Carlsberg Group Sustainability Report 2015 Sustainability Report 2015 Contents 2 MANAGEMENT REVIEW 3 Carlsberg Group introduction 4 Selected highlights 5 Foreword from our CEO Resources & Environment, page 10 7 Our sustainability strategy 9 Sustainability throughout the value chain 10 Resources & Environment 23 Health & Well-being 34 People & Policies APPENDICES 47 Section 1: Data summary table 51 Section 2: Independent assurance report 52 Section 3: Global Reporting Initiative table Health & Well-being, page 23 58 Section 4: Reporting process and scope 60 Section 5: Definitions 61 Section 6: List of reporting sites Editor Carlsberg Group Sustainability Design and production Kontrapunkt Copywriting One Stone Advisors Proofreading Borella projects People & Policies, page 34 Sustainability Report 2015 Carlsberg Group introduction 3 BALANCED GEOGRAPHY Carlsberg Group 2015 Our regional exposure has changed in recent years and introduction 28% the growing Asia region now 21% 2014 accounts for 28% of Group 51% 53% operating profit. 28% 19% Western Europe Eastern Europe 65.4bn Asia Net revenue (DKK) 8.5bn Operating profit before special items (DKK) 7.5bn Free cash flow (DKK) 8.1% Return on invested capital (ROIC) Learn more about our business model and 47,464 financial performance in our Annual Report 2015, Employees available at www.carlsberggroup.com. Sustainability Report 2015 Selected highlights 4 Selected highlights 78% of our companies conducted responsible drinking RESPONSIBLE DRINKING campaigns We reached more than 1.5 million consumers with responsible drinking messaging during the RENEWABLE ENERGY first Global Beer Responsibility Day. We increased our use of renewable energy from 5% to 7%. SUSTAINABLE CROWDSOURCING ENERGY, WATER, CO2 We received 162 ideas Slight improvements VOLUNTEERING from 35 countries in Cheers in energy and CO2 to Green Ideas, our first and stable water crowdsourcing campaign performance. 25,796 to make beer more sustainable. hours spent on volunteering SUSTAINABLE INNOVATION HEALTH & SAFETY We initiated the We reduced our Group development of a bio- lost-time accident based and biodegradable rate by 16% and our bottle with EcoXpac, days lost rate by 8% one of our partners in compared with 2014. the Carlsberg Circular Community. Sustainability Report 2015 Foreword from our CEO 5 Foreword from In my short time with the Group, our CEO I have already seen significant progress in the projects that contribute to the communities in which we operate. In 2015, we continued to pursue our seen numerous examples of us working as sustainability ambitions by focusing one, such as our energy management efforts on three themes: Environment & in Poland, Denmark and Russia, and biogas Resources, Health & Well-being and recovery projects across the Group. I am People & Policies. sure that a company-wide collaborative ap- proach will continue to deliver results in the Ever since J.C. Jacobsen established the months and years ahead. Carlsberg Foundation 140 years ago, a com- mitment to society has been at the heart of Collaboration with external stakeholders our business. This is nowhere more evident deepens the impact of our sustainability than in our sustainability efforts. In my efforts and helps us deliver tangible results. short time with the Group, I have already For example, as part of the Carlsberg Circu- seen significant progress in the projects that lar Community (details on page 14), we are contribute to the communities in which we now working with our suppliers to make our operate. Many also strengthen our bottom packaging more sustainable. line, which is encouraging. Collaboration is also the key to tackling In 2015, we set ourselves a new ambition some of the world’s biggest challenges, so to be a professional, successful and attract- I was pleased to see the climate change ive beer-based company in the markets agreement accepted at COP21 in Paris. The in which we choose to operate. Our sustain- Carlsberg Group will continue to support the ability programme ‒ with its strong man- UN Global Compact and the implementation agement systems, bold targets, and spirit of the Ten Principles. This report serves as of collaboration and innovation ‒ is vital in our annual Communication on Progress and helping us achieve this aspiration. underlines our commitment to transparency when it comes to sustainability. As the new CEO, I have a great opportunity to introduce new ways of thinking. And I We have also seen how collaboration helps truly believe it makes a difference when an us increase the impact of activities to en- organisation acts as one, across markets courage moderate consumption and inform and cultures. You could say that sustain- consumers about the risks associated with ability is all about tearing down silos and alcohol misuse. Throughout 2015, we contin- thinking in an integrated way. I have already ued to work directly with local organisations Sustainability Report 2015 Foreword from our CEO 6 in many markets to engage consumers and “celebrating responsibly” at the UEFA EURO Our key themes address alcohol-related risks to society, 2016™ football championships in France. and in September we helped to create the first ever Global Beer Responsibility Day, a It is with great regret that I report the worldwide effort to promote responsible beer deaths of three Carlsberg employees consumption. The Carlsberg Group partici- and two contractors in 2015. To me, it is pated in 10 markets along with other global completely unacceptable that lives are lost in Resources & and local brewers and beer associations (see the service of our company. I can therefore details on page 31). assure you that we will continue our efforts Environment to improve the health and safety of all Sustainability requires constant innovation, employees of the Carlsberg Group and of We strive to minimise our impact on the environment and optimise our use of not only in what we do, but also in the way our business partners. resources across our operations in an effort we do it. One example of an innovative ap- to help build a more sustainable future. proach in 2015 was Cheers to Green Ideas, Finally, I would like to encourage my a crowdsourcing competition in which we colleagues, our consumers and any other asked people for ideas about how to make readers to tell us how you think we are our beer more sustainable. The response doing. I strongly believe that an open was remarkable and the judges described dialogue is essential for increasing the the winning entry as “truly inspirational” value of our sustainability efforts. Health & (see details on page 22). Well-being Despite these successes, challenging market conditions meant that we had to reduce our We are committed to creating a culture of headcount by around 1,700 colleagues in Cees ’t Hart responsible drinking by promoting moderate 2015, and we did not achieve all we set out President & CEO consumption of our products and addressing to do at the start of the year. I am confident, alcohol-related harm in society. however, that the changes we have made will create a stronger foundation for the future and support our sustainability efforts in the long run. Looking ahead, 2016 promises to be another People & eventful year. We launch our new corpor- ate strategy, SAIL’22, in March. We will Policies then align our sustainability strategy with WE SUPPORT Our aim is to protect, develop and engage this and ensure that sustainability is deeply our employees, and to make a positive embedded in the business in order to deliver contribution to the communities in which more value to our stakeholders. We will we operate. also be rolling out a new Code of Ethics & Conduct to reiterate our commitment to be- Tell us how you think we are doing ing a responsible employer. And we will be at [email protected]. Sustainability Report 2015 Our sustainability strategy 7 Our sustainability strategy Strategy and decision-making in the Carlsberg Group are guided by our desire to play an active role in THE ELEMENTS OF OUR SUSTAINABILITY STRATEGY a sustainable world. Three elements provide the framework for managing our sustainability strategy: We research and analyse our environ- being a sustainable business also makes us mental and social impacts as well as our more attractive to shareholders, as it implies economic impacts, and use our findings to greater resilience and lower risk of disruption, Articulating our commitment spot trends, reduce risks and maximise op- as well as making us alert to opportun ­­ities that We are committed to: creating our products in a way that optimises portunities for the benefit of the Group and we might otherwise miss. We are therefore the use of resources across our operations while minimising our impact our stakeholders. happy to have been included in the FTSE4Good on the environment; promoting responsible drinking; and adhering to Index, following an independent assessment our policies and standards in all our operations and activities. These BRINGING SUSTAINABILITY TO LIFE against the FTSE4Good entry criteria. This commitments are brought to life through relevant partnerships and Three elements bring our sustainability listing is a testament to our efforts to continu- specific priorities. strategy to life and provide the framework ously integrate sustainability into our business for managing our activities: articulating and throughout our value chain. our commitment, collaborating with others and activating our priorities. Our THE GLOBAL CONTEXT Collaborating with others commitment in all areas is to enhance our Our business is dependent on the availability We recognise that we cannot tackle the global challenges facing our positive and reduce our negative impacts. of land, water, crops, healthy ecosystems business and society alone. All kinds of collaboration – both internal We strive to amplify our positive impacts and thriving communities. Without these, and external – are essential for amplifying our impact and targeting through collaboration and by forming mu- we would not be able to make and sell our our efforts more effectively.