due to its excellent results and leadership, Ziad was named Guatemala Commercial Director, granting him, the responsibility of the whole countries one of the most important in the cbc system. Ziad results and commitment allowed him to assume the Cluster Director of Central America and Jamaica. In that position he achieved important results in the market development of all countries.
Because of his trajectory, results, people development and specially for being a leader that represents the values of the company, Ziad assumed the cbc CEO position on November 2017.
“cbc is a company of people that have big dreams and that works with passion to reach them. All collaborators have the opportunity to develop their talent and, based on merits, to undertake its career plan”.
Ziad Nahas CEO cbc 99
RECOGNITION
GRI 404-2
Objective: Collaborator of the Month:
Standardize the execution of recognition for all • Collaborator of the Month – Sales: is the collaborators. recognition granted to the best sales person of the agencies according to the sales ranking of Development of Activities: The management of each one of them. company`s recognition involves specific actions to grant special merit to outstanding collaborators in • Collaborator of the Month – Operations: is the certain accomplishments or achievements in the recognition granted to the collaborator that has company. The standard recognitions are: excelled in his performance according to the ranking of every warehouse. Trajectory Honor: Once a year, People and Management organizes a • Collaborator of the Month – Manufacturing: is special event where it recognizes all collaborators that the recognition granted to the collaborator that have been part of the cbc family for more than 10 has excelled in his performance according to the years. In this celebration the spouses participate as a ranking of the plant production indicators. way to recognize the support that the family gives to the labor life of the collaborators. All collaborator`s recognition are public and are placed in the information bulletin board. New Family Members: To give a special recognition to the new personnel of • Conquerors: A conqueror is a cbc collaborator the company through actions and activities designed that travels to work from one operation to the to introduce them to all collaborators, facilitating a other to transmit cbc values and principles. It is better integration to the team. characterized for being a big dreamer with spirit of service and that arrives to direct and execute great plans.
• Ambassadors: Is a team member of cbc that dreams of reaching goals that seem impossible and does not limit to dream and is focused on achieving sustainable results. An ambassador can be of any hierarchy inside the organization. 100
cbc UNIVERSITY GRI 404-1, 404-2, PRINCIPLE 6
The objective of cbc University is to train the collaborators so they can efficiently execute the functions of their positions. It contributes to increase the technical abilities and/or behaviors needed to develop a career plan inside the company and to stimulate a better comprehension of the business. Through the cbc University, collaborators have access to high quality courses with up to date contents and with a methodology that allows a better formation, the development of knowledge and abilities and the opportunity to follow a career inside the company.
Training in the function The process of training in the function contributes to increase the abilities and knowledge of the collaborators in their positions and so reduce the breaches between their technological knowledge and the required behaviors in the position.
Development training It is designed to train and develop collaborators that have been identified in the Annual People Meeting with the growth potential to take leadership positions in the company.
Leaders’ factory It is a formation program for leaders that includes subjects of leadership, coaching, change management to develop strategies and form better leaders.
PDP: Professional Development Program It is a program to develop collaborators that can assume a superior charge. They receive the knowledge they require and have the opportunity to get more knowledge in other areas of the company.
PDS: Successors Development Program Is a program to prepare successors of second lines to assume a superior position. They provide the knowledge required for a better understanding of other areas of the company. 101 cbc UNIVERSITY GRI 404-1, 404-2 AND PRINCIPLE 6
The three pillars that sustain cbc University are: • Functionality • Method • Leadership
The University is composed of: • Deans • Train the Trainers • Technological Platform
All cbc collaborators can participate in different courses of the cbc University. MASTER AND BUSINESS AT cbc
GRI 404-1, 404-2 AND PRINCIPLE 6
We created MBC with the objective to design a program specifically for cbc. 50% of the content is develop by our own Directors (Deans of the cbc University) based on the main processes and strategies of the company, and the other 50% is complemented by content of INCAE, which allows a balance between our processes and external benchmark.
The objective is to develop our own talents in the critical areas of cbc to bring a systematic and integral vision of our business, with the purpose to strengthen the decision making and the strategic vision.
The selection is performed in the following way:
• The Director of the Excellence Center and Operations proposes the candidate • It has to be a person with high competences and results and with a career and succession plan 102 OBJECTIVE: GRI 404-1, 404-2, PRINCIPLE 6
Develop our talents in the critical areas of cbc to give them a systematic and integral vision of our business in order to strengthen the decision making at medium term and that his results reflect a more effective and strategic execution. 21% of the participants are women.
To reach the objective, a strategic alliance with INCAE, an internationally recognized business school, was done.
first promotion 103
ENGAGEMENT GRI 404-2
A satisfaction and organizational culture identification survey is performed annually among the collaborators. In the last years, the survey has been performed by the Hay Group, guaranteeing the confidentiality and proper interpretation of the results.
To guarantee an adequate management of the results and to develop an action plan, each of the areas carries out a PMO with the Project Manager or Project Management methodology.
The steps after the engagement survey are:
Results Broadcasting: It is guaranteed that all collaborators get to know the results of the survey in all the business units. To achieve this, a splitting process is carried out starting on the first line.
Also, a brainstorming session is performed with the participation of all collaborators to improve the results. 104
ENGAGEMENT RESULTS
Build an Action Plan:
The People and Management area elaborates an Action Plan from the Brainstorming session and in a way that guarantees that all opinions are taken into account and that there is a follow up to the continues improvement of the environment and health of the organization. 85% cbc ENGAGEMENT AVERAGE Communication and follow up of the Action Plans:
The Action Plan is communicated through the PMO and a calendar of activities and actions is followed up monthly. 89 89 90 PMO Engagement Management: 87 86 The PMO has the objective of implementing a routine to 85 follow up action plans, but also is an opportunity for the different areas to share best practices. 83 83
Engagement Committee: 70
With the purpose of improving the results of the engagement survey, taking into consideration the active participation of all collaborators, there is a Committee in which all areas of the company are represented. It is also a permanent communication link of the People and Manufacture Commercial Finance G&G Marketing Corporation Purchasing Logistics Audit Management area with other areas. & Operations
The general average of cbc takes into consideration the number of collaborators in each country. 105 INTERNAL COMMUNICATION
Objective: • Newspaper: Its objective is to inform and communicate the most relevant local and regional news to our collaborators to keep them informed. Through the newspaper, our culture of corporate communication is complied, reinforcing To transmit our business values and guarantee that we cbc`s commitment. all live the cbc culture, having transparent, agile and effective communication with all collaborators to have • The newspaper highlights the most relevant of the business happening and incentivizes the reading of our good a motivated, happy, winning and productive team. practices, events and news. It is printed quarterly and delivered to the agencies and plants.
Communication Characteristics: • Regional Magazine – DRINK LIFE: Drink Life is the communication channel that gives life to one of our traditional communication channels: THE MAGAZINE. Its objective is to publish the news, goals, programs, expansion, new • Clear, relevant, attractive and addressed. portfolio, events and important people of cbc. The brand identity that our company has deserves a printed material • Fast, simple and dynamic, avoiding information that highlights corporate information to a regional level and that is valid through time to be consulted in a business gaps. hemeroteca that has been enriched with each edition. It is prepared by Corporate Internal Communications and sent • “Face to face” communication in order to encourage to every operation to be distributed among the collaborators. two way communication between the leaders of our organization and their teams to obtains suggestions, criticism and evaluation from our collaborators.
Internal communication: Is the process that guarantees the flow of information to any member of the cbc team, which brings more commitment with our objectives and guidelines, aligned with our culture. Communication must be clear to follow the cbc image guidelines, where all feel comfortable to intervene, participate, agree or disagree and in this way ensure an excellent work environment.
Communication routes: The unit must guarantee the following channels of communication:
Communication Media:
• Bulletin Boards: cbc bulletin boards are used to divulge information about subjects, news, actions, market news, institutional campaigns, benefits and other information that People and Management consider necessary to broadcast.
• Intranet: directed to all cbc collaborators that have a user in the net so that they can access information of its area and the company on one click. 106
DIALOGUE GRI 404-2
Dialogue is the monthly meeting performed with the objective that the CEOs, together with special guests, can transmit to the whole organization culture messages, results, news and general guidelines. Is the most direct communication with the collaborators. Using technology we are capable of reuniting 9 countries at the same time.
This meeting is directed by our Executive President with the participation of the CEO and the People and Management Director.
It is done the last week of each month and has the goal to communicate both ways, openly and transparently, so that everybody at cbc is aware of the business results. 107
FREEDOM OF ASSOCIATION AND COLLECTIVE NEGOTIATION
GRI 102-41 PRINCIPLE 3 AND 6
cbc respects freedom of association, syndical freedom and the liberty of collective negotiation as fundamental rights of all collaborators that have been proclaimed on Article 23 of the Universal Declaration of Human Rights and the International Labor Organization Agreements.
In cbc operations there are 10 union organizations with which we develop dialogue, agreements and collective negotiation according to what is established by the local laws.
The countries with union organizations are Guatemala (1), Honduras (1), Nicaragua (2), Peru (2), Jamaica (2) and Puerto Rico (2).
PERCENTAGE OF TRADE UNIONS
Guatemala Perú Puerto Rico Jamaica National Union of cbc Peru workers Solidary Movement Union National Union of cbc Peru workers Union of Workers of the Mariposa . (SINTRACBCP) (SINTRACBCP) Bottling Company (SITRAEMSA) 55% 3.23% 58.34% 0.52% Tranquilistas Union Unique Union of cbc Peru Workers Unique Union of cbc Peru Workers (SUNTRACBC) 15% (SUNTRACBC) 20.77% 7.06% Honduras Nicaragua
Union of workers of the Beverage Democratic Union of ENSA Workers Industry (STIBYS) (SIDETRENSA) 58.3% 6.4% Union of ENSA Workers (SITENSA) 8.3% 108
TURN OVER MANAGEMENT GRI 401-1 cbc HISTORICAL TURN OVER Staff rotation is the number of people that leave the company against the total number of people in the company for a determined period of time.
To understand the causes of retirement, voluntary or not, cbc analyzes the rotation in the operations in all countries and in each area. It also performs exit surveys and consultations with the area leaders to understand objectively the causes of leaving.
All information gathered in the interviews, together with complementary information that the company has based on the satisfaction surveys and culture adhesion, allows taking the necessary measurement to strengthen talent retention strategies and to improve the recruiting processes if necessary. 109
OCCUPATIONAL HEALTH AND SAFETY 110 HEALTH AND SAFETY POLICY GRI 403-1
The Safety and Health Policy establishes a prevention format that can be reproduced and that complies with all and awareness program that allows preventing and communication norms. minimizing labor risks of the activities performed at Guarantee the compliance of the monitoring policy of the cbc, through the implementation of rules that promote implementation of the security strategy 2020. hygiene and security in all cbc facilities. This policy is directed to al operations, affiliations and subsidiaries. Local People and Management Manager (plant, country or cluster): The policy covers all operations of cbc, including all areas Guarantee that the Global Policy of Health and Security is of manufacturing and logistics, from the purchasing of included as part of the Inycie of the company. raw materials to the storage of product in the agencies. Country SSO Responsible: cbc is committed to identify and control labor risks linked Guarantee that the Global Policy of Health and Security to the development of the operations, guaranteeing is included in the annual training plan that covers all the labor conditions that are safe and healthy to execute personnel of the plants and agencies, including outsourced the activities through competent personnel, complying personnel. with the legal requirements and other requirements of cbc in health and occupational security matters, with Manager Service Applicant: the purpose of protecting the health and life of our Guarantee that the contractors comply with the safe workers, shareholders, contractors, suppliers and visitors. management contractors’ procedure.
Roles and responsibilities: Local Purchasing: Plant Managers / Operations and Services Managers / Prequalify that the contractors and guarantee its Commercial Managers: proficiency.
Commercial Managers: Comply with the safety management contractors’ Promote the commitment and policy compliance, procedure. internal procedures, legal requirements and others established in each country. Health and Safety Regional Manager: Ensure the compliance of the Health and Safety Policy, Guarantee that the Health and Security Policy is exhibited direct the SSO strategy and ensure the continuous and visible in the main access of the production plants improvement of SSO. and agencies.
Directors / CoEs VPs: Promote the commitment and compliance of the policies, internal procedures, legal requirements and other established in each country.
People and Management Director: Guarantee that the policy is physically signed in a 111
OCCUPATIONAL HEALTH AND SAFETY
PRINCIPLE 6
In the last 4 years, cbc has evolved in occupational health and safety, adopting a safety culture in all countries where it operates. A short and medium term strategy was developed based on international standards and company benchmarking with leaders in occupational health and safety. A result of this evolution is the reduction of 60% of labor accidents. Our factories and agencies are safe and we are in the top 3 of PepsiCo bottlers in terms of health, security and environment.
The safety culture was created by raising awareness among the collaborators and contractors by means of a campaign of safe attitude, specific trainings and health and security manuals for the manufacturing, commercial, operations and services and administration areas and by implementing the Health and Safety Pillar with procedures and formats that guarantee the excellence in the processes, minimizing risks. Key to the success has been the leadership showed by each supervisor, coordinator, chief, manager and high management that are convinced the safety is first at all times.
Each day, our collaborators and contractors develop activities with a safe attitude and give example by respecting the rules and promoting safety culture inside and outside of cbc.
Mario Reichert Safety and Security Corporate Manager 112
OCCUPATIONAL HEALTH AND SAFETY GRI 403-1, PRINCIPLE 1 AND 2
The policy is designed to guarantee safe and healthy all the applicable legal requirements are identified. Induction and training courses will be given periodically operations for all collaborators, contractors, visitors and That matrix is the guide to comply with measures and to guarantee that the collaborators know and apply the others, working with the highest standards of health actions that have to be implemented in each operation. regulations. and safety, complying with all legal requirements in each country where cbc operates. International standards Security Level:
The objectives are: The rules and international standards that are reference Is the tool used to measure the safety level of the • Identify possible dangers and risks to adopt for the measures adopted in each operation are the production plants and the distribution agencies, based corresponding measures following: on the compliance of inspections and trainings and • Work with safety attitude driven by corrective actions in health and security • Comply with the legal requirements in occupational • National Fire Protection Association matters in order to improve the safety level of the health and safety • National Institute for Occupational Safety and facilities. The Security Level indicators must be in sight • Provide safe and healthy places Health in the production plants and agencies as part of the • Guarantee the health conservation • Occupational Safety and Health Association improvement commitment. • American National Standards Institute Local regulations and international standards Critical Equipment Inspections: Basic Safety Requirements The compliance of local norms is essential and the The purpose of these inspections is to establish the unsafe conditions and actions have to be identified to To give the basic guidelines of safety to the collaborators compliance of the requirements and good practices for take corrective measures immediately by establishing and contractors that have to develop activities in the the preventive maintenance and the regular inspections processes, facilities and trained personnel that complies facilities of the different business units, guaranteeing to the critical equipment to ensure that the operations with the requisites and international standards of health effective control to minimize risks and guarantee the can be performed in a reliable way. and safety. compliance of occupational health and safety standards.
Safety Committees Occupational Health and Safety Infrastructure
Each of the work areas has responsible committees Guarantee that the Infrastructure Manual is compiled that promote and manage the prevention of risks in and that the safety and environmental requirements the different facilities. The committees are integrated are adequate. according to the legal requirements of each country and are enabled when necessary. Internal Safety Regulation
Legal Requirements Matrix Each of the operations has to have an internal health and safety regulation that includes all the collaborators The Health and Safety Legal Matrix is a format in which obligations to guarantee a healthy and safe operation. 113
Report of unsafe acts and conditions
Inspections are performed regularly to detect and report the conditions and acts that may be unsafe in the different work areas to take immediate corrective actions.
The corrective actions are adopted in base of:
• Routinely internal inspections and revisions • Internal and external audits • Occupational health and safety inspections • Periodical revisions of systems and programs • Incident investigations • Emergencies • Incidents • Accidents
The Occupational Health and Safety Program includes the training of the collaborators that work in cbc facilities, such as the case of the pre sellers that move by other means to develop their functions outside of the facilities of the cbc business units. 114 ACCIDENTS AND INCIDENTS STATISTICS GRI 403-2 AND 403-3
Evolution of lost work time 203 Dream Reduction 2020 40% 0 accidents
122
Reactive Proactive
Production Logistics Commercial
cbc Total lost work time – Accidents 115
SUPPLIERS 116
PURCHASING POLICY
GRI 102-9, PRINCIPLE 10
The purchasing policy establishes guidelines and The Purchasing Committee deals with subjects related to best circumstances with the manufacturers, distributors responsibilities for the process of acquiring goods and purchasing events of major economic impact in the cbc and suppliers in general; this in order to optimize cost services in a way that guarantees transparency and an operations. The revision of the events of major economic effectiveness and ensure competitive advantage and optimal and ethical management of the purchasing impact will be determined in the Committee, supported by leadership in the purchases. process of cbc. an analysis of the Kraljic matrix. The general conditions of the negotiations that are written The purchasing policy seeks to ensure that cbc obtains Independence in the contracts must clearly reflect the commitment the best value while purchasing goods and services in an between both parts and must respect the principles in the efficient, transparent and ethical way, thereby contributing The Purchasing Area must be independent of the areas Ethics Code and the Purchasing Policy of cbc. to the profitability and competitiveness of the company. that use suppliers, contractors and distributors, to ensure the control of the supply chain in terms of quality, prices All contracts subscribed with third parties must be validated Purchasing Area and transparency. by the Legal Area. No legal responsibility may be assumed for contracts lacking the approval of the cbc Legal Area. The Purchasing Area refers to the Purchasing and Supplies Contracting and Procurement Department, which has different areas and sub-divisions, Purchasing Order which include: purchasing, logistics and supply of direct For any contracting or procurement only suppliers related and indirect materials, goods and services. to the goods or services category are to be included in All acquisitions must be formalized with a purchasing the bidding process. That means that the quoted good or order generated by the SAP system. This will be the only The Purchasing Area promotes innovation, growth and the service must be referenced in the economic activity that document authorized to make a payment to suppliers, strengthening of long-term relationship with our certified the supplier declares in the merchant record. which must be previously certified by the Purchasing Area. suppliers. The Purchasing Area is not obligated to emit a purchase File, Shelter and Maintenance of the Information Purchasing Committee order for events if it is detected that they do not comply with the support necessary to guarantee compliance with The Purchasing Manager is responsible for filing and The Purchasing Committee has the direct responsibility cbc policy and the established purchasing process. protecting all supporting documents of the purchases at of ensuring the application of the purchasing policy and least to the end of the fiscal prescription, while the process guidelines and taking care that these practices are in Gifts Prohibition is still open or until the contract expiration. compliance with cbc policy. Accepting gifts or favors from clients or suppliers is The agenda of the Purchasing Committee is reviewed forbidden on the grounds that it may be illegal and yearly. It includes the following points: revision of the may also compromise the objective decision making as Purchasing Policy, strategic negotiations, advances in established in the cbc Ethics Code. the process of previewed purchase variations, conflicts of interest (suppliers/employees), decisions of financial Negotiations and Contracts coverage and all those factors which may imply strategic decisions for the company. The areas and people authorized to purchase must see to it that any negotiation has been made under the 117
OPERATIONAL PURCHASING COMMITTEE
GRI 102-9, PRINCIPLE 10
The Purchasing Committee is integrated by the President of the Board of Directors, the Executive President, the Distribution CEO, the Finance VP, the Purchasing Director, the Corporate Audit Director and the Corporate Strategy Director. The Committee meets quarterly.
The Purchasing Committee has the responsibility of applying the Purchasing Policy and must orient and ensure policy compliance.
The Purchasing Committee deals with major economic impact events in the cbc operations.
JORGE SANTOS PURCHASING DIRECTOR 118 ETHICS CODE IN BASIC PURCHASING PURCHASING PRINCIPLES GRI 102-9, PRINCIPLE 10 GRI 102-9, PRINCIPLE 10
All people who perform purchasing functions for the affiliated operations and • Transparency: Maintain all documents and registers in order. subsidiaries, whether from the Purchasing Area or a different area, should always act according to what is established in the Ethics Code and according to the • Confidentiality: Do not divulge cbc information. This applies to collaborators Confidentiality Contract. and suppliers.
All officials who execute purchasing functions must ensure that they have • Equal Opportunities: Objective purchasing processes and suppliers selection. communicated the Ethics Code and the Purchasing Policy to the suppliers and further ensure that they sign a commitment to comply with it. • Integrity and Professional Ethics: Avoid conflicts of interest and any illicit payment. The relationship of cbc with its suppliers is based on integrity, confidentiality, honesty and transparency, evidenced in the signed Confidentiality Contract. All areas of cbc must act with integrity with the suppliers, respecting the commitments established in the contract established. LOCAL SUPPLIERS The purchasing process must assure the quality of the good or service and guarantee the compliance of the Ethics Code and the Purchasing Policy in a sustainable and DEVELOPMENT standardized way for all cbc entities. GRI 102-9, PRINCIPLE 10
SUPPLIERS SELECTION GRI 102-9, PRINCIPLE 10 cbc has developed a methodology to cultivate alternate suppliers. These providers may supply standard or generic components of industrial equipment to accomplish the following:
• Optimize the use of resources Only the Purchasing Area can register suppliers and selection in this regard is its • Ensure reliability of the pieces and components responsibility. The Purchasing Area directly performs the search of the main suppliers; • Establish selection criteria it is not done by an intermediate for the quotation process, except in those cases • Establish technical analysis criteria where the supplier is the local representative of the manufacturer or an exclusive • Establish management criteria distributor. • Cost reduction All suppliers have to be previously selected, evaluated and certified; only then will can This process is developed respecting the rights to intellectual property, industrial they be registered as suppliers. property and the applicable laws and rules. 119 SUPPLIERS´ CERTIFICATION PRINCIPLE 10
The objective is to present a general procedure to document the required steps for the execution of the activities of certifying suppliers of goods and services of the direct and indirect categories, according to the cbc policy.
Pillars of the suppliers’ certification
Sedex Members Ethical Trade Audit (SMETA)
The Purchasing Department started in 2017 in using the methodology of SMETA (Sedex Members Ethical Trade Audit), certified by SGS, which works with SEDEX. This audit is made with all suppliers according to what is established in the impact matrix. For example, the logistics suppliers and the suppliers that supply and provide maintenance to the refrigeration equipment. This audit is a control procedure of the compliance of the suppliers.
SGS has broad participation in the sustainability audit, complying with the requirement of various codes and standards. SGS is a founder member of the associated audit group of SEDEX.
SGS
As required by cbc, SGS supports the verification, analysis and certification to determine that the products, processes, systems and services comply with the national and international standards and regulations defined by the client through the certification.
Financial, economic and legal audit (COFACE)
COFACE – Financial / Legal Certification.
The reports of COFACE allow obtaining information about the economic and financial situation of the suppliers, which permits to know and prevent risks.
This certification is focused in offering evaluation services and information recompilation (Example: Supplier Creation).
The established cbc plan states that the high impact suppliers must be addressed first, because of the amount of spending or the importance of the service or product to deliver. 120
SUPPLIERS´ RISKS TP VENDORS IDENTIFICATION PROTOCOL GRI 205-1 PRINCIPLE 10
The TP Vendors are suppliers that have contact with authorities and public institutions. Risk at the process level To prevent risks of bribery, cbc will implement in 2018 a Due Diligence process with those suppliers with the support of an external supplier specialized in these kind of The risk matrix at the process level was elaborated with the purpose of supporting processes. the critical business processes. The matrix includes important elements as the identification of risks, the area of the risk and the control activity that will mitigate The Due Diligence process has two parts: questionnaires (internal and external) and that risk. environmental research.
Internal Questionnaire: This questionnaire is completed by the internal user who will be the direct beneficiary ANTI-CORRUPTION CLAUSE of the suppliers. The content of the questions is related with the nature of the service FOR SUPPLIERS to be bid. GRI 205-1 External Questionnaire: This questionnaire is completed by the supplier, who must respond to a series of questions related with the compliance of laws, regulations and rules that apply, According to our Anti-Fraud and Anti-Corruption Policy and the principles established the history of the company, the name of the shareholders and owners, etc. This in the Ethics Code and the Purchasing Policy, it is an indispensable requirement for a information is validated by an external company specialized in the development of company or person that is a supplier of cbc to know the policies and the Ethics Code an evaluation process. and comply with its principles. If the companies provide services or goods to cbc through a third party or sub- Also, in the contracts that cbc makes, there is an anti-corruption clause where both contractors, they should also give all the information of those companies. parts declare that they comply with the highest standards of business ethic and integrity and also observe all national or international legal dispositions and rules, according to the activities they develop. Also those applicable in matters or crime prevention, bribery or corruption in any way. 121
LABOR COMPLIANCE REQUIREMENTS MANUAL FOR SERVICES SUPPLIERS OF CBC
GRI 205-1 PRINCIPLE 1 AND 2
To guarantee the compliance of labor standards by the suppliers of cbc, a Labor Compliance Requirements Manual was elaborated. This manual is a tool that transmits this knowledge to the providers of services and goods to facilitate the alignment that ensures the respect to human and labor rights, as well as the rights and obligations established in the different agreements of the International Labour Organization that have been ratified in each country where cbc operates.
The Manual provides a general guide for the compliance of the labor requirements in each country, as well as the labor rights of each country. The Manual is a guide for the services suppliers about the general principles and regulations that they must comply in terms of labor and occupational safety matters, for an adequate management of the human resources. 122
AUDIT OF COMPLIANCE OF LABOR LAWS TO LOGISTICS OPERATORS
GRI 205-1, PRINCIPLE 4 AND 5
cbc is a socially responsible company that periodically performs legal labor audits in all its operations to verify the compliance with the laws of every country.
The base line to measure the compliance of labor aspects in each country is formulated through local experts in Labor Law, external to the company, who present a list of legal requirements to verify. Then the experts report the results.
In 2017, cbc started audits in three logistics operators in Guatemala. These operators agglutinate fourteen companies that provide services to cbc. This audit is made to verify the compliance of the dispositions of the labor laws.
The audit was made on all the required labor documentation according to the Work Code and other legal dispositions, making a random review of the records of the active workers. 123 DOCUMENTS REVISED BY THE AUDIT AUDIT`S GENERAL GRI 412-1, PRINCIPIO 4 Y 5 CONCLUSIONS GRI 412-1, PRINCIPIO 4 Y 5
In the audit performed to the logistics operators in Guatemala, it was verified At the legal audit performed, it was evidenced that the companies comply with that all entities complied with the subscription and register of the individual their employer obligations regulated by the Work Code and the labor laws. These work contracts in the Labor Ministry. revisions will be performed at least every two years in the countries in which cbc hires logistics operators, to guarantee that they continue to comply with the • All work records were revised to verify that they comply with the applicable labor laws. documentation required by the law. The audits showed that there is no child work in the logistics operators that work • The payment of employment benefits was verified, according to the laws of for cbc. Guatemala, such as the payment or ordinary salaries, extraordinary salaries, Christmas bonus, vacations, among others.
• Vacations: Of the verified sample, it was determined that the companies do comply in giving each worker the days of vacations required by law. This was evidenced by the vacation slips signed by each worker.
• It was verified that the termination of contracts was done according to the law.
• Internal Work Regulations: it was verified that the companies have Internal Work Regulations.
• Payments to the Guatemalan Social Security Institute: The payrolls and the payment receipts were revised, corresponding to the months of April, May and June 107, verifying that each company does comply with the payment of the employer fees to the Guatemalan Social Security Institute.
• All contractors, suppliers and other parties that provide services must accept in writing their commitment to comply with the Ethics Code and the Anti-Corruption Policy. 124
ANTI-CORRUPTION CLAUSES SUPPLIERS` AUDITS IN SUPPLIERS` CONTRACTS GRI 205-1, 412-1, PRINCIPLE 4 AND 5
GRI 205-1, PRINCIPLE 4 AND 5 Through a specific clause, the contractors authorize cbc to audit and revise the compliance of the suppliers with the labor laws and others that may be considered pertinent, in a direct way or through specialized third parties. cbc The Anti-Corruption and Anti-Fraud Policy and the Ethics Code prohibit may verify the compliance with the laws and the principles established in the bribery, which is why all cbc contracts contain the following clauses about the Ethics Code. compliance of integrity standards: “The suppliers assume the following commitments: (i) keep the guarantees and “cbc complies with the highest integrity and ethical standards and also observes the contracts declarations safe, and (ii) answer all oral or written questionnaires all national legal dispositions and requirement applicable in the prevention of that cbc gives from time to time and enable the interviews to its employees at bribery and corruption and also requires it from its suppliers”. reasonable hours.” The Contractor must declare the following: CODE OF ETHIC “That he has not offered, paid, delivered or promised to pay or authorize a payment of money in a direct or indirect way, to give gifts or any other object or COMPLIANCE valuable to obtain or retain in an inadequate way any business or commercial advantage to induce a person to perform inadequate functions that may result GRI 205-1 PRINCIPLE 4 AND 5 in violations to the laws of the republic of Guatemala”.
And that he complies with the laws of its country, specially the laws that All suppliers have the obligation to adhere to the cbc Ethics Code and comply consider bribery, corruption and money laundering. with its principles. Among them is the respect of human rights, the rejection to child work by making sure they don`t hire minors and to ensure the compliance “The supplier is obliged to the strict fulfillment of the country`s laws and of any with the laws. other country where they have any type of activity”. “Hire the necessary workforce to perform the services, making sure not to hire any minors. Comply with the safety rules and regulations, occupational health and hygiene and harmlessness in the services to provide inside cbc facilities. To comply with all the cbc Code of Ethic dispositions which he declares to have in his power and know …” 125
RISK MANAGEMENT 126 RISK MANAGEMENT POLICY GRI 102-11
The Risk Management Policy establishes the rules to Risks treatment: All of cbc`s different areas are manage risks in the different business units and processes responsible or preparing actions to mitigate the risks of cbc, considering the internal and external factors that according to their qualification. may impede reaching the objectives of the organization. Follow up and report of the risk management: Control Activity: The policies and procedures that help to register and keep up to date all the risks and its management to make sure that the answer to risk is qualifications every time a new event presents. executed timely and appropriately. All new collaborators that are in charge of a key process Risk is defined as the possibility of an event with negative must receive training about risk management when impact in the achievement of the objectives. they receive their training.
Risks with major levels of expositions must be considered Risks classification: a priority in the risk management, bowing to growth, Considering the principles and the type of industry in competitiveness, business continuity and the compliance which cbc operates, the risks are classified as follows: with laws and regulations. • Strategic The Risk Management Policy has to be integrated with • Financial all other policies and processes of the organization. All • Operational processes have to be structured considering the policy • Compliance and risks that can affect the accomplishment of goals in • Technological each area and of the organization. • Business continuity • Reputation The risks administration has to be periodic, timely and • Information security systematic and has to be aligned with the objectives of • Environment the organization.
The risk management process of cbc must include the following steps:
Communication: the policies and producers of the risks management have to be broadcasted at all levels of the organization at least once a year and have to be available on the intranet of the organization.
Evaluation: once the risks have been identified, an evaluation of the impact has to be performed as well as an evaluation of the probability of the risk to happen again. 127
STRATEGIC RISKS PLAN GRI 102-11
The Strategic Risks Plan is according to the demands of the business. This plan is presented annually by the Risks and Bonds Committee. The Risks Plan is developed RISKS EXECUTIVE COMMITTEE with the management methodology through all the business cycles and includes the critical processes of the organization. GRI 102-11
RISKS MANAGEMENT The Risks Executive Committee is responsible of managing cbc risks before the company and groups of interest, together with the responsible executives in each METHODOLOGY area of the organization. GRI 102-11 In the case of acquiring new operations, the Corporate Risks Unit will realize an initial evaluation to identify possibly fraud risks. For the elaboration of the Corporate Risks Management Methodology, the highest international standards and best practices were used. This methodology was complemented with systematic tools that allow its automation. ANSWER TO RISKS This methodology has 5 phases that were developed at a process level for best comprehension, being: GRI 102-11
• Phase 1: Risks and controls identification Once the relevant risks are identified, the manager of the area has to define in • Phase 2: Risks and controls analysis and valorization which way the risk will be mitigated. All answers have to take the risk between the • Phase 3: Answer to risk tolerance limits. • Phase 4: Information and communication of the status of the risk management • Phase 5: Monitoring. 128
BUSINESS CONTINUITY POLICY GRI 102-11
The Business Continuity Policy ensures that the company Each operation and area that is part of the different plans has plans and procedures to safeguard human lives and to of the continuity program is responsible of maintaining facilitate the timely recuperation of the critical processes of and updating the Recuperation Plan. When the plan the company if an interruption to the business is caused by is implemented, it will include the procedures and an unexpected event. agreements that ensure the availability and delivery of our products to the points of sales. In case of a disaster, the policy establishes the safety of all personnel as a priority, protecting life, wellness and health Roles and responsibilities of the collaborators, suppliers and clients. The area managers are responsible of activating the Continuity Plan when needed in case of a natural or man- This policy establishes the roles and responsibilities of the provoked disaster. They will also be in charge of ensuring recuperation leaders in case of a disaster. the development of the plan.
The continuity plan considers the following aspects: Continuity leader: He is responsible before the Risks Committee and the organization to activate and develop • Risk management the Continuity Plan together with the operation. • Communication management and crisis committee during the crisis Recuperation Leader: Each area and business unit has • Start-up of the operation a plan coordinator or recuperation leader that will be • Information systems recuperation responsible of ensuring its development. • Training programs • Definition of tests for the recuperation of the operation Risk and Compliance Unit: The unit should document • Costs projection of its implementation and maintain updated the responsibilities in a crisis according to the organization`s structure. The areas that are part of the value chain of the company must have a contingency plan that allows the operation Internal Audit: They must perform periodical audits to to continue operating during a disaster event. The key the Continuity Plan in its annual work plan. personnel of cbc are trained in the Continuity Plan.
The Continuity Plan has to be presented to the responsible areas and monitored by the Risks Committee of the Board of Directors.
The plan has to be evaluated, revised and updated at least once a year by the Risks and Compliance area. They should also present to the Risks Committee the reports about the follow-up, maintenance and change of the Continuity Plan.
PAOLA OROZCO CORPORATE RISKS MANAGER 129 PUERTO RICO CASE
Background
On September 2017, there was a hurricane watch in The Caribbean with possibilities to impact Puerto Rico. The local team, led by its Director José Sanabria, implemented a Business Continuity process.
Business Continuity Process 1. Since September 5, when the authorities announced the hurricane alert, the local team proceeded to activate all continuity mechanisms focused initially on people`s safety. 2. A potential risks evaluation was performed and immediate communication was established with the different areas and excellence center to activate all warning, support and follow-up mechanisms. 3. Inventories were uploaded; specially water, in supermarkets and distributors. 4. Once the emergency of the Maria hurricane was over on September 20, damages were evaluated and it was determined that the production plant had suffered medium-size damages. Reparations started to be able to initiate production and they were the first industry to supply water not only to the commercialization chain but also to entities that attended the emergency. 5. The local team, led by its Director José Sanabria, implemented the Continuity Plan despite the adverse conditions. The Excellence Centers were active giving the support required and joint actions were coordinated with our strategic partners to implement recuperation processes and the supply of some of our products from the United States. 6. The biggest challenge was the supply of electric energy. The national system did not work because of the damages produced by the hurricane. The plant worked from September 20 to December 10 with the support of energy generators bought outside of Puerto Rico.
At all times there was communication with all of cbc collaborators to guarantee its safety and to take care of their basic needs.
Opportunities • In this emergency, a formula homologation was identified to facilitate the supply from other plants of the cbc system. 130
PERU CASE
Background
On March 17, 2017, because of the floods that affected most of the Peruvian territory, the emergency and Business Continuity mechanism was activated.
Business Continuity Process 1. The first steps were the following: safeguard the integrity of the collaborators, locate the ones that were not working to know their situation and give them the needed support. 2. A situation evaluation was performed and immediate communication was established with the different areas and Excellence Centers to activate all warning, support and follow up mechanisms. 3. Since the production capacity was affected by the effects of a “huayco” in Huachipa at the Lima Province, supply mechanisms were activated from other operations, especially from Ecuador. 4. The production plant located in the Suliana Province in the Department of Piura continued its operations, which allowed to support the damaged with a million liters of water. 5. With the leadership of the local team and its director Anibal Mùjica, a Business Continuity Plan was implemented. The Excellence Centers were active giving support and coordinating the recuperation process with our strategic partners.
Opportunities 1. The opportunity found in the crisis management process is related with the homologation of formulas to have a larger portfolio and be able to attend the volume needs from other plants in case of a natural disaster. 131
ENVIRONMENTAL SUSTAINABILITY
The Environmental Area is focused on guaranteeing excellence in our environmental development through the compliance of external requirements of the authorities and internal requirements. It also guarantees that the environmental risks of our activities are managed proactively.
In cbc we are motivated to conserve natural resources, looking to leave a better legacy to the future generations. Our recycling strategies and operational efficiency lets us reduce the environmental footprint of our operations, creating a value chain that is part of the lifestyle of our collaborators optimizing the use of water, energy, fuel and packaging materials. 132
ENVIRONMENTAL POLICY PRINCIPLE 7
The Environmental Policy establishes the general guidelines of the organization related with administrative processes, minimizing the generation of waste through an integral its environmental performance, providing the structure for action and the establishment of management of the resources. the environmental objectives. • To integrate environmental considerations in the strategic planning, processes and In cbc we focus on prevention, minimization and compensation of our environmental activities, incorporating best practices. To incorporate the environmental objective impact to guarantee the continuity of our business. All cbc members are committed with: in the performance evaluations, unfolding goals at all levels.
• Complying with the environmental laws and rules applicable to every country in which • Make aware our suppliers, clients, consumers, community organizations and other we operate. key groups of our environmental programs.
• Produce and distribute our products in an environmentally responsible way, keeping • Evaluate continuously, identify best practices and communicate our environmental our commitment with quality, optimizing the use of water, reducing the use of energy, development. fuel and emissions to the environment.
• Reduce, reuse and recycle in all the industrial, distribution, commercialization and 133 ENVIRONMENTAL PROCESSES MAP
Natural Sub-products Resources Control Conservation
Legal Environmental Requirements Indicators Environ- Managing Control Environmental Environmental mental Controls Communication Policy Evaluation and Training Environmental Environmental Aspects control and Evaluation containment installation
Environmental Sewage Water Risks and Non- Control conformities
INTERNAL ENVIRONMENTAL COMMISSION ENVIRONMENTAL PROCEDURES
All plants have an Environmental Internal Commission conformed by the person in The Environmental Book is a compilation of procedures that include the description charge of the environment, the Plant Manager and the area chief or coordinator. of roles and environmental objectives defined to maintain the environmental management of cbc and contribute to a better world. This commission defines action plans through the PDCA, makes a revision and follow up the environmental indicators, significant impacts and excellence programs. It is a tool that presents the guidelines for the environmental management, to guarantee that the processes are executed according to the Environmental Policy, the guidelines of the company and the legal requirements, ensuring at the same time the control and prevention of environmental risks. 134
MEASUREMENTS USED FOR THE REDUCTION OF WATER AND ELECTRIC POWER CONSUMPTION
GRI 416-1 PRINCIPLE 9
Two of the main resources we use at cbc are water and electric power, which is why a series of controls are implemented in order to control, reduce and optimize its consumption.
WATER CONSUMPTION
1. We are progressively implementing flow meters that guarantee the control of the water used in every step of the production. Those meters are revised every 6 hours to identify any inconvenience with the equipment.
2. In all plants we realize a daily calculation of the water indicator of the plant. This is obtained in relation to the liters of beverage produced over the total liters used in its productions. Additionally, a per production line indicator is measured to keep a rigorous control of each line (can, glass or PET). This indicator is sent daily to each people in charge for a revision.
3. There is a Water Committee that meets monthly to revise the indicator trend and defines new actions that may reduce or optimize the consumption. Each action is assigned to a responsible with a date to guarantee its execution in an established period of time.
4. Training days are organized on international celebrations such as Water Day, Environmental Day and Earth Day in order to make aware all the personnel about the importance of this vital resource. 135
cbc WATER CONSUMPTION
2.20 2.09 2.10 2.03 2.03 2.00
1.90
Liters Consumed / 1.80 Liters Produced 0 In the 2017 accumulated result 2015 2016 2017 we were able to recuperate the loss of performance of January by 2.23 reaching the 2016 accumulated. The trend is positive, with a November 2.20 month under 2 L/L, a record in 2017 consumption. 2.10
We continue developing plans to 2.00 reduce and maintain the relation liter / liter. 2.05 2.04 2.03 2.03 2.06 2.06 2.06 2.04 2.01 1.90 1.98 0 Ene Feb Mar Abr May Jun Jul Ago Sep Oct Nov
2015 2016 2017 136
ENERGY POWER CONSUMPTION GRI 302-1
• cbc plants have an energy indicator that is obtained by the relation of the consumption of electric power over the quantity of boxes of 8 ounces produced. For this indicator, an annual reduction goal is defined that forces to implement new technologies and to optimize the operation of the equipment to reach the objectives and goals.
• In the optimization of the equipment, work has been done in the modulation of the compressed air and refrigeration equipment. This is done by a detailed analysis of the planning and the demand of the production plan to work on the equipment at a potency that allows generating the amount of air needed to avoid waste. A parameterization was performed in the functioning of the air conditions in the different areas, establishing hours of starting up and hours of stopping.
• In the implementation of new technologies, an investment has been made to substitute traditional lights for LED lights and lighting controllers have been installed to regulate the hours of turning on and off the entire net. 137
cbc ENERGY GRI 302-1, 302-4
0.800 0.709 0.0.716 0.709
0.700 0.765 0.800 0.729 0.600 0.709 0.731 0.705 0.724 0.711 0.700 0.684 0.688 0.697 0.400 0.676 0.600 0.200 0 0.100 Ene Feb Mar Abr May Jun Jul Ago Sep Oct Nov Dic 0 2015 2016 2017
kWh Consumption x 8 ounces box produced
BUNKER cbc
0.064
0.060 0.060 0.051 0.050 0.050 0.050 0.048 0.049 0.048 0.048 0.048 0.050 0.047 0.047 0.046
0.040 0.040 0.046 0 0 2015 2016 2017 Ene Feb Mar Abr May Jun Jul Ago Sep Oct Nov Dic
Mililiter of bunker consumed x 8 ounces box produced Fuel consumption to produce a box of 24 units of 8 ounces. 138 CONTROL OF EMISSIONS TO THE ATMOSPHERE GRI 305-1, 305-5
Our plants have an annual environmental monitoring program in which the activities and its frequency are established to realize each of the environmental samplings.
For the control of Emissions to the Atmosphere, periodical monitoring is performed to determine the concentration of gas emitted to the atmosphere by the production plan operation
The quantity of sampling points is defined depending on the diameter of the boilers` chimneys. The variables to be analyzed during the monitoring are velocity, flow, charge of gases, humidity, iso-kinetics, combustion efficiency, air excess and air defect.
The methodologies to obtain these variables are:
a. US EPA 1 Method – Determination of the monitoring point b. US EPA 2 Method – Gas speed and flow c. US EPA 3 Method – Gas and molecular weight analysis d. US EPA 4 Method – Particulate material and humidity analysis
Monitored gases are: a. O2 – Gaseous Oxygen b. CO – Carbon Monoxide c. CO2 – Carbon Dioxide d. MP – Particulate Material e. SO2 – Sulfur Dioxide f. NOx – Nitrogen Oxides
Where there is no regulation about gas emissions, cbc has taken the initiative to abide to the established limits of the IFC of the World Bank.
cbc has invested in new technologies to reduce emissions to the atmosphere. As an example of this, the Mariposa Plant located in Guatemala has implemented an emulsifier for the boiler. With this they obtained satisfactory results. In 2018, a Gas Scrubber will start to operate diminishing considerable the emissions to the atmosphere, together with best practices of operation in search of optimizing the boilers.
Similar action is being taken in the rest of cbc plants. 139
DYNAMIC DISPATCH GRI 305-5
Is the most efficient way to optimize and program the trucks to guarantee the dispatching of orders in the shortest time and the shortest possible routes.
The system we use has two software. One optimizes the loading capacity of the trucks and the other develops logical and more efficient routes for the dispatching of orders, achieving the following:
Save routing time • Eliminates the guessing in the design of territories and routes. • Rapidly evaluate multiple scenarios. • Improve sales • Visit key customers at the proper frequency. • Consistent compliance and improvement of the service guidelines.
Improve customer service • Be at the right time with the right product. • Handle seasonal fluctuations and holidays.
Include exceptions in the plan in an improved way. • Transportation efficiency • Reduce the mileage and thus, the consumption of fuel and emissions. • Use alternate routes.
Improve the performance of the Sales Executive • Do a follow up and compare what was planned with what was done. • Provide key information of every dispatch.
Save time in the generation of routes • Generate the fastest and most efficient routes. • Easily import and export information. 140
ECO FRIENDLY BOTTLE GRI 417-1, 301-2, 305-5, PRINCIPLES 7, 8 AND 9
The Aqua bottle, part of the portfolio of our strategic partner Beliv, is totally elaborated with recycled resin (RPET), making it 100% ecological and recyclable.
With this bottle, the consumption of petroleum was reduced 100% by using recycled resin. Also the CO2 emission was reduced 60%, diminishing the impact of carbon footprint. And also, the electric power use was reduced 60%. This bottle reflects cbc`s sustainability vision and its Environmental Policy.
In cbc`s sustainability plans we search the progressive incorporation of more recycled resin in all our packaging, searching to diminish the use of water, electricity and fuel.
All cbc bottles are 100% recyclable. 141
BYPRODUCTS MANAGEMENT GRI 306-2 PRINCIPLE 8
1. Description of the process and byproducts. In cbc we have a description of the production process and a residue classification to identify the byproducts generated and separate them from the common debris.
2. Byproducts classification. There is a classification system for byproducts in agencies and production plants through containers to classify cans, glass bottles, PET, sacks, plastic bottles HDPE, barrels, carton, nylon, covers, strips, tetra pack, wooden pallets, among others.
3. Recyclers’ management: There is a selection and homologation process for recyclers to guarantee that they have the corresponding environmental licenses and they realize an adequate management of the byproducts, turning them into raw materials for external processes. The prices and recyclers are approved by a Byproducts Committee formed by representatives of the Operations, Purchasing, Manufacture, Environment, Finance and Audit areas.
4. Recycled materials: The main Byproducts that are generated from the cbc operations are: glass, wood, carton, pet, nylon, PRB and others. 142
PROPORTION OF BYPRODUCTS SENT TO RECYCLING GRI 306-2
Glass Pallets 38% 33% Carton PET 10% 4% Boxes
3% HDPE Plastic LDPE 3% Plastic 2% Scrap 2% PRB 2% Tetrapack 1% Preform 1% Aluminum 1% 143
OPERATION OF WASTEWATER TREATMENT PLANS
GRI 306-1
The production plants of cbc have wastewater treatment plants. Their operation is based on a biological aerobic treatment with activated muds and ultrafiltration membranes that guarantee the adequate treatment of residual waters in the plant to comply with what is established by law and by the standards of cbc.
There are equipped laboratories with the necessary instruments to make daily analysis for the process controls. Also, analyses are performed at certified laboratories to verify the compliance of the parameters that the laws and regulations establish.
The guidelines established in the local laws and internal requirements of cbc are complied with the operation of the residual water treatment plants.
When necessary, the treatment plants are expanded when the production volume increases. 144
CLEANER PRODUCTION CENTER GRI 102-12
cbc is part of the Guatemalan Cleaner Production Center that was created with the support of the United Nations Organization for the Industrial Development, the Swiss Economic Affairs Secretary and the United Nations Program for the Environment, as well as national institutions such as the Chamber of Industry of Guatemala.
The objective is to share best practices based on international standards, contributing to the efficiency, competitiveness, environmental compatibility and social development of the private and public organizations.
The Cleaner Production Center take measurements of energy consumption make sewage water technical studies, air quality studies and aspects related with more efficient production and friendly with the environment. 145
ALLIANCES AND PROGRAMS 146
ECO CHALLENGE GRI 413-1, 203-2, 203-1 PRINCIPLE 8
The Eco-Challenge is the environmental innovation category of the Talent and Innovation Currently, cbc grants seed capital to the best project in Central America, Ecuador and Peru. Competition of the Americas (TIC Americas) that is held annually in alliance with PepsiCo, The initiative is aimed at young people who have ideas, solutions and innovative business The Young Americas Business Trust and the American States Organization. Eco-Challenge with ages between 18 and 34. The winners receive seed capital and advise to develop a awards young entrepreneurs who propose innovative ideas to resolve environmental sustainable business. problems. Each year, the finalists present their projects in an event previous to the American States Since 2013, cbc joined this initiative as a sponsor in the category that awards the best Organization General Assembly or the Summit of the Americas and have the opportunity project in Central America and also promotes the participation of young people of to establish a wide net of knowledge exchange with international experts and other countries in The Caribbean and South America where cbc has operations. entrepreneurs. 147
ALLIANCE FOR SUSTAINABLE DEVELOPMENT IN GUATEMALA GRI 413-1, 203-2, 203-1
Through its iconic brand Pepsi, PepsiCo and cbc have been in Guatemala for 75 years. In that time, they have shared similar visions related to the sustainable development of the business and the communities which they help through diverse projects.
As part of its commitment, an investment was announced to contribute to the sustainability of aquifers in areas of water stress, working in alliance with “The Nature Conservancy” (TNC); this is an innovative water conservation model will impact over the long term 150 hectares in the metropolitan region of Guatemala through investments from different associates.
Additionally, for the first time, an innovation project named “Liter of Light” was undertaken. This project offers light by using recycled plastic bottles. The bottles are filled with water and chlorine and then placed on the roofs of houses, obtaining light equivalent to a 75 watt bulb. The project has the support of PepsiCo since 2015 in 3 countries of Latin America; it launched together with cbc in Guatemala in 2016.
The alliance strengthens the link between the two companies and reveals the importance of social development and environmental preservation in Guatemala. This initiative gives life to the PepsiCo vision of “Development with Purpose”, which means to integrate sustainability in its business strategy, leaving a positive footprint in the society and the environment.
PepsiCo and cbc are conscious of the importance of taking care of natural resources for the economic development of the country and commit to realize joint activities to work in this regard.
These companies act together in public-private associations, strengthening existing projects and developing new initiatives. The established commitment and the results reached through this alliance are a sample of the corporate social responsibility assumed by PepsiCo and cbc, strengthening environmental action in line with what Guatemala needs for a solid growth in the long term. 148
I HAVE THE RIGHT TO FEEL SAFE GRI 413-1, 203-2, 203-1
“I have the right to feel safe” is a program of cbc, in conjunction with the Azulado Foundation in Ecuador, which aims at the prevention of child abuse in educational institutions.
Tesalia cbc and Azulado Foundation work together in the execution of this education program in the Mejia and Rumuiñahul cantons at the Pichincha province.
The initiative involves the execution of 10 training and socialization days which focus on aspects related to children`s rights and the prevention of situations of risk. The beneficiaries are boys and girls aged from 6 to 12 years.
The program has 1,171 children participating and 55 teachers. 149 WATER FUNDS GRI 413-1, 203-2, 203-1 PRINCIPLE 8
Water Funds are instruments designed to protect and preserve water recharge areas. Water Funds are conceived as public-private alliances to develop impact mechanisms that can, in turn, contribute to the water safety of determined areas through the investment in natural infrastructure.
QUITO WATER FUND GRI 413-1, 203-2, 203-1 PRINCIPLE 8
In the year 2000, the Quito Water Fund was created through an agreement signed by a diverse group consisting of private companies, government entities, the Latin America Development Bank and The Nature Conservancy (TNC). TNC is an international non- profit organization dedicated to the conservation of biodiversity and the natural environment.
cbc has worked with the Water Fund since 2015.
Developed programs:
In July 2015, the Water Protection Fund and Tesalia cbc subscribed an agreement of inter-institutional cooperation. This agreement aims to foster activities that maintain and recuperate water recharge areas for human and productive consumption in the Metropolitan District of Quito. Another aims is to encourage responsible behavior in relation to the environment conservation.
In the first stage of the intervention, vegetable coverage recuperation actions were developed with native species in areas near the San Pedro river (San Agustin Bajo, San Agustin Alto, Genoveva German school communities). At an educational level, the communities, as well as 100 students that now are part of the Water Guardians group, were sensitized about a new water culture through activities and a broad range of didactic resources. The education, communication and vegetable coverage recuperation programs intervened in a radius of 7 kilometers at the river banks of Rio San Pedro. In 2017, a new agreement was signed that wants to enlarge the intervention area by 5 more kilometers. 150
GUAYAQUIL WATER FUND
GRI 413-1, 203-2, 203-1 PRINCIPLE 8
On November 23, 2015, the Guayaquil Water Fund was born as a mechanism to receive, administrate and channel resource for the conservation and restoration of the river basin of Rio Daule. Rio Daule supplies water to Guayaquil.
The agreement was signed by several private companies and government entities, as well as the Latin America Development Bank and The Nature Conservancy (TNC).
Since March 4, 2016, cbc is part of the Water Conservancy Fund of Guayaquil. The objective is to ensure quality water provision for different uses and at the same time to protect and restore critical areas of hydrological importance.
cbc supports the co-financing of actions that allow the implementation and management of projects for the conservation and restoration of the basin of this important river.
Some actions of the Guayaquil Water Fund are:
• The protection of critical areas and the restoration of specific areas, including the riverbank. • The implementation of productive best practices and the territorial ordering with focus on the river basin. • Reforestation and measures to avoid erosion. • Education and environmental awareness. • Monitoring of water quality and quantity.
A study has been undertaken with the University of Guayaquil on the water hydraulic discharge in the area. 151
GUATEMALA WATER FUND – FUNCAGUA GRI 413-1, 203-2, 203-1 PRINCIPLE 8
cbc is a founding partner of the Guatemala Water Fund, FUNCAGUA, which began in 2017 as a private initiative. It is a stable, transparent and long-term financial project that permits that different actors join efforts to solve the common problem of integrated water management.
cbc belongs to the multisector platform whose objective is to foment the conservation, recuperation and sustainable exploitation of water sources in the metropolitan region of Guatemala. The initial goal is to implement action in approximately 17,000 hectares during the first 15 years.
FUNCAGUA centers its actions in 12 of the 17 municipalities of the Department of Guatemala, where 94% of the population is concentrated.
The objectives the FUNCAGUA include the following:
• Improves the potential recharge of the aquifers in the metropolitan region. • Reduce the runoff and landslides of extreme hydrometereological events. • Educate and raise awareness among the different water users. • Improve the capacity to manage financial resources in favor of water conservation. • Monitor the environment as part of the integral management of water in the metropolitan region. 152
REGIONAL WATER FUND – FORASAN PIURA GRI 413-1, 203-2, 203-1 PRINCIPLE 8
cbc is part of the FORASAN Piura Water Fund, a long term project to increase the efforts and financial resources to contribute to an integral management of water in the Chira Piura riverbank.
The FORASAN Piura has the objective to administer and channel investments to guarantee the quality and quantity of the water resources going through the conservation of the ecosystem and development of a water culture.
cbc, through FORASAN, contributes to the realization of activities of protection to the areas of water recharge in Peru.
As of the end of 2017, cbc is the only private company member of the Piura Water Fund, the first Water Fund of Peru. 153
HONDURAS SAFE WATER
GRI 413-1, 203-2, 203-1
As part of its commitment to the Sustainable Development Objectives, cbc contributes to the access of safe water. cbc joined the initiative of the Education Ministry in Honduras to guarantee that communities and schools of the center, south and eastern regions of the country have water filters.
In the rural areas of Honduras, the access to drinking water and adequate bathrooms is an unmet basic need. That is why the Pure Water Project was born with cbc Honduras.
The program benefits more than 20,000 people directly. It positively impacts school attendance, due to the reduction of gastrointestinal disease arising from the consumption of impure water.
Before delivering the filters, the municipal and local authorities, as well as the parents, receive training about the use and maintenance of the filters as well as the importance of taking care of water. 154
COOPERATION AGREEMENT WITH THE PRIVATE INSTITUTION OF INVESTIGATION ABOUT CLIMATIC CHANGE IN GUATEMALA GRI 413-1, 203-2, 203-1
The Private Institute of Investigation of Climatic Change ICC is a private organization that investigates and develops projects for the mitigation and adaptation to climatic change in the communities. The Institution creates and promotes actions that facilitate the mitigation and adaptation to climatic change based on scientific technical guidelines.
cbc has made an alliance with ICC for the integrated management of the riverbanks, looking to implement actions to maintain the integrity of the natural resources on the riverbanks. These actions are realized by means of an integrated management of the water, soil and forestry resources.
In 2017, the reforestation of the riverbanks of Sis-Ican river began at the municipality of Pueblo Nuevo in the town of San Francisco Pecul of Suchitepéquez Department. Eighty volunteers from the production plant of Cuyotenango, Suchitepéquez participated in this activity. 155
FOOD SECURITY AND PERCENTAGE OF CHRONIC NUTRITIONAL PROGRAM MALNUTRITION Santa Apolonia Municipality, Department of Chimaltenango, Guatemala GRI 413-1, 203-2, 203-1 0 - 6 months
As part of an alliance between cbc and the Asociación Puente on April 2013, an agreement was signed for the implementation of the Food Security and Nutritional Program. The program started operations in June 2013 in 24 communities of the municipality of Santa Apolonia, Chimaltenango, Santa Apolonia, Chimaltenango with the participation of 1,008 women and 1,030 boys and girl under 5 years, pregnant women, March 2014 - June 2016 breastfeeding women and women of reproductive age that live in nutritional vulnerable conditions in rural communities.
Results:
The project was designed for a period of 36 months. A total of 1,008 women subscribed; 40 monitor mothers participated in the formation process to strengthen their community leadership capabilities. 72.9% 72.2% In addition, 617 spouses participated in the training sessions and 720 associates graduated from the 66% program. The program impacted more than 5,000 people.
With the alliances and interventions made in the communities of the Santa Apolonia municipality Reduction of chronic malnutrition of Chimaltenango, cbc and Puente reduced the severity of chronic malnutrition, by 6.9% in a period of 3 years, as shown in the following graph.
6.9 PERCENTAGE POINTS 156
EARN TOGETHER PROGRAM IMPLEMENTATION
San Jose Paquil Municipality, Department of Chimaltenango, Guatemala
GRI 413-1, 203-2, 203-1
As part of a continuous effort to reduce chronic malnutrition, cbc and Asociación Puente signed an agreement in July of 2017 for the implementation of the program Learn Together. This program started operations that same month in San José Poaquil, Chimaltenango, with the participation of 250 more people. The objective of this program is to improve food safety and nutrition in women and their families, having as its objective group boys and girls under 5, pregnant women, breastfeeding woken and women of reproductive age that live in nutrition vulnerable conditions in rural communities.
Through this project, six components will be worked to prevent chronic malnutrition: a) Strengthen the family and the community organization so that adequate management processes are in place to prevent malnutrition and promote food and nutritional safety; b) Develop competencies in women at reproductive age to prevent malnutrition in their sons and daughters; c) Promote the growth and development of boys and girls under 5 years of age; d) Boost productive sustainable activities that allow to improve food availability in the home; e) Promote income-generating activities that affect the quality of life of women and their families; f) Promote basic sanitation best practices and home improvement for the goal of illness prevention. 157
COOPERATION AGREEMENT WITH THE UNITED NATIONS POPULATION FUND
GRI 413-1, 203-2, 203-1
cbc subscribed in 2015 an agreement with the United Nations Population fund – UNFPA. The objective of the agreement is to strengthen the capabilities of the health services in the Department of Chimaltenango, Guatemala. This agreement affirms the joint commitment to strengthen the capabilities of health services, providing equipment to give opportune and quality maternal and neonatal attention, contributing to the implementation of the action of the 1000 days window.
In 2017, as part of this commitment, cbc and UNFPA delivered medical equipment for obstetric emergencies in the Health Area Direction, with the goal of bringing comprehensive health services to the area and contributing to the reduction of maternal mortality. The donation included medical equipment as Sphygmomanometers, stethoscope and Doppler ultrasound. A donation of computers to the health system of the Chimaltenango Department for the registering of statistics of morbidity and mortality was also made. The information gathered will allow for better actions to be taken to improve those indicators.
The donated equipment was delivered to the local authorities of the Health Ministry and will be used in all health services of the department of Chimaltenango, health centers and hospitals to tend to more than 15,000 pregnant women and 300,000 kids that receive medical attention in Chimaltenango. 158
AGREEMENT WITH THE FOUNDATION FOR THE COMPREHENSIVE DEVELOPMENT OF GUATEMALA – FUDI
GRI 413-1, 203-2, 203-1
cbc has an alliance with FUDI to support boys and girls diagnosed with chronic malnutrition in 2016 and who are in the process of recovery. The follow-up is done in medical-nutritional monthly medical visitation days in Santa Apolonia, Department of Chimaltenango in Guatemala.
As part of the support strategy, medical and nutritional check-ups are done to verify the health of the families. Medicines and vitamins are given to the kids to support their recovery.
cbc, in collaboration with FUDI, has programmed for 2018 the delivery of Eco Filters to provide access to safe water and gas stoves to eradicate open fires. 159
cbc IS PART OF THE FOUNDATION “AYUDAME A VIVIR” (HELP ME TO LIVE) GRI 413-1, 203-2, 203-1
cbc is part of the Foundation “Ayúdame a Vivir” since 2001. This entity, a multi- firm endeavor, has assumed the challenge to help the Pediatric Oncology Unit of Guatemala to obtain the resources necessary for its proper functioning. This unit has become the leader in pediatric cancer treatment in the region and provides treatment without cost to boys and girls with this illness.
This initiative integrates a multi-disciplinary team of professionals. The team includes psychologists, nutritionists and social workers. Working together, they give orientations, advice and support to the parents and family of the patients. Additionally, medical monitoring of the children is performed, with attentive, humane medical attention provided at all times.
Currently, the survival rate of the kids receiving treatment is 70%; almost complete sticking to the treatment (99%) has been reached. As of June 2017, 7,460 kids had been attended, of which 5,772 were diagnosed with cancer.
The attention to the families includes a temporary home so that when kids are interned in the hospital, the families can have close follow up to the treatment and be present during the process.
cbc´s economic contribution to this project exceeds US$ 6 million; this is in addition to the multi-disciplinary team of the company what works through volunteer actions. 160
INSTITUTE OF NUTRITION OF CENTRAL AMERICA AND PANAMA - INCAP GRI 413-1, 203-2, 203-1
In 2015, cbc celebrated an agreement of inter-institutional cooperation for technical assistance to the Food Security and Nutritional Program in Santa Apolonia, Department of Chimaltenango, Guatemala. This agreement includes the Shalom Foundation, an entity that developed, together with INCAP, the program of complementary food for children of ages 6 to 24 months.
The technical support of INCAP focuses on the standardization of the personnel of the Puente Association (Asociación Puente) to take anthropometric measures and to supervise the process of recollection of weight and height data. Work was also done in support in the generation of a database to keep control of the growth of kids under 2 years. 161
FOOD AND NUTRITIONAL SAFETY PROGRAM IN SULLANA, PERU GRI 413-1, 203-2, 203-1
Anemia affects four out of ten children under three years of age in Peru. Since 2016, cbc Peruana supports the Anemia Reduction Program for Cieneguillo, Sullana, where a cbc plant operates.
Driven by the Americas Fund, this project follows the guidelines of the Health Ministry as is developed by Prisma, a Non-Governmental Organization that promotes sustainable development.
The objective is to reduce by 50% the prevalence of anemia in the children population under three years of age in the community. To reach this objective, different actions are done such as the promotion of breastfeeding to improve the availability and consumption of food rich in iron and micronutrients. Other activities include demonstrative workshops that teach mothers how to prepare food with high iron content, educational fairs, etc.
The project has benefited more than 100 mothers and family managers with children between 6 months and 2 years of age. During the first year of execution a significant decrease of 30% in anemia cases was achieved. 162
OPERATION SMILE GRI 413-1, 203-2, 203-1
cbc is part of Operation Smile in Guatemala, Honduras, Nicaragua and Peru. Operation Smile is a foundation oriented to facilitate free operation of cleft lip and palate in boys and girls.
The operations are performed in periodical medical visitation days with the support of international doctors. Additionally, they perform education processes for professionals in every country.
Participating in this movement are important companies and hundreds of volunteers that each year contribute in the announcement and execution of the medical days, both nationally and internationally.
Children with cleft lip or palate can present difficulties feeding, dental complications, complications in speech development and problems of social adaptation. It is very important to provide these children with the opportunity of a happy and healthy life. 163
SPORTS AND PHYSICAL ACTIVITY PROMOTION IN CENTRAL AMERICA
GRI 413-1, 203-2, 203-1
Through its brand Gatorade, cbc is committed to the promotion of a balanced and healthy lifestyle for its consumers, mainly through physical activity. As part of its pillars, Gatorade wants to be an ally to athletes who want better performance, giving them adequate nutritional and hydration solutions.
One of the projects developed by the brand is Gatorade 5v5, a soccer 5 tournament for young people 14 to 16 years old that was celebrated in 2017 in Guatemala, Honduras and El Salvador. The winning teams traveled to Cardiff to represent their country in a global tournament of 14 countries. This impacted 380 young people in the region, who received talks on nutrition and hydration, specifically tailored to their age range and physical activity.
Several projects are realized in each country, encouraging sports and education on the hydration required by different forms of physical activity. For example, in Guatemala cbc supports the soccer camp FCB Escola. This program offers children the opportunity to train under the standard of the Barcelona FC team and includes nutritional talks and sport practices in Barcelona, Spain. In El Salvador, cbc participates in the College Cup project, an intercollegiate soccer tournament that reunites more than 200 youngsters who during the year participate in the tournament with the objective to obtain sports scholarships in different universities in the United States.
Gatorade supports the track and field events that take place in Central America. Just in 2017, 130,000 participants were hydrated by the brand in at least 120 events in the region. Also, through its Gatorade Legion program, a safe space has been given for runners to train under the supervision of a professional, hydration and nutritional talks. In Guatemala, there are five training groups of more than 600 runners, while in El Salvador there are 200 athletes who form part of this initiative. 164
HEALTHY PUERTO RICO
GRI 413-1, 203-2, 203-1
In Puerto Rico, cbc participates in the “Healthy Puerto Rico” program, a platform that seeks to implement a plan of sustained access to information and training in nutritional education, as well as to promote physical activity in all stages of life. The program is carried out in cooperation with United Way, the Police Athletic League, Boys & Girls Clubs, Public Housing Administration and the Department of Sports and Recreation of Puerto Rico, Home Made, Caribbean Cinemas and “El Nuevo Dia”. 165
EDUCATION SUPPORT
GRI 413-1, 203-2, 203-1
cbc believes in the children`s to facilitate the learning process and right to a quality education that at the same time promotes the use will expand their opportunities of new methodologies among the in life. Through its brand teachers. Pepsi and the Guatemorfosis movement, cbc joined the The school is also an open space of singer Ricardo Arjona and comprehensive development for the Adentro Foundation to the communities. construct and finance the Enrique Castillo Monge School. It functions as a formation center for teachers, and also provides advice This educational center functions and information to parents about using the foundation model how to contribute in the learning and promotes the participation process and the comprehensive of students, teachers and development of their children. parents. It also combines high quality academic formation, innovation and technology with the diffusion of art as elements for the development of the individual in the society.
To these values, sports are added as a source of wellness, health and discipline. The school, located in the town of El Porvenir between the Departments of Sacatepéquez and Escuintla, started classes in January 2016, welcoming some 200 children in pre-school and elementary school.
In 2017, Samsung and cbc inaugurated the interactive classroom “Smart School”. With a capacity of 25 students and a teacher, the school has all necessary elements to provide a different and fun learning experience, promoting curiosity and facilitating contact with new technologies, preparing the children for the future.
This program aims for students of the school to have new avant-garde technological tools 166
SCHOLARSHIPS AND CREDIT FOR POSTGRADUATES STUDIES IN GUATEMALA AND HONDURAS
GRI 413-1, 203-2, 203-1
cbc is part of the GuateFuturo and HonduFuturo foundations, organizations that give young professionals the opportunity to conduct postgraduate studies at some of the best universities in the world. This formation allows then to grow both academically and personally, so that they can return to work towards the development of their home countries.
Both organizations are recognized for their Credit-Scholarships programs that provide orientation and financing to professionals who want to undertake master´s or doctoral studies abroad.
GuateFuturo was born in 2008 with the support of a public-private alliance and private donors. The objective of GuateFuturo is to provide new educational opportunities to a new generation of leaders. GuateFuturo wants to promote HonduFuturo, with the support of cbc and other important companies, is the only institution positive change in the region by providing young leaders with the opportunity to that provides Honduran professionals with the possibility to realize post-graduate studies in achieve the academic excellence of the best universities in the world. the best universities of the world.
The young scholarship holders are professionals with academic excellence, students In 2017, 24 students formed part of the fourth generation of this program Credit-Scholarship involved in extracurricular activities and citizens who participate actively in their (PCB) from HonduFuturo. Since 2013, this foundation has benefited 73 people from communities. They are given support before, during and after their studies through Honduras with an investment in education above 51 million Lempiras. Thirteen beneficiaries academic counseling, job intermediation and promotion of their leadership. are already back in Honduras, contributing to the development of their country.
This program credit-scholarship is functional and transparent. It is based on the merit system, and is anonymous and impartial during the whole process. To date, the investment made through GuateFuturo has been around US$9 million.
GuateFuturo has worked with 10 generations of students and 295 beneficiaries who have attended more than 150 universities in 25 countries on five continents. As of the end of 2017, 159 beneficiaries will be in Guatemala, working and linked to diverse projects of positive impact for the country. 167
COOPERATION AGREEMENT WITH THE SECRETARY OF EDUCATION OF HONDURAS GRI 413-1, 203-2, 203-1
cbc works together with the Secretary of Education and the United Nations Population Fund in the program Allies for the Education, where joint actions are developed to favor the development of quality education services, environmental education, access to safe water, nutrition and recycling. This program also supports the prevention of violence and the promotion of schools as spaces of peace for the development of children. The Cooperation Agreement was signed on April, 2015.
With the objective of promoting awareness among the population about the importance of the early detection of cancer in children, cbc in alliance with the Honduras Foundation for Children with Cancer and the Secretary of Education created a program to train teachers and parents to recognize the early alert signs of this illness.
It is first phase executed in 2017, the program was developed in the Department of Francisco Morazán with the participation of 50 schools from the region. The next phase will start in 2018, extending the impact to more areas of the country. 168
SUPPORT OT “ARTEDUCARTE” FROM TINKUY FOUNDATION IN ECUADOR
GRI 413-1, 203-2, 203-1
“Arteducarte” is an independent, private, non-profit artistic education project that is dedicated to nurturing creativity and expression in elementary school boys and girls in the disadvantages areas of Ecuador, using artistic processes that foster the ability to learn, self-esteem and values.
cbc supports this initiative, contributing to improve culture and education in Ecuador, through the development of the program “Arteducarte” from Fundación Tinkuy. The program is carried out in two schools from Quito and is directed to students from fourth, fifth and sixth year.
“Arteducarte” generates a meeting point for art, education and culture and its primary purpose is improve the quality of life, to boost the development of the community and to create awareness of caring our natural resources and the environment. 169
GREEN LEARNING
GRI 413-1, 203-2, 203-1 PRINCIPLE 8
Green Learning is an initiative that transmits using virtual tools environmental knowledge and culture to children from Latin America. The program was created by the Monterrey Technological School and has the support of PepsiCo, Televisa Foundation, The Young Americas Business Trust and the American States Organization. Thanks to the support of cbc, this initiative is reaching teachers throughout Central America.
The program is directed to children in elementary school and has three main subjects: climate change vulnerability reduction, water care and recycling. The program includes the training of teachers by the Monterrey Technological School. After this, a teacher can register, create a profile and have access to interactive tools that can facilitate his pedagogic work, such as tasks to perform, games, videos and projects, all with an environmental focus.
Currently, more than 30,000 children have benefited with Green Learning in Guatemala, El Salvador, Honduras and Nicaragua. 170
AGREEMENT WITH SEEDS FOR PROGRESS IN NICARAGUA
GRI 413-1, 203-2, 203-1
cbc, together with the Foundation Seeds for Progress, signed a cooperation agreement in 2015 to promote environmental learning through the virtual community Green Learning. cbc supports the training of teachers that are part of the Digital Seeds program to strengthen the environmental culture among boys and girls of pre-school and elementary school ages. The aim is to generate a positive impact in their homes and communities, fostering environmental concern at an early age.
In Nicaragua, thanks to the support of the Seeds for Progress foundation, cbc delivered 38 computers and 14 recycling islands to the Education System. This has been delivered to 16 schools in the north, facilitating the creation of computer labs that have benefited more than 6,000 children. Additionally, several workshops about the Green Learning portal management have been given. 171
EDUBECAS (EDUSCHOLARSHIPS) GRI 413-1, 203-2, 203-1
Livsmart in El Salvador has granted 365 scholarships for the elementary and high school levels. The scholarships are granted together with the Corporate Foundation for Educational Development (Fundación Empresarial para el Desarrollo Educativo – FEPADE) as part of the education program EDUBECAS supported by the Ministry of Education. 172
RECYCLING PROGRAM IN THE BASIN OF LAKE ATITLAN
GRI 413-1, 203-2, 203-1 PRINCIPLE 8
In August of 2017, a cooperation agreement was A recollection of more than 58 tons of recyclable residues is Another important aspect is to promote recycling as an signed between “Friends of the Lake” and cbc expected. alternate source of income for the communities, which can to promote a recycling culture and proper make money by selling the recollected material. disposal of solid waste in the basin of Lake The objective of Atitlán Recycles is to strengthen the Atitlán located in Sololá Department of Guatemala.
The project operates through gathering and transference centers where recyclable solid waste is recollected (aluminum, PET, glass, etc.). These are located in nine municipalities located around the basin: Santa Lucia Utatlán, Santa Maria Visitación, Santa Clara La Laguna, Santiago Atitlán, San Lucas Tolimán, San Pedro La Laguna, San Juan La Laguna, San Marcos La Laguna y Santa Cruz La Laguna.
This process started under the direction of “Friends of the Lake”, using a boat donated by cbc and especially adapted.
Each municipality culture of recycling among the population by facilitating The project seeks to encourage community participation handles its own the infrastructure and logistical support needed for the of women and youngsters. To this end, groups of women daily or weekly adequate handling of solid waste. leaders are in direct charge of the operation of the gathering recollection. This will directly reduce contamination in the lake basin. centers. 173
With the active participation of more than 150 women, 18 Research and technical assistance was required to get the of tourism revenues. It is the source of subsistence for more teams were formed among the women working in their gathering centers up and running. than 300,000 people that live in the basin, who also depend respective communities. on its water for drinking and hygiene. Through Atitlán Recycles we are integrating members from The process started under the direction of Friends of the different communities, authorities and organization so that Lake, which gave workshops and training to the main recycling becomes an integral activity of the population, groups that execute the project (youth, women, personnel especially among the children. of the gathering centers of the municipalities). The training was on subjects such as management of solid waste and Located in Sololá in the southwest region of Guatemala, residues, treatment and final disposition, as well as team Lake Atitlán is one of the most important bodies of water in work, relationships and business administrations. the region and is an engine of development and generator 174
COOPERATION AGREEMENT WITH THE RECICLYING ASSOCIATION OF NICARAGUA
GRI 413-1, 203-2, 203-1
cbc signed an agreement in 2015 with the Recycling Association of Nicaragua to promote the recycling culture. This has permitted to perform actions that promote the benefits of recycling and the importance to separate solid waste in Nicaragua.
In 2017, the III Congress of Recyclers took place in the Central Auditorium of the Managua University. This year, besides giving security equipment and uniforms to the elite team formed by 65 people, they also received a speech by Eliezer Méndez, winner of Eco Challenge 8.0 with his project of an irrigation system based on Eolic energy. 175
JAMAICA RECICLYING PROGRAM
GRI 413-1, 203-2, 203-1 PRINCIPLE 8
cbc Jamaica is part of the Recycling Partners of Jamaica initiative. The Jamaican government and different companies form it. The purpose of the initiative is to recover PET bottles for the recycling efforts so as to generate a positive impact in the development of new job opportunities.
In 2015 first results were reported. The first report highlighted the creation of gathering centers and the start of the recuperation process. The program is still on going.
In the next three years, it is expected that the program will create 3,000 jobs. 176
RECICLARTE GRI 413-1, 203-2, 203-1 PRINCIPLE 8
This project is developed in the schools of Lima in alliance with local government and the Municipality of Surco, our ally in 2017.
ReciclArte is a program to educate children from elementary school about the importance of taking care of our environment and to promote the recycling of plastic (PET), cbc is in charge of the following activities:
• To promote awareness and consciousness among teachers • To promote awareness and consciousness among children in the classroom with activities that encourage recycling.
The material is gathered by the Municipality and then sent to a plant of recycled resin. 177
COMMUNITY RECICLYING IN GUATEMALA GRI 413-1, 203-2, 203-1 PRINCIPLE 8
Since 2008, cbc has supported more than 120 micro entrepreneurs that form part of a recycling network which has the objective of reducing the environmental footprint. Through this program, 300 communities have been trained through associations and cooperatives. The program has motivated the formation of microenterprises dedicated to the recovery and commercialization of recyclable material, with an emphasis on PET bottles. The communities receive technical training and tools as scale for weighing and transportation for the bottles.
The program Community Recycling has turned into a valuable opportunity for the members of the network to generate extra income. 178
COOPERATION AGREEMENT BETWEEN LIVSMART AND THE ENVIRONMENT CONSERVATION ASSOCIATION OF EL SALVADOR
GRI 413-1, 203-2, 203-1
Livsmart, a business unit of cbc that produces and develops nutritional and functional beverages, signed a cooperation agreement with The Environment Conservation Association of El Salvador. It includes the following:
• To jointly develop actions that will allow the implementation of the program Green Learning in selected schools. These schools will be in the influence zones of the Natural Protected Areas in San Marcelino. The objective of these actions is to strengthen the environmental culture in pre-school and elementary school children, to generate a positive impact in their homes and communities.
• To jointly promote the use of the Eco Unidos application to motivate the recycling of solid waste, particularly bottles. With this action we contribute to improve the environmental management of influence zones of the Natural Protected Areas in San Marcelino.
A 2009 Agreement of Technical Cooperation and Environmental Compensation that gives resources for the conservation of the Biosphere Reserve Apaneca-Ilamatepec complements this cooperation agreement. 179
cbc-LIVSMART-TETRA PAK ALLIANCE FOR RECICLYING
GRI 413-1, 203-2, 203-1
cbc, Livsmart and Tetra Pak reaffirmed their commitment to jointly develop capabilities and concrete action to promote an adequate environmental management by supporting initiatives to recollect and recycle packaging’s solid waste.
As part of the project, two pilot projects will be created in Guatemala, one in Panajachel, Sololá and the other in Párramos, Chimaltenango. The objective is to implement adequate recycling management and promote environmental education and selective recollection.
The agreement aims to strengthen human and company development through three actions:
• Promote the recollection and recycling of solid waste, especially Tetra Pak packaging. • Motivate respect for the environment and awareness of healthy practices and behaviors. • Encourage microenterprise formation with projects that generate profitability through the recollection and commercialization of recyclable materials (Tetra Pak packaging). 180
January 5, 2018
VERIFICATION LETTER
The company Personaz, S.A.C., through its Director, Milagros Samudio, and as per the request of cbc, has performed an independent verification of their Communication On Progress of the United Nations Global Compact at an advanced level.
Scope
The scope of the verification performed consisted in revising the contents of the Communication On Progress elaborated by cbc. The work done consists of issuing a responsible opinion about the reliability of the information obtained, as per:
• The attainment of adequate and sufficient evidence to comply with the objective. • The quality of the information disclosed about the performance in sustainability is in compliance with the 10 principles of the United Nations Global Compact and the 21 criteria corresponding to the advanced level. • The reliability of the specific information regarding sustainability performance.
Standards and verification processes
The performed verification used the AccountAbility AA1000 standards in addition to the revision of the Global Reporting Initiative – GRI – standards taken by cbc as reference for the structure of their report.
At a general level, an evaluation Type 2 was performed, evaluating the information disclosed, the systems and procedures that the organization has to comply with the principles and the performance information that demonstrates this compliance.
Assurance strategy and methods of obtaining information:
The performed verification took place mainly in cbc headquarters at Boulevard Los Próceres 24-69, Zone 10, Tower 4, Level 3, Zona Pradera, Guatemala City, Guatemala. From this office the operation is handled globally. The following revisions were performed: 181
• Physical examination through visits to the different places where cbc operates: production plants, sales rooks, social programs, clients, among others, in Guatemala and Perú. This included conversations with different stakeholders of the company in order to get to know the management and performance depth of the company in sustainability matters. • Testimonials through interviews with Directors and Managers of different areas of cbc. • Analysis of the reported indicators.
Conclusions
After the exhaustive revision of the contents of the report and the verification of evidence, the conclusion was reached that this Communication on Progress for the United Nations Global Compact complies with the requirements demanded at the advanced level.
Recommendations
Since a series of indicators was used and several principles of the GRI were accomplished, it is suggested that in the future a report on sustainability is made in accordance with the GRI to measure the results, specifically in the operations area.
Milagros Zamudio Director
Member of the Stakeholder Council of the Global Reporting Initiative – GRI since 2014. She participated in one of the work teams for the G4 Version of the GRI. She has 20 years of experience, having occupied managerial positions in large companies such as Telefónica and Electroperú. She was founder and president of the Corporate Social Responsibility Committee of the government companies – FONAFE, Director and Founder of Women CEO of Perú and Country Manager of BSD Consulting. She has been jury in the beyondBanking awards of BID, the Award of Protagonists of Change from UPC and part of the Kunan Technical Committee. She has also been university professor and columnist writer. Milagros has a Master in Communications from Michigan State University (USA) and also has studies in Harvard. 182 SUSTAINABLE DEVELOPMENT OBJECTIVES INDEX
SDO NAME DESCRIPTION LOCATION/CHAPTER PAGE
182 1 End of Poverty To end all forms of poverty everywhere. N/A N/A
To end hunger, achieve food safety and better nutrition 2 Zero Hunger Alliances and Programs 155,156,158, 160,161 and promote sustainable agriculture.
3 Health and Wellness To end hunger, achieve food safety and better Alliances and Programs 155, 156, 157, 158, 159, 160, 161, nutrition and promote sustainable agriculture. 162, 163, 164
165, 166, 167, 168, 169, 170, 4Education of Quality To guarantee education of quality, inclusive and equitable, and to Alliances and Programs promote permanent learning opportunities to everybody. 171, 176, 178
5Gender Equality Achieve gender equality and empower women and girls. Alliances and Programs 172, 173, 177
6 Clean Water and Sanitation To guarantee availability of water and sustainable management and Alliances and Programs 149, 150, 151, 152, 153, 154, sanitation of water for everybody. 172, 173
Accessible and Secure access to accessible, trustworthy, sustainable and modern 7 Alliances and Programs Non-emitting Energy energy for everybody. 147
Decent Work Promote sustained, inclusive and sustainable economic growth, full 8 People and Management 87 and Economic Growth and productive employment and decent jobs for everybody.
Industry, Innovation 9 Build resilient infrastructure, promote inclusive and sustainable N/A N/A and Infrastructure industrialization and encourage innovation.
10 Inequality Reduction Reduce inequality inside and outside the countries. N/A N/A
Sustainable To make cities and human settlements inclusive, safe, resilient and Environmental Sustainability 11 Communities and Cities sustainable. 138, 141, 142
Responsible Production 12 Environmental Sustainability, 143, 147, 169, 172, 173, 174, and Consumption Guarantee consumption patterns and sustainable production. Alliances and Programs 175, 176,177, 178, 179
Take urgent measures to ght climatic Risk Management, 13 Action for Water 129, 130, 146, 149, 150, 151, change and its impacts Alliances and Programs 154, 169, 170
Submarine Life Conserve and sustainable use the oceans, seas and marine resources Environmental Sustainability 14 for sustainable development. 143
Protect, restore and promote the sustainable use of earth ecosystems, Earth Ecosystems Life manage forests in a sustainable way, combat deserti cation, halt and Alliances and Programs 15 reverse earth degradation and stop the loss of biodiversity. 154
Promote peaceful and inclusive societies for the sustainable Peace, Justice development, provide access to justice for everybody and create Ethics and Anti-Corruption, 16 and Solid Institutions e ective, responsible and inclusive institutions at all levels. Anti-Corruption 69, 83
Strengthen the implementation tools and revitalize worldwide Alliances and Programs 17 Alliances to Reach association for the sustainable development. 178 the Objectives 183
GLOBAL COMPACT PRINCIPLES INDEX
GROUP PRINCIPLE DESCRIPTION LACATION / CHAPTER PAGE
Businesses should support and respect the protection of internationally 1 proclaimed human rights; and Ethics & Anti-Corruption, Occupational Safety 76, 112, 121 and Security, Suppliers DERECHOS HUMANOS Ethics & Anti-Corruption, Occupational Safety Make sure that they are not complicit in human rights abuses. 73, 76, 112, 121 2 and Security, Suppliers
Businesses should uphold the freedom of association and the effective 3 recognition of the right to collective bargaining; People and Management 107
the elimination of all forms of forced and compulsory labour; 4 Ethics & Anti-Corruption, Suppliers 73, 122, 123, 124
ESTÁNDARES
LABORALES 5 the effective abolition of child labour; and Suppliers 122, 123, 124
the elimination of discrimination in respect of employment and 89, 91, 92, 93, 100, 101, 102, 6 People and Management, Occupational occupation. Safety and Security 107, 111
Businesses should support a precautionary approach to environmental Environmental Sustainability 7 challenges; 132, 140
undertake initiatives to promote greater environmental responsibility; and 140, 141, 146, 149, 150, 151,169, Environmental Sustainability, Alliances and MEDIO AMBIENTE 8 172, 173, 175, 176, 177 Programs
encourage the development and diffusion of environmentally friendly 9 technologies. Environmental Sustainability 134,140
Businesses should work against corruption in all its forms, including 10 Ethics & Anti-Corruption, Suppliers 84, 116, 117, 118, 119, 120 ANTICORRUPCIÓN extortion and bribery. 184 GRI CONTENT INDEX
GRI INDICATOR DESCRIPTION LOCATION / CHAPTER PAGE
ORGANIZATIONAL PROFILE
102-2 Activities, brands, products and services. Who Are We?, Portfolio 6, 18, 19, 20, 21
102-3 Headquarters location. Values 15
102-4 Ubicación de las operaciones.Values, Portfolio 15,22
102-6 Operations location. Values, Portfolio, Clients 15, 18, 19, 20, 21, 22, 23, 52, 53 102-7 Size of the organization. Values 15
102-9 Supply chain. Suppliers 116, 117, 118
102-11 Precaution principle or focus.. Risk Management 126, 127, 128 cbc International Certifications, Environmental 102-12 External initiatives. 17, 144 Sustainability STRATEGY
102-14 Declaration of high management and responsible of decision making.Letter from our Executive President 4, 5
ETHICS AND INTEGRITY
102-16 Values, principles, standards and conduct rules.Mission / Vision, Values 11, 12, 13, 14
GOVERNANCE Corporate Government, committees that emanate 26, 27, 28, 29, 32, 33, 102-18 Governance structure. from the Board of Directors, other committees 34, 35, 36, 38, 39 184 102-19 Delegation and authority. Support and Excellence Centers 40
102-20 Executive level responsibility on economic, environmental and social subjects. Support and Excellence Centers 41
102-21 Consultation to groups of interest about economic, environmental and social subjects. Support and Excellence Centers 41 26, 27, 28, 29, 32, 33, 102-22 Composition of the maximum government body and its committees Corporate Government, other committees 34,35,36,38,39
102-23 President of the maximum organ of government. Corporate Government 26
102-25 Conflicts of interest. Ethics & Anti-corruption 78
GROUPS OF INTEREST PARTICIPATION
102-40 Groups of interest list. Relationship with groups of interest 66
102-41 Collective negotiation agreements.People and Management 107
102-42 Identification and selection of groups of interest. Relationship with groups of interest 66
Relationship with groups of interest 102-43 Focus on the participation of groups of interest. 66
PRACTICES FOR THE PREPARATION OF REPORTS
102-45 Entities included in the consolidated financial statements.Corporate Government 27
102-47 List of the material themes.Relationship with groups of interest 66
103-1 Explanation of the material theme and its limit. Relationship with groups of interest 66
SPECIFIC CONTENTS
203-1 Investment in infrastructure and support services. Alliances & Programs 146 - 179
203-2 Indirect and significant economic impacts Alliances & Programs 146 - 179
205-1 Operations evaluated for risks related to corruption. Suppliers 120, 121, 122, 124
205-2 Communication and formation of anti-corruption policies and procedures. Ethics and Anti-Corruption 70, 71, 79, 81
301-2 Usage of recycled supplies. Environmental Sustainability 140
302-1 Energy consumption In the organization. Environmental Sustainability 136, 137
302-4 Reduction of energy consumption Environmental Sustainability 137
305-1 GEI direct emissions (reach 1), Environmental Sustainability 138
305-5 Reduction of FEI emissions. Environmental Sustainability 138, 139, 140
306-1 Water discharge according to its quality and destination. Environmental Sustainability 143
306-2 Waste by type and method of elimination. Environmental Sustainability 141, 142
401-1 New hires and staff rotation. People and Management 108
Workers representation in the health and safety committees. 403-1 Occupational Health and Safety 110, 112
Types and rates of injuries, occupational diseases, lost days of work and absenteeism, 403-2 number of deaths related to work. Occupational Health and Safety 114
Workers with high incidence or high risk of diseases related to their activity. 403-3 Occupational Health and Safety 114
404-1 Average of hour of training per employee per year. People and Management 100, 101, 102
Programs to improve the employees` skills and transition help programs. 93, 97, 99, 100, 101, 102, People and Management 404-2 103, 106
Percentage of employees that receive periodical performance and professional People and Management 95 404-3 development evaluations.
Operations revised or evaluated about the impact on human rights. 412-1 Suppliers 123, 124
Training to the employees regarding human rights policies and procedures. 412-2 Ethics and Anti-Corruptionn 72
Operations with participation of local communities, impact evaluations and Alliances and Programs 146-179 413-1 development programs. Health and safety impact evaluation of the product and services categories. 416-1 Consumers and Environmental Sustainability 61, 63, 64, 134
417-1 Requirements of information in labels of products and services. Consumers and Environmental Sustainability 61, 140 185
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