SUSTAINABILITY REPORT 2019 CONTENTS INTRODUCTION METHODOLOGY, SCOPE AND ASSURANCE CEO foreword ............................................................... 3 This report covers the relevant and significant Sustainable business ................................................... 5 social, ethical and environmental issues for the Together Towards ZERO ........................................... 6 financial year 1 January to 31 December 2019. It gives our stakeholders an overview of our OUR AMBITIONS performance in these areas, complementing our Annual Report, which primarily covers our financial ZERO performance. CARBON FOOTPRINT ....................................................... 9 The first section presents our strategy, along with ZERO details of Together Towards ZERO, our global WATER WASTE ............................................................. 18 sustainability programme. The second section describes performance against our four Together ZERO Towards ZERO ambitions, presenting selected case IRRESPONSIBLE DRINKING ........................................................ 22 stories from across the Group. The third section provides additional information under the headings: ZERO Responsible business, Economic contribution, and ACCIDENTS CULTURE ......................................................... 28 Data and assurance. This report serves as our annual communication on RESPONSIBLE BUSINESS progress to the UN Global Compact and as the RESPONSIBLE BUSINESS ........................................... 33 statutory statement on CSR in accordance with section 99a of the Danish Financial Statements Act. ECONOMIC CONTRIBUTION ..................................... 37 DATA AND ASSURANCE ............................................ 41 SDG actions ................................................................. 41 Materiality matrix ...................................................... 45 carlsberggroup.com @carlsberggroup Data summary table................................................. 46 Reporting process and scope ................................. 53 Indicator definitions ................................................... 55 @carlsberggroup Carlsberg Group List of reporting sites ................................................ 63 Tax contribution principles ...................................... 65 Economic contribution methodology .................. 67 Assurance report ........................................................ 68 Introduction CARLSBERG GROUP SUSTAINABILITY REPORT 2019 INTRODUCTION 3 PARTNERING TOWARDS ZERO Our purpose is brewing for a strong margin improvement and and cutting the carbon impact of better today and tomorrow. strong cash flow. This success packaging. We brew and sell quality beers enables us to invest in the that are highly appreciated by technology, innovation and efficiency We need to move faster to achieve our consumers every day and needed to meet the targets of our ambition of ZERO water waste secure our commercial success. Together Towards ZERO at this and our target to halve water usage And we contribute to a better critical time for the planet. At COP25 at our breweries by 2030. In 2019, tomorrow by investing and in Madrid, we signed the Business we reduced relative consumption by innovating in our sustainability Ambition for 1.5°C Pledge, 3% to 3.0 hl/hl. To go further, we programme, Together reconfirming our commitment to need to invest in state-of-the-art Towards ZERO. fighting climate change and pursuing water-recycling technology. We science-based targets that align our were pleased to announce that the “Together” is a critical word. The business with the more ambitious Fredericia brewery in Denmark will success of our business is bound up level of the Paris Agreement. be the first to virtually eliminate with our partners, our consumers water waste, moving from 2.9 hl of and the natural world on which we We have made steady progress on water per hl of beer to just 1.4 hl/hl. all depend. Nobody can solve the our ambition of ZERO carbon. In This project has been made possible challenges the world faces alone. By 2019, we reduced relative emissions through a progressive public-private working in partnerships, we are able at our breweries by 13% and partnership and will provide learnings to make faster progress and deliver increased renewables to 56% of our for our other breweries around the change that would otherwise not be total electricity use, while five of our world. possible. A belief in the power of sites are now carbon-neutral. We partnerships is deeply rooted in our are making good progress with On our ambition of ZERO Nobody can solve the business – stemming from our sustainable packaging innovations, irresponsible drinking, we sometimes challenges the world faces founder’s belief that bringing including breakthrough technologies hear cynicism. But this ambition is alone. By working in together bright minds is the most such as the Green Fibre Bottle, which crucial for us – it sends a clear signal partnerships, we are able to effective way to improve our reached the next stage of its to consumers, encouraging make faster progress and business and society. development when we unveiled two responsible and moderate deliver change that would research prototypes. We were consumption. While we cannot delighted to welcome more leading ultimately control how people otherwise not be possible. In 2019, the Carlsberg Group delivered a strong set of results, companies and brands as partners in consume our products, we can Cees ’t Hart, including healthy top-line growth, advancing paper bottle technology market our brands responsibly and CEO, Carlsberg Group CARLSBERG GROUP SUSTAINABILITY REPORT 2019 INTRODUCTION 4 inform consumers better. We can Finally, we were pleased to find WATCH OUR PARTNERSHIPS IN ACTION also enable greater choice by through our latest employee survey increasing the availability and that over 90% of our employees acceptability of alcohol-free brews. believe they work for a socially and While we are already doing a lot environmentally responsible ourselves, partnerships are probably company. Employees see what we even more important in this field really do every day, so their than elsewhere. feedback is very important. We are on the right track, but there is much Together with the industry, we have more to be done to achieve our already taken action to ensure that ambitions and progress towards our communications reach the right ZERO. people at the right time and support sound judgements, including the industry-wide Digital Guiding Cees ’t Hart Principles for responsible advertising CEO, Carlsberg Group PARTNERING TO PARTNERING TO and promotion on digital platforms. RETHINK PACKAGING REDUCE WATER WASTE This year, along with the other CEOs in the International Alliance for Responsible Drinking, we reinforced our commitment in this area. On our ambition of a ZERO accidents culture, I am pleased to report another significant reduction in our accident rate, down 15%. This demonstrates what can be achieved with hard work and relentless focus on health & safety. But there is still plenty to do. We are continuing to focus training and communication on the areas where it matters most, especially through our Life Saving PARTNERING TO PARTNERING TO Rules programme. More broadly, we GROW ALCOHOL-FREE BUILD A SAFE WORKING miss no opportunity to ensure that health & safety remains top of mind BREWS ENVIRONMENT with all our people. WATCH OUR PARTNERSHIPS IN ACTION carlsberggroup.com/partnerships CARLSBERG GROUP SUSTAINABILITY REPORT 2019 INTRODUCTION 5 SUCCESSFUL BUSINESS IS SUSTAINABLE BUSINESS We believe sustainability and profitability can work together in harmony. Our aim is to create sustainable value growth by optimising the balance between our financial performance and our sustainability progress. CARLSBERG GROUP SUSTAINABILITY REPORT 2019 INTRODUCTION 6 TOGETHER TOWARDS ZERO Our purpose of brewing for a ZERO. It identifies four sustainability individuals to act on climate change. ecosystems and supporting the our focus is on enabling positive better today and tomorrow ambitions: ZERO carbon footprint, We have a key role to play and are growing human population. It is also choice through alcohol-free brews, has guided our business for ZERO water waste, ZERO determined to be part of the a vital ingredient for brewing. We informing consumers and working over 170 years. It means we irresponsible drinking and a ZERO solution. We thus remain committed aim to eliminate water waste at our with governments, communities and are committed to brewing accidents culture. Strong and to the science-based targets we set breweries, halving usage from 2015 others to promote a better, more quality beers today while measurable targets for 2022 and in 2017, aligned to the more to 2030 and partnering to safeguard responsible drinking culture. striving to combat global 2030 underpin each ambition. This ambitious level of the Paris shared water resources in high-risk challenges for a better world report is an update on progress Agreement to limit global areas. To focus on addressing global tomorrow. during 2019. temperature rise to 1.5°C above challenges, first we must ensure a pre-industrial levels. Public health challenges continue to healthy work environment for our Our response to the global issues of MEETING GLOBAL CHALLENGES affect people around the world, people. Every person should go to climate change, water scarcity and In 2019, we have seen Climate change will add