Water Balancing Report 2020 OVERVIEW Without water, The HEINEKEN Every Drop water EVERY strategy ensures we look at water there will be no beer. Working Improving the health of watersheds together holistically: in water-stressed areas is at the towards a heart of HEINEKEN’s 2030 ambition. healthy watershed Water is an essential resource for our Each watershed is unique in terms of geology, climate, topography and industry. users. So context matters. Water Stewardship A healthy watershed requires collaboration and activities to fully balance the water we use in our products that reduce shared water risks. Protecting Water Resources is an important pillar in HEINEKEN’s global Brew A Better World sustainability co r llec s efo act tiv up re ion e in po strategy. sta filt rt tio rat n ion rt re nd a ltu e a smricu us ing ag re ycl rec infil n tr tio at use tra ion d r re fil lan on ate rs in t ati w the wetor y o res b gr r ound ate Working w w ate ce ound r urfa gr s ter together wa towards a healthy watershed HEINEKEN’s ambition for 2030 Water Water Water Stewardship Circularity Fully balance water used Treat 100% of wastewater Reduce average water in our products in of breweries by 2023 intake to 2.6 hl/hl in Water Circularity Water Efficiency water-stressed areas by water-stressed areas and maximize reuse and minimise the usage of 2030, through water Maximise reuse and 2.9 hl/hl worldwide by stewardship programme recycling in water-stressed 2030 recycling of treated water in production and collective action areas by 2030 wastewater Contributes to UN Sustainable Development Goal 6 2 Water is a crucial shared resource that must be protected. While improving efficiency and circularity are mainly Striving to have a Based on projected demand, the world will face a confined within our brewery’s operations, our Water 40% shortfall in fresh water supply within 10 years. Stewardship initiatives are carried out by our CSR arm Environmental sustainability is a key pillar of Brew A Better SPARK Foundation, in collaboration with our partner, the World, HEINEKEN’s global sustainability strategy. Besides Global Environment Centre (GEC). These initiatives enable POSITIVE our bold commitments to become carbon neutral in us to balance the amount of water used in our products by production by 2030 and our entire value chain by 2040, we replenishing water at source, rehabilitating rivers, reducing also focus our efforts in protecting healthy watersheds. dependence on treated water through alternative water systems, as well as reforestation of carbon sinks to help IMPACT That is why in 2019, we launched Every Drop, our retain more water for our watersheds. We will continue investing 2030 water strategy aimed at addressing our water vulnerabilities, especially in water stressed areas. We Our efforts in protecting water resources over the years in science-based Water believe our long-term impact in water will be created by have now enabled us to fully balance water used to brew Stewardship initiatives for adopting three key principles of our ‘water triangle’: Water our beers and ciders. We have an ambitious target to Stewardship (restore watersheds to absorb more water); balance 1.5 litres for every 1 litre of water used in making the long term to ensure the Water Circularity (treat wastewater and reusing water); our products. In 2020, we achieved 267% versus our sustainability of our watershed. and Water Efficiency (using as little water as possible). target. We are proud to reach this milestone 10 years ahead of our 2030 commitment, and we will continue In Malaysia, I am proud to share that we’ve consistently investing in science-based Water Stewardship improved our Water Efficiency over past years. Since initiatives for the long term to ensure the 2014, we’ve reduced water consumption by 15.5% to sustainability of our watershed. I invite you to read 3.65 hectolitres per hectolitre (hl/hl) of beer we brew. this report to learn more about the impact created Our target for 2030 is to reduce this by another 29% to through our Water Stewardship initiatives. 2.6 hl/hl. In terms of Water Circularity, we treat 100% of our wastewater beyond the standards required by the Department of Environment whilst continuing our efforts Roland Bala to maximise reuse and recycling of treated wastewater for Managing Director HEINEKEN Malaysia non-potable use. 3 built 16 river care communities, and invested over RM13.5 • Installation of over 1,000 water thimbles for more Achieving real and million in W.A.T.E.R Project outreach programmes. than 500 households in the Klang Valley, which resulted in water savings of 19 litres per capita per day These Water Stewardship initiatives help balance the on average amount of water used in making our products, and I am • Installation of 16 rainwater harvesting systems proud that in 2020 we had achieved our 2030 target LASTING for communities in Selangor, thus providing them 10 years ahead of the goal. The initiatives that we with an alternative water source and reduce reliance carried out and maintained over the years have been on treated water for non-potable usage as well as quantified and independently verified by LimnoTech, relieving pressure on our water resources CHANGE a leading international environmental science and Water is not an infinite resource. Water scarcity, engineering firm based in the USA, who applied • Reforestation of one hectare of degraded peatland wastage and pollution are real issues that confront methodologies consistent with the Volumetric Water at the Raja Musa Forest Reserve, which reduces the risk the world and as a responsible brewer, we want to Benefit Accounting (VWBA) approach published by the of peat fires and increases the peatland’s water table, do our part to protect our watersheds. Through our World Resources Institute in 2019. contributing to the health of Sungai Air Hitam within CSR arm SPARK Foundation, we partner with the the Sungai Selangor watershed Global Environment Centre (GEC) to execute Water This report details the impact of our Water Stewardship Stewardship projects that enable us to replenish and initiatives, which resulted in more than 545 million litres of We recognise that the impact of Water Stewardship protect our water source, whilst reducing demand on water being balanced in the Sungai Selangor and Sungai initiatives will need to be amplified through wider treated water through alternative water systems for Penchala watersheds in 2020. Key initiatives include: participation and action from various stakeholders. our communities. We are proud to give back more than I take this opportunity to call upon other industries what we take. • Rehabilitation of Sungai Way river, an urban river in to start looking into sustainable water management an urban industrial zone, resulting in the improvement practices. With collective action, we can be part of Our journey towards balancing more than 100% of of the river’s water quality from Class IV – V (extremely the solution to safeguard the sustainability of water water used in our products began in 2007. SPARK polluted, not suitable for living organisms) to Class III supply for all. Foundation’s collaboration with GEC has created (suitable for living organisms) significant impact along the way. Together, we’ve • at the Raja helped rehabilitate 5 rivers (Sg Penchala & Sg Way in Construction of a 305-metre clay dyke Renuka Indrarajah Selangor and Sg Buntong, Sg Senam & Sg Kledang Musa Forest Reserve that stores up to 136.1 million Corporate Affairs & Legal Director, HEINEKEN Malaysia in Perak), engaged 180 local communities and over litres of water annually, contributing to the long term Trustee, SPARK Foundation 54,000 Malaysians in river rehabilitation programmes, sustainability of Sungai Selangor 4 EVERY DROP 2030 Water Ambition for HEINEKEN Malaysia Fully balance water used in our products in water- WATER STEWARDSHIP GOAL IS ACHIEVED THROUGH Water Stewardship stressed areas by 2030, through water stewardship programme and collective action Treat 100% of wastewater of breweries by 2023 CSR arm of Heineken Malaysia Berhad in partnership with Global Environment Centre (NGO) Water Circularity Maximise reuse and recycling in water-stressed areas by 2030 Reduce average water intake to 2.6 hl/hl in water- Water Efficiency stressed areas and 2.9 hl/hl worldwide by 2030 5 WATER STEWARDSHIP AND WATER BALANCING DEFINITION What is Water Stewardship? HEINEKEN Malaysia Target: • The socially equitable, environmentally sustainable and economically beneficial 3 3 3 use of freshwater, achieved through a Balance Volume (m ) = Water Intake (m ) – Treated Effluent (m ) stakeholder-inclusive process that involves site-and catchment-based actions. Balancing amount to be more than water used in our products 1 litres of water per litre produced plus unavoidable losses from evaporation and moisture included in by products like spent grains (~0.5 litre per litre) What is Water Balancing? • Organisational goal or target to balance Target Water Balancing 2020 a volume of water equal to what is consumed by the organisation, through interventions in catchments and (1.5 x water used in our products) communities outside the four walls of the organisation. 100% of wastewater treated beyond standards of DoE Source: Volumetric Water Benefit Accounting (VWBA) by Watershed supplies water to Water consumption for Long term watershed health World Resources Institute communities and industries production activities protection (https://www.wri.org/research/volumetric-water-benefit-