SUSTAINABILITY ENVIRONMENT, SOCIAL & GOVERNANCE REPORT 2020 DISCLOSURES GROUP REPORT 2020 2

INTRODUCTION

Welcome to the INTRODUCTION ...... 3 FIND OUT MORE ’s SUSTAINABILITY REPORT TOGETHER TOWARDS ZERO ...... 9 + SUMMARY Sustainability This full Sustainability Report provides ZERO detailed information on our strategy, Report for 2020 CARBON governance, partnerships and FOOTPRINT ...... 10 performance. The Summary includes extracts from this report to provide an ZERO overview of our approach and progress. Here we present an update on WATER progress on our Together Towards WASTE ...... 20

ZERO programme as we work with ZERO our people and partners to achieve IRRESPONSIBLE Annual Report ZERO carbon footprint, ZERO water DRINKING ...... 27 Our Annual Report focuses on our waste, ZERO irresponsible drinking and financial performance. It includes ZERO information on sustainability that is a ZERO accidents culture. We explain ACCIDENTS CULTURE ...... 35 most pertinent to investors. how we do business responsibly to support these goals and our business strategy. And we provide information RESPONSIBLE BUSINESS ...... 41 on sustainability governance.

GOVERNANCE AND TRANSPARENCY ...... 51 Website Carlsberggroup.com hosts our reports and policies, as well as showcasing

stories on our biggest sustainability achievements.

Social media @carlsberggroup We share our latest sustainability carlsberggroup.com stories on social media

throughout the year. @carlsberggroup Carlsberg Group

Introduction

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 INTRODUCTION 3

MESSAGE FROM OUR CEO

2020 has been an incredibly organic decline in operating profit to DKK 956m to support research, arts, challenging year for our 3.1%. We ended the year with culture and civil society, including reported revenue of DKK 58.5bn, DKK 109m specifically for COVID-19 business, our customers and operating profit of DKK 9.7bn and relief efforts. our people all around the free cash flow of DKK 5.1bn. world. Our purpose is for a better Despite the challenges posed by today and tomorrow. Despite the Through it all, we have remained COVID-19, our strategic priorities immense and immediate threat to resilient, buoyed by our strong and ambitions remain intact, and we human health, I am encouraged to performance over the past few years. have continued to invest in our see that the global pandemic has brands. While volumes sold have sharpened the world’s focus on the I would like to thank each and every declined overall, we have seen long-term sustainability of the one of our people for their role in growth of 1% in our craft & speciality planet too. We must not lose sight of continuing to support our business brews and 11% in our alcohol-free this overriding objective and I joined and our customers through these brews. other leading CEOs in urging tough times. governments to ensure their recovery Our financial performance and efforts support the Paris Agreement’s During the year, our top priority was SAIL’22 business strategy are 1.5˚C climate goal. the health and wellbeing of our underpinned by our ongoing employees, while at the same time commitment to responsibility and At Carlsberg, we have our own taking the actions required to protect sustainability. ambitious targets to cut carbon the financial health of our business emissions and water waste, and we this year and capture long-term This year, we increased our support will not let COVID-19 throw us off We are on track growth opportunities for the future. for local communities – including the course. We are on track to meet our to meet our ambitious hard-hit hospitality industry – and 2022 targets, and since 2015 we sustainability targets for The market decline and prolonged transformed production lines to help have reduced our emissions 2022 and we will not let on-trade closures in many markets meet unprecedented demand for by 39% and our water use by 18% for COVID-19 throw us off course. led to an 8.4% organic decline in hand sanitiser. The Carlsberg every hectolitre of produced. revenue, but our relentless focus on Foundation, together with the New Cees ’t Hart, From 2015 to 2019, we cut our CEO, Carlsberg Group cost efficiencies and early and the beer-in-hand emissions by 7%. intervention enabled us to limit the Tuborg Foundation, also donated

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 INTRODUCTION 4

Achieving these targets as we work accidents culture. Our efforts steadfast in our commitment to ABOUT THIS REPORT Together Towards ZERO will help us towards achieving all four ambitions uphold the principles of the UN Our annual reporting suite comprises three mitigate risks to our business that play a critical role in the success of Global Compact. With the creation of reports: our Annual Report, this Sustainability will be amplified by climate change our business now and in the future – the Carlsberg Sustainability Advisory Report and a Remuneration Report. Each in the future. I am pleased to see the not only by addressing risks but by Board, we are inviting external includes content tailored to its specific audience increased focus on ESG risks and creating opportunities for growth. experts to provide an “outside in” and cross-references to the other reports opportunities by our stakeholders, view to help us stay true to the where relevant. Download all the reports at including investors, which will Our burgeoning range of alcohol- values of our founder, challenging carlsberggroup.com. contribute to creating progress at the free brews has delivered 11% growth ourselves to constantly strive for pace and scale needed. in sales volumes this year as more better as we work towards our This Sustainability Report describes our people embrace healthy balanced ambitious targets. approach and performance on our most This year, for the first time, we are lifestyles in the wake of the material social, environmental and ethical reporting in line with the pandemic. We also want consumers I am convinced that driving progress issues for the financial year 1 January to recommendations of the Task Force to enjoy our alcoholic products Together Towards ZERO will help 31 December 2020. on Climate-related Financial responsibly and reached our target Carlsberg keep brewing for a better Disclosures to better understand and to include messaging about today and tomorrow as the world It covers all Carlsberg Group subsidiaries in act on climate-related risks and responsible drinking on all packaging recovers from COVID-19. which we have a controlling stake and possess opportunities for our business. two years early. more than 50% of the voting rights, across 31 countries, including 86 and soft Climate change is also increasing The success of our business depends Cees ’t Hart production sites (together referred to as water risks and our ground-breaking on our people, and their health and CEO, Carlsberg Group “breweries” in this report) and two malting water risk scenario analysis with safety remains our top priority. As plants. See page 74 for more on our reporting WWF is helping us target action to well as supporting them through the scope and methodology. Selected data on key sustain essential water supplies – challenges of the pandemic, we have performance indicators is subject to limited both for our breweries and for the stepped up our efforts to embed safe assurance by PwC (see page 90). communities whose water resources behaviour and continued to drive we share. Our innovative partnership down accident rates by a further 19% This report serves as our annual with Desolenator will use renewable across the business in 2020. But this communication on progress to the UN Global energy from the sun to create access progress was overshadowed by the Compact and as our statutory statement on to clean water for thousands of death of a contractor during corporate social responsibility in accordance people in an area of India stricken by dismantling work at a former with section 99a of the Danish Financial the effects of both climate change production site. Any accident is one Statements Act. and COVID-19. too many and this tragedy strengthens our resolve to get to Our actions to contribute to the UN Sustainable ZERO carbon footprint and ZERO ZERO. Development Goals are signposted in relevant water waste are key ambitions in our sections and summarised in the Governance Together Towards ZERO Carlsberg was founded over 170 and transparency section (see pages 59-65). programme, alongside ZERO years ago on a strong sense of social irresponsible drinking and a ZERO responsibility – and we remain

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 INTRODUCTION 5

EXTERNAL PERSPECTIVES

The Carlsberg Sustainability Advisory Board (CSAB) was established and I am pleased to be part of It has been my utmost Since 1847, Carlsberg and held its first meetings in 2020 to the CSAB and have the opportunity pleasure and privilege to be a its people have remained true to the provide additional “outside in” to follow – and influence – the part of the CSAB, which has allowed founder’s heritage, aspirations and perspectives directly to our CEO and Carlsberg sustainability journey. me to contribute my consumer responsible way of working. The senior executives. We invited the trends expertise for a higher cause. decade leading to 2030 will three external members to provide From my perspective it is a genuine be dynamic and challenging. feedback on our sustainability improvement journey that seeks to It’s heartening to see how the approach and performance. continuously raise the bar, focusing Together Towards ZERO initiative To transform itself whilst securing on the material issues. Much has is more than just a CSR campaign; business continuity and success will See page 53 to find out more about been done in recent years, which but a well-crafted strategic plan not be an easy task. Well-supported the CSAB, their feedback and our allows us to set high ambitions. to lead Carlsberg towards a more by a bold company purpose, with its response. All companies are today truly at an sustainable future. ambitious Together Towards ZERO inflection point with regard to ESG sustainability programme and strong We also completed an update of our and sustainability, and it is clear to Looking ahead, I’m hopeful that the commitment from its leadership and materiality assessment, analysing me that Carlsberg is stepping up to executive leadership of Carlsberg staff, Carlsberg is ready for the job. the greatest risks and opportunities this challenge. will be able to set new standards for our business. This included an for how business success will be The CSAB will play its part, acting as Knut Haanaes, measured – not just by financial a sparring partner for the leadership internal survey across a range of Professor of Strategy, functions and geographies, as well Lundin Sustainability Chair, metrics and shareholder value, but team and helping to stay in sync with as a series of interviews with external IMD Business School by the organization’s impact on expectations of the outside world. stakeholders. people and planet. Companies must adapt to survive, and we will challenge the speed and Acacia Leroy, scale of sustainability implementation, See page 57 for more about our Greenhouse Labs Manager, advising on the tough dilemmas and materiality assessment and our most Deloitte SEA material issues. trade-offs on the way Towards ZERO.

Frank van Ooijen, Independent Sustainability Consultant

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 INTRODUCTION 6

OUR BUSINESS

Carlsberg is one of the world’s by 1% and alcohol-free brews by through domestic sales, exports and together with the New Carlsberg largest brewery groups. In 11%, although the overall volumes of licensing agreements. Foundation and the Tuborg beer we sold declined due to the Foundation, granted DKK 956m to 2020, we produced almost impact of various COVID-19 We deliver value to our shareholders support scientific research, arts, 117 million hectolitres (hl) of restrictions. and society, and support sustainable culture and civil society, including quality and beverages. development, through the over DKK 109m towards COVID-19 More than 40,000 employees help contribution we make to economies relief efforts. Our 100+ consumer brands include us produce, transport and sell our around the world (see graphic). international premium brands such beer. We have 88 sites in Western See our Annual Report for more as Carlsberg, Grimbergen, 1664 and , and Asia. Our majority shareholder, the information on our business and Tuborg, as well as strong local Our products reach consumers in Carlsberg Foundation, uses its financials at carlsberggroup.com/ brands. In 2020, we increased sales over 100 countries around the world dividends for wide societal benefit. In reports-downloads. volumes of craft & speciality brews 2020, the Carlsberg Foundation,

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 INTRODUCTION 7

TOGETHER TOWARDS ZERO

At Carlsberg, we are brewing brewing for many more years to issues. It also enables us to capture irresponsible drinking and ZERO Development Goals (SDGs) where for a better today and come. See our Annual Report for opportunities by meeting growing accidents culture. Identified through we can have the greatest impact. more on our SAIL’22 strategy. consumer demand for more a materiality process (see page 57), tomorrow. That is our purpose. sustainable products and healthier these are the areas where we can We partner with suppliers, NGOs and Our Together Towards ZERO choisces. have the biggest impact on others in our industry to make We have been brewing for over 170 programme helps us mitigate long- sustainable development through our progress Together Towards ZERO. years. Doing business responsibly term risks and make our business The programme sets out business and our partnerships. We Our steadfast commitment to doing and sustainably will help us stay on more resilient by tackling global transformative targets to drive action have aligned our ambitions and business responsibly underpins course to achieve our SAIL’22 challenges such as climate change, in four priority areas: ZERO carbon targets to the UN Sustainable progress in all four priority areas. strategy, deliver value for water scarcity and public health footprint, ZERO water waste, ZERO shareholders and society, and keep

1 Beer-in-hand data for 2015-2019. See page 88.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 INTRODUCTION 8

SUPPORTING PEOPLE THROUGH THE COVID-19 CRISIS

The COVID-19 pandemic has research, arts, culture and civil impacted lives and livelihoods society. worldwide, with far-reaching health and economic consequences. CALLING FOR A LOW-CARBON RECOVERY During these unprecedented and As we work to respond to COVID-19 challenging times, we prioritised the challenges and reset our business for health and wellbeing of our people the future, we know society must (see page 39) and stepped up efforts also do the same and we are to support our customers and determined to play our part in communities. supporting a low-carbon recovery.

HELPING COMMUNITIES STAY Together with the Science Based STRONG Targets initiative and 150 other We transformed brewery production leading businesses, we called on lines to produce alcohol for hand governments around the world to sanitiser. We donated equipment and align their COVID-19 recovery alcohol-free beverages to support efforts with the latest climate healthcare workers. And we ran science. We also joined business campaigns to support the hard-hit leaders and investors in urging the hospitality sector. See map for local European Union to put the European examples. Green Deal at the core of its recovery package. We made corporate contributions and Carlsberg teams around the world raised funds for local organisations. In addition, the Carlsberg Foundation, together with the New Carlsberg Foundation and the Tuborg foundation, donated DKK 109m during the crisis to support

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 INTRODUCTION 9

TOGETHER TOWARDS ZERO

Our ambition is to achieve ZERO carbon footprint, ZERO water waste, ZERO irresponsible drinking and a ZERO accidents culture. We are making good progress towards our targets by working in partnership Towards ZERO.

IN THIS SECTION ZERO carbon footprint ...... 10 ZERO water waste ...... 20 ZERO irresponsible drinking ...... 27 ZERO accidents culture ...... 35

MAKING OUR BEER MORE SUSTAINABLE

Watch our video to find out how our Together Towards ZERO programme helps us produce our beer more sustainably, enables consumers to enjoy it responsibly and keeps our people safe.

ZERO Carbon Footprint

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT 10 ZERO CARBON FOOTPRINT

The world is facing a climate glass – what we call beer-in-hand emergency that threatens emissions – by 30% by 2030 (from 2015 levels). people, the environment and our business. Beyond our own operations, we work with partners who supply our Governments, businesses and ingredients, packaging, logistics and individuals must take action now to refrigeration. Together, we are help prevent the worst effects of supporting sustainable agriculture, climate change. We are determined making the transition to lower- to do our part by cutting the carbon carbon transport and cooling, and footprint of our operations and our creating packaging solutions like our entire value chain. Snap Pack and Green Fibre Bottle.

Our ambitious targets, approved by Extreme weather and shifting rainfall the Science Based Targets initiative patterns as a result of climate in 2017, are in line with the latest change pose a direct risk to our climate science to limit global brewing operations and to the crops warming to 1.5˚C. In 2020, we and water we need to make our joined other leading companies in products. This year, we signed up to urging governments to ensure their the Task Force on Climate-related COVID-19 recovery efforts align with Financial Disclosures and are the Paris Agreement’s 1.5˚C goal and applying its recommendations to calling for European Union leaders to better understand and report on embrace a 55% carbon emissions these risks. We were also included in reduction target by 2030. the CDP A List of global corporate leaders for transparency and action We are making strong progress on on climate risks and opportunities. our 2022 targets to switch to 100% renewable electricity, eliminate use of coal and halve carbon emissions at our breweries as we drive progress towards ZERO carbon brewing by 2030. Eliminating emissions from our breweries will help us cut our 7.2 & 7.3 13.1 & 13.3 17.16 & 17.17 12.2, 12.5, value chain footprint from field to 12.6 & 12.9

See SDG index, page 59. 1 Emissions from driving a car 20,000 km a year at We have discontinued our target specifying 30 supplier partnerships as collaboration a rate of 130 g CO2/km = 2.6 tonnes CO2/year with suppliers has become such an integrated part of our approach. See page 16. CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT 11

Our farm is one of the leading farms in the Yaroslavl region and has grown brewing for several years. Thanks to the Carlsberg Group, our experience turned out to be a success: the harvest almost tripled within three years. The barley must meet specifications and grows under regular monitoring that allows it to reach high quality. Carlsberg Group specialists provide consultations and always assist us with expert advice.” FEATURE: ZERO CARBON FOOTPRINT IN ACTION Nikolay Minakin, Head of Kurdumovskoye farm, Yaroslavl, PROMOTING SUSTAINABLE AGRICULTURE THROUGH CROP

Scientists at the Carlsberg Research ground-breaking research into resilient traits such as greater integrate those varieties into our beer current elite varieties. Their yield is Laboratory in have climate-tolerant crops. In the last tolerance to drought and heat supply chain. approximately 10% higher than been exploring the boundaries of decade, we have invested more than waves, deeper roots and the ability varieties developed locally in Russia. crop science and perfecting the art of DKK 50m in research on breeding to grow in saline soils. Barley bred to produce higher yields brewing since 1876. Today, they are new sustainable and climate- also has a lower climate impact We set requirements for these turning their attention to sustainable tolerant raw materials, as well as We are now partnering with local because the same amount can be farmers on fertiliser use and hold agriculture to reduce climate risks in advances in hop, yeast and brewing breeders in to see how the grown using less fertiliser, which field days to prepare them to harvest our supply chain. processes. new crop varieties cope in extreme takes a lot of carbon to produce. In the benefits of future drought and adverse soil conditions. Russia, the 70 farmers who supply from our lab. Barley is an essential ingredient for Our scientists have isolated more The varieties that grow best will form our are using our beer – and the focus of the lab’s than 40 candidates for barley a pipeline for barley breeding, and barley varieties developed by our lab varieties that display climate- we will work with partners to rapidly that are more sustainable than

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT 12 ZERO CARBON FOOTPRINT ELIMINATING sites to track progress. In 2020, SWITCHING TO RENEWABLE carbon emissions totalled 563,000 ENERGY BREWERY tonnes. We are well over halfway towards our WHAT WE EMISSIONS goal to source 100% of electricity for We are switching to 100% renewable our breweries from renewable sources MEAN BY ZERO Our global Environmental Policy electricity, eliminating use of coal and like the sun and wind by 2022. To CARBON supports our progress towards ZERO adopting best practices and advanced ensure a robust approach to the carbon emissions from our breweries. technologies in production processes. measurement and use of renewable FOOTPRINT It sets out our commitment to robust electricity, we are members of the Brewery emissions: We aim to environmental standards with In 2020, we reduced relative emissions RE100, and apply their technical eliminate carbon emissions from our particular focus on energy and at our breweries by 12% to 4.3 kg CO2 criteria when working with renewable 88 sites – including breweries and emissions as well as water, waste and per hl from 4.9 kg CO2 per hl in 2019. electricity – see overview of approved malting sites – by 2030. To help us packaging. That is a 39% reduction since 2015, renewable electricity types below. In drive progress towards this absolute

well on the way to our target of 50% 2020, we reached 64% (up from 56% target and improve production We manage our 86 breweries and two by 2022. Overall, across our breweries in 2019). Our breweries in efficiency on the way, we aim to malting sites as part of our integrated and malting sites we have cut our achieved 100% this year, joining all our halve emissions per hectolitre (hl) of supply chain, using best practice absolute emissions by 33% since 2015. breweries in , which production from our 86 breweries – environmental management systems This is a saving of 283,000 tonnes of achieved this target several years ago. including breweries, soft and to drive continuous improvement. CO2, equivalent to taking 109,000 water plants, but excluding malting These systems are certified to the ISO 1 cars off the road for a year . Most of our renewable electricity sites – between 2015 and 2022. 14001:2015 standard at 79 of our comes from the grid through the breweries, and energy management We are on course to eliminate purchase of renewable electricity Both targets include Scope 1 and 2 systems at 19 sites are also certified emissions from our breweries and certificates, totalling 570,077 MWh emissions and exclude owned to ISO 50001. malting sites by 2030. in 2020. At eight of our sites, we logistics and distribution, which are

generate renewable power from on- included in our beer-in-hand target. We collect environmental data from site solar panels. We are also across all our breweries and malting exploring options to buy renewable Beer-in-hand emissions: We aim to reduce our value chain (beer-in- RE100 OPTIONS FOR RENEWABLE ELECTRICITY hand) emissions per hl of beer To achieve 100% renewable electricity, a company produced by 15% by 2022 and 30% may choose from the following options: by 2030 from our 2015 baseline. Self-generated electricity These reductions cover Scope 1, 2 1. Generation from installations owned by the company and 3 emissions from: growing and Purchased electricity malting raw materials; brewing, 2. Purchase from on-site installations owned by a supplier packaging, distributing, and chilling 3. Direct line to an off-site generator with no grid transfers our products; and handling our 4. Direct procurement from offsite grid-connected generators 5. Contract with suppliers (green electricity products) packaging waste after use. 6. Unbundled energy attribute certificate purchase

7. Other options

1 Emissions from driving a car 20,000 km a year at a rate of 130 g CO2/km = 2.6 tonnes CO2/year. * 2020 data within PwC's assurance scope. 2015-2019 data assured in prior years (see previous sustainability reports).

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT 13

electricity directly from wind and solar certificates. In , 52% of all producers through power purchase heat generation came from renewable agreements. fuels, including 27% from ethanol extracted while producing our alcohol- Our site at Farris in achieved . zero carbon emissions in 2020, switching from fuel oil to renewable TRANSFORMING BREWING electricity. Globally, eight of our EFFICIENCY breweries are now carbon-neutral, Our breweries continued to break new powered by 100% renewable electricity boundaries for efficiency and and thermal energy. innovation in 2020.

By targeting 100% renewable In Asia, we cut the amount of heat our electricity for brewing, and through breweries use by 13% from 2019 our membership of the RE100, we through investments in bottle washing aim to encourage our industry peers and energy recovery systems. and suppliers to make the same switch to renewables. In Western Europe, we installed new brewhouse heat recovery systems in ELIMINATING COAL and that cut heat In 2020, we converted a coal-fired use by over 10%. CASE STUDY boiler at our in to run on biogas generated on In Eastern Europe, we added OUR SCIENTISTS PURSUE site and, if necessary, natural gas. recuperative heat exchange units in That leaves just one site where we still and reduced brewhouse TOMORROW’S ZERO CARBON use coal, our Aurangabad brewery in evaporation in Russia. SOLUTIONS India. Plans to convert the coal-fired boiler at this site to run on biomass Climate and water risks to our Post-doctoral researchers at the Carlsberg energy-saving solutions at our breweries have been delayed due to an extended business are connected and so are Research Laboratory are using next-generation without disrupting current production. The COVID-19 lockdown in India, but we many of the solutions. For example, technology to bring us a step closer to a ZERO scientists are already trialling interventions aim to complete this in 2021. the new advanced water-recycling carbon future. that could help our brewery in Ukraine cut plant at the Fredericia brewery in energy use by up to 15%. Many of our breweries have replaced , operational in 2021, will In 2020, the talented members of our Young coal and natural gas with innovative halve water consumption, and biogas Scientists Community created a “digital twin” They are also evaluating early-stage technology to harness carbon-neutral generated from the wastewater brewery in close collaboration with colleagues technologies with the potential to save energy thermal energy. In 2020, 28 breweries treatment process will replace around from our integrated supply chain and Baltika in and carbon at our breweries globally, including made use of biomass, biogas 10% of the site’s natural gas Russia. This unique virtual tool will enable us to solar-assisted brewing, heat pump integration extracted from on-site wastewater, consumption. simulate new ideas, brewing techniques and and energy from spent grain. renewable district heating or biogas

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT 14

CUTTING OUR In 2020, we conducted our most extensive analysis yet of our global BEER-IN-HAND value chain carbon footprint, based We have worked closely with Carlsberg REPORTING ON EMISSIONS on the European Commission on their supply chain emission CLIMATE- guidelines and with support from the calculation model since 2016, and the We look beyond the brewery gates Carbon Trust. Suppliers representing RELATED to understand and reduce the climate more than 60% of our spend provided work we did this year sets new impact of our products across the in-depth product-level data on the standards for Scope 3 emissions FINANCIAL RISKS value chain – from growing and emissions they generated to provide accounting and measurement. The AND malting grain to brewing, packaging, ingredients, packaging and transport model we have developed together OPPORTUNITIES transporting and cooling our for our beer. uses very granular data for each value products. We call this our beer-in- chain step. This enables Carlsberg to hand emissions. The results showed that our value Recognising the increasing risk of climate chain emissions in 2019 totalled 6.8 track, measure and reduce its Scope 3 change to businesses and communities across our regions, in 2020 we MEASURING OUR VALUE CHAIN million tonnes of CO2-equivalents emissions on a market, regional and broadened our analysis and reporting in FOOTPRINT (CO2e). For every hectolitre of our global level with great precision, which this area by aligning with the We cannot manage what we do not beer that consumers enjoyed, it took puts the company at the forefront of recommendations of the Task Force on measure. We conduct in-depth 56.4 kg of CO2e to do everything Scope 3 accounting.” Climate-related Financial Disclosures assessments of our carbon emissions needed to put the beer in their hand. (TCFD). across the value chain every three That is 7% less than in 2015, putting Myles McCarthy years, using leading best practices us almost halfway towards our 2022 Director Implementation, The Carbon Trust Using the TCFD reporting framework, we and the Greenhouse Gas Protocol. goal of 15%. We will use the data to will continue to improve our help identify and implement the understanding and disclosure of the actions needed to achieve our target. medium- and long-term impact of climate change on our business.

Our first disclosure according to the TCFD reporting framework is included in our 2020 Annual Report (page 36), available at carlsberggroup.com/ reports-downloads.

It provides a brief summary of our governance, strategy, risks, metrics and targets in relation to climate change with links out to more information in this Sustainability Report and elsewhere.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT 15

The graphic illustrates our progress across each stage of the journey from field to glass. It shows that we have significantly cut carbon from our brewing and cooling, and made some progress on packaging and transport. However, emissions generated from agriculture – over which we have least control – have risen slightly.

Methodologies for value chain footprinting continue to develop, and in our latest analysis we updated our 2015 baseline to reflect the improved methodology, greater availability of primary data, and additional sector guidance on both calculations and emissions factors from the Product Environmental Footprint Category Rules (PEFCR) and the Beverage Industry Environmental Roundtable (BIER). This resulted in a 12% increase in our 2015 baseline.

THE SCIENCE BEHIND OUR CARBON Industry GHG Emissions Sector Guidance We were early adopters of the product reduction target – exceeding the 67% required ACCOUNTING (Version 4.1), developed by the Beverage environmental footprint guidelines, developed by the Science Based Targets initiative. We conduct a comprehensive analysis of our Industry Environmental Round Table (BIER). by the European Commission for measuring a Adopting globally recognised best-practice global beer-in-hand carbon footprint every product’s environmental footprint. And we Detailed data from our suppliers enables us to standards gives us confidence that we are few years, using stringent processes that apply the relevant parts of these specific track emissions by market down to product gathering science-based information to inform enable us to identify and conduct reduction product rules for beer to measure our group level. In total, we collect primary data our efforts to reduce our carbon footprint and activities specific to each market. corporate value chain footprint. for more than 60% of our spend, covering our mitigate climate-related risks to our business. We adhere to the rigorous GHG Protocol for wide-reaching value chain from raw materials Seventy-five percent of our Scope 3 emissions Read more about the methodology on page 88. Scope 1, 2 and 3 emissions and the Beverage to point of sale. are covered by our 2030 beer-in-hand carbon

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT 16

PARTNERING TO SHRINK OUR Together with O-I Glass, a supplier of Our own packaging – including glass that can make them last three times SHARED FOOTPRINT our Western European markets, we and plastic bottles, cans, kegs, as long. With 87% of our value chain carbon localised production of our Grimbergen plastic wrap and cardboard boxes – footprint outside our operations and bottles in at an energy- generates 41% of our beer-in-hand Many of our breweries support local direct control, partnering is key to efficient plant. The bottles are made emissions. This is by far the largest initiatives to boost recycling rates for reducing our beer-in-hand emissions. using almost 80% recycled broken part of our value chain carbon packaging. In 2019, Baltika launched glass and delivered to our nearby footprint. 19 partnerships to operate 10,000 We collaborate with partners who by train, a recycling containers in 50 supply our ingredients, packaging, lower-carbon emission alternative to To cut the climate impacts of municipalities across Russia. And in transport and refrigeration on trucks. packaging, we invest in innovation 2020, the powerhouse brand efficiencies and innovation that drive and promote reuse and recycling. We expanded its trial with retailer down their carbon footprint and ours. Some of our key suppliers have are also developing industry-leading VkusVill to install vending machines For example, partnerships are helping adopted their own carbon-cutting solutions to reduce our plastic in St. Petersburg and Moscow stores us drive progress in areas such as roadmaps that support our 2022 and packaging, which can have a wider where consumers can drop off used sustainable packaging and switching 2030 targets to reduce our beer-in- environmental impact, particularly if cans and plastic bottles – the first to renewable energy. hand footprint. Examples include two it ends up in the world’s oceans (see initiative of its kind in the country. major beverage can suppliers, Ball and feature on next page). Originally, we set a fixed target to Crown. We are also experimenting with enter into 30 partnerships with Aluminium cans are the containers product packaging to reduce our suppliers to reduce our shared carbon In 2020, Ball completed two long- we use most for our products and carbon footprint. With our supplier footprint by 2022. Partnerships have term renewable energy agreements account for the biggest share of our DS Smith, we are testing stronger, now become such an integral part of for 93.4 MW of new wind energy emissions from packaging. This year, thinner cardboard boxes that could our approach that we have decided to and secured additional Guarantees of we partnered with suppliers to cut raw material use and related stop tracking the number of Origin to address 100% of its energy continue reducing their weight, use emissions from a multipack by partnerships and focus on their impact. load in Western Europe moving more recycled content and improve around 20%. In 2020, we started forward. Meanwhile, Crown has recycling rates after use. Our beer- trialling the boxes at our brewery in This year, we were able to obtain launched new goals to halve its in-hand analysis showed we cut Falkenberg, . primary data input on greenhouse gas operational emissions and source emissions from cans by around 17% emissions from suppliers representing 60% of its electricity from renewables from 2015 to 2019 – a testament to more than 60% of our spend to inform by 2030. the impact we and our suppliers can our beer-in-hand carbon footprint have when we work together. analysis. RETHINKING PACKAGING High-profile campaigns and new Around the world, we support well- More than 98 companies in our supply regulations have put the established and efficient bottle return chain have joined the Science Based environmental impacts of packaging, systems for consumers with high Targets initiative, 12 of which account and particularly plastics, in the collection rates. In some markets we for more than 13% of our total carbon spotlight. wash and refill returnable glass footprint and have a significant direct bottles. And in Malaysia we impact on our beer-in-hand targets. implemented a protective coating

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT 17

FEATURE SPOTLIGHT ON PLASTICS

We are continuing our efforts to packs of cans together. It is now in The Green Fibre Bottle, made from launched a trial in Sweden and savings will total 200 tonnes of CO2e reduce, recycle and avoid plastics. use in Denmark, Estonia, France, sustainably sourced wood fibre, has the UK. a year. Meanwhile, in 2020, Bon , , Lithuania and the the potential to offer a more Aqua in launched 100%

In 2020, we partnered with suppliers UK. sustainable alternative not only for We are also innovating in our use of recycled PET bottles, joining our to extend our revolutionary Snap Pack beer, but for other drinks and liquid recycled plastics for product Imsdal brand in Norway, which technology to three more markets. We are getting closer to a “paper” products. We were joined by other packaging. We now use shrink film moved away from virgin plastic in Launched in the UK in 2019, Snap beer bottle that can be launched leading companies in the project, all made of 100% recycled plastic in 2019. And we launched the first PET Pack cuts plastic by up to 76% per commercially, with a trial planned for of which have made good progress Denmark, Finland, France, Norway, bottle-recycling machine in multipack by replacing plastic shrink 2021 pending regulatory approval this year: Coca-Cola has launched its Poland and Sweden. For the Karhu together with supermarket and waste wrap or rings with glue dots that hold with our technology partner, Paboco. first prototype and Absolut has brand in Finland alone, carbon collection partners.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT 18

PROMOTING SUSTAINABLE The energy used to malt grain for making up around 70% of the fleet Russia, Sweden, Switzerland and From 2021, we will introduce energy AGRICULTURE our beers – by our suppliers and at globally. Ukraine. management systems in all The second biggest share of our our own malting plants in Russia – replacement fridges, where feasible, value chain climate impact – 25% of accounts for around 3% of our total Outsourcing most of our outbound CUTTING IMPACTS FROM to reduce electricity use and related emissions – comes from growing, value chain emissions. Between logistics enables us to make COOLING carbon emissions. This will require malting and processing ingredients 2015 and 2019, we reduced carbon efficiency gains, including higher fill Most of our products are best additional investment from us, but it for our beers and other beverages. emissions from malting processes by rates, by transporting our products enjoyed chilled. The fridges and beer will save our customers energy and 19% for every hectolitre of beer alongside others. We set clear coolers used for our beer and money – and help us reach our 2022 Our business depends on a long- produced. This was achieved through sustainability requirements in our beverages in bars, restaurants and and 2030 targets. term, sustainable supply of crops, decarbonising efforts at our own contracts with logistics providers. For retail stores account for 9% of our mainly barley and rice. We generally plants and by our supplier Viking, example, they must train drivers to beer-in-hand footprint. purchase barley as a commodity. which has converted a large part of maximise fuel efficiency, and track While we only work directly with its heat generation to sustainable fuel use and emissions. We work closely with two major farmers in one country, Russia, we biomass. suppliers, Frigoglass and Klimasan, support sustainable agriculture more In some markets, where we operate to adopt the latest market broadly in several ways. MAKING OUR LOGISTICS our own fleets, we use telematics technologies and solutions, switching SMARTER programmes to monitor and improve to more energy efficient fridges and We invest in next-generation crops The logistics of getting our beer from our drivers’ awareness on the road. refrigerants that have a lower through the work of scientists at the breweries to warehouses and on to These have helped to cut emissions climate impact. This proactive Carlsberg Research Laboratory. Their bars, restaurants and retailers by by improving fuel efficiency, as well approach, combined with more ground-breaking efforts, highlighted road, rail and sea account for 12% of as reducing accidents and vehicle electricity from renewable sources in on page 11, include developing beer-in-hand emissions. wear and tear. In 2021, new route national grids, reduced our climate-tolerant and high-yield planning software will reduce our refrigeration emissions by 21% from varieties of barley. Emissions from transport decreased road mileage, further cutting 2015 to 2019. by 12% between 2015 and 2019. We emissions. In 2020, we took delivery Our beer-in-hand analysis enables plan to take advantage of improving of the first of our fleet of 26-tonne The fridges and beer coolers we us to identify drivers of emissions, technology to make our fleet more electric trucks in Switzerland – the provide to our retail customers last which we will work on factoring into sustainable. first of their kind manufactured by around eight years on average. To our purchasing decisions in the Renault Trucks. minimise their carbon footprint, all future. For example, higher-yield At our warehouses, whenever we new models we buy must use LED crops can significantly reduce carbon replace machinery such as forklift Even at its most efficient, transport lighting and refrigerants such as emissions from agriculture. This trucks we aim to switch from natural by road is a relatively high-carbon hydrocarbons that have a lower means we may buy grain from gas and diesel to electric models, solution. We therefore look for climate impact than regions that produce higher yields and from lead acid batteries to more opportunities to transport products hydrofluorocarbons. In 2020, 97% of even if this involves transporting our efficient lithium ion batteries. To do by train wherever national rail fridges and beer dispense equipment raw ingredients over longer this, we also need to invest in networks allow. In 2020, we purchased through our central distances, since it reduces overall suitable infrastructure for charging continued to use rail in Denmark, procurement team used low- carbon emissions. electric vehicles. We now have over France, , Norway, climate-impact hydrocarbons & LED 1,550 electric powered forklifts, lightning.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT 19

ZERO CARBON FOOTPRINT: OUR PROGRESS & TARGETS

PLANNED ACTIONS FOR 2020 STATUS PROGRESS IN 2020 PLANNED ACTIONS FOR 2021 2022 TARGETS1 2030 TARGETS

Breweries

We converted a coal-fired boiler at Poland’s Okocim Phase out coal at our two remaining coal-fuelled brewery to natural gas. Plans to convert the coal Convert the boiler at our Aurangabad brewery in Zero coal at our sites. boiler in India to biomass were delayed due to India – our last remaining use of coal – to biomass. breweries COVID-19.

Explore additional on-site generation and power Increase use of renewable heat and electricity through We increased electricity from renewables to 64% (up purchase agreements to secure renewable electricity sourcing renewable power (such as international 100% electricity from from 56% in 2019) primarily by investing in more for all regions for 2022. Zero carbon emissions at renewable energy certificates and power purchase renewable sources at our renewable energy certificates. 28 breweries now our breweries agreements), biogas generation and on-site solar operate fully or partly on biomass or biogas. Explore increasing use of renewable electricity for breweries projects. heating.

Increase use of biogas from wastewater to replace We upgraded equipment at breweries in China, natural gas. 50% reduction in carbon Estonia, Lithuania, Russia and Ukraine, and reduced Explore low-carbon alternatives with heat and gas Upgrade equipment to improve heat recovery. emissions at our heat usage where possible by optimising production suppliers to reduce carbon emissions. breweries processes. Support research on new renewable heat technologies.

Beer-in-hand

We completed a detailed analysis based on supplier Engage with major packaging and malt suppliers to input in line with the Greenhouse Gas Protocol (and support their transition to renewable electricity. Update beer-in-hand carbon footprint analysis using 15% reduction in beer-in- European Commission guidelines specific to beer). Continue to pursue reductions in carbon emissions 2019 data. hand carbon footprint This showed a 7% emissions reduction per hl from in the areas identified for all steps of the value

2015 to 2019. chain, from growing crops to packaging,

transporting and chilling our beer. 30% reduction in beer-in- hand carbon footprint We engaged with refrigeration partners on low-

climate-impact cooling, with farmers in Russia to Support local market teams with tracking and Introduce energy management systems in all improve barley yields, with suppliers to extend 100% low-climate- reducing beer-in-hand carbon footprint and engaging replacement fridges, where feasible, to reduce sustainable packaging solutions to more markets, and impact cooling with suppliers to reduce joint carbon footprint. electricity use and related carbon emissions. with logistics partners to improve the efficiency of our product transport.

Fully Partially Not

achieved achieved achieved

1 We have discontinued our target specifying 30 supplier partnerships as collaboration with suppliers has become such an integrated part of our approach. See page 16.

ZERO Water waste

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO WATER WASTE 20 ZERO WATER WASTE

Water shortages directly hectolitre (hundred litres) of beer. affect communities and our We have already achieved an 18% business. reduction through best practice efficiency and water treatment Many parts of the world face upgrades at our breweries. And we increasing water scarcity challenges will accelerate progress with state- as the effects of climate change of-the-art water-recycling trigger droughts and alter rainfall technology. patterns. As soon as 2025, two thirds of people worldwide may be In 2020, we updated our water risk dealing with water shortages. And by assessment for 81 of our 86 2050, almost half of global GDP majority-owned breweries and could come from areas facing high finalised a ground-breaking scenario water risk.1 analysis with WWF to prepare for future risks to our business. The Water is an essential ingredient in findings will help us prioritise actions our products, and other key as we work with partners to protect ingredients, such as grain and hops, and improve water supplies for the need it to grow. Put simply, no water communities whose resources we means no beer. With 17 of our share. We disclose our management breweries located where water risk is of water risks to the CDP and high, our focus on pushing the achieved an A- rating in the latest boundaries of efficiency and assessment. technology is both a business and a sustainability priority.

Industries like ours have a big role to play in safeguarding water supplies wherever we operate. That is why we have set ambitious global targets for ZERO water waste.

By 2030, we aim to halve the amount of water used to make every 6.1, 6.2, 6.3 17.16 & 17.17 6.4, 6.5, 6.6

1 Source: WWF, October 2020. See SDG index, page 59.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO WATER WASTE 21

Since ages a communal well has been our village’s water source. Day in day out, we took buckets of water from that well home for drinking, cooking and personal hygiene. Every day we anticipated the completion date [of the Huda project] to be able to FEATURE: ZERO WATER WASTE IN ACTION access freshwater for our daily life.” IMPROVING WATER QUALITY Villager, central AND ACCESS IN VIETNAM

Brewed and bottled in central public taps are available, they often First, we identified the communities we accelerated expansion to support Vietnam for 30 years, our popular run dry. most in need, then we collaborated over 14,000 more people as the Huda brand is deeply rooted in its with local people to plan how best to COVID-19 pandemic made the need local communities. The brewery put our commitment to provide clean, reliable fresh water. for reliable clean water even more safeguard shared water resources Projects included installing or urgent. Many people across the region still into action – bringing clean water at repairing water pipelines, reservoirs, get their drinking water from the turn of a tap to almost 20,000 wells, pumping stations, filter tanks, Huda’s highly effective approach unhygienic wells or ponds, store people. We partnered with local water flow meters and a concrete offers a useful template as we rainwater or are forced to buy costly authorities to construct new water dam. partner to extend water projects in bottled water to avoid drinking from infrastructure in five provinces, priority areas across Asia to fulfil our contaminated supplies. Even where including Thua Thien Hue, where the The projects we completed in 2019 2030 target to safeguard shared brewery is based. serve around 5,500 people. In 2020, water resources.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO WATER WASTE 22 ZERO WATER WASTE ELIMINATING To meet our 2022 target (see box) • India: Our Mysuru brewery was and reduce our reliance on fresh recognised as a noteworthy water- WATER WASTE water, we will combine continued efficient unit in the 2020 WHAT WE FROM BREWING efficiency upgrades with investments Confederation of Indian Industries in wastewater recycling and reuse. National Awards for excellence in MEAN BY ZERO OPERATIONS We are building an advanced water management. WATER WASTE wastewater recycling plant in We employ best practices and the Denmark and are assessing the INNOVATING TO REUSE latest technologies to continually opportunities for other breweries. WASTEWATER improve the efficiency of our 86 Breweries: We aim to progressively Treating and reusing wastewater breweries and avoid any water being eliminate water waste in our IMPLEMENTING BEST-IN- offers huge potential to shrink our wasted. Our focus on efficiency operations by reducing water use at CLASS EFFICIENCY MEASURES water footprint, while creating biogas reduces costs and the risks to our all our majority-owned breweries We maintain rigorous environmental for our heat use. We have 58 business, as well as delivering (including soft drinks and water management standards at all our wastewater treatment plants in sustainability benefits. plants, but excluding malting sites). breweries (see page 12) that support operation at our breweries. All our operations at these sites are continuous improvement. To drive In 2020, it took 2.8 hl of water for covered, including offices, production progress towards our targets, our At our Fredericia brewery in our breweries to produce 1 hl of and warehousing. breweries invest in making water- Denmark, we are investing in beer. That represents a 7% intensive cleaning and production advanced recycling technology that improvement on 2019, saving more Our targets are to reduce relative processes more efficient. Highlights will make it the world’s first brewery than 1,100 Olympic swimming pools water use by 25% by 2022 and by from 2020 include to virtually eliminate water waste. of water. Overall, the water 50% by 2030 compared with the Once operational, the new water- efficiency of our breweries has 2015 baseline performance of 3.4 • Vietnam: The Phu Bai brewery recycling plant will halve water improved by 18% since 2015. hectolitres (hundred litres) of water installed two new bottle washers consumption at the brewery, cutting used to produce 1 hectolitre of our that, combined with best practice the amount of water used to produce beer and beverages (3.4 hl/hl). water management, have helped each hectolitre of beer from 2.9 hl to

cut water use from 3.24 to 2.48 1.4 hl. Communities: We will begin hl/hl of beer produced. This will partnering to safeguard shared save the equivalent of 75 Olympic Construction of the plant began in water resources for communities in swimming pools per year. 2020 and the Danish Minister for areas identified as high-risk by 2022 Higher Education and Science and have a partnership in place in all • China: Our Dazhulin brewery is at attended a ceremony at the site (see high-risk areas by 2030. the forefront of implementing quote on next page), along with our

Carlsberg operating practices in partners in DRIP – the public-private water management (see feature on partnership behind the project. next page).

* 2020 data within PwC's assurance scope. 2015-2019 data assured in prior years (see previous sustainability reports).

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO WATER WASTE 23

Other significant progress included building a state-of-the-art wastewater treatment plant at our We want to make Shumen brewery in , which Denmark a green and will begin operating in 2021. In sustainable pioneer Eastern Europe we built three country, and one of the wastewater treatment plants, in Novosibirsk, Rostov and St. things that means a lot to Petersburg. In India, our Alwar me is how we make more brewery introduced a rooftop green research work in rainwater harvesting system and society. Here in Fredericia, extended wastewater recycling. A you have done it, across new water-recycling plant planned business, government and for our Kolkata brewery was not installed due to COVID-19 researchers. lockdowns. Ane Halsboe-Jørgensen Danish Minister for Higher Education Looking further into the future, our and Science Young Scientists Community – a team of postdoctoral researchers CASE STUDY based at the Carlsberg Research

Laboratory – developed a promising WATER WASTE DETECTIVES prototype that will reduce the water and chemicals needed for brewery cleaning. Our dedicated team at the Dazhulin brewery water. Based on this analysis, the team in China has made it their mission to introduced measures such as reusing water in MEASURING EVERY DROP dramatically reduce water waste. The brewery, cleaning processes and using less water in We source water for our operations one of our priority sites for water risk, is bottle washing and pasteurisation. These have from municipal supplies, boreholes at located within the Yangtze river basin. delivered big results for little additional cost. our own sites and surface water. We continually monitor intake at both The team scrutinised brewing and packing In just four months, the team reduced water site and global level to drive processes, checked all water pipes to detect used in beer production by 18% – from 2.7 to improvements and understand any leaks, inefficiencies or blind spots, and 2.2 hl/hl. Dazhulin’s striking success brings the broader performance trends. In installed more water meters to get a fuller brewery close to achieving our 2022 target to 2020, our total water consumption picture of water use in specific areas of explore going below 2.0 hl/hl at sites in areas decreased by 8% to 33 million m3. production. of high water risk. We are now sharing the team’s approach and lessons learned as best They also asked employees at every level to practice across our breweries. use their experience to share ideas for saving

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO WATER WASTE 24

MAPPING OUR can plan interventions accordingly. future risks to our breweries and how The results showed that none of our we can best prepare. WWF has now WATER RISK breweries currently face high overall incorporated the scenarios into its Preparing for a world where water is operational risks. However, 17 water risk tool, to be used by increasingly scarce helps us build a breweries were identified as being in thousands of companies globally. more resilient business and better high-risk areas, spread across nine support the communities whose major river basins in Asia (see map). Mapping water risk for our breweries natural resources we share. In 2020, Together, these breweries account and local communities will help us we worked closely with WWF to gain for 17% of our global production work towards our 2022 goal to a better understanding of water risk. volume. explore reducing water use below 2.0 hl/hl at all high-risk breweries IDENTIFYING HIGH-RISK MODELLING WATER RISK and prioritise local partnerships to BREWERIES SCENARIOS protect shared water sources. We assessed 81 of our majority- Climate and water risks are closely 1 connected, especially for businesses owned breweries across Europe and like ours that depend on reliable Asia using WWF’s leading Water Risk Companies are finally Filter tool. water supply in many parts of the world. waking up to growing To gain a complete picture, we water risks and the need collected and evaluated data on a In 2020, we worked with WWF on a to take urgent action to wide range of river basin and ground-breaking addition to its reduce their risks and operational risks2. These included Water Risk Filter – forward-looking scenarios to help us better tackle shared water vulnerability to floods, water scarcity challenges. By harnessing and poor water quality, and the understand our global water risk in a potential for regulatory action or changing climate. the new scenarios in the reputational challenges such as Water Risk Filter tool, media scrutiny or community We were the first multinational to test companies and investors conflict. In evaluating sites, we also and use the tool, which enables can better assess, factored in each brewery’s size and businesses to explore scenarios for 2030 and 2050 based on current respond and plan for anticipated growth. climate and water trends as well as both optimistic and This assessment – the most detailed pessimistic alternatives. The findings resilience. on likely changes in water availability we have ever conducted – enabled Ariane Laporte-Bisquit, and quality will help us evaluate us to rank sites by risk level, so we Water Risk Filter Lead, WWF

1 The water risk assessment did not cover five Carlsberg microbreweries in Europe, which together account for around 0.1% of our total production volume. 2 The methodology used was more comprehensive than our 2016 assessment, which focused only on river basin risks. In 2020, we scored sites on four factors, weighted as follows: basin risks (33.33%), operational risks (33.33%), site size (16.67%) and growth projections (16.67%).

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO WATER WASTE 25

Our projects range from improving PARTNERING TO water access in homes and schools to PROTECT THE restoring habitats and installing WATER WE innovative technology. Some involve international NGO partners and SHARE extensive community engagement, Thriving healthy communities and while others are initiated directly by freshwater ecosystems around our our breweries based on their breweries are essential to our business knowledge of local needs. success. These communities around the world rely on the water we share, In 2020, we partnered with WWF and and we have a responsibility to help the University of Kathmandu to protect this essential natural resource. consult stakeholders and research water-related health risks and Investing in water stewardship helps management in the Narayani river us build strong relationships with region in . Based on the We are proud to partner with Carlsberg, a company whose 2030 goals are setting the communities and regulators, and findings, in 2021 we will begin standard for corporate sustainability. It’s been a privilege to work with such incredible cross- supports our licence to brew now and projects to restore wetlands, which sector organisations, as well as the women entrepreneurs in the Sundarbans. The impact of in the future as water becomes will help purify water and maintain a this collaboration goes beyond the provisioning of clean water. It is a demonstration of the scarcer. stable supply for local communities transformational potential of convening partners around a shared vision of the future. and freshwater ecosystems. Louise Bleach, Development and Impact Lead, Desolenator

By 2030, we aim to partner to CASE STUDY safeguard shared water resources in In India, we have developed plans to fund clean drinking water and all high-risk areas with breweries. MAKING CONTAMINATED WATER Identifying our 17 breweries in high- sanitation improvements at three risk areas – in Cambodia, China, India, schools in Alwar and Mysuru that DRINKABLE IN INDIA and Nepal – is an important step currently lack soap, running water towards this goal. and other hygiene essentials. Our In 2020, we announced our first project with where rising sea levels are contaminating the technology partner Desolenator and our partner Desolenator – the world’s first solar last remaining freshwater sources. We already have water access social enterprise Ecosoftt will support thermal sustainable water purification projects underway or in the pipeline in delivery of these projects in 2021. technology – in a priority river basin shared Construction will be completed in 2021. Our river basins serving several of these by our Kolkata brewery. multi-disciplinary partners, including local breweries, as well as in Vietnam, experts Water Aid and the Sundarban Social where our Huda brand has set a The installation in the Sundarbans, West Development Centre as well as researchers strong example (see page 21). Bengal, will convert saline-contaminated water from Strathclyde University in , are into 20,000 litres of clean water a day using designing a water distribution model that will technology powered by 100% renewable energy. generate for local women by Around 4,000 people will benefit in the region, empowering female micro-entrepreneurs.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO WATER WASTE 26

ZERO WATER WASTE: OUR PROGRESS & TARGETS

PLANNED ACTIONS FOR 2020 STATUS PROGRESS IN 2020 PLANNED ACTIONS FOR 2021 2022 TARGETS 2030 TARGETS

Breweries

Continue best-practice efficiency improvements, We continued to implement efficiency measures Continue efficiency programme and conduct roll out benchmarking tools, and invest in and equipment upgrades. Learnings from our best equipment upgrades. efficiency and equipment upgrades with the performing breweries are being shared globally. greatest potential for water savings.

25% reduction in water usage at our breweries Construction of a water-recycling plant is underway 50% reduction in brewery Build new wastewater treatment plants in Denmark at the Fredericia brewery in Denmark. Opening of Explore going below 2.0 1 and Bulgaria. the treatment plant at the Shumen brewery in water use hl/hl at all high-risk Bulgaria was delayed due to COVID-19. breweries Begin operating advanced water-recycling and wastewater treatment plants in Denmark and Bulgaria, and assess the feasibility of developing We continuously work to improve the efficiency of treatment and recycling plants at other sites. our wastewater treatment facilities, reducing use of electricity and thermal fuels. We completed Optimise existing wastewater treatment plants to optimisation projects at our Yaroslavl and Tula enhance efficiency. breweries in Eastern Europe, focused on reducing heat energy requirements and increasing biogas production respectively.

We completed a comprehensive water risk assessment Use results of water risk assessment to engage Partner to safeguard Partner to safeguard of 81 of our majority-owned breweries. We identified Further develop and implement water community with communities and specific water projects in shared water resources shared water resources 17 in high-risk areas, and began working with partnerships in high-risk areas. high-risk areas. in high-risk areas in all high-risk areas partners to plan and launch specific projects.

Fully Partially Not

achieved achieved achieved

1 Target refers to all our majority-owned breweries (including soft drinks and water plants, but excluding malting sites).

ZERO Irresponsible Drinking

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO IRRESPONSIBLE DRINKING 27 ZERO IRRESPONSIBLE DRINKING

We want to make sure inform and encourage them to everyone enjoys our beers enjoy responsibly. responsibly and that we We are stepping up efforts to avoid provide consumers with marketing to minors and include choices that support a responsible drinking messages, as balanced lifestyle. well as ingredient and nutritional information, on our product Our brands sit at the heart of social packaging and online. We partner occasions and play a positive role in with governments, customers and the lives of millions of people around NGOs to tackle alcohol-related the world. Drinking cultures are challenges in each market. And we improving in many regions, including are rapidly expanding our range of Europe, where heavy episodic alcohol-free brews (AFBs). drinking is declining in 29 of 30 countries.1 Our commitment to responsible drinking is the right thing to do. It COVID-19 has reinforced the also helps to protect the reputation importance of healthy lifestyles for of our business and the brewing many people around the world. But industry, and supports our ability to misuse of alcohol – like drinking partner with regulators. As when underage, while driving or to consumers prioritise healthy choices, excess – remains a global health our AFBs are creating new revenue concern. That is why we are for our business. In 2020, AFB committed to promoting ZERO volumes grew by 11%. irresponsible drinking in all our markets.

People make their own decisions about how they consume our products, but we aim to enable,

1 World Health Organization. Status report on 3.5 & 3.6 17.16 & 17.17 alcohol consumption, harm and policy responses in 30 European countries. 2019. See SDG index, page 59.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO IRRESPONSIBLE DRINKING 28

We are not taking away anyone’s rights to drink, but instead encourage responsible drinking. In this regard, I commend initiatives such as the #CelebrateResponsibly campaign by Carlsberg Malaysia and Sin Chew Daily which are pivotal to educate and create awareness among the public.”

Datuk Seri Ir. Dr. Wee Ka Siong, Malaysian Minister of Transport

We are proud of our long-standing partnership with Carlsberg Malaysia’s Managing Director, Stefano Clini, and Corporate Affairs Director, Pearl Lai, with our #CelebrateResponsibly ride-hailing partners. Carlsberg Malaysia in this initiative to promote responsible drinking habits. We aim to empower more women to celebrate responsibly by providing a women-only ride-hailing service that values convenience, privacy and personal safety.”

FEATURE: ZERO IRRESPONSIBLE DRINKING IN ACTION Denise Tan, Founder, Riding Pink. DISCOURAGING DRINK-DRIVING WITH

DISCOUNTED RIDES IN MALAYSIA

Drink-driving remains a problem in Health Organization recommenda- with several ride-hailing services. ride-hailing service. We also The six-week campaign, our biggest Malaysia, where several recent tions. It also introduced harsher The campaign discouraged drink- partnered with three other yet, provided around 5,700 traffic fatalities have emphasised the penalties for drink-driving. Education driving by offering people discounted chauffeuring services – SOCAR+, discounted rides from GrabCar and dangers of driving after consuming and personal responsibility are of rides home after a night out any Lailah and DriveSafe – that each Riding Pink alone. Since 2015, this alcohol. Our team is supporting equal importance in ensuring time from 7 pm to midnight. offered a 10% discount on fares. annual ride-hailing campaign has government efforts to change progress on reducing drink-driving reached more than 81,000 consumer mindsets and behaviour. incidents. Consumers at more than 1,800 of To increase consumer awareness and consumers on the ground, and in our affiliated bars, bistros and education, we partnered with leading 2020 it connected with an additional In 2020, the country’s Road On Global Beer Responsibility Day, restaurants around the country used newspapers Sin Chew Daily and The 4.5 million people through digital Transport Act was amended to lower we launched our sixth annual smartphone apps to access discounts Star to publish articles and videos on channels. the blood alcohol level permitted campaign supporting people to from our established partners, Grab the new laws and ways to avoid while driving to align with World #CelebrateResponsibly in partnership and Riding Pink, a women-only drink-driving.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO IRRESPONSIBLE DRINKING 29 ZERO IRRESPONSIBLE DRINKING EXPANDING Our AFB sales by volume climbed by Switzerland, we saw a 40% rise in 11% in 2020 (83% since 2015) as AFB sales during March and April CHOICES WITH offerings expanded and consumers compared with the same months in WHAT WE ALCOHOL-FREE looked to moderate alcohol 2019. The brewery created around consumption during lockdowns. The 336,000 litres of high-proof alcohol, MEAN BY ZERO BREWS category outperformed our extracted during AFB production, to IRRESPONSIBLE We offer consumers a wide range of mainstream beers, which were more be turned into disinfectant gel to DRINKING tasty, positive choices to help them affected by COVID-19-related combat hospital shortages. In

drink responsibly. These include restrictions on bars and restaurants. Sweden, online sales of AFBs soared Tailored market-level approach: By beers with a range of alcohol by as much as 350% from March to 2030, our goal is for 100% of our content, including our increasingly MEETING EVOLVING DEMAND September 2020 compared with the markets to improve on responsible popular alcohol-free brews (AFBs). DURING COVID-19 same period in 2019. drinking every year. Each market And we continue to develop our Consumer demand is being driven by will set a target and prioritise actions products, focusing on great taste and a shift to healthy lifestyles that has Despite COVID-19 restrictions in specific to local needs. For example, a better consumer experience. been strengthened by the COVID-19 2020, we pressed ahead with our a market may focus on supporting a pandemic. Nearly one in three first AFB launches in Asia, where the reduction in drink-driving rates and We have set a target to ensure that people said they drank less – or category is less developed. We measure progress according to by 2022 all customers and partners stopped altogether – during successfully launched Carlsberg available national statistics. in all our operating markets have lockdowns, according to a nine- Alcohol Free and Carlsberg

access to our AFB portfolio, country survey by the International Alcohol Free Wheat, first in Global programmes: Our 2022 wherever Carlsberg brands are sold. Alliance for Responsible Drinking.1 Singapore and then in . targets commit us to offer alcohol- We currently offer alcohol-free And lager in China free brews everywhere we sell beer, variants in 48 domestic and export The impact of this trend was striking became our first local powerhouse launch partnerships in every market markets. in some of our markets. At our brand to launch an AFB in Asia. to support responsible consumption, Feldschlösschen brewery in and add responsible drinking messages and consumer information PREMIUM AND LOCAL to all primary packaging. These POWERHOUSE BRANDS initiatives support our 2030 target. GO ALCOHOL FREE

1 IARD survey, 2020. https://iard.org/press/ALMOST-ONE-IN-THREE-DRINKERS-CONSUMING-LESS-ALCOHO

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO IRRESPONSIBLE DRINKING 30

EXTENDING OUR LOW- AND recommendations from the World NO-ALCOHOL PORTFOLIO Health Organization. We have expanded alcohol-free options to all our international IMPROVING PRODUCT premium brands, adding to Carlsberg INFORMATION 0.0 and 1664 Blanc Alcohol Free We use our product labels to send with Tuborg Nul and Grimbergen clear messages about responsible 0.0%. We have also increased drinking to consumers – such as text distribution of existing AFBs, such as or icons warning people not to drink Brooklyn Special Effects Alcohol while driving, pregnant or underage. Free and Somersby 0.0%, into more markets (see page 29). Having achieved our target to put this messaging in place across our Several local power brands have product portfolio, together with other introduced new AFB options, members of the International including Falcon 0.0 in Sweden, Alliance for Responsible Drinking Mythos 0.0% in , CRISP 0.5% (IARD) we are now focusing in Finland and an Okocim 0.0% beer specifically on strengthening mix in Poland. messages about underage drinking.

A third of our brands now offer We continue to include nutritional alcohol-free variants. information, such as calorie counts, on our product labels and online. By 2022, we will do this for all beers CASE STUDY INFORMING sold in the EU as part of the Brewers of Europe Proud to Be Clear CONSUMER voluntary agreement with the FROM SUPER BOCK TO SUPER DOC CHOICES European Commission, and our aim is to achieve this globally. Consumers want transparency from , a Carlsberg joint venture in An accompanying digital campaign reached food and beverage companies. We In 2020, 99% of beverages we , found a unique way to thank more than 4 million people on social media provide clear product information produced globally listed all frontline health workers battling COVID-19. and received great engagement from the that allows people everywhere to ingredients (up from 90% in 2019) healthcare community. make informed choices and enjoy and 67% included nutritional (calorie) The company made a special edition of its our beer safely and in moderation. information (up from 65% in 2019). alcohol-free offering, changing the name from Super Bock also partnered with a Portuguese We collaborate with industry Super Bock Free to Super Doc for four months. distillery to turn the alcohol removed during associations, local partners and The alcohol-free brews were delivered to the production of its alcohol-free beer into governments to reduce alcohol- hospitals with thank-you cards for doctors and disinfectant gel that was donated to hospitals related harm in line with nurses. across the country.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO IRRESPONSIBLE DRINKING 31

ACCELERATING ACTIONS TO seeing or interacting with our brands In early 2021, we will launch our MONITORING COMPLIANCE safeguards. Results showed 90.6% REDUCE UNDERAGE DRINKING online. updated global Marketing We are prioritising safeguards for compliance with all five Digital Through the IARD, we have made a Communication Policy which sets digital channels and online sales Guiding Principles across global strong commitment with others in We also plan to step up strict controls to ensure that all our platforms, which have become more channels, an increase from 87% our industry to accelerate action to collaboration with retailers, advertising, communications and popular during COVID-19 compliance in 2019. Content is prevent underage drinking. wholesalers and distributors on best- promotions meet our high standards lockdowns. regularly updated and requires practice initiatives for age as a responsible brewer. These regular monitoring. In the rare event Our new target to add legal age verification, including developing include: In 2020, we introduced a new that we find problems, we direct symbols or text to all alcohol global standards for online alcohol • Design communications to appeal centralised system to better monitor local marketing teams to them products and AFB extensions sends a sales and delivery. to adult audiences local market compliance with our quickly. clear message to all communities • Restrict people under the legal that our beer, and spirits should OUR MARKETING drinking age from being exposed to not be bought or consumed by REQUIREMENTS our communications minors. These new commitments and • Advocate responsible drinking and partnerships support our Digital enjoyment in moderation Consumers increasingly engage with Guiding Principles, based on IARD • Never associate consumption of our us online and on social media. We guidelines designed to restrict those products with drink driving, are working with industry peers and under the legal drinking age from potentially dangerous activities or digital platform owners, including seeing our marketing on online antisocial behaviour Although underage Our Brewers’ Ambition Facebook, Snapchat and YouTube, platforms and social media. • Never claim that alcohol can drinking has fallen in 2022 is a significant step to implement rigorous online contribute to individual success, safeguards that prevent minors from enhance abilities or benefit health many parts of the world, in demonstrating our • Provide transparent information this trend is not universal. members’ leadership in about our products We want to accelerate ensuring all beers label • Communicate legally, truthfully progress and work with ingredients and calories. RESPONSIBLE DRINKING AND MARKETING COMMUNICATIONS and respectfully, championing others to eliminate Fulfilling this

social inclusion and environmental underage drinking in commitment, Europe’s 2015 2016 2017 2018 2019 2020 sustainability % of Carlsberg companies 78% 75% 90% 76% 97% 71% • Offer choice through alcohol-free every community through brewing sector is meeting implementing responsible drinking initiatives brews and market them responsibly a whole-of-society the expectations of Number of responsible 239 194 248 159 162 81 approach. consumers on how drinking campaigns alcoholic beverages % Fermented produced - - - 85 90 99 Henry Ashworth, volume listing ingredient CEO, International Alliance for should be providing information* Responsible Drinking (IARD) ingredients and calorie % Fermented produced - - - 65 65 67 volume listing nutritional information. information*

Lasse Aho, President, Brewers of Europe * 2020 data within PwC's assurance scope. 2018-2019 data assured in prior years (see previous sustainability reports).

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO IRRESPONSIBLE DRINKING 32

ENCOURAGING than 35.5 million people in 2020. teams. An annual survey by EXPANDING ALCOLOCKS IN behaviour. In 2020, 48% of our cars Examples include: Juvente, a youth temperance COMPANY VEHICLES in Western Europe and 50% in RESPONSIBLE • Bulgaria: Our yearly campaign with organisation, found a 20% decline Alcolocks prevent people from Eastern Europe were fitted with BEHAVIOUR the Union of Bulgarian Brewers to in alcohol sales by stores to driving if they are over the legal alcolocks (up from 37% and 31% in support healthy adolescents and underage customers. blood alcohol limit. In many markets 2019). We plan to continue this roll- Harmful drinking behaviours and families reached 1,160 people. • UK: We continued our partnership where there are no legal restraints to out in 2021. trends vary from country to country. • Denmark: We ran a pilot with the with The Drinkaware Trust, whose do so, we use these in our company We work with local partners who can Danish Centre for Social research at Drink Free Days campaign vehicles to encourage responsible help us identify national priorities – Aarhus University using targeted attracted 1 million unique visitors such as underage drinking, drink- text messages to encourage to the website, pledging 27,800 driving or drinking to excess – and students to drink less. drink-free days. target action where it will make the • Finland: Our Karhu 0.0 AFB most difference in each market. launched a Zero January social media campaign that reached These partners include local and 473,000 people during a month national governments, police when many choose to abstain from departments, supermarket chains, alcohol. NGOs, social research institutes and • France: Kronenbourg led a coalition ride-hailing companies. Together, of drinks companies to prevent we engage with customers and harmful drinking behaviour, consumers to encourage responsible partnering with 80,000 cafés, bars choices. and restaurants. • Laos: Our brand, the As markets track progress against country’s bestselling beer, funded their locally developed targets, we billboards and handed out 8,500 will use this information to measure stickers to drivers in support of the progress against our global 2030 government’s anti-drink-driving target for 100% of markets to campaign. improve on responsible drinking year • Latvia: The results of our survey on on year. what motivates bad driving habits, conducted with the Safe Driving In 2020, there were fewer School and the Latvian State responsible drinking campaigns than Police, generated strong media and in 2019. This is due to restrictions as public interest. a result of COVID-19, including the • Norway: We partnered with major closure of the on-trade in many grocery chains and the national markets and the cancellation of brewers’ association to prevent festivals and events. However, our alcohol sales to minors through in- local initiatives still reached more store advertising and training sales

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO IRRESPONSIBLE DRINKING 33

FEATURE . CELEBRATING GLOBAL BEER RESPONSIBILITY DAY 2020

We celebrate Global Beer Together, they reached 22.5 million alcohol: “We sell responsibly because alcohol and how they talk about it consumers of the dangers of drink- Responsibility Day in September people. we care.” with their children. We also teamed driving, including using simulation every year. COVID-19 restrictions up with artists in Kazakhstan and goggles to let them experience the curtailed many of the experiential Our Ukraine team saw an In Russia, we reached 7 million popular musicians in to impairing effects of alcohol. In activities we had planned for 2020, opportunity to use ubiquitous people through a social media channel responsible drinking Malaysia, we partnered with ride- but our teams around the world facemasks as a tool to promote campaign aiming to combat messages. hailing services to offer discounted came up with other creative ways to responsible drinking. They created underage drinking by asking for rides home for patrons using our deliver positive drinking messages. masks for retail customers carrying a honest answers about how old In China, we partnered with the affiliated bars and restaurants (see message for minors trying to buy people were when they first tried police in Chongqing to warn page 28).

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO IRRESPONSIBLE DRINKING 34

ZERO IRRESPONSIBLE DRINKING: OUR PROGRESS & TARGETS

PLANNED ACTIONS FOR 2020 STATUS PROGRESS IN 2020 PLANNED ACTIONS FOR 2021 2022 TARGETS 2030 TARGETS

We established a centralised system to expand Work with IARD and e-commerce platforms to tracking to local marketing channels. Compliance with develop standards for responsible sales of alcohol 100% responsible drinking Continue to implement and measure compliance of Digital Guiding Principles improved from 87% to 90.6% online. messaging through global brands with Digital Guiding Principles through of global channels. packaging and brand new centralised process. Continue implementation of legal age symbol on all We also revised our Marketing Communication Policy, activations product packaging. launching early 2021.

We launched partnerships in several markets, but COVID-19 delayed planned partnerships in others. On 100% of our markets run 100% of our markets Strengthen responsible drinking partnerships Continue to expand responsible drinking a global level, we joined other IARD members in partnerships to support improve on responsible on a local level. partnerships with measurable targets in all markets. committing to accelerate actions to protect minors responsible consumption drinking year on year from alcohol harm.

We extended AFB options to all international Continue AFB expansion to new markets and 100% availability of Expand availability of alcohol-free brews (AFBs) by premium brands, introduced over 20 new AFB line increase AFB distribution to more hospitality and alcohol-free brews increasing volume and number of different brews. extensions, launched our first AFBs in Asia and grew retail outlets in markets where AFBs have already (AFBs)1 the global volume of AFB sales by 11%. launched.

Fully Partially Not

achieved achieved achieved

1 100% availability means Carlsberg will ensure all customers and partners in all our operating markets will have access to our AFB portfolio, wherever Carlsberg brands are sold.

ZERO Accidents Culture

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO ACCIDENTS CULTURE 35 ZERO ACCIDENTS CULTURE

The health and safety of our Our relentless focus on safety is people always comes first. We working, with accident rates falling for four years in a row. We aim to want everyone to go home reach ZERO lost-time accidents safe every day. across the business by 2030.

We believe all accidents are Staying safe and healthy enables our preventable. By 2030, we aim to people to live full and productive make them a thing of the past by lives at home and at work – and instilling a ZERO accidents culture. makes our business more efficient. In 2020, we stepped up our support for Everyone at Carlsberg is responsible our employees’ wider health and for their own safety and the safety wellbeing to help our people stay of those around them. We aim to strong through the COVID-19 empower our people to identify pandemic. unsafe behaviours and take action to help their colleagues adopt safe ways of working.

Managers at all levels of the business lead by example, making safety a personal priority to help them demonstrate strong and credible leadership. Part of their role is to make sure that every individual in their team complies with safety rules and keeps safety top of mind.

We manage key risks through our health and safety management systems, training and compliance with our stringent standards, including our Life Saving Rules that everyone must follow at all times. 8.8 17.16 & 17.17

See SDG index, page 59.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO ACCIDENTS CULTURE 36

Creating safety ambassadors for our distribution and event services was something completely new. No one had any experience with it. With support from our top management, the ambassadors are now firmly anchored in the day-to-day business and are making an important contribution on our journey towards ZERO accidents.”

FEATURE: ZERO WATER WASTE IN ACTION Frank Pfeifer, Distribution/Transportation Manager, CHAMPIONING SAFE Feldschlösschen brewery, Switzerland BEHAVIOUR IN SWITZERLAND

Almost all accidents share a brewery in Switzerland. Every day, environment and take action for safely loading and unloading vehicles observations and feedback is common root cause: unsafe they reinforce the message that improvement. This could be speaking to safe driving. They act as role designed to open people’s eyes to behaviour. That is why we put safety is everybody’s responsibility to a colleague or showing them how models for safe behaviour as they things they are doing that they may behaviour-based safety at the heart and that nobody should just walk to work in a safe way instead. Or accompany other truck drivers on not even realise are unsafe. The of our ZERO accidents culture. past if they see anything unsafe. working with a customer to create a their routes delivering beer to ambassadors are helping to make safer delivery point. customers and event venues across sure safe behaviour is an integrated At the start of 2020, four specially Drawing on their experience and the country, helping them stay safe part of the working culture at trained truck drivers in the safety training, the ambassadors All four ambassadors are every step of the way. Feldschlösschen. distribution team took on an help other drivers and employees experienced members of our important new role as safety understand how to spot unsafe distribution team and they know the Changing culture and behaviour Together, we will create a ZERO ambassadors for our Feldschlösschen behaviour and risks in their working delivery process by heart – from takes time, but our system of accidents culture.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO ACCIDENTS CULTURE 37 ZERO ACCIDENTS CULTURE DRIVING DOWN further through the year as the investigations of the incidents and ACCIDENT pandemic heightened awareness of strengthened our controls for health and safety, and government contractor management. We set the WHAT WE MEAN RATES restrictions led to fewer hours being following programme objectives: worked. • A consistent end-to-end contractor BY ZERO In 2020, there were 116 lost-time management process to prevent ACCIDENTS accidents among employees, and the RESPONDING TO SERIOUS serious accidents. employee accident rate dropped by INCIDENTS • A robust fatality prevention

19% to 3.0. We have now reduced Any accident is one too many. framework through compliance Accidents: We define these as lost-time our accident rate by 55% since 2015 Serious accidents are unacceptable. with the Life Saving Rules. accidents that result in an employee as we work towards ZERO accidents • A structured permit-to-work being unable to perform their full range of by 2030. Including contractors, there We deeply regret that a contractor system for high-hazard activities. normal duties for at least one day, were 155 lost-time accidents, 23% lost his life during dismantling work excluding the day of the accident. We are fewer than in 2019. at our former Chelyabinsk production We identify health and safety aiming for ZERO by 2030. site in Russia in January 2020. There compliance during execution of high-

Our safety initiatives have continued were also two other serious hazard contractor works as a key Accident rate: This is calculated as the to drive down our accident rate, with accidents this year, which resulted in focus area and we are strengthening number of lost-time accidents multiplied year-on-year progress at the start severe finger injuries to an employee our contractor management by 1,000 and divided by the number of of 2020. As a result of COVID-19, in Cambodia and a contractor in standards globally (see page 39). full-time employees. We are targeting the accident rate dropped even Germany. We completed thorough year-on-year reductions by 2022.

ACCIDENTS BY TYPE IN 2020

Slips, trips and falls Struck by/against, other contact Traffic collisions Handling/carrying/ergonomic * 2020 data within PwC's assurance scope. 2015-2019 data assured in prior years Other (see previous sustainability reports).

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO ACCIDENTS CULTURE 38

MANAGING the Life Saving Rules to 94% across INSTILLING A Our leaders took the training first to and overcome any reluctance to the business (up from 90% in 2019). secure their commitment, encourage report on colleagues. RISKS SAFETY them to lead by example and help Health and safety management By keeping safety top of mind, our CULTURE them coach their teams. Over the We have introduced new pocket systems at our production sites focus on these key risks has also last three years, we have trained cards for people to carry with them Our Behaviour Safety Programme is support continuous improvement in helped us tackle other issues that 6,000 leaders. This year, we also so they are always ready to observe, central to building a ZERO accidents risk management and performance. can cause less severe but more trained Safety Champions at our spot and act on safe and unsafe culture. We are initially rolling this These are certified to ISO frequent accidents, such as slips, breweries across Eastern Europe to behaviours (see image). The cards out to production and logistics teams 45001:2018 at 77 of our breweries. trips and falls. act as ambassadors for our contain tips tailored to employees worldwide, as these are two of the behaviour-based safety programme. and leaders, and we have rolled out highest risk areas of our business. Our Health & Safety Policy includes TARGETING ROAD SAFETY training on how to put these tips into We also provide safety behavioural our commitment to create a robust RISKS Globally, we have begun focusing practice. Training conducted virtually training for sales teams. ZERO accidents culture and key In 2020, we continued to roll out more on peer-to-peer observations due to COVID-19 will be reinforced elements of our approach to training on road safety risks for and feedback to encourage people to with practical coaching sessions on The premise of this approach is to managing risks. It is supported by company drivers across the business, interact directly with each other site once restrictions are lifted. encourage everyone working with us detailed standards, guidance and including truck drivers and sales about safe and unsafe behaviours, to look out for safety risks and training on risks relevant to specific teams. unsafe behaviours, report their roles. observations and act on them. This is More than 11,000 employees – 95% not about blame, and we make it EMBEDDING OUR LIFE of our drivers – completed our new very clear that nobody should judge SAVING RULES online training on road safety in or feel like they are being judged. It The policy includes our Life Saving 2020 and we aim to reach 100% in is about taking action, caring for Rules, which distil our safety 2021. Practical training has been each other and helping colleagues to standards into clear and simple postponed to 2021 due to COVID-19 adopt safe behaviours. mantras that everyone must follow restrictions.

(see box). The five rules focus on our TRAINING OUR PEOPLE TO biggest risks – road traffic (on and Around 2,260 employees have now STAY VIGILANT off site), working at height or in completed two-wheeler training in We provide training that is designed confined spaces, and working with Asia, where a significant number of to empower people to notice when electricity or machinery that has employees ride scooters or something looks unsafe or someone moving parts. motorcycles to visit customers. is doing something in an unsafe way.

It emphasises the importance of A big push to communicate the Life providing positive reinforcement by Saving Rules and ensure they are recognising safe ways of working as applied in every relevant situation well as identifying safe and unsafe has contributed to a significant drop behaviours. in accident rates since 2018. In • 2020, we increased compliance with

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO ACCIDENTS CULTURE 39

ACTING ON SAFETY Safety observations from employees Management of these contractors is a Our operations in China were among decontaminated any areas where OBSERVATIONS and leaders help us identify risks and critical element of our Health and the first affected, and we applied the they had been working and activated Of the 306,377 safety observations define actions to address them. We Safety Policy. best practices we developed there to our tracing systems to identify who recorded across our business in track implementation of these create global guidelines and enable a that employee had been in close 2020, 265,594 were recorded by our actions at each of our sites and In 2020, we introduced a new safety rapid response across the business. contact with to ensure they also Production and Logistics teams, an monitor how many actions have standard specifically for temporary Throughout the pandemic, we have quarantined. As an extra precaution, average of 14.0 per employee in been closed. contract workers and achieved 93% closely monitored and aligned our we also informed and monitored the these functions. Around 97% of compliance by the end of the year. approach with guidance issued by condition of others who had been employees in these roles are now Like employees, all contract workers the World Health Organization. near the affected individual but not actively reporting observations. WORKING WITH receive safety training as part of their in close contact. induction, as well as specific training The COVID-19 guidelines we Site and team leaders conducted CONTRACTORS relevant to their role. We also use a developed enabled local crisis Outside the roles that have to be 133,694 safety walks, including Contractors work alongside our buddy system to partner each management teams to adapt and performed on site, many of our 128,487 in Production and Logistics, employees to provide additional contract worker with an experienced respond to the rapidly evolving employees have worked from home checking safe working environments labour during seasonal production employee to coach them on safe pandemic situation and related for an extended period during the and behaviours first-hand. peaks and to support infrastructure behaviours. regulations. The guidelines set out a pandemic to support our efforts to projects to improve facilities. series of mandatory measures to prevent the spread of the virus. We For contractors supporting prevent the spread of the virus, as provided training and tools to infrastructure projects at our sites, we well as recommended practices and support them. include safety criteria at every stage tips on keeping employees informed. of our partnership – from qualification Our CEO, Cees ’t Hart, issued and selection to induction and Measures to stay healthy at work personal video messages every week performance evaluation. This year, we included social distancing, more at the height of the COVID-19 achieved 94% compliance with our frequent disinfection of shared restrictions to keep employees contractor management standards. In spaces, additional personal engaged. Some markets used pulse 2020, there were 39 lost-time protective equipment, and keeping surveys to check on wellbeing, and accidents involving contractors. teams separated through shift we created a global toolbox to help patterns and smart working managers better support their teams schemes. Our rigorous approach through COVID-19 challenges, SUPPORTING enabled us to keep production including providing guidance on how running at all our breweries to identify and respond to signs of EMPLOYEE throughout 2020, except where stress. HEALTH AND government restrictions enforced closures. WELLBEING Helping our people stay well at work If an employee presented with and at home was a priority this year symptoms, we asked them to stay at through the unprecedented COVID- home, phone a doctor and inform 19 pandemic. their manager. We then

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO ACCIDENTS CULTURE 40

ZERO ACCIDENTS CULTURE: OUR PROGRESS & TARGETS

PLANNED ACTIONS FOR 2020 STATUS PROGRESS IN 2020 PLANNED ACTIONS FOR 2021 2022 TARGETS 2030 TARGETS

Breweries

We introduced pocket cards with tips to help our Run communication campaign to strengthen production and logistics teams provide feedback on Launch Behaviour Safety Programme to drive employee engagement in the reporting of H&S near unsafe behaviours, and rolled out training on how to safety culture and people engagement. misses and observations. put these tips into practice.

Increase compliance with Life Saving Rules standards We achieved a compliance rate of 94% globally, Maintain at least 90% compliance with our Life to maintain at least 90% compliance rate globally. achieving our targets across all regions. Saving Rules globally.

Reduction in accident ZERO lost-time rate year on year accidents

Continue roll-out of Carlsberg Safe Driving training We reached more than 11,000 employees – 95% of Continue roll-out of online Safe Driving training to programme to all company drivers through online our company drivers – through online training. all company drivers and reach at least 25% with training and reach at least 25% with practical in- Practical training was postponed to 2021 due to practical in-person training. person training. COVID-19 restrictions.

Focus on sustainable implementation of the We achieved 94% compliance with the contractor contractor management standard and temporary Continue implementation of the contractor management standard and 93% compliance with the labour standard. management standard and introduce new standard temporary labour management standard introduced on temporary labour management. in 2020. Complete roll-out of permit-to-work standard on high-risk activities.

Fully Partially Not

achieved achieved achieved

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO ACCIDENTS CULTURE 41 RESPONSIBLE

BUSINESS

Doing business responsibly is fundamental to protect our reputation, achieve our business goals and deliver our Together Towards ZERO programme.

We do this by contributing to economies, acting with integrity, respecting and supporting people, sourcing responsibly and ensuring product safety. Our responsible approach supports several of the UN Sustainable Development Goals.

IN THIS SECTION Contributing to economies ...... 42 Living by our Compass ...... 44 Respecting human rights ...... 46 Embracing diversity & inclusion ...... 46 WHO WE ARE Developing talent ...... 48 We asked employees to submit candid Engaging employees ...... 48 video clips, before and during the COVID-19 Sourcing responsibly ...... 48 pandemic, to celebrate who we are. Their Ensuring product quality and safety ...... 48 responses illustrate the energy, creativity and Our progress & planned actions ...... 49 diversity of our people. Watch the video above.

Responsible Business

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 RESPONSIBLE BUSINESS 42

CONTRIBUTING Our business and our products play CREATING JOBS The number of indirect jobs we an important role in economies, We directly employed more than generated fell this year due to the 40,000+ TO ECONOMIES supply chains and communities 40,000 people in our majority- effects of the COVID-19 pandemic, DIRECT EMPLOYEES around the world. owned businesses around the world particularly in the hospitality sector at the end of 2020. as bars and restaurants were shut for We make a significant contribution extended periods in many countries. to local and national economies In addition to this direct through the jobs we create and the employment, our business indirectly Many of the jobs we create provide 1.09 million taxes we generate. In doing so, we created an estimated 1.09 million vital employment opportunities for are also supporting UN Sustainable further jobs for people involved in people in rural areas, particularly INDIRECT JOBS CREATED Development Goal 8 to promote supplying our raw ingredients and through our agricultural supply chain sustained, inclusive and sustainable serving our beer to consumers1. That and breweries that are located away economic growth. is equivalent to 28 for every single from cities. Carlsberg employee.

1 Estimation by research consultancy Europe Economics. See page 89 for details on the methodology used.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 RESPONSIBLE BUSINESS 43

GENERATING ECONOMIC VALUE In 2020, our total tax contribution In 2020, we generated DKK 85bn1 in amounted to DKK 38bn (down from total economic value. While DKK 44bn in 2019). This includes: remaining substantial, this total is • Taxes borne, including 11% lower than in 2019 due to corporate income tax, social COVID-19 restrictions that affected security taxes and other taxes our business. The decrease highlights (including environmental taxes). the need for governments to support • Taxes collected on behalf of brewing and related sectors so that governments, including personal together we can continue our vital income taxes paid on behalf of role in sustaining livelihoods. our employees, VAT and excise duties. Generating taxes in the regions where we operate is one of the ways Additional government revenues are we contribute to the UN Sustainable generated from related sectors, such Development Goals, specifically as agriculture, retail and hospitality. target 8.1 to sustain per capita METHODOLOGY AND DEFINITIONS economic growth. In our Tax Policy, See page 89 for details on the we set out our commitment to fulfil methodology we use to calculate our our global tax obligations and economic contribution and definitions contribute to the societies in which of the categories used. we do business. Our business and our beer generate substantial revenues for governments, support public services and stimulate economic growth.

1 Economic value generated is a combination of gross revenue, other income, financial income and income included in special items. 2 All figures have been rounded. Includes segments “not allocated” and “non-beverage”. * 2020 data within PwC's assurance scope.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 RESPONSIBLE BUSINESS 44

LIVING BY OUR We also extend ethical requirements corruption for people in roles such as to our business partners and sales, procurement and finance. COMPASS suppliers (see page 48). 19,162 employees completed the SPOTLIGHT ON course, which includes real-life BUILDING AWARENESS examples, experiences and HARASSMENT Everyone joining our business dilemmas. completes training on our Code of The #MeToo movement has shone a Ethics & Conduct as part of their IMPLEMENTING COMPLIANCE spotlight on harassment in the induction. In 2020, 4,511 employees CONTROLS workplace and sparked much debate in did this training. We deliver refresher We implement strong compliance the media. training when we review and update controls to protect our reputation Integrity. Responsibility. Honest and the code every three years. The next and the smooth operation of our At Carlsberg, we have a zero-tolerance ethical business conduct. These are review is planned for 2021. business everywhere we operate. approach to any form of harassment our core values. against our employees. Our Code of Regular communications about Our controls include annual Ethics & Conduct protects this value Living by these values – our ethics and compliance help to assessments to identify risks of non- and clearly states the consequences if Compass – supports our strategy, maintain awareness and empower compliance with our policies or anyone breaks the rules. The message mitigates risks and protects our our people to act with integrity in relevant laws on topics such as data is reinforced by detailed guidance in reputation as a responsible brewer. everything they do. These include protection, anti-bribery and our HR Policy and manual. videos, posters and e-mails that corruption, competition law and Our leadership team sets the tone encourage employees to consider trade sanctions. Based on the Everyone must be treated with respect from the top, and we empower how they would respond to high-risk findings, we adopt additional in our workplace. Leaders have a everyone working with us to Live by situations. measures, where required, to control responsibility to set a good example our Compass every day. these risks effectively. and protect colleagues from physical, TARGETING BRIBERY AND verbal, sexual or psychological SETTING CLEAR STANDARDS CORRUPTION In 2020, we updated our controls, harassment, bullying, abuse or threats. Our Code of Ethics & Conduct We consider any form of bribery to including enhancement of the trade provides clear guidance for all our be dishonest, morally wrong and sanction screening process. We also We support and encourage anyone employees and contract workers. unacceptable. Our Anti-Bribery and developed tailored compliance who may have experienced harassment Corruption Policy and manuals spell toolkits for key functions. The aim is to talk to their manager, their The code covers issues such as anti- out our zero-tolerance approach and to make it easier for business leaders manager’s manager or their local HR bribery and corruption, competition guide employees on what constitutes to understand the requirements most team – or to report it via our law, data protection and privacy, a bribe and how to deal with specific relevant to them and ensure they confidential Speak Up line – so we can situations, for example how to understand their role in ensuring conflicts of interest, political activities, take action. discrimination and harassment. It is decide whether modest gifts or compliance. In early 2021, our supported by more detailed policies hospitality are appropriate. markets will use a new tool for on each topic (as referenced in reporting implementation of relevant sections of this report). In 2020, we introduced new online compliance controls across the training on anti-bribery and business.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 RESPONSIBLE BUSINESS 45

SPEAKING UP independent third-party Speak Up INVESTIGATING AND ACTING ON ALLEGATIONS In addition, we conducted an India- If anyone who works for or with us helpline. RESPONDING TO CONCERNS In 2018, a concern was reported wide internal audit of the process for has any ethical concerns, we urge Our Group Internal Audit & Control alleging potential improper obtaining permits and licences. This them to speak up without fear of The 24-hour helpline is available to team reviews, and where needed, payments in 2015-2016 at a joint- showed a clear improvement in retaliation. anyone inside and outside the investigates all reported concerns. venture brewery in India. An behaviour over time, as well as company in local languages online or Investigations of the most serious investigation concluded that the identifying opportunities to further Suspected misconduct, non- by phone. People outside the allegations are overseen by our allegations could not be evidenced. strengthen controls. We have compliance with the law or breaches company can also report concerns Integrity Committee, which is chaired Following the presentation of new appointed a dedicated compliance of our Code of Ethics & Conduct can directly to our senior managers in by the Chief Financial Officer and materials in 2019, the investigation officer to oversee compliance at be reported to line managers, HR each market. includes the General Counsel, Senior was reopened. Carlsberg India. teams or compliance representatives. Vice President of Group HR, Vice Concerns can also be reported President of Group Internal Audit and The investigation during 2019 and In early 2021, the media reported on anonymously to Vice President of Compliance. 2020 was conducted by a leading a separate case in India from 2018, [email protected] or via our international accounting firm and a involving underage labourers and The number of reported cases of top-tier Indian law firm. It found no non-compliant working conditions in suspected misconduct has increased evidence of actions aimed at personal a warehouse operated by a third significantly – from 53 in 2017 to gain for Carlsberg employees, but did party. We identified this through 196 in 2020 – since we established find evidence of potential unethical internal monitoring processes at the REPORTED CONCERNS REPORTED CONCERNS an Integrity Committee and raised practices in breach of Carlsberg Group time and took immediate action, BY TYPE IN 2020 BY REGION IN 2020 awareness of the importance of policies in the period up to 2018. terminating the contract with the

speaking up. third-party provider in 2018. While no breaches of our policies We take all reported concerns very were detected in relation to current seriously, conducting thorough operations, the investigations reviews and investigations where identified the need for further needed. In 2020, more than half of strengthening of controls. Actions the cases reported were fully or taken included disciplinary measures partially substantiated. As a result, for implicated employees still at the 51 employees were dismissed, 56 company, and strengthening of employees received a verbal or compliance and internal controls. written warning and 37 feedback meetings were held.

Business integration 77 (39%) Eastern Europe: 106 (54%) Asset misappropriation 56 (29%) Asia: 63 (32%) Work environment 52 (27%) Western Europe: 27 (14%) EHS 8 (4%) Other breaches 2 (1%) (Non)financial reporting 1 (<1%)

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 RESPONSIBLE BUSINESS 46

RESPECTING To embed our commitment to substantiated (21 cases). All fully or EMBRACING The Council will act as ambassadors respect human rights across our partially substantiated cases were for diversity and inclusion across the HUMAN RIGHTS organisation, we train people addressed through an agreed action DIVERSITY & business and provide input to our managers in all markets on the plan. INCLUSION Executive Committee on how we can policy and provide an improve in this area. It met for the implementation manual. In 2020, we IDENTIFYING SALIENT first time in January 2020 and will continued to assess compliance in HUMAN RIGHTS meet virtually at least three times our operations in potentially higher- We are committed to engaging with a year. risk markets through audits in global and local stakeholders to Bulgaria, Kazakhstan, Laos, identify, prioritise and address salient We conducted an anonymous survey Lithuania, and Ukraine. human rights issues – the human of 800 senior leaders across the rights that are at risk of the most business to get a better

Our Supplier & Licensee Code of severe negative impact across our understanding of support for Conduct extends our commitment to operations and value chain. Valuing diverse perspectives and diversity and inclusion. It found that uphold labour and human rights to experiences makes our business most leaders, both men and women, the thousands of third parties we With support from Shift, the leading stronger by creating a winning team perceive Carlsberg as an inclusive that supports innovation and helps We are committed to respecting all work with. centre of expertise on the UN organisation while also seeing us better serve our customers around internationally recognised human Guiding Principles on Business and opportunities to make our culture the world. We strive to foster an rights – of our employees, workers in Any grievances or possible violations Human Rights, we undertook a more welcoming to all. inclusive environment where our supply chain and anyone else of human rights can be reported via cross-company exercise in 2020 to everyone can bring their true self to connected to our business. our Speak Up helpline, which is identify and prioritise our salient The results are informing our work. available to anyone, including supplier human rights issues. roadmap to enhance diversity and

Carlsberg is a signatory to the UN workers. We investigate all reports of inclusion. Focus areas for 2021 Our Diversity & Inclusion Policy Global Compact and supports both human rights concerns and, where The analysis found that the highest include training managers on outlines how we will achieve this by the UN Universal Declaration of reports are substantiated, we develop risks we face relate to labour rights unconscious bias and inclusive adopting a global mindset, building a Human Rights and the UN Guiding an action plan to mitigate the issues for employees and supplier workers leadership, anchoring our diversity diverse talent base, ensuring equal Principles on Business and Human identified. We do not tolerate in specific roles. Our next step is to and inclusion agenda locally in our opportunities for all our people and Rights. retaliation against anyone who raises complete a deeper assessment of markets, and integrating diversity encouraging inclusive leadership. a question or concern in good faith. these risks. and inclusion in our processes such

Our Labour & Human Rights Policy as recruitment, development, SETTING AND DRIVING OUR outlines our commitment to Of the total number of Speak Up promotion and pay. AGENDA respecting the human rights of all reports received in 2020 (196), 58 We have established a Diversity & our employees and contract workers, (30%) were related to human rights Inclusion Council to help us define irrespective of the country in which topics (including discrimination and our approach and turn our policy into they work. It covers topics such as harassment, retaliation, data privacy, practice. It is made up of senior working hours and wages, freedom health and safety, labour law leaders who represent diverse of association, discrimination, breaches and other HR issues). Of perspectives, business functions and harassment, and child and forced the closed human rights-related regions (see next page). labour. cases, 38% were fully or partially

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 RESPONSIBLE BUSINESS 47

EMBEDDING INCLUSIVE Nearly half of our employees in the OUR DIVERSITY & INCLUSION COUNCIL LEADERSHIP early stages of their careers are We continued rolling out training on women as we build a pipeline of IRINA FEDOROVA VICTOR SHEVTSOV unconscious bias at the start of female talent. In 2020, women 2020, with workshops for 130 senior represented 37% of participants in Senior Government VP Supply Chain, leaders, building on the 90 already global leadership programmes (up Relations Director, Carlsberg EE Asia and trained in 2019. More planned face- from 34% last year) and 40% of , Russia Hong Kong to-face workshops were curtailed employees on developmental or due to COVID-19 restrictions, but a short-term assignments (down from When we make an effort to be aware of, and Embracing a culture of diversity and inclusion address, our biases, we actively behave in ways that will help us reflect the rapidly changing world outside, further 110 leaders completed the 43%). This year, we conducted make people feel valued, included and respected. explore new perspectives and foster an environment virtual training. gender pay reviews across our There is no idea more fundamental to performance where each employee can bring their whole selves to markets to ensure we continue to than how we see and treat each other.” work and unleash their capabilities to the fullest.” Inclusive leadership is also integrated meet our commitment to equal pay into our leadership development for equal work. training, and online learning on MYRIAM SHINGLETON CECILIA LUNDGREN unconscious bias and cultural Flexible working arrangements can Vice President CFO, Western Europe awareness is available for all support diversity by enabling people Product Development Copenhagen, employees. to manage their varied work/life area, France Denmark situations. The COVID-19 pandemic REINFORCING INCLUSIVE has accelerated the move to Diversity fuels innovation and debate, and I feel very strongly about treating everyone the PEOPLE PROCESSES homeworking, and we are ensures that companies don’t get locked into a single same and with the same respect independently of which We are working to integrate diversity developing global flexible workplace world view and miss out on the reality of the changing position they have in the company and independently of and inclusion into our recruitment guidelines based on feedback from marketplace. But diversity alone doesn’t make this who they are or their background. You can see diversity happen – what matters is inclusion. As we look to and inclusion in many ways but, to me, the idea is to and development processes to build employees about their needs and accelerate growth with our SAIL’22 strategy, we will ensure that everyone gets the same opportunity, no a diverse pool of potential future preferred ways of working. need everyone’s best thinking to get us there.” matter who you are and what your background is.” leaders. Our initial focus is on gender balance. VICTOR CHEONG JORIS HUIJSMANS Marketing Director, Laos Chief HR Officer Petaling Jaya, , Copenhagen, Malaysia Denmark Gender diversity (% women) Diversity and inclusion is good for the company The correlation between diverse teams, inclusive 2019 2020 and its people. We want to tap into the diverse working environments and business performance is Supervisory Board 27% 27% experience, capability and talent offered by every unambiguous. But diversity is not enough – nor should it Top 60 leaders 14% 14% employee around the world to enhance our be the end goal. As a company we must embrace Management 27% 28% competitive advantage, as well as providing equal different perspectives, creating an environment where opportunities and the best chances of success.” people feel they belong, and acknowledging the benefits Early careers (graduates and apprentices) 47% 47% of inclusivity. Tangible and lasting results will require All employees 33% 32% specific and immediate action, continuous commitment, gentle nudging of our leaders, a vow to measure progress and an active approach to tackling biases.”

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 RESPONSIBLE BUSINESS 48

DEVELOPING We run leadership development principles into our leadership toolbox practices, and offered support to find We ensure that suppliers understand training to prepare high-potential for leading remotely during COVID- new jobs. We also trained managers and follow our requirements, and TALENT employees for future roles in 19. In a pulse survey in 2021, we will to lead their teams through change, monitor compliance through our We aim to enable everyone at leadership positions. In 2020, we ask employees how well they feel including setting revised objectives supplier relationship management Carlsberg to achieve their goals and continued to roll out our leadership we have responded to their and priorities for remaining staff. practices. Suppliers must be able to build their career with us. We want training for managers, which focuses feedback. demonstrate compliance with the to develop people with the right skills on alignment, accountability and code and applicable laws on request. and experience to support our action. More than 1,300 managers We also engage with employee SOURCING In the event of a breach, suppliers business now and in the future. We have now completed the course. representatives through formal RESPONSIBLY must promptly inform us and act to strive to provide exciting careers and consultation and we recognise the remedy the issue promptly. If a opportunities at all levels, from right to collective bargaining. In We strive to build long-term, supplier fails to comply with the code apprentices and graduates to ENGAGING 2020, 67% of our employees collaborative relationships with or show willingness to remedy non- managers and senior leaders. EMPLOYEES worldwide were covered by collective suppliers that share our values and compliances, we may terminate their bargaining agreements. meet our high standards. contract or refuse to do business Employees set individual We keep employees informed and with them. development objectives each year engaged in the business through Rewarding and recognising our We spend billions of Danish kroner and review progress. In 2020, we regular team dialogue, internal people’s hard work and with tens of thousands of suppliers We reserve the right to conduct introduced more continuous dialogue communications and CEO townhall achievements supports employee around the world. They provide the audits of supplier sites. In 2020, we between managers and employees meetings. engagement and job satisfaction. We raw materials, packaging and carried out 53 integrated quality to enable real-time feedback, offer competitive pay and benefits, logistics for our products, as well as audits to ensure our vendors are increase the focus on development We run a global employee survey which we benchmark in each market. other goods and services to support complying with the code and other and wellbeing, and empower people every two years to help us We also expect our leaders to seek our business. relevant quality standards. Due to to adjust their objectives as needed understand how we are doing as an out opportunities to recognise their COVID-19 restrictions, we conducted throughout the year. employer and where we can colleagues informally or through To work with us, all suppliers must fewer on-site audits than planned improve. In the last survey, in 2019, local award schemes. comply with the standards set out in and focused on business-critical In 2020, we provided an average of we achieved a high level of our Supplier & Licensee Code of suppliers. 15 hours of training per employee. employee engagement (84%). SUPPORTING PEOPLE Conduct and commit to extending Our functional academies helped us Priorities identified for improvement THROUGH CHANGE these standards to their own continue to train people virtually included more frequent feedback and COVID-19 has affected demand for suppliers too. ENSURING during the pandemic. They offer recognition, career opportunities and our beer at bars, restaurants and PRODUCT programmes tailored to different support for wellbeing. events due to restrictions on the The code covers topics related to roles and functions across the hospitality industry. Sadly, as a business ethics, labour and human QUALITY AND business, including commercial, In 2020, we responded by building result of these uncertainties, we have rights, health and safety, and SAFETY leadership, financial, compliance and more continuous feedback into our had to say goodbye to some of our environmental sustainability. It production skills. We also offer people processes and encouraging colleagues. includes commitments to reduce We closely monitor our additional internal and external managers to give their teams more carbon emissions and manage water manufacturing operations and supply training locally. support for development and We consulted employees and their risk in line with our Together chain to make sure that consumers wellbeing. We integrated these representatives throughout the Towards ZERO focus areas. always get high-quality and, above process in line with local law and all, safe products from us. Quality

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 RESPONSIBLE BUSINESS 49

management systems at all our certified to external schemes to assess risks, monitor performance sensory elements of our quality leave our sites. In 2020, we major European breweries and 87% recognised by the GFSI. and build capacity through our systems and evaluation of consumer enhanced the escalation process for of our large Asian breweries are supplier management tool, starting complaints to ensure the best reporting quality incidents to ensure certified to ISO 9001. Suppliers of raw ingredients and with suppliers of glass and cans. consumer experience at all times. information is shared across our packaging play a critical role in production sites and prevent similar Carlsberg is part of the Global Food ensuring the safety of our products. We aim to continually enhance the Our rigorous approach to product incidents occurring elsewhere. Safety Initiative (GFSI), which We require them to meet high robust quality systems and quality and safety includes stringent supports continuous improvement in standards on food safety and we foundations we have in place to checks and controls designed to On rare occasions, a quality issue is food safety throughout the supply monitor compliance through our ensure end-to-end product quality. ensure all our products are right first identified after products have been chain. All our major breweries in integrated quality audits. In 2020, In 2020, we updated our strategic time. The aim is to identify and sold to consumers, requiring a recall. Europe and 27% in Asia are now we continued to work with suppliers quality initiatives to increase focus on remedy any issues before products In 2020, one product was recalled.

RESPONSIBLE BUSINESS: OUR PROGRESS & PLANNED ACTIONS

PLANNED ACTIONS FOR 2020 STATUS PROGRESS IN 2020 PLANNED ACTIONS FOR 2021

Diversity & inclusion

Conduct a diversity and inclusion survey measuring the inclusion climate We launched a diversity and inclusion survey to establish a baseline to Repeat diversity and inclusion survey to track progress for this agenda. and the experience of inclusion among all senior leaders. measure our progress within diversity and inclusion.

Continue to analyse pay practices to ensure equal pay for equal work and We conducted a gender pay review to ensure we are meeting our Conduct a gender pay review in all our markets. shift focus beyond pay to other drivers of an equal and inclusive workplace, commitment to equal pay for equal roles across our markets. including through guidelines around workplace flexibility

We initiated a global roll-out of our unconscious bias training, which was Train leaders in unconscious bias. Continue global roll-out of virtual training on unconscious bias. reformatted for virtual delivery due to the pandemic.

We introduced a gender bias analyser in our recruitment system, created a recruitment toolkit to help minimise biases in the process, revised our Continue training all recruiters in unconscious bias and debiasing our Debiasing our recruitment process. employer brand to signal our inclusion, and are training all recruiters in recruitment process. unconscious bias.

Fully Partially Not

achieved achieved achieved

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 RESPONSIBLE BUSINESS 50

RESPONSIBLE BUSINESS: OUR PROGRESS & PLANNED ACTIONS

PLANNED ACTIONS FOR 2020 STATUS PROGRESS IN 2020 PLANNED ACTIONS FOR 2021

Living by our Compass

Introduce new anti-bribery & corruption e-learning course for white-collar We introduced e-learning on anti-bribery and corruption, completed by Implement an enhanced risk-based compliance programme employees. 19,162 employees. with a single look and feel across the four key compliance areas.

We updated our controls and developed tailored compliance toolkits for key Implement upgraded risk and control framework and 2020 monitoring Review and refresh the Code of Ethics & Conduct functions to make it easier for senior leaders to understand the plan. and the associated e-learning. requirements most relevant to them.

Implement new governance, risk and compliance (GRC) tool for recording We introduced a new tool for reporting implementation of compliance Implement pilot of enhanced anti-bribery and sanctions third-party and assessing compliance controls. controls across the business. screening process.

Labour & human rights

We continued to assess compliance with our Labour & Human Rights Continue in-market audits in selected higher-risk markets to monitor Continue in-market audits in selected higher-risk markets to monitor Policy in higher-risk markets through audits in Bulgaria, Kazakhstan, Laos, effectiveness of Labour & Human Rights Policy implementation. effectiveness of implementation of Labour & Human Rights Policy. Lithuania, Myanmar and Ukraine.

Review Labour & Human Rights Policy to reinforce our commitment

to respecting human rights and to preventing and mitigating human Develop initiatives to conduct value chain risk assessments in line with the We partnered with experts to help us identify salient human rights risks rights-related risks.

UN Guiding Principles. across our value chain. Assess identified salient issues and develop action plans to mitigate

the issues.

Fully Partially Not

achieved achieved achieved

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 RESPONSIBLE BUSINESS 51 GOVERNANCE AND TRANSPARENCY

This section explains how we govern Together Towards ZERO, engage with stakeholders and identify our most material issues. It includes indexes on the UN Sustainable Development Goals and Global Compact, and details performance data, reporting MSCI: Our AAA rating Sustainalytics: FTSE4Good: Carlsberg from MSCI places us Our score of 18.3 out of has been a member scope and assurance. among the top leaders on 100 from Sustainalytics of the FTSE4Good Index environmental, social and positions Carlsberg as of socially responsible governance (ESG) criteria. low-risk for investors. companies since 2015.

IN THIS SECTION Governing sustainability ...... 52 CDP: We made the CDP’s prestigious Employee feedback: Engaging with stakeholders ...... 55 A list in 2020, positioning us among a small 91% of employees agreed group of companies that take a leadership that Carlsberg is socially Identifying our priorities ...... 57 approach to tackling climate change. and environmentally Contributing to the UN We also achieved an A- rating for water responsible in our latest Sustainable Development Goals ...... 59 based on our latest CDP disclosure. employee survey in 2019. UN Global Compact Index ...... 66 Performance data ...... 67 Reporting process and scope...... 74 Assurance report...... 90

Governance and transparency

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 52

GOVERNING Executive remuneration is linked to KPIs related to TTZ and SUSTAINABILITY sustainability. The performance of Our Executive Committee (ExCom) is the Executive Board against their responsible for sustainability, sustainability-related KPIs is providing strategic guidance and discussed in the Remuneration approval for policies and targets. Committee four times a year. Ultimate accountability for sustainability at Carlsberg, including TTZ is also on the agenda of all the our Together Towards ZERO (TTZ) extended leadership team meetings programme, lies with our CEO and for our top 60 leaders, with monthly ExCom. health and safety updates and engagement on relevant projects External experts inform our approach throughout the year. by engaging with the CEO and other executives through the Carlsberg EMBEDDING TTZ IN OUR Sustainability Advisory Board (see BUSINESS page 53). We integrate responsibility for specific areas of our TTZ programme Our Group sustainability team drives to people in relevant roles. For train Sustainability Champions in REVIEWING PERFORMANCE and management of sustainability strategic initiatives and partnerships, example, innovation managers each market to drive internal Key performance indicators (KPIs) topics into core business functions. and supports Sustainability receive training on how to integrate communications and awareness at for our TTZ programme are reported Champions, who help to coordinate environmental life cycle thinking into local level. monthly to our integrated supply Designated TTZ owners drive the local sustainability initiatives across product development, and we chain management team and programme’s implementation and the business. present the results of our beer-in- To give people a personal stake in ExCom, and at least once a year to progress towards our 2022 and 2030 hand carbon footprint analysis to our progress Together Towards our Supervisory Board. Both ExCom targets within their respective areas ENGAGING OUR PEOPLE local market management teams to ZERO, we link remuneration to and the Supervisory Board review of responsibility. They are supported We embed sustainability throughout help them target improvements. performance on TTZ targets for overall sustainability performance by local target owners and the business and aim to get our relevant roles, including executives, and progress towards our TTZ leadership teams in our markets and people involved in the TTZ TTZ is a global programme, but it is brewery managers, facilities targets at least once a year, in relevant functions. programme to help us achieve our anchored through ownership, action managers, and innovation, addition to reviewing relevant targets. and communication at local level. marketing and sustainability teams. investments and projects in line with The Executive Vice President, Examples from across the business Relevant KPIs range from energy normal business procedures. Integrated Supply Chain – who is New employees are introduced to help us showcase local flavour and and water savings to stakeholder responsible for production, logistics, TTZ as part of their induction to the share examples of best practices with engagement, brand engagement and Examples in 2020 included our latest supply chain and procurement business, and everyone can access other markets. We post local stories reputation. beer-in-hand carbon footprint operations – owns the TTZ targets training on sustainability through our on the intranet for all employees and analysis and topics related to on carbon, water and accidents. The online academies. We provide disseminate these through our global COVID-19 crisis management. Chief Commercial Officer owns the TTZ targets on responsible drinking. additional training on specific topics corporate affairs teams. We also

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 53

MANAGING RISK macroeconomic and geopolitical The CSAB first met in May 2020 to ExCom leads our corporate risk environment, reputation, supply provide feedback on our TTZ management programme, with chain and climate. These will feed programme, progress and reporting. oversight from the Audit Committee. into our assessment of business risks. They raised important CARLSBERG We map the impact of each risk on considerations, challenging us to SUSTAINABILITY our operating profit or brand/image An analysis of relevant risks continually strive for better. The against the likelihood of that risk informed our latest assessment of table summarises their feedback and ADVISORY materialising. the most material sustainability our response. See page 5 for direct BOARD: issues for our business and our feedback from each of the external EXTERNAL Based on this assessment, ExCom stakeholders (see page 57). CSAB members. identifies high-risk issues for the MEMBERS coming year and assigns risk owners INTEGRATING EXTERNAL We also asked for insights into to oversee activities to manage and PERSPECTIVES external trends on plastics and Knut Haanaes: Professor of mitigate them. See our Annual The Carlsberg Sustainability Advisory sustainability trends among Asian Strategy – Lundin Sustainability Report for more on our approach to Board (CSAB), established in 2020, consumers. At a second full meeting Chair at IMD Business School in risk management and a list of key provides a valuable “outside in” in October, the CSAB discussed the Lausanne. risks identified for 2020. perspective to ExCom. business case for sustainability and how the COVID-19 pandemic has Acacia Leroy: Greenhouse Labs We integrate sustainability risks into Three independent external affected the sustainability agenda. Manager, Deloitte SEA. this assessment and management of sustainability experts sit on the CSAB business risks, primarily in relation to (see box). They engage directly with Frank van Ooijen: Independent legal and regulatory compliance, and our CEO, TTZ area owners and other consultant specialising in issues regulatory changes. In 2020, we senior executives who are also CSAB management, strategic corporate strengthened our focus on longer- members. The director of our Group communications and sustainability term sustainability challenges, Sustainability team facilitates CSAB programme management. starting with climate-related meetings, which are held at least financial risks – including reporting in twice a year. line with the recommendations of the Hear more from the Carlsberg Task Force on Climate-related The role of the CSAB is to: Sustainability Advisory Board on Financial Disclosures (TCFD) (see • Help us stay in sync with page 5, or read their feedback and page 14) – and a ground-breaking expectations in the outside world our response on the next page. scenario analysis of water risks (see and remain true to our founder’s page 24). aspirations through our strategy and actions. From 2021, mid- and long-term • Provide strategic advice, critical risks will be reviewed annually, review and feedback. including those related to the areas • Act as a sparring partner for of commercial and competition, ExCom and other members of the governance, consumer, leadership team.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 54

RESPONDING TO CSAB FEEDBACK

CSAB FEEDBACK OUR RESPONSE

Strengthen the links between sustainability and the business in We set out the business case for our TTZ targets in the relevant sections of this report. In 2020, we integrated sustainability further in our Annual Report for investors and in our risk risk mapping and reporting. mapping through alignment with the Task Force on Climate-related Financial Disclosures (TCFD) guidelines. While our Annual Report and Sustainability Report are published simultaneously, we believe that a separate Sustainability Report offers more value for a wider range of stakeholders.

Set out a clear plan to deliver the pace of progress required to We have established roadmaps with specific actions to achieve our 2022 targets on water, elimination of coal and 100% renewable energy. We are now working on a roadmap to meet TTZ targets on carbon and water. help us achieve our carbon reduction targets, supported by our latest beer-in-hand footprint analysis (see page 11). Roadmaps for the 2030 targets will be more high level to enable flexibility as the business evolves and new technologies emerge.

Benchmark performance and reporting by publishing external Our performance in key external sustainability benchmarks is published in this report (see page 51). In 2020, we aligned our reporting with TCFD guidelines. While we used the ratings and aligning reporting with established guidelines. principles of the Global Reporting Initiative sustainability reporting guidelines to inform the performance indicators and framing of our reporting, we do not currently report in accordance with the GRI Standards.

Increase focus on raw materials and agriculture. Our influence on agricultural practices is relatively limited because we buy our ingredients mainly from commodity markets and do not operate in regions, such as Africa and South America, where there is a strong industry focus on supporting smallholder farmers. However, we are supporting sustainable agriculture through research at our lab, which is field- testing drought-resilient crops as part of our focus on tackling climate change (see page 10).

Elaborate on the materiality process and which stakeholders We updated our materiality assessment in 2020 and provide information on the process, including stakeholders consulted, in this report (see page 57). were consulted.

Share innovative solutions to benefit the wider industry and The Green Fibre Bottle is a good example of how we aim to extend our positive impact by sharing innovative solutions with the wider industry. We were instrumental in developing clarify the next steps for innovations like Snap Pack and the it, then invited others to join the initiative too. The bottle was piloted by The Absolut Company in 2020, and The Coca-Cola Company launched its first prototype. We aim to trial Green Fibre Bottle. the Green Fibre Bottle with our beer as soon as we receive regulatory approval. We also rolled out Snap Pack to more markets in 2020. See page 17.

Translate corporate impact into the consumer’s personal We are investing in life cycle assessments and fact-based product claims to help consumers understand what our sustainability performance means for the beer in their hand. We impact, explain initiatives in a language consumers can also strive to use simple language, tangible comparisons and engaging infographics to help communicate our sustainability story to consumers. For example, we compare our understand and quantify impact in tangible terms carbon savings with the equivalent number of cars taken off the road and our water savings with Olympic swimming pools (see pages 12 and 22). consumers can identify with.

Identify ways to contribute to sustainability locally and Many TTZ programmes are run at local level, particularly in relation to responsible drinking, shared water resources and recycling. We aim to engage further with local colleagues highlight local case studies. to translate our global programmes and targets into local contexts. Local case studies and examples are included throughout this report.

Rewrite the rules of the industry on responsible drinking and We are committed to collective industry efforts and partnerships to promote responsible drinking. We offer alcohol-free brews across our brands, and we are working on more tell the world more about it. purpose-driven marketing to better communicate our sustainability actions to consumers.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 55

ENGAGING WITH STAKEHOLDERS Dialogue with stakeholders helps us understand what matters most to them and respond. This is essential for fostering open communications and building trust. Their input helps us define and prioritise our sustainability efforts. And our partnerships with stakeholders enable us to drive progress Together Towards ZERO.

How we engage with stakeholders on sustainability topics

STAKEHOLDER HOW WE ENGAGE TOPICS OF INTEREST OUR RESPONSE

Consumers Marketing campaigns Consumer demand for healthier and more We are developing products and packaging that are more sustainable for the planet through our TTZ Social media sustainable options is growing. Sustainable targets on carbon (see page 10) and water (see page 20). We are also developing a process to implement Local websites packaging is the most tangible aspect of sustainability in each of our brands. Responsible drinking initiatives sustainable products for consumers. We put a strong focus on enjoying our beer responsibly in our marketing, we include product labelling to support healthy choices, and we have extended our range of alcohol-free brews. Our responsible drinking initiatives also connect directly with consumers (see page 27).

Customers Sales and marketing channels Customers want to know how we can help them In addition to our own response to consumers (see above), we partner with customers, such as bars and Responsible drinking partnerships achieve their own sustainability goals and meet retailers, on campaigns like Global Beer Responsibility Day (see page 33). Customers’ supplier requirements, questionnaires and consumer demand for healthier and more We also help customers reduce sustainability risks in their supply chain through our TTZ programme and audits sustainable options. by doing business responsibly. Customer satisfaction surveys

Employees Biennial global employee survey Feedback from our latest employee survey in We have responded to what employees told us in 2019 by building more continuous feedback into our Regular dialogue and feedback 2019 showed improved employee engagement people processes and encouraging managers to focus more on support for development and wellbeing Twice-yearly performance reviews and highlighted several areas where we could (see page 48). Formal consultation with employee representatives improve, including more frequent feedback and recognition, career opportunities and support for wellbeing.

Industry Engagement through industry organisations, such as the Industry peers are keen to work together to tackle Together with other members of the IARD, in 2020 we committed to accelerating measures to tackle International Alliance for Responsible Drinking (IARD), common challenges and protect the reputation of underage drinking (see page 31). We are also part of the Brewers of Europe Proud to Be Clear initiative to Brewers of Europe, the Worldwide Brewing Alliance and brewing companies and the wider drinks industry. expand nutrition and ingredient information on product labels and online. national trade associations We welcomed others in the drinks industry to join our innovation initiative to develop a Green Fibre Bottle Engagement with peers on initiatives to drive sustainable and The Absolut Company began trialling it in 2020 (see page 17). innovation

Investors Annual Report Investors want to know that we meet their We respond to investor questionnaires to demonstrate compliance with ESG requirements, and we explain Annual General Meeting environmental, social and governance (ESG) the business case for our TTZ programme. Investor roadshows requirements – and have been showing increasing Our strong scores in ratings such as MSCI and Sustainalytics demonstrate our business is low risk for Individual meetings interest in ESG. They want to understand how investors. Investor questionnaires investments in sustainability will support our business goals and help deliver sustainable See also our Annual Report and Investor Relations at carlsberggroup.com/investor-relations. financial returns in the long term.

Journalists Individual meetings and calls Journalists’ questions give us an insight into wider We always seek constructive and fact-based dialogue with media and journalists, and value an open Direct engagement by e-mail trends across and beyond the industry. Recently, discussion on detailed subjects to ensure that our approach and communication are well understood and their focus has been on carbon emissions and accurately reflected. renewables, due diligence standards, GMO policy and transparency.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 56

STAKEHOLDER HOW WE ENGAGE TOPICS OF INTEREST OUR RESPONSE

Suppliers Supplier & Licensee Code of Conduct Suppliers want to know what our priorities are in We communicate our requirements on sustainability through our Supplier & Licensee Code of Conduct, Integrated quality audits relation to sustainability so they can play their and we monitor compliance through audits (see page 48). Partnerships to support progress on our value chain part in helping us achieve our targets and meet In 2020, we also engaged with suppliers to gather data at product level to support our beer-in-hand carbon targets our sustainability criteria to secure access to value chain carbon footprint analysis, and pursued partnerships to reduce our shared carbon footprint in business opportunities with us. areas like packaging, transport and refrigeration (see page 14).

Sustainability experts Carlsberg Sustainability Advisory Board (CSAB) Sustainability experts want to understand how our See page 54 for our response to CSAB feedback in 2020. Consultations and partnerships with NGOs and issue TTZ programme aligns with our business strategy We are a member of the Science Based Targets initiative and in 2020 we supported its call for experts and responds to global challenges. They also want governments to align COVID-19 recovery efforts with the latest climate science (see page 8). to see ambitious targets, strong performance and transparent reporting. We have strategic partnerships with WWF and Plastic Change. In 2020, we worked closely with WWF to map water risks in our business (see page 24). In 2020, the CSAB provided detailed feedback (see page 54). Human rights experts Shift provided feedback and input on our human rights risks and due diligence (see page 46). Sustainability experts also provide valuable input on our approach to issues such as human rights.

Policymakers and Engagement through trade associations, such as Brewers Governments want to know that we comply with Our Public & Government Affairs Manual, updated in 2020, sets out clear guidance on how we engage regulators of Europe, and industry organisations in our local laws and contribute to economies through job with governments globally. markets creation and taxes. They also want to understand We have controls in place to ensure compliance with all applicable laws (see page 44). We report our total High-level public events, such as the World Economic how we support their strategies on sustainability economic contribution, including taxes generated and jobs created, every year (see page 42). And we Forum’s annual Davos meeting, New York Climate Week and public health. engage with governments indirectly on sustainability and public health issues through industry and similar conferences where government officials are associations such as the IARD and Brewers of Europe. present

Communities Local community engagement programmes Communities near our operations want us to be a Our business creates jobs through the people we employ directly and many more in related sectors, responsible neighbour and to understand how we including in rural communities with few employment opportunities (see page 42). can support them. In 2020, we provided targeted support for communities around the world through the COVID-19 crisis (see page 8). We also improved access to safe, reliable drinking water for people living in high-risk areas (see page 25).

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 57

IDENTIFYING associations, investors, customers, suppliers and academics. OUR PRIORITIES We aim to ensure that our work THE FINDINGS remains focused on the topics that Four interconnected environmental are most significant to our business themes top the most material issues and our stakeholders – our most for Carlsberg: climate change material issues. The Together adaptation; energy and carbon; Towards ZERO programme was water stewardship; and sustainable informed by a materiality packaging. These were also priority assessment conducted in 2016. This issues in 2016, but the scale and helped us identify where we can of stakeholder expectations have the biggest economic, have evolved. Sustainable packaging environmental and social impact. is more prominent among these top issues, while climate change Global challenges continue to evolve adaptation is now as important as and the COVID-19 pandemic has seeking to mitigate risks. Water highlighted health and economic stewardship remains a high strategic concerns. In 2020, we conducted a and reputation risk, but is also seen new materiality assessment with as an opportunity for Carlsberg to support from experts at GlobeScan. show leadership.

Analysis of existing data and Supporting equality and caring for research from both within our employees have risen in prominence. business and externally, combined Diversity, inclusion and equity is a with insights from a digital listening high priority. Employee safety, platform, informed an initial issues health and wellness is also a critical list. This was used to support issue and will remain so as we Stakeholders also see an opportunity The prominence of sustainable prominent in stakeholder feedback focused consultation to gain internal emerge from the COVID-19 crisis. for Carlsberg to show leadership on agriculture and ecosystem health is (responsible supply chain and external perspectives. We Looking forward, areas for potential product health impact and social rapidly increasing and expected to management), with human rights conducted a survey of employees future consideration are the future of impacts (preventing harmful use of become more of a high-profile issue and labour standards being key representing a range of geographies work and the need for upskilling or alcohol) through innovating and for the whole food and drinks sector. components. Other issues identified and functions, and in-depth reskilling (talent and development), widening the availability of products Stakeholders also highlighted the as highly material include product interviews with external stakeholders as well as Carlsberg’s role in (such as low-/no-alcohol or low- interconnection between biodiversity, quality and safety, ethical behaviour representing groups including non- supporting social justice and sugar options), bolder marketing, water and climate. and governance, waste management governmental and inter- economic equality (community and working with the industry and and circular resource use in governmental organisations, industry impact and investment). others to define the role for beer in a Carlsberg’s extended responsibility production, responsible marketing, “healthy” society. across the whole supply chain was and economic impact and tax.

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ISSUE DEFINITIONS

ISSUE DEFINITION ISSUE DEFINITION

Responsible supply High social (including workers) and environmental standards for sourcing and partners. Chemical and Appropriate systems and procedures for the continuous reduction of chemicals in products and chain management Supporting partners to develop strategies for improvement (on environmental and social hazardous material processes, and appropriate disposal of chemical and hazardous waste. impact) and monitoring their performance through audits etc. management

Human rights and Ensuring human rights are protected within own operations and throughout the value chain, Ethical behaviour and Ethical approach to the legal and regulatory environment, including ensuring compliance with labour standards including implementing governance and systems to identify, address and remedy issues. internal governance all local laws. Good governance systems, rules and procedures, including executive oversight. Eliminating all forms of forced and compulsory labour, child labour and human trafficking. Rigorous action against corruption, misconduct, negligence, anti-competitive behaviour. Upholding the right of freedom of association and collective bargaining. Executive Fair, appropriate and transparent system of executive compensation, including pay and Sustainable packaging Reducing, reusing, recycling and rethinking packaging materials, as well as developing remuneration incentives. sustainable packaging innovations and advocating for circular packaging systems (e.g. return schemes). Corporate lobbying Responsible lobbying practices that are fully aligned with the company's sustainability commitments and strategy. Preventing harmful use Working with others (e.g. policymakers, partners within and beyond the industry, and of alcohol customers) to raise awareness, promote moderation, tackle misuse and reduce alcohol- Data security and Protecting the right to privacy and ensuring security of data for customers, consumers, employees related harm in society (e.g. violence and abuse, underage drinking, drink-driving). privacy and business partners. Including via social media and other communication outlets.

Responsible marketing Marketing alcoholic and non-alcoholic products in a responsible manner. Diversity, inclusion A workplace where all employees are treated fairly and without discrimination. Working and equity towards equality internally (gender, age, race, sexual orientation, disabilities, faith etc.) and Effective and relevant Providing the information consumers need to make informed decisions about their advocacy with partners and externally. consumer information consumption of alcohol. Transparency through provision of consumer information on ingredients and nutrition (e.g. sugar, calories). Employee safety, A safe working environment across all operations. Protecting the health and wellbeing of health and wellness employees, including work/life balance, stress and mental health, flexible working and support Sustainable consumer Labelling and transparency about environmental impacts on products and in for physical health issues. behaviour communications. Encouraging consumers to adopt more sustainable behaviours (e.g. recycling, use of returnable bottles) or buying the more environmentally friendly product Talent and Good pay, benefits and services to workforce (e.g. health insurance, retirement contributions). development Maximising employee engagement and talent recruitment/retention through career (e.g. with the lowest CO2 impact or free from plastic). development, training and opportunities. Product quality and Ensuring traceability, safety and consistency of products through high-quality standards and safety procedures. Including clear identifications of use of GMOs and pesticides. Community impact Creating shared economic value with communities and other stakeholders in all operational and investment locations (e.g. through access to opportunities, investment, programmes and partnerships to Energy and carbon Reducing carbon emissions and improving energy efficiency across own operations, support development, inclusion and environmental protection). distribution and full value chain, including investing in clean low-carbon technologies and renewable energy. Economic impact and Positive economic impact across all markets through job creation/security, investment and tax supporting the wider value chain. Fulfilling taxation responsibilities to the economies in which Adapting to climate Developing strategies to protect against climate-related hazards (e.g. water shortages, we operate. change increases in pests and diseases, temperature and rain impacts on crops) and natural disasters - within own operations, supply chain and communities. Examples include investment in Product health Supporting healthy consumption of alcohol and other beverages, including innovation on climate-resilient and disease-resistant hops or strengthening of finance options for farmers. impact healthier products (e.g. low-/no-alcohol or low-sugar options). Working with others to raise awareness and tackle the potential impacts of alcohol on mental and physical health (e.g. Waste management Designing out waste and pollution, while keeping products and resources in use within own obesity, NCDs, alcohol during pregnancy). and circular resource operations and supply chain. Responsible disposal of any waste, including discharge of use in production brewery effluent, spent grain and treatment of wastewater. Threats to Potential threats to the business (e.g. linked to the COVID-19 pandemic) through demonisation commercial freedom of alcohol via government restrictions, illicit trade in alcohol or threats to the wider hospitality Sustainable agriculture Protecting the health of ecosystems associated with the production of raw materials and industries. and ecosystem health across operations. Including soil health, biodiversity and land use. Understanding opportunities to have a positive impact on the health of ecosystems. External risks to Challenges to the supply chain, including raw material availability, as well as import and export supply chain restrictions caused by trade wars or pandemic-related labour and travel restrictions. Water stewardship Good water stewardship and governance approach across own operations and supply chain, especially in water-scarce regions, including advocating with government, partners and Air pollution Reduction in pollutants with negative impact on public health, particularly nitrogen oxide and peers. Supporting farmers to be good water stewards. sulphur dioxide.

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CONTRIBUTING TO THE UN SUSTAINABLE DEVELOPMENT GOALS

SDG TARGETS EXAMPLE ACTIONS FOCUS AREA PAGE

3.5 Strengthen the prevention and Achieved 11% global volume growth in alcohol-free brews (AFBs) in 2020 (83% since 2015). ZERO 27-34 IRRESPONSIBLE treatment of substance abuse, including DRINKING harmful use of alcohol. Extended alcohol-free options to 100% of international premium brands and a third of all brands.

3.6 By 2020, halve the number of global Reached more than 22.5 million people with responsible drinking campaigns on Global Beer Responsibility

deaths and injuries from road traffic Day. accidents. Maintained commitment to the Digital Guiding Principles alongside member companies of the International Alliance of Responsible Drinking (IARD). Achieved 90.6% compliance globally.

Continued implementation of actionable advice on responsible drinking, including age-restriction messaging.

Continued to encourage responsible behaviour, including campaigns to tackle drink-driving in countries such as China, Laos, Latvia and Malaysia.

Equipped 48% and 50% of company cars in Western Europe and Eastern Europe respectively with alcolocks.

5.1 End all forms of discrimination against Established a Diversity & Inclusion Council to act as ambassadors for diversity and inclusion, and to provide Respecting human rights 46

all women and girls everywhere. input to the Executive Committee to define our approach on this topic. Embracing diversity & inclusion 46-47

5c Adopt and strengthen sound policies Conducted an anonymous survey of 800 leaders to get a better understanding of perceptions of inclusivity and enforceable legislation for the at Carlsberg and inform a roadmap for improvement, which includes training managers on unconscious

promotion of gender equality and the bias and inclusive leadership, integrating diversity and inclusion in our HR processes, and promoting flexible empowerment of all women and girls at all working. levels. Continued to build a pipeline of female talent, with women making up 14% of our top 60 leaders, 28% of managers, 47% of employees in the early stages of their careers, 37% of global leadership programme participants, and 40% of developmental or short-term assignments.

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SDG TARGETS EXAMPLE ACTIONS FOCUS AREA PAGE

6.1 By 2030, achieve universal and Reduced water usage by 18% per hectolitre of beer produced since 2015, saving almost 3,000 Olympic ZERO 20-26 equitable access to safe and affordable swimming pools of water. WATER WASTE drinking water for all.

Introduced new efficiency measures that will significantly reduce water use in China and Vietnam. 6.2 By 2030, achieve access to adequate and equitable sanitation and hygiene for all Commenced construction of a state-of-the-art water-recycling plant to reuse 90% of process wastewater and end open defecation, paying special at the Fredericia brewery in Denmark, which will take water efficiency from 2.9 hl/hl to 1.4 hl/hl. attention to the needs of women and girls and those in vulnerable situations. Continued research and innovation for reusing and reducing water use through the Carlsberg Young Scientists Community. 6.3 By 2030, improve water quality by reducing pollution, eliminating dumping and Began sharing lessons learned from best-in-class efficiency measures at the Dazhulin brewery in China minimizing release of hazardous chemicals across the business. and materials, halving the proportion of untreated wastewater and substantially Completed a detailed water risk assessment at all 81 of our breweries using WWF’s leading Water Risk increasing recycling and safe reuse globally. Filter tool, identifying 17 breweries in high-risk areas – all in Asia.

6.4 By 2030, substantially increase water- Worked with WWF on a ground-breaking pilot to use its Water Risk Filter tool to develop forward-looking use efficiency and ensure sustainable scenarios to better understand global water risk in a changing climate. withdrawals and supply of fresh water to address water scarcity. Implemented projects to improve access to reliable water supplies for communities, including better water infrastructure for 20,000 people in Vietnam, wetlands restoration in Nepal and an innovative partnership 6.5 By 2030, implement integrated water with Desolenator in India, which will use solar power to provide clean water for around 4,000 people. resources management at all levels.

6.6 By 2020, protect and restore water- related ecosystems, including mountains, forests, wetlands, rivers, aquifers and lakes.

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SDG TARGETS ACTIONS FOCUS AREA PAGE

7.2 By 2030, increase substantially the Sourced 64% of electricity from renewable sources (2019: 56%) and increased the total share of renewable ZERO 10-19 share of renewable energy in the global energy to 25% (2019: 24%). CARBON FOOTPRINT energy mix. Used 100% renewable electricity at all sites in Western Europe and, for the first time, China.

7.3 By 2030, double the global rate of

improvement in energy efficiency. Used renewable thermal energy (partially or fully) at 28 breweries through biogas extracted from our own wastewater, biomass, renewable district heating or biogas certificates.

Assessed viability of new technologies such as solar-assisted brewing, heat pump integration and energy from spent grain through the Carlsberg Young Scientists Community.

Continued to improve energy efficiency at our breweries through initiatives such as heat and energy recovery systems, and heat exchange units.

Took delivery of the first of our fleet of 26-tonne electric trucks in Switzerland and continued to invest in electric forklift trucks to support the transition away from fossil fuels.

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SDG TARGETS ACTIONS FOCUS AREA PAGE

8.1 Sustain per capita economic growth in Directly employed over 40,000 people in our majority-owned businesses and indirectly created an ZERO 35-40 ACCIDENTS accordance with national circumstances estimated 1.09 million further jobs for people involved in supplying our raw ingredients and serving our CULTURE and, in particular, at least 7 per cent gross beer to consumers. domestic product growth per annum in the least developed countries. Generated DKK 85bn1 in economic value, including a total tax contribution of DKK 38bn globally. Contributing to economies 42

8.5 By 2030, achieve full and productive Maintained our commitment to uphold internationally recognised human rights as a signatory to the UN Respecting human rights 46 employment and decent work for all Global Compact, and as a supporter of the UN Universal Declaration of Human Rights and the UN Guiding

women and men, including for young Principles on Business and Human Rights. people and persons with disabilities, and equal pay for work of equal value. Continued to train people managers on our Labour & Human Rights Policy. Assessed compliance with the policy in potentially higher-risk markets through audits in Bulgaria, Kazakhstan, Laos, Lithuania, Myanmar 8.7 Take immediate and effective and Ukraine. measures to eradicate forced labour, end modern slavery and human trafficking and Undertook a cross-company exercise to identify and prioritise our salient human rights issues, and planned secure the prohibition and elimination of a deeper assessment of the highest risks we face, which relate to labour rights for employees and supplier the worst forms of child labour, including workers in specific roles. recruitment and use of child soldiers, and by 2025 end child labour in all its forms. Reduced the number of lost-time accidents to 116 (2019: 146) and the lost-time accident rate by 55% since 2015 to 3.0 (2019: 3.7). 8.8 Protect labour rights and promote safe and secure working environments for all Completed 133,694 safety walks and recorded 306,377 observations on safety risks and unsafe workers. behaviours reported by employees. Achieved 94% compliance with Life Saving Rules.

1 Economic value generated is a combination of gross revenue, other income, financial income and income included in special items.

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SDG TARGETS ACTIONS FOCUS AREA PAGE

10.2 By 2030, empower and promote the Established a Diversity & Inclusion Council to act as ambassadors for diversity and inclusion, and provide Respecting human rights 46 social, economic and political inclusion of input to the Executive Committee to define our approach on this topic.

all, irrespective of age, sex, disability, race, Embracing diversity & inclusion ethnicity, origin, religion or economic or 46-47 Conducted an anonymous survey of 800 leaders to get a better understanding of perceptions of inclusivity other status. at Carlsberg and inform a roadmap for improvement, which includes training managers on unconscious

bias and inclusive leadership, and integrating diversity and inclusion in our HR processes.

10.3 Ensure equal opportunity and reduce inequalities of outcome, including by Continued to train people managers on our Labour & Human Rights Policy, which covers non- eliminating discriminatory laws, policies and discrimination. Assessed compliance with the policy in potentially higher-risk markets through audits in practices and promoting appropriate Bulgaria, Kazakhstan, Laos, Lithuania, Myanmar and Ukraine. legislation, policies and action in this

regard. Undertook a cross-company exercise to identify and prioritise our salient human rights issues, and planned a deeper assessment of the highest risks we face, which relate to labour rights for employees and supplier workers in specific roles.

12.2 By 2030, achieve the sustainable Extended our revolutionary Snap Pack technology – which cuts plastic by up to 76% by replacing plastic shrink ZERO 10 -19 management and efficient use of natural wrap or rings with glue dots that hold packs of cans together – to three more markets. It is now in use in CARBON FOOTPRINT resources. Denmark, Estonia, France, Germany, Latvia, Lithuania and the UK.

12.5 By 2030, substantially reduce waste Celebrated progress on our Green Fibre Bottle project with trials launched by project partners and a

generation through prevention, reduction, commercial trial for use with our beer in 2021 pending regulatory approval. recycling and reuse. Launched 19 partnerships to operate 10,000 recycling containers in 50 municipalities across Russia and 12.6 Encourage companies, especially partnered with retailer VkusVill to install innovative in-store vending machines where consumers can drop large and transnational companies, to off used cans and plastic bottles. adopt sustainable practices and to integrate sustainability information into their Rolled out shrink film made of 100% recycled plastic to further markets. It is now used in Denmark, reporting cycle. Finland, France, Norway, Poland and Sweden.

12.9 Support developing countries to Launched 100% recycled PET bottles in Finland and introduced the first PET bottle-recycling machine in strengthen their scientific and technological Belarus. capacity to move towards more sustainable patterns of consumption and production.

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SDG TARGETS ACTIONS FOCUS AREA PAGE

13.1 Strengthen resilience and adaptive Made progress towards our climate targets, which have been approved by the Science Based Targets ZERO 10-19 capacity to climate-related hazards and initiative as in line with the latest climate science to limit global warming to 1.5°C. CARBON FOOTPRINT natural disasters.

Reduced brewery carbon emissions by 39% since 2015. 13.3 Improve education, awareness- raising and capacity on climate change Conducted our most extensive analysis yet of our global beer-in-hand value chain carbon footprint, with mitigation, adaptation, impact reduction input from suppliers representing more than 60% of our spend. It showed a 7% reduction in relative and early warning. emissions since 2015, halfway towards our 15% target by 2022.

Joined other leading companies in urging governments to ensure their COVID-19 recovery efforts align with the Paris Agreement’s 1.5°C goal and called for European Union leaders to embrace a 55% carbon emissions reduction target by 2030.

Achieved an A rating from the CDP for transparency and action on climate.

Increased the number of carbon-neutral breweries to eight (2019: 5).

Increased proportion of newly purchased fridges and beer coolers using low-climate-impact technology to 97% (2019: 93%).

Continued to invest in climate-tolerant and high-yield varieties of barley through the Carlsberg Research Laboratory.

16.5 Substantially reduce corruption and Introduced new online training on anti-bribery and corruption, completed by 19,162 employees in roles Livin g by our Compass 44 bribery in all their forms. such as sales, procurement and finance.

Investigated and acted on reported concerns of suspected misconduct, including those related to business integrity, and took appropriate disciplinary action.

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SDG TARGETS ACTIONS FOCUS AREA PAGE

17.16 Enhance the global partnership for Collaborated with suppliers representing more than 60% of our spend to obtain primary data input on ZERO 10-19 CARBON sustainable development, complemented greenhouse gas emissions. Used this data to inform our beer-in-hand carbon footprint analysis, conducted FOOTPRINT by multi-stakeholder partnerships. with support from the Carbon Trust.

17.17 Encourage and promote effective Partnered with suppliers to extend our Snap Pack technology to three more markets. Celebrated progress on ZERO 20-26 public, public-private and civil society our Green Fibre Bottle innovation project with two of our project partners: The Coca-Cola Company launched WATER

partnerships. a prototype, The Absolut Company is conducting a trial and we are planning a trial for our beer in 2021 WASTE pending regulatory approval.

Commenced construction of a state-of-the-art water-recycling plant to reuse 90% of process wastewater at Fredericia brewery, Denmark – a result of a public-private partnership with DRIP.

Partnered with WWF to complete a detailed water risk assessment of our breweries using its Water Risk ZERO Filter tool. Completed a ground-breaking pilot using the tool to develop forward-looking scenarios on IRRESPONSIBLE 27-34 water risk in a changing climate, which WWF has now incorporated into the tool for use by thousands of DRINKING companies globally.

Began implementing an innovative partnership with Desolenator in India, which will use solar power to

convert contaminated water into clean water for a town of 4,000 people. ZERO 35-40 ACCIDENTS CULTURE Worked with local partners to reach more than 22.5 million people on Global Beer Responsibility Day to

encourage responsible drinking, addressing locally relevant issues.

Partnered with contractors to support compliance with safety standards, achieving 94% compliance with our contractor management standards and 93% compliance with our new standard for temporary contract workers.

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UN GLOBAL COMPACT INDEX We support the UN Global Compact and this report is our Communication on Progress in implementing its Ten Principles. The index below sets out where to find information on our approach and performance in relation to each principle.

GLOBAL COMPACT PRINCIPLE OUR APPROACH

Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights Respecting human rights, page 46

Principle 2: Businesses should make sure that they are not complicit in human rights abuses Respecting human rights, page 46

Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining Engaging employees, page 48

Principle 4: Businesses should uphold the elimination of all forms of forced and compulsory labour Respecting human rights, page 46

Principle 5: Businesses should uphold the effective abolition of child labour Respecting human rights, page 46

Principle 6: Businesses should uphold the elimination of discrimination in respect of employment and occupation Living by our Compass, page 44 Respecting human rights, page 46 Embracing diversity & inclusion, pages 46-47

Principle 7: Businesses should support a precautionary approach to environmental challenges ZERO carbon footprint, pages 10-19 ZERO water waste, pages 20-26

Principle 8: Businesses should undertake initiatives to promote greater environmental responsibility ZERO carbon footprint, pages 10-19 ZERO water waste, pages 20-26

Principle 9: Businesses should encourage the development and diffusion of environmentally friendly technologies ZERO carbon footprint, pages 10-19 ZERO water waste, pages 20-26

Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery Living by our Compass, page 44

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DATA SUMMARY TABLE

ENERGY, CARBON AND WATER 2015 2016 2017 2018 2019 2020

General production figures Number of reporting sites 110 92 85 85 82 88 Beer production (million hl) 105.4 100.9 97.9 102.2 101.4 100.2 Soft drinks production (million hl) 13.9 14.3 14.2 15.6 16.1 16.5 Total production of beer and soft drinks (million hl)* 119.3 115.2 112.1 117.8 117.5 116.7 Malting (kt) 547.2 311.5 301.3 314.1 307.5 295.9

Environmental performance data (beer, soft drinks and malt production) Total thermal energy consumption (GWh)* 2,943 2,481 2,326 2,341 2,340 2,193 Total electricity consumption (GWh)* 988 914 869 885 870 857

Total CO2 emissions (from direct and indirect fuel consumption) (kt)* (market-based) 945 768 698 701 626 555

Total CO2 emissions (from direct and indirect fuel consumption) (kt)* (location-based) 883 802 801 766 727

Total SO2 emissions (tonnes) 1,695 815 731 509 446 422

Total NOx emissions (tonnes) 1,562 1,163 1,075 1,027 1,419 1,288 Total water consumption (million m³)* 41.2 37.7 35.6 37.5 35.9 33.1 Total wastewater discharged (million m³) 26.6 24.2 23.0 23.8 23.3 19.5

Solid waste & by-products Incinerated (kt) 8.7 5.7 5.1 9.2 6.0 6.8 To sanitary landfill (kt) 68.6 56.9 68.6 60.9 82.5 54.9 Special waste (kt) 0.7 1.4 0.7 0.4 1.1 0.6 Recycled (kt) 189.2 225.5 222.0 162.6 172.9 219.3 Disposed of for land applications (kt) 165.9 127.4 117.4 125.1 115.2 104.0 Total solid waste (kt) 433.1 416.9 413.8 358.3 377.6 385.6 Brewer’s grain and brewer’s yeast utilised (kt) 1,348.9 1,265.0 1,236.0 1,372.8 1,501.3 1,464.4

* 2020 data within PwC's assurance scope (see PwC’s Assurance Report, pages 90-91). 2015-2019 data assured in prior years (see previous sustainability reports).

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2015 2016 2017 2018 2019 2020

Relative figures for beer and soft drinks production Thermal energy (kWh/hl)* 21.2 20.0 19.3 18.3 18.0 16.9 Electricity (kWh/hl)* 7.8 7.7 7.6 7.3 7.1 7.1 Combined energy (thermal and electricity) (kWh/hl)* 29.0 27.7 26.9 25.6 25.1 24.0

CO2 emissions (kg CO2/hl)* 7.0 6.3 5.9 5.6 4.9 4.3 Water (hl/hl)* 3.4 3.2 3.1 3.1 3.0 2.8

Relative figures for malt production Thermal energy (kWh/tonne) 692.2 489.3 457.9 436.4 430.7 446.4 Electricity (kWh/tonne) 84.1 73.2 67.1 65.6 64.7 67.8 Combined energy (thermal and electricity) (kWh/tonne) 776.3 562.5 525.0 501.9 495.4 514.1

CO2 emissions (tonnes CO2/tonne) 0.18 0.13 0.12 0.11 0.11 0.11 Water (m³/tonne) 2.2 1.6 1.5 1.4 1.3 1.5

Other figures Complaints 33 36 32 9 13 16 Number of ISO 14001-certified sites 74 66 70 76 79** 79 Number of ISO 50001-certified sites 3 4 18 20 20 19

Water source split Municipal water 48% 46% 48% 49% 52% 51% Own boreholes 42% 47% 46% 45% 42% 39% Surface water 10% 7% 6% 6% 6% 10%

Wastewater destination Public sewer with wastewater treatment 67% 66% 66% 69% 73% 72% On-site treatment, followed by public sewer without wastewater treatment 3% 2% 2% 1% 0% 0% On-site treatment, followed by discharge to river/lake 28% 28% 28% 26% 24% 24% Other 2% 4% 4% 4% 3% 4%

Thermal energy mix Natural gas 66.1% 71.9% 69.1% 72.9% 75.4% 76.6% Coal 15.6% 7.0% 5.9% 3.5% 1.8% 0.6% District heating 6.4% 7.1% 7.6% 7.4% 6.8% 4.3% District heating from renewable energy 2.0% Heavy fuel 2.8% 3.1% 3.6% 3.0% 3.0% 2.8% Renewable energy 6.9% 8.2% 9.8% 11.8% 12.3% 11.4% Light fuel 1.2% 1.4% 3.0% 1.4% 0.8% 3.3% Other 1.0% 1.3% 1.0% 0% 0% 0%

* 2020 data within PwC's assurance scope (see PwC’s Assurance Report, pages 90-91). 2015-2019 data assured in prior years (see previous sustainability reports). ** Restated.

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2015 2016 2017 2018 2019 2020

Packaging mix Cans 26.6% 27.4% 28.6% 29.9% 30.6% 32.4% RGB 33.7% 31.5% 29.8% 28% 29.2% 27.0% NRGB 9.2% 9.5% 11.6% 12.3% 11.9% 13.2% PET 23.0% 23.0% 20.8% 20.3% 19.8% 22.0% Kegs 6.4% 7.6% 7.8% 7.7% 6.8% 4.4% Bulk 1.0% 0.9% 1.2% 1.4% 1.4% 0.7% Other 0.1% 0.1% 0.2% 0.4% 0.4% 0.3%

Total CO2 emissions from refrigerants

HFC-based refrigerants (kt CO2)* 14.9 9.8 6.8 2.9 12.3 8.7

Together Towards ZERO brewery target

Scope 1 – Absolute CO2 emissions (excl. Logistics) (kt CO2)* 436 415

Scope 2 – Absolute CO2 emissions. Market-based. (kt CO2)* 202 148

Scope 1+2 – Absolute emissions (Together Towards ZERO 2015 baseline) (kt CO2)* 846 777 704 704 638 563

Renewable electricity Percentage of electricity from renewable sources* 41 43 45 46 56 64

Sites using coal Number of sites using coal* 31 17 12 6 5 2

Cooling % low-climate-impact cooling 88% 93% 97%

Together Towards ZERO beer-in-hand (value chain) target***

Total value chain emissions – Absolute CO2e emissions (kt CO2e) 7,141 6,766

Total value chain emissions – Relative CO2e emissions (kg CO2e/hl) 60.8 56.4 Agriculture & Processing (GHG Protocol**** Scope 3 category: 1. Purchased goods and services; and Scope 1, 2, 3 23% 25% of owned malt plants) Breweries (GHG Protocol: Scope 1, Scope 2 market-based, and Scope 3 categories: 1. Purchased goods and services 3. Fuel & 16% 13% energy related activities, 5. Waste generated in operations) Packaging (incl. end-of-life treatment) (GHG Protocol Scope 3 categories: 1. Purchased goods and services, 12. End-of-life 38% 41% treatment of sold products) Transportation & Distribution (GHG Protocol Scope 3 categories: 4. Upstream transportation and distribution, 6. Business travel 13% 12% (aviation), 9. Downstream transportation and distribution) Cooling (GHG Protocol Scope 3 category: 9. Downstream transportation and distribution) 10% 9%

* 2020 data within PwC's assurance scope (see PwC’s Assurance Report, pages 90-91). 2018-2019 data assured in prior years (see previous sustainability reports). *** Methodology on page 88. **** All Greenhouse Gas Protocol categories are quantified by Carlsberg, but not all are part of the beer-in-hand target. Please see the annual CDP climate assessment for the remaining categories (<25% of total impact) not part of the beer-in-hand target.

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HEALTH & SAFETY 2015 2016 2017 2018 2019 2020

Figures for Production*** Number of lost-time accidents* 114 105 73 59 53 52 Lost-time accident rate* 6.2 7.0 5.1 4.5 4.1 4.1 Number of lost days* 1,911 1,281 1,219 1,393 2,247 1,332 Days lost rate* 104.5 85.6 85.6 105.4 172 106

Figures for Logistics*** Number of lost-time accidents* 140 109 62 48 40 27 Lost-time accident rate* 15.5 13.8 8.2 7.5 6.3 4.4 Number of lost days* 2,511 1,619 1,128 1,393 1,473 1,508 Days lost rate* 277.2 205.1 149.5 218.0 233 243

Figures for Sales & Marketing*** Number of lost-time accidents* 52 95 43 58 46 36 Lost-time accident rate* 3.3 6.2 2.5 3.5 2.7 2.2 Number of lost days* 565 2,787 961 1,545 1,623 1,300 Days lost rate* 36.2 183.0 56.3 94.1 97 78

Figures for Administration*** Number of lost-time accidents* 6 2 5 4 7 1 Lost-time accident rate* 1.4 0.6 1.4 1.2 2.0 0.3 Number of lost days* 43 30 57 271 123 79 Days lost rate* 9.7 8.2 16.3 82.0 35 21

Figures for the Group*** Number of lost-time accidents* 312 311 183 169 146 116 Lost-time accident rate* 6.6 7.4 4.3 4.3 3.7 3.0 Number of lost days* 5,030 5,717 3,365 4,602 5,466 4,219 Days lost rate* 106.2 136.9 79.4 117.0 138 108 Fatalities (Carlsberg Group employees on and off site, contractors and members of the public on site) 5 5 1 3 0 1 Number of lost-time accidents, contractors* 42 54 39 Number of lost-time accidents, members of the public* 0 0 0

Lost-time accidents – department split Percentage in Production 37 34 40 35 34 45 Percentage in Logistics 45 35 34 28 35 23 Percentage in Sales & Marketing and Administration 19 31 26 37 32 32

* 2020 data within PwC's assurance scope (see PwC’s Assurance Report, pages 90-91). 2015-2019 data assured in prior years (see previous sustainability reports). *** Carlsberg Group employees.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 71

RESPONSIBLE DRINKING AND MARKETING COMMUNICATION 2015 2016 2017 2018 2019 2020

Percentage of companies implementing responsible drinking initiatives 78 75 90 76 97 71 Percentage of fermented produced volume carrying responsible drinking guiding symbols and/or equivalent text 54 85 97 96 99 Percentage of fermented produced volume that carry legal age-restriction symbol or equivalent text* 50 Percentage of fermented produced volume that lists nutritional information* 65 65 67 Percentage of fermented produced volume that lists ingredient information* 85 90 99 Number of responsible drinking campaigns 239 194 248 159 162 81

LIVE BY OUR COMPASS 2015 2016 2017 2018 2019 2020

Total number of employees trained in the Code of Ethics & Conduct 4,336 34,500 2,911 4,700 4,511 Number of incidents reported through our Speak Up system 87 55 53 95 168 196

* 2020 data within PwC's assurance scope (see PwC’s Assurance Report, pages 90-91). 2018-2019 data assured in prior years (see previous sustainability reports).

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 72

LABOUR & HUMAN RIGHTS 2015 2016 2017 2018 2019 2020

Total workforce (FTE*****) 47,464 42,062 41,430 40,837 41,248 40,010

Percentage of employees by employment contract Permanent employees 88 86 89 86 87 89 Temporary employees 12 14 11 14 13 11

Percentage of employees by employment type Full-time 98 93 93 94 91 93 Part-time 2 7 7 6 9 7

Percentage of employees by employment category Total presidents + top managers 1.5 1.5 1.4 1.8 1.9 2 Total managers 12.3 12.6 13.2 13.5 14 13 Total specialists 39.9 36.7 36.9 38.5 39 36 Total workers 46.3 49.2 48.5 46.2 46 49

Percentage of employees by gender Male 72 69 71 68 67 68 Female 28 31 29 32 33 32

Percentage of management level by gender Male 78 77 76 75 73 72 Female 22 23 24 25 27 28

Percentage of employees by age Younger than 18 0.19 0.11 0.13 0.02 0.03 0.02 19-29 22 23 25 23 19 18 30-39 33 33 35 35 38 39 40-49 29 27 25 26 26 26 50 or older 16 17 15 16 17 17

***** FTE data from Carlsberg Group Annual Report 2020.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 73

2015 2016 2017 2018 2019 2020

Employee turnover Employee turnover percentage 19 21 24 19 17 17

Employee turnover percentage by age Younger than 18 ------19-29 32 31 31 36 35 33 30-39 33 34 38 35 37 36 40-49 20 20 18 16 15 16 50 or older 15 15 15 13 13 14

Employee turnover percentage by gender Male 71 69 63 70 73 69 Female 29 31 37 30 27 31

Hours of training per employee Average for the Group 15 15 15 16 18 15

Collective bargaining Percentage of employees covered by collective bargaining agreements 73 74 74 72 72 67

RESPONSIBLE SOURCING 2015 2016 2017 2018 2019 2020

Number of integrated quality audits 171 182 154 166 197 53

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 74

REPORTING PROCESS

AND SCOPE

REPORTING APPROACH AND global megatrends, take part in Joint ventures and companies over Germany find additional information on each CRITERIA industry initiatives and assess the which the Carlsberg Group does not • Site: Hamburg Hausbruch of the topics below: activities of our competitors. This have the opportunity to exercise SCOPE OF THE SUSTAINABILITY ensures that we fully understand the management control are not Lithuania BALANCE REPORTING key issues and keep up to date. covered. However, we work with our • Site: Klaipeda We are committed to communicating This report covers the relevant and partners routinely to ensure ongoing honestly and openly about our significant social, ethical and The report focuses on the topics that focus on sustainability issues. If a Norway performance, both when it has environmental issues for the financial we consider most important to our majority-owned entity is acquired • Company: E.C. Dahls Bryggeri improved and when it has not. Our year 1 January to 31 December business and society. It is based on a during the financial year, it will be • Site: E.C. Dahls Trondheim aim is to provide our stakeholders 2020. It gives our stakeholders an range of inputs from our included in the following year’s with sufficient information about our overview of our performance in these stakeholders, including, but not report. Sweden: company for them to form their own areas, complementing our Annual restricted to, the materiality • Company: Nya judgements concerning the Carlsberg Report, which primarily covers our assessment updated in 2020 in Carnegiebryggeriet Group’s position and role in the financial and economic performance. cooperation with GlobeScan, water COMMENTS ON BOUNDARY • Site: Nya Carnegiebryggeriet societies in which we operate. risk assessments undertaken with SETTING For many years, we have been using WWF, the UN’s Sustainable UK: CLARITY the standards of Global Reporting We strive to make our sustainability Development Goals (SDGs), carbon Excluded from 2020 reporting scope • Site: London Fields Brewery Initiative (GRI) as guidance for our footprinting analyses undertaken Holsten-Brauerei Hamburg, reporting accessible and easy to read sustainability work. For this 2020 with the Carbon Trust and guidance Germany, closed since 2019. Renamed: for anyone, but we are always open report, the GRI G4 Sustainability from the Carlsberg Sustainability Former Carlsberg Eastern Europe to feedback about the way we Reporting Guidelines were applied in Advisory Board. Added to 2020 reporting scope: (Grain Co) is now named Hoppy communicate on our material issues. Cambodia preparing the underlying data and Union • Company: Cambrew LTD framing our reporting principles; BOUNDARY SETTING • Site: Brewery Sihanouk Ville however, the Carlsberg Group does Entities included in this report’s not apply GRI-specific disclosures in performance data include majority- ENSURING DATA QUALITY Czechia accordance with the standard. owned subsidiaries, which are In gathering information about our • Company: Zatecky Pivovar defined as companies that the sustainability performance, we • Site: Zatec We receive recommendations on our Carlsberg Group directly or indirectly applied the widely used principles of sustainability activities and reporting owns, in which it controls more than balance, clarity, accuracy, reliability, Denmark: from our assurance provider, PwC, 50% of the voting rights or that it timeliness and comparability. Please • Company: Visit Carlsberg while we ourselves routinely analyse otherwise controls.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 75

ACCURACY AND RELIABILITY PwC has been appointed to provide TARGETS Since 2009, our dedicated independent assurance regarding We communicate through actions sustainability reporting system has selected social, environmental and and targets: helped us collect data from local safety indicators. In each section of • One-year short-term actions sites and consolidate this at Group the report, we indicate which data towards ZERO level. Every year, we have improved has been assured. For further details, • 2022 targets the indicator definitions for our see pages 90-91. • 2030 targets performance indicators in order to help our entities report accurately These have been developed by each and reliably. TIMELINESS of the area owners in cooperation Internally, we report our with Group Sustainability and may However, it is a challenge to obtain a sustainability data with varying be adjusted following significant complete and fully aligned overview degrees of frequency, depending on changes in the business, such as of all our data that, at the same the nature of the data. Where major acquisitions and divestments. time, takes into account local necessary, we revise the reporting As far as possible, we include such procedures for data gathering. For frequency in order to strike the right changes by applying scenario this reason, we are continuously balance between obtaining the planning to our target-setting working on improving data accuracy. correct data and observing process. Since 2009, we have been using an appropriate time intervals for international provider of reporting on them. Annual data sustainability software solutions to gathering and external reporting are systematise and collect our data. aligned with financial data collection, This gives us a higher degree of following the calendar year. control over the data-gathering process, helps local companies compare data year on year, and COMPARABILITY enables instant consistency checks On pages 76-83, we have published during the data-gathering phase. As the definitions we use for the key well as the system, we use internal indicators in the report, which are data management systems to collect also the data points on which PwC information such as employee provides assurance. headcounts. An additional tool used to improve our sustainability data is We include three- or five-year data the Carlsberg Operational Manual in all cases where a comparable (COM), which sets out details three- or five-year data history is regarding processes and best available. practices.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 76

INDICATOR DEFINITIONS

In the following, we explain the indicators we use to measure our sustainability performance. We define them and clarify their scope and any relevant assumptions we have made when collecting data globally.

INDICATOR NAME INDICATOR DEFINITION UNIT

ZERO CARBON FOOTPRINT

Total production of beer and soft drinks Definition: Million hl Volume of fermented and non-fermented products produced.

Production output that has passed through the production process on the company's own premises is included. Output is defined as approved packaged product to warehouse, plus volume of bulk beer and volume of bulk non-fermented products.

Scope: Beer and soft drinks production sites as defined on page 4.

Total thermal energy consumption Definition: GWh Total thermal energy consumption used for beer, soft drinks and malt production.

Thermal energy originates from different energy sources such as light fuel oil, heavy fuel oil, natural gas, town gas, biogas from wastewater treatment plants, coal, biomass, district heating, grid electricity and biogas with renewable certificates (documented and traceable).

Scope: Beer, soft drinks and malt production sites as defined on page 4. Consumption for non-production site activities is included.

Assumptions: Thermal energy sold to third parties, fuels for on-site logistics and fuels used for electricity production from on-site combined heat and power (CHP) plants are excluded from "Total thermal energy consumption". Losses from CHPs are included.

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INDICATOR NAME INDICATOR DEFINITION UNIT

ZERO CARBON FOOTPRINT

Total electricity consumption Definition: GWh Total electricity consumption for beer, soft drinks and malt production.

Electricity originates from different sources such as renewable electricity generated on site (solar, wind), electricity bought with renewable certificates (e.g. Guarantees Of Origin, Renewable Energy Guarantees Origin − REGO), electricity from grid and electricity from on-site combined heat and power (CHP) plants.

Scope: Beer, soft drinks and malt production sites as defined on page 4. Consumption for non-production site activities is included.

Assumptions: Electricity sold to third parties is excluded from “Total electricity consumption”.

Total CO2 emissions (from direct and Definition: kt indirect fuel consumption) Total fossil fuel emissions (direct and indirect).

Direct emissions are from the combustion of fuels for thermal energy and indirect emissions are from purchased electricity and district heating.

CO2 emission factors used for fossil fuels and electricity are in accordance with the 2006 Intergovernmental Panel on Climate Change Guidelines for National Greenhouse Gas Inventories and International Energy Agency statistics. Electricity grid emission factors from IEA are updated annually.

Renewable energy types have an emission factor of 0 g CO2/KWh.

Scope: Beer, soft drinks and malt production sites as defined on page 4.

Assumptions:

CO2 emissions related to sold thermal energy and electricity are not deducted from “Total CO2 emissions”.

Relative thermal energy consumption Definition: kWh/hl Thermal energy needed to produce 1 hectolitre of beer and soft drinks.

“Total thermal energy consumption” / “Total production of beer and soft drinks”

Scope: Beer and soft drinks production sites as defined on page 4. Consumption for non-production site activities is included.

Assumptions: Thermal energy used for malting or other extraordinary site activities is deducted from “Total thermal energy consumption”.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 78

INDICATOR NAME INDICATOR DEFINITION UNIT

ZERO CARBON FOOTPRINT

Relative electricity consumption Definition: kWh/hl Electricity needed to produce 1 hectolitre of beer and soft drinks.

“Total electricity consumption” / “Total production of beer and soft drinks”

Scope: Beer and soft drinks production sites as defined on page 4. Consumption for non-production site activities is included.

Assumptions: Electricity used for malting or other extraordinary site activities is deducted from “Total electricity consumption”.

Relative CO2 emissions Definition: kg CO2/hl Fossil fuel carbon dioxide emissions (direct and indirect emissions) emitted from energy used to produce 1 hectolitre of beer and soft drinks.

“Total CO2 emissions (from direct and indirect fuel consumption)” / “Total production of beer and soft drinks”

Scope: Beer and soft drinks production sites as defined on page 4.

Assumptions:

CO2 emissions related to malting or other extraordinary site activities are deducted from “Total CO2 emissions (from direct and indirect fuel consumption)”.

Total CO2 emissions from refrigerants Definition: Kt

CO2 equivalent emissions caused by refrigerant losses from on-site refrigerant systems.

Emission factors for refrigerants are obtained from a range of publicly available sources.

Scope: Beer, soft drinks and malt production sites as defined on page 4.

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INDICATOR NAME INDICATOR DEFINITION UNIT

ZERO CARBON FOOTPRINT

Percentage of electricity from Definition: % renewable sources Share of electricity from renewable sources.

Renewable sources can be on-site renewable electricity generation or electricity supplied with Guarantees Of Origin, Renewable Energy Guarantees Origin or similar standards.

RE100 requirements provide the guiding principles for how renewable electricity is reported.

“Total renewable electricity intake” / “Total electricity intake”

Scope: Beer, soft drinks and malt production sites as defined on page 4.

Assumptions: Electricity generated from on-site combined heat and power (CHP) plants is not included in “Total electricity intake”.

Number of sites using coal Definition: Number of sites Number of breweries that used coal as the primary thermal energy source during the reporting period.

Scope: Beer, soft drinks and malt production sites as defined on page 4.

Assumptions: The brewery does not use coal on site to generate thermal energy.

kt Scope 1+2 - Absolute CO2 emissions Definition:

(Together Towards ZERO brewery Sum of “Total CO2 emissions (from direct and indirect fuel consumption)” and “Total CO2 emissions from refrigerants”. target) Scope:

Beer, soft drinks and malt production sites as defined on page 4.

kt Scope 1 - Absolute CO2 emissions Definition: (excl. Logistics) (kt CO2) Sum of “Total CO2 emissions (from direct fuel consumption)” and “Total CO2 emissions from refrigerants”.

Scope: Beer, soft drinks and malt production sites as defined on page 4.

kt Scope 2 - Absolute CO2 emissions. Definition:

Market-based. (kt CO2) Sum of “Total CO2 emissions (from indirect fuel consumption)”.

Scope: Beer, soft drinks and malt production sites as defined on page 4.

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INDICATOR NAME INDICATOR DEFINITION UNIT

ZERO WATER WASTE

Total water consumption Definition: million m³ Total water consumption for beer, soft drinks and malt production.

Water originates from water withdrawal from own boreholes, municipal water supply, surface water or other sources.

Scope: Beer, soft drinks and malt production sites as defined on page 4. Consumption for non-production site activities is included.

Assumptions: Water intake to brewery sold to third parties is excluded from “Total water consumption”.

Relative water consumption Definition: hl/hl Water needed to produce 1 hectolitre of beer and soft drinks.

“Total water consumption” / “Total production of beer and soft drinks”

Scope: Beer and soft drinks production sites as defined on page 4. Consumption for non-production site activities is included.

Assumptions: Water used for malting or other extraordinary site activities is deducted from “Total water consumption”.

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INDICATOR NAME INDICATOR DEFINITION UNIT

ZERO IRRESPONSIBLE DRINKING

Percentage of fermented produced Definition: % volume carrying legal age-restriction “Volume of packed fermented products that carry legal age-restriction symbol or equivalent text (on primary packaging, excluding kegs and alcohol-free brews)” / “Total symbol or equivalent text packed fermented production volume x 100%”.

Scope: All majority-owned companies and production sites as defined on page 74, excluding companies without production and/or direct sales activities.

Percentage fermented produced volume Definition: % that lists nutritional information “Volume of packed fermented products that lists nutritional information (on primary packaging, excluding kegs and alcohol-free brews)” / “Total packed fermented production volume x 100%”.

Nutritional declaration: nutrition declared on consumer-facing primary packaging. Minimum requirement is to present energy in linear form (e.g. “Energy: 190 kJ/46 kcal per 100 ml”).

Scope: All majority-owned companies and production sites as defined on page 74, excluding companies without production and/or direct sales activities.

Percentage of fermented produced Definition: % volume that lists ingredient information “Volume of packed fermented products that lists ingredient information (on primary packaging, excluding kegs and alcohol-free brews)” / “Total packed fermented production volume x 100%”.

Ingredient declaration: ingredients presented on consumer-facing primary packaging in linear form (e.g. “Water, barley malt, hops”).

Scope: All majority-owned companies and production sites as defined on page 74, excluding companies without production and/or direct sales activities.

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INDICATOR NAME INDICATOR DEFINITION UNIT

ZERO ACCIDENTS CULTURE

Lost-time accidents (LTAs) in Definition: LTA Production, Logistics, Sales & Marketing, Any wound or damage to the body, resulting from a brief single event or exposure, causing lost time. Administration Lost time occurs when the injured/ill person is medically considered unable to work. It includes time away from work for rest, recovery or treatment.

“Accident” and “injury” are used interchangeably.

Scope: All majority-owned companies and production sites as defined on page 74.

Days lost (DL) in Production, Logistics, Definition: DL Sales & Marketing, Administration Calendar days, starting the day after the incident and ending the day before return to work, including weekends, holidays etc.

Scope: All majority-owned companies and production sites as defined on page 74.

Full-time equivalents (FTEs) in Definition: FTE Production, Logistics, Sales & Marketing, Full-time equivalents (FTEs) is equal to the average number of employees on the payroll. Part-time employees are converted into FTEs proportionally. Administration Scope: All majority-owned companies and production sites as defined on page 74.

Lost-time accident rate (LTAR) in Definition LTAR Production, Logistics, Sales & Marketing, Number of lost-time accidents (LTAs) x 1,000 / Number of full-time equivalents (FTEs). Administration Scope: All majority-owned companies and production sites as defined on page 74.

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INDICATOR NAME INDICATOR DEFINITION UNIT

ZERO ACCIDENTS CULTURE

Days lost rate (DLR) in Production, Definition: Logistics, Sales & Marketing, Number of days lost (DLs) x 1,000 / Number of full-time equivalents (FTEs). Administration DLR Scope: All majority-owned companies and production sites as defined on page 74.

Lost-time accidents (LTAs), contractors Definition: on Carlsberg site Any wound or damage to the body, resulting from a brief single event or exposure, causing lost time.

Lost time occurs when the injured/ill person is medically considered unable to work. It includes time away from work for rest, recovery or treatment.

Contractor: any individual who works for a service provider (or who is self-employed) and performs an outsourced activity for Carlsberg (including individuals who work for LTA subcontractors).

Carlsberg site: any site managed by Carlsberg, or where construction work is being carried out on our behalf, including greenfield and brownfield project sites.

“Accident” and “injury” are used interchangeably.

Scope: All majority-owned companies and production sites as defined on page 74.

Lost-time accidents (LTAs), members of Definition: the public on Carlsberg site Any wound or damage to the body, resulting from a brief single event or exposure, causing lost time.

Lost time occurs when the injured/ill person is medically considered unable to work. It includes time away from work for rest, recovery or treatment.

Member of the public: any individual who does not correspond to the definitions of regular employee, temporary employee or contractor (e.g. visitors, delivery personnel, suppliers, consultants, students, family members). LTA

Carlsberg site: any site managed by Carlsberg, or where construction work is being carried out on our behalf, including greenfield and brownfield project sites.

"Accident" and "injury" are used interchangeably.

Scope: All majority-owned companies and production sites as defined on page 74.

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LIST OF REPORTING SITES

COUNTRY COMPANY SITES

WESTERN EUROPE Bulgaria Carlsberg Bulgaria Pirinsko, Carlsberg Croatia Koprivnica Czechia Zatecky Pivovar Zatec Denmark Carlsberg Danmark Saltum, Carlsberg Fredericia Visit Carlsberg Jacobsen Brewery Carlsberg Breweries No production sites Estonia Saku Õlletehase as Saku Finland Kerava France Kronenbourg Kronenbourg Germany Carlsberg Deutschland Hamburg Hausbruch, Mecklenburgische Brauerei Lübz Greece Olympic Brewery S.A. Thessaloniki, Ritsona Brewery Italy Carlsberg Italia Varese Latvia Aldaris Aldaris Riga Lithuania Svyturys Utena, Klaipeda Norway Farris, Gjelleråsen, Imsdal E.C. Dahls Bryggeri E.C. Dahls Trondheim Poland Carlsberg Polska Okocim Brewery , Kasztelan Brewery, Szczecin Brewery Carlsberg Shared Services (CSS) No production sites Serbia Carlsberg Srbija − Celarevo Sweden Carlsberg Sverige Falkenberg, Ramlösa Sverige Nya Carnegiebryggeriet Nya Carnegiebryggeriet Switzerland Feldschlösschen Rhäzüns, S Rheinfeld, Sion Carlsberg Supply Company No production sites UK Carlsberg UK Northampton, London Fields Brewery

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COUNTRY COMPANY SITES

EASTERN EUROPE Carlsberg Azerbaijan Belarus Alivaria Alivaria Kazakhstan Carlsberg Kazakhstan Carlsberg Kazakhstan (brewery site) Russia Baltika Breweries Baltika Brewery St. Petersburg, Baltika Don Brewery Rostov-Na-Don, Baltika , Baltika Novosibirsk, Baltika Samara, Baltika Tula Brewery Tula, Yarpivo Brewery Yaroslavl, Yarpivo Hoppy Union Malt Plant Yaroslavl, Malt Plant Tula Ukraine Carlsberg Ukraine Lvivska Brewery Lviv, Slavutich Zaporozhye, Slavutich Kiev

ASIA Cambodia Cambrew LTD Brewery Sihanouk Ville China Group Akesu Brewery, Urumqi No. 2 Brewery, Wusu Brewery, Yining Brewery, Korle Brewery CIB & TMH (business unit) Carlsberg Brewery (Huizhou), Changzhou Tianmuhu Beer Co. Ltd, Anhui Tiandao Beer Co. Ltd Ningxia Ningxia Xixia Jianiang Brewery Group Kunming Huashi Brewery Yunnan, Dali Beer Co. Ltd Chongqing Brewery Mawangxiang Brewery, Dazhulin Brewery, Hechuan Brewery, Liangping Brewery, Wanzhou Brewery, Fuling Brewery, Panzhihua Brewery, Xichang Brewery, Boke Brewery, Shizhu Brewery, Yibin Brewery, Guoren Lixian Brewery, Guoren Yongzhou Brewery Guangzhou Carlsberg Consultancy and Management No production sites Services Co., Ltd Carlsberg Brewery Hong Kong No production sites India Carlsberg India Kolkatta, Alwar, Aurangabad, Paonta Sahib, Hyderabad, Dharuhera, Mysuru Karnataka brewery Laos Lao Brewery Pepsi Plant Vientiane, Lao Brewery Pakse, Lao Brewery Vientiane Malaysia Carlsberg Brewery Malaysia Berhad Carlsberg Kuala Lumpur Nepal Gorkha Brewery Gorkha Brewery Singapore Carlsberg Singapore No production sites Vietnam Carlsberg Vietnam Phu Bai

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TAX CONTRIBUTION PRINCIPLES

BASIS OF PREPARATION Data is collected for consolidated SCOPE OF REPORTING AND Total tax contribution Employee taxes GENERAL COMMENTS entities in the Carlsberg Group. DEFINITION OF KEY TERMS Total tax contribution is the sum of Include personal income taxes and This Basis of Preparation presents “Tax” in this Section means any borne and collected taxes paid to social contribution for employees the scope and methodology of the Companies over which the Carlsberg amount of money required to be governments for the period from 1 (collected). collection and reporting of the data Group exercises a significant paid to, or collected and January to 31 December. Amounts on tax payments used in the influence, but does not consolidate, subsequently remitted to, a are included as paid when cash is Government Contributing to economies section are considered to be associates. Data government. released from or received by the Any government body or nation, (“the Section”). for associates is not part of the Carlsberg Group. state, region or district. Carlsberg Group tax contribution. Terms defined in the Carlsberg

The Section aims to provide readers Group’s Annual Report 2020 are not Operating costs Include cost of sales, sales and with an overview of the total tax Entities acquired or formed during described below. SCOPE OF REPORTING distribution expenses, administrative 1. BORNE TAXES contribution to society that the the year are recognised in the expenses and other operating These are the taxes that the Carlsberg Group (excluding Section from the date of acquisition Taxes borne and taxes collected are expenses, but exclude employee Carlsberg Group is obliged to pay to associates) has generated during the or formation. Entities that are the taxes due in respect of an wages. a government on its own behalf, or year. The total tax contribution is disposed of or wound up are accounting period as defined in IFRS, taxes that the Group is obliged to defined as taxes borne and taxes recognised in the consolidated as adopted by the EU. Employee wages pay to a third party and that cannot collected by the Carlsberg Group. income statement up to the date of Include wages to employees, be recovered from a government. disposal or winding-up. excluding social security costs. It is the responsibility of the KEY TERM DEFINITIONS Economic value generated Corporate income tax management of the Carlsberg Group The data includes a degree of Economic value generated comprises Providers of capital Corporate income tax comprises any to ensure that appropriate estimation, as tax per entity is not gross revenue, other income, Include financial expenses recognised tax on the business calculated on the procedures are in place to prepare reported in detail if a type of tax is financial income and income included in the income statement, but exclude basis of its profits, income or capital reporting in line with this Basis of below DKK 100,000 per year. in special items, and share of profit financial expenses recognised in gains. Typically, these taxes would Preparation. Instead, taxes below DKK 50,000 after tax in associates and joint other comprehensive income. be reflected in corporate income tax are not reported, and taxes above ventures. Income recognised in other returns made to governments and All data, unless otherwise stated, has DKK 50,000 but below DKK Economic value retained comprehensive income is not tend to become payable, and are been prepared for the year from 1 100,000 are reported as DKK Consolidated profit after tax. included. paid, either in the year the profits January 2020 to 31 December 2020. 50,000. The data is reported by the were made or up to one year later,

entity in local currency in multiples depending on the local tax rules as

of 1,000. to timing of payments.

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Energy taxes (net, non-refundable) Withholding taxes on dividends, 2. TAXES COLLECTED, INCLUDING employees’ social security Energy taxes comprise royalties, interest and professional EXCISE DUTIES contributions by deducting these environmental taxes levied on the fees These are taxes not finally borne by from wages and salaries. Withholding taxes comprise the final consumption of energy borne by the Carlsberg Group, but for which companies’ own supply of energy. tax burden on payment of dividends, the Group bears an administrative Withholding tax on dividend Such taxes may include taxes on the interest etc. after possible tax relief. burden of collection. These taxes distributions made by Carlsberg A/S consumption of electricity, oil, gas or are, however, indirectly generated This comprises taxes that are Transportation taxes coal. from the Group’s business activities required to be withheld in advance Transportation taxes comprise flight and are therefore part of the Group’s on payments made to shareholders. Environmental fees tax, petrol tax, registration duties total tax contribution. Environmental fees comprise and other taxes levied on the VAT/GST additional environmental taxes that mobility of goods and employees. Excise duties (beer and soft drinks VAT is a broadly based consumption may apply depending on company etc.) tax assessed on the value added to Social contribution for employees operations. Such taxes may include Excise duties are indirect taxes on goods and services. It applies more Social contribution for employees other taxes and duties on the supply the consumption of alcoholic or less to all goods and services that comprises the social security of goods and services that are beverages etc. are bought and sold for use or contributions levied on and borne by potentially harmful to the consumption. the employing company. Such environment and have not been Excise duties are generally imposed contributions may include the included in the energy taxes. by the tax authorities and are VAT is assessed and collected at employer’s national insurance collected by the Group on behalf of each point in the manufacturing– contributions, employment insurance VAT (non-deductible) the authorities when the goods are distribution–sales process of a good tax, employees’ provident fund, old- Non-deductible VAT is the part of transferred to the customers and are or supply of a service. age, survivors’ and disability the input VAT that cannot be thereby ready for consumption. insurance tax. recovered, e.g. VAT on gifts or Like VAT, the Goods and Service Tax Personal income taxes entertainment. (GST) is a value-added tax assessed Stamp duties These comprise employee taxes on most goods and services bought Stamp duties comprise taxes that withheld from employee wages and Real estate taxes and sold for consumption. Real estate taxes comprise any arise on transfers of assets or paid to governments, i.e. tax property-related taxes, including capital. Typically, these taxes would collected and remitted to property, land and estate tax (other be reflected in stamp duty returns governments on behalf of than stamp duty, which is shown made to governments and tend to employees. below). Typically, these taxes tend become payable, and are paid, to to become payable, and are paid, to governments shortly after the capital Social contribution withheld by the company governments throughout the year. or assets have been transferred. These comprise social contributions

Other taxes payable by employees to social This category comprises all paid security, and private funded and taxes that are not included in the unfunded schemes. Generally, the above categories. employment of staff requires the employing company to administer

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 88

BEER-IN-HAND CARBON FOOTPRINT VALUE CHAIN METHODOLOGY

Our value chain carbon footprint – operational emissions (Scope 1 and much of it is also applicable to emissions related to our production, primary, secondary, tertiary and which we call our beer-in-hand 2), visibility of Scope 3 emissions is value chain analysis). licensees, third-party products and quaternary packaging (incorporating footprint – includes Scope 1, 2 and 3 often more limited. joint ventures. The 75% exceeds the all minor components, such as emissions as set out in the DATA QUALITY Science Based Targets initiative’s labels, glues and caps). Greenhouse Gas (GHG) Protocol. Calculating footprints requires a We use the most robust data requirement to cover more than two combination of measurement and available to model our beer-in-hand thirds of total Scope 3 emissions. Transportation and distribution: Our targets, aligned with the modelling, which includes an emissions. In 2020, this included includes inbound transport of raw Science-Based Targets initiative, are inherent level of uncertainty. We primary data from suppliers Our beer-in-hand footprint includes materials and outbound transport of to cut our beer-in-hand footprint by limit this uncertainty by following accounting for more than 60% of our emissions from each stage of the finished products – based on 15% by 2022 and by 30% by 2030 and supporting the development of total spend – most related to value chain: distances travelled, mode of (from our 2015 baseline). industry-leading standards – and we packaging, which accounts for the transport (road, rail, sea) and encourage others to adopt these largest portion of our value chain Agriculture and processing: includes temperature (ambient, chilled) – as To assess progress, we measure our standards to support consistency and emissions. Collecting raw data all upstream emissions (such as well as flights for business travel. beer-in-hand footprint every few credibility in reporting across the directly from suppliers helps to fertiliser and seed production), years. In 2020, we completed an industry. ensure the quality and comparability farming and processing of Cooling: includes chilling of products analysis of our 2019 footprint, which of data sets. We apply the agricultural raw materials used at all by customers (retail and hospitality). showed a 7% improvement from the The standards we follow are: standardised Circular Footprint Carlsberg breweries – modelled using Excludes home cooling as this is 2015 baseline. • GHG Protocol (including the Formula, part of the PEFCR, for all data specific to each country and beyond our influence and beverages Corporate Value Chain (Scope 3) packaging types supplied to us. type of grain where available. account for only a small proportion We worked with the Carbon Trust to Accounting and Reporting Standard Where primary data is not available, of home refrigeration. build a value chain model that Supplement) we use the PEFCR’s country-specific Breweries: includes emissions from enables us to measure and track • Beverage Industry GHG Emissions emission factors. electricity, thermal fuels, waste Engagement within the organisation reductions in our beer-in-hand Sector Guidance (Version 4.1), leaving breweries, water treatment The results of our beer-in-hand footprint. developed by the Beverage MATERIAL SCOPE 3 EMISSIONS and refrigerant leakage at all footprint analysis, as well as Industry Environmental Round We focus our efforts and our beer- majority-owned breweries within the priorities to support reductions at MODELLING AND USING Table in-hand footprint targets on the Carlsberg Group’s management each stage of the value chain, are STANDARDS • Specific Product Environmental Scope 3 emissions where we have control. Excludes emissions from discussed and approved by our To calculate a value chain carbon Footprint Category Rules (PEFCR) the greatest influence: the value off-site warehouses. Executive Committee. In 2020, we footprint requires extensive data on developed for the beer industry in chain associated with our own also ran sessions with all local emissions at every stage of the value cooperation with the European production volume. An initial analysis Packaging: includes production and management teams to present chain. While we have a good Commission (while this standard is showed that this accounts for more end-of-life treatment (recycling, market-specific developments and understanding of our own for product life cycle analysis, than 75% of the total value chain incineration or landfill) for all identify local actions.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 89

ECONOMIC CONTRIBUTION METHODOLOGY

Estimates of the total jobs we for the raw ingredients, products and Bank (available for the agriculture, not removed as the productivity maintained through government job- indirectly support throughout the services we purchase. industry and services sectors only). ratios used from statistical sources support schemes during the value chain were calculated by the include these duties. pandemic in 2020, when lower levels research consultancy Europe These were calculated using data on DOWNSTREAM INDIRECT of production and consumption have Economics using a well-established the shares of upstream domestic EMPLOYMENT Downstream indirect employment been observed. methodology. purchases for production in the Our downstream indirect impacts was calculated using ratios of following sectors: agriculture; include impacts in the hospitality turnover per person employed. Therefore, we would expect the The methodology uses data utilities; packaging and bottling; (on-trade) and retail (off-trade) number of jobs related to our collected from the Carlsberg Group transportation and storage; sectors. For European countries, we used business activity to be slightly higher Export & License department, and equipment and other industrial Eurostat data for the NACE Rev. 2 than the ones we report for 2020. from the 29 companies across the activities; media, marketing and These were calculated using data on sectors of retail sale of beverages in world owned by Carlsberg A/S, communication; and other goods prices collected in 2019 and shares specialised stores and beverage- COMPARABILITY WITH including data on: and services. of Carlsberg Group sales in on- and serving activities. For non-European PREVIOUS ESTIMATES • employment (number of people in off-trade markets collected at the countries, we used World Bank data The scope of our economic each market) For our fermented beverages, we end of 2020. for the services sector. contribution analysis for 2020 has • production, exports and imports (in used data for 2019 and the shares been broadened to include indirect hectolitres) were assumed to be the same in Calculations start with the total EFFECTS OF THE COVID-19 impacts from our non-fermented • taxes borne and collected by 2020. For our non-fermented consumption values in on- and off- PANDEMIC beverages as well as our fermented Carlsberg in each of the markets beverages, we used 2020 data. trade markets, which are calculated The methodology used for beverages. (excise, VAT, corporate, based on three components: estimating indirect employment involves a direct translation of environmental, employee income, Upstream indirect employment was • annual domestic 2020 sales in each This means the results of the 2020 social contribution and other taxes, calculated using ratios of turnover country (domestic production plus production volumes into the level of analysis (presented in this report) are in national currency). per person employed. imports less exports, in hectolitres) employment needed to produce not directly comparable with the these volumes. • the estimated 2020 split between results of the 2019 analysis This data is complemented with For European countries, these ratios on- and off-trade markets in each (reported in the Carlsberg Group productivity indicators sourced from were sourced from Eurostat, the country This methodology is appropriate for Sustainability Report 2019), which estimating employment in normal various national statistics offices. statistical office of the European • the relative prices of the products only included sales of fermented Union, using the European sold in each country. circumstances as it provides a fair products. However, the differences UPSTREAM INDIRECT Classification of Economic Activities reflection of employees’ productivity. are small because non-fermented EMPLOYMENT (NACE) Rev. 2 sector classifications. The market values are then beverages are only produced in Our upstream indirect impacts For non-European countries, we converted to pre-tax values by However, this methodology does not seven markets and represent a small reflect jobs that have been include impacts in the supply chain used ratios taken from the World removing the VAT. Excise duties are share of Carlsberg’s total production.

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 90

LIMITED ASSURANCE REPORT OF THE INDEPENDENT AUDITOR

The Carlsberg Group engaged us to SELECTED INFORMATION 2015 baseline)”, “Percentage of PROFESSIONAL STANDARDS understanding of internal control, provide limited assurance on the The scope of our work was limited to electricity from renewable sources” APPLIED AND LEVEL OF and the procedures performed in selected data described below and assurance on selected data for the and “Number of sites using coal” ASSURANCE response to the assessed risks; set out in the Carlsberg Group period 1 January – 31 December (pages 67-69); We performed a limited assurance consequently, the level of assurance Sustainability Report for the period 1 2020 in the sections “Generating • Health & Safety: data on “Lost- engagement in accordance with the obtained in a limited assurance January – 31 December 2020. economic value” and “Data summary time accidents in production, International Standard on Assurance engagement is substantially lower table” (page 43 and pages 67-73), logistics, sales & marketing and Engagements 3000 (revised), than the assurance that would have OUR CONCLUSION namely: administration”, “Lost-time “Assurance Engagements other than been obtained had a reasonable Based on the procedures we • Economic value generated: data on accident rate”, “Number of days Audits and Reviews of Historical assurance engagement been performed and the evidence we “Corporate income tax”, “Taxes lost” and “Days lost rate” in the Financial Information” and, in respect performed. obtained, nothing has come to our borne and excise duties collected” Carlsberg Group and “Number of of the greenhouse gas emissions attention that causes us not to and “Excise duties” (page 43); lost-time accidents, contractors” stated on pages 67-69, in OUR INDEPENDENCE AND believe that data in scope for our • Energy, carbon and water: data on and “Number of lost-time accordance with International QUALITY CONTROL limited assurance engagement are “Total production of beer and soft accidents, members of the public” Standard on Assurance We have complied with the Code of free of material misstatements and drinks”, “Total thermal energy (page 70) and ; Engagements 3410 “Assurance Ethics for Professional Accountants are prepared, in all material respects, consumption”, “Total electricity • Responsible drinking and marketing engagements on greenhouse gas issued by the International Ethics in accordance with the accounting consumption”, “Total water communication: data on statements”. Standards Board for Accountants, principles as stated in the sections consumption”, “Total CO2 “Percentage of fermented produced which includes independence and “Reporting process and scope” emissions (from direct and indirect volume carrying legal age Greenhouse Gas quantification is other ethical requirements founded (pages 74-75), “Indicator definitions” fuel consumption) (market- restriction symbol or equivalent subject to inherent uncertainty on fundamental principles of (pages 76-83), “List of reporting based)”, “Total CO2 emissions text”, “Percentage of fermented because of incomplete scientific integrity, objectivity, professional sites” (pages 84-85) and “Tax (from direct and indirect fuel produced volume that lists knowledge used to determine competence and due care, contribution principles” (pages 86- consumption) (location based)”, nutritional information” and emissions factors and the values confidentiality and professional 87) of the 2020 Carlsberg Group “Relative figures from beer and soft “Percentage of fermented produced needed to combine emissions of behaviour. The firm applies the Sustainability Report. drinks production”, “Total CO2 volume that lists ingredient different gases. International Standard on Quality emissions from refrigerants”, information” (page 71). Control 1 and accordingly maintains This conclusion is to be read in the “Scope 1 – Absolute CO2 emissions A limited assurance engagement is a comprehensive system of quality context of what we say in the (excl. logistics)”, “Scope 2 – We do not provide any assurance on substantially less in scope than a control, including documented remainder of our report. Absolute CO2 emissions, Market the achievability of the Carlsberg reasonable assurance engagement in policies and procedures regarding based”, “Scope 1+2 - Absolute Group's objectives, targets and relation to both the risk assessment compliance with ethical emissions (Together Towards ZERO expectations. procedures, including an requirements, professional standards

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 91

and applicable legal and regulatory • Reviewed the suitability of the Sustainability Report in order to • Forming an independent requirements. Our work was carried reporting criteria; identify any material conclusion, based on the out by an independent • Evaluated the design and inconsistencies with the selected procedures performed and the multidisciplinary team with implementation of the systems, data in scope for our assurance evidence obtained; and experience in sustainability reporting and processing and internal engagement and our limited • Reporting our conclusion to the and assurance. controls over the selected data in assurance report thereon. stakeholders of the Carlsberg scope for our assurance Group. UNDERSTANDING REPORTING engagement; CARLSBERG’S RESPONSIBILITIES AND MEASUREMENT • Conducted interviews with relevant Management of the Carlsberg Group METHODOLOGIES policy owners at corporate levels, is responsible for: Data and information need to be who are responsible for collecting, • Designing, implementing and read and understood together with consolidating and carrying out maintaining internal control over the accounting principles (sections internal control procedures on the information relevant to the “Reporting process and scope”, selected data in scope for our preparation of data in the Carlsberg “Indicator definitions”, “List of assurance engagement; Group Sustainability Report that is reporting sites” and “Tax contribution • Performed remote site visits on free from material misstatement, principles”), which Management is production sites in Vietnam, Russia whether due to fraud or error; solely responsible for selecting and and Greece to obtain insight into • Establishing objective accounting applying. The absence of a local sustainability management, principles for preparing data; significant body of established review data and assess the • Measuring and reporting data in practice on which to draw to robustness of the sustainability the Sustainability Report based on evaluate and measure non-financial data management systems; the accounting principles; and information allows for different, but • Conducted an analytical review of • The content of the Carlsberg Group acceptable, measurement techniques the selected data in scope for our Sustainability Report for the period and can affect comparability assurance engagement submitted 1 January – 31 December 2020. between entities and over time. by all production sites for consolidation at corporate level OUR RESPONSIBILITIES WORK PERFORMED • Evaluated relevant internal and We are responsible for: We are required to plan and perform external documentation, based on • Planning and performing the Copenhagen, 5 February 2021 our work in order to consider the risk sampling, to determine whether the engagement to obtain limited of material misstatement of the selected data in scope for our assurance about whether selected PricewaterhouseCoopers data. In doing so and based on our assurance engagement is supported environmental, health & safety, Statsautoriseret Revisionspartnerselskab professional judgement, we: by sufficient evidence; social and economic contribution CVR no. 3377 1231 • Completed a media search to • Reconciled selected tax information data in the 2020 Carlsberg Group identify relevant risks and issues with the audited consolidated Sustainability Report are free from Mogens Nørgaard Mogensen Gert Fisker Tomczyk within the scope of the assurance financial statements of Carlsberg material misstatement, and are State Authorised Public State Authorised Public engagement for Carlsberg during A/S; prepared, in all material respects, in Accountant Accountant the reporting period; • Read other information included in accordance with the accounting Mne21404 Mne9777 the 2020 Carlsberg Group principles;

CARLSBERG GROUP SUSTAINABILITY REPORT 2020 GOVERNANCE AND TRANSPARENCY 92

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