SUSTAINABILITY SUMMARY 2020 Introduction CARLSBERG GROUP SUSTAINABILITY SUMMARY 2020 INTRODUCTION 2 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 brewing 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 brewery 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 beer produced. Cees ’t Hart, revenue, but our relentless focus on Foundation, together with the New From 2015 to 2019, we cut our CEO, Carlsberg Group cost efficiencies and early Carlsberg Foundation and the beer-in-hand emissions by 7%. intervention enabled us to limit the Tuborg Foundation, also donated CARLSBERG GROUP SUSTAINABILITY SUMMARY 2020 INTRODUCTION 3 Achieving these targets as we work accidents culture. Our efforts steadfast in our commitment to WHERE TO FIND OTHER REPORTS Together Towards ZERO will help us towards achieving all four ambitions uphold the principles of the UN mitigate risks to our business that play a critical role in the success of Global Compact. With the creation of will be amplified by climate change our business now and in the future – the Carlsberg Sustainability Advisory in the future. I am pleased to see the not only by addressing risks but by Board, we are inviting external increased focus on ESG risks and creating opportunities for growth. experts to provide an “outside in” opportunities by our stakeholders, view to help us stay true to the including investors, which will Our burgeoning range of alcohol- values of our founder, challenging 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 people embrace healthy balanced ambitious targets. This year, for the first time, we are lifestyles in the wake of the reporting in line with the pandemic. We also want consumers I am convinced that driving progress recommendations of the Task Force to enjoy our alcoholic products Together Towards ZERO will help 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 Sustainability Report + Summary act on climate-related risks and responsible drinking on all packaging recovers from COVID-19. This Sustainability Summary is a highlights opportunities for our business. two years early. version of our full Sustainability Report. Climate change is also increasing The success of our business depends Cees ’t Hart Download our full Sustainability Report at water risks and our ground-breaking on our people, and their health and CEO, Carlsberg Group carlsberggroup.com/sustainability/report-policies/ water risk scenario analysis with safety remains our top priority. As WWF is helping us target action to well as supporting them through the Annual Report sustain essential water supplies – challenges of the pandemic, we have Our Annual Report focuses on our both for our breweries and for the stepped up our efforts to embed safe financial performance. It includes communities whose water resources behaviour and continued to drive information on sustainability that we share. Our innovative partnership down accident rates by a further 19% is most pertinent to investors. with Desolenator will use renewable across the business in 2020. But this Website energy from the sun to create access progress was overshadowed by the Carlsberggroup.com hosts our to clean water for thousands of death of a contractor during reports and policies, as well as people in an area of India stricken by dismantling work at a former showcasing stories on our biggest the effects of both climate change production site. Any accident is one sustainability achievements. and COVID-19. too many and this tragedy strengthens our resolve to get to Social media ZERO carbon footprint and ZERO ZERO. We share our latest sustainability stories water waste are key ambitions in our on social media throughout the year Together Towards ZERO Carlsberg was founded over 170 programme, alongside ZERO years ago on a strong sense of social carlsberggroup.com @carlsberggroup irresponsible drinking and a ZERO responsibility – and we remain @carlsberggroup Carlsberg Group CARLSBERG GROUP SUSTAINABILITY SUMMARY 2020 INTRODUCTION 4 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. 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 SUMMARY 2020 ZERO CARBON FOOTPRINT 5 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 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. CARLSBERG GROUP SUSTAINABILITY SUMMARY 2020 ZERO CARBON FOOTPRINT 6 Our farm is one of the leading farms in the Yaroslavl region and has grown brewing barley 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.