Ethical Performance
inside intelligence for responsible business
 
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interview

Cheers to a sustainable future

December 2014

As we enter the season of over-indulgence, Roland Pirmez, president of Heineken Asia Pacfic tells Ethical Performance why responsible consumption is one of the most important issues on the company’s CR agenda

What are the sustainability issues specific to the business in the Asia Pacific region?
We have made significant progress in reducing energy and water consumption at our breweries in Asia Pacific. Water scarcity is the biggest challenge we face as a business. Breweries are very much dependent on a reliable supply of good quality water. With limited water resources and ever increasing demand with the rising population in the region, we need to work with all our stakeholders, internal and external, to manage this resource well.

What would you consider to be the key highlights of achievements so far?
Our key achievements are the reduction of specific energy and water consumption, therefore reducing our carbon and water footprint. Water consumption was reduced by 9.1% in 2013 vs 2012. We reduced CO2 emissions by 4.5% in 2013 vs 2012. Through internal benchmarking, with tools like the utility benchmark model, we have reduced losses and increased efficiency in our breweries. We have also made investments in more energy and water efficient equipment to ensure long term sustainability in the way we carry out our business. To further reduce our CO2 footprint, we have invested in using bio-gas from our waste water treatment plants instead of flaring it.

What is the main challenge in water stewardship?
For us water stewardship means managing a resource that we do not own. While we make every effort internally to reduce our own consumption, we also work within our supply chain to try to motivate and stimulate suppliers to work as efficiently as possible. Water stewardship is more than improving water use efficiency in our own operations and the supply chain. It deals with preserving and protective watersheds and engaging collaborative partners. By working with internal and external stakeholders like NGOs and various government agencies we plan to compensate for the water that is not returned in a treated way to local watersheds. This is to ensure we become water neutral in breweries operating in water scarce areas.

What is the main challenge in reducing carbon emissions?
In Asia Pacific we have been constantly looking for ways to reduce our carbon emissions through the deployment of renewable energy like solar, bio-mass, wind energy etc. The cost of solar has come down significantly still it is not financially viable in most of the countries we operate in hence we have decided to go with leasing option to deploy solar energy in our breweries with a pilot planned for our brewery in Singapore. We have started using bio-mass fuel for our boilers. The biggest challenge would be to ensure proper control to ensure a sustainable source of biomass fuel throughout the supply chain.

How do you monitor sustainability in your supply chains? It must be very exacting with the number of suppliers the company deals with?
HEINEKEN expects all our suppliers to actively support and respect our values and principles in their own business practice. To ensure that this is the case, we have developed an efficient supplier engagement and monitoring system on sustainability performance through our 4-step Supplier Code Procedure; 1) Signing, 2) Supplier Risk Analysis, 3) Supplier Monitoring, 4) Audit plan. The Supplier Code applies to all suppliers from whom HEINEKEN purchases, and outlines key elements on Integrity and Business Conduct, Human Rights and Environment. This year the Asia Pacific region focused on Step 1 and we can already report that more than 3,000 of our suppliers in the region have signed our Supplier Code. Our ambition is to have the 4-step procedure in place in the region for the end of 2015.
 Are 2020 goals really achievable (for Asia Pacific)?
Yes, I believe so. We foresee a challenge in the area of water stewardship but are nevertheless committed to reaching our 2020 targets.

Is the drinking culture in Asia Pacific different to Western Europe and the US?
Alcohol is a beverage that has been enjoyed during many types of occasions around the world for centuries. In many places, a majority of our consumers enjoy our products responsibly, but a minority does not. The issue of alcohol abuse exists across all regions and is a key area of focus for our business. However issues by each market are likely to differ and so we work with local partners to take into account cultural differences in attitudes towards alcohol.

How do you make 'responsible consumption' an attractive option? (when most brand ad campaigns show how attractive consuming is?)
We advocate responsible consumption in many ways. A key approach is through our brands, as we know that when brands communicate directly, the message resonates more with consumers. Our Heineken® brand encourages consumers to enjoy responsibly with its ‘Sunrise is for moderate drinkers’ and ‘Dance More, Drink Slow’ campaigns, spreading the message that if they practice responsible consumption by pacing themselves, drinking water between drinks etc, they will be able to have a great time all night long. We also convey this idea through our regional responsible drinking campaign ‘Have a Good Night Out’, which in 2013 consisted of offering tips on responsible drinking behaviour through a series of six short tongue-in-cheek videos. We want consumers to enjoy our products – but responsibly, and for a long time to come.

How are employees impacted by your work in this area?
At HEINEKEN we value our employees and see them as ambassadors for our company and products. We actively promote staff alcohol responsibility and encourage employees to enjoy responsibly. Recently in September we had a global ‘Enjoy Responsibly Day’ where 45 markets across the globe organised local activities to educate and engage employees on this important topic. We are committed to advocating responsible consumption and have made it an integral part of our company culture.

Given stakeholders' request for more local CSR initiatives, what have you been doing?
We have increased our expenditure on local CSR initiatives and shifted our focus from general philanthropy to targeted local community investment. In 2013, we spent $1.8m on 18 responsible drinking campaigns and initiatives across our region, 64% more than the previous year. An example would be our 21+ campaign in Indonesia where we partnered with local convenience stores to create awareness that alcohol can only be sold to those at or above the legal drinking age.

Our shift from philanthropy to community investment (CI) is also evident in their respective portions of the pie – 76.8% vs 23.2% in 2012 and 30.5% and 69.5% in 2013 respectively. For example, in one of our CI focus areas – water, our local operating company Vietnam Brewery Limited expanded their 2012 campaign last year to educate the community about the shortage of clean water and the importance of water conservation, and in Papua New Guinea our local operating company South Pacific Brewery Limited launched and completed its first ‘SP Brewery Clean Drinking Water Project’ in 2013.

Is working in collaboration with competitors key to a sustainable business model in the drinks industry?
My view is that working in collaboration with competitors is not essential to having a sustainable business model in our industry, but it could contribute to big advancements a key area – responsible consumption. As this is an issue which is relevant to the entire industry, working with not only competitors, but also regulators, governments and all stakeholders, can help to elevate the issue and together create and implement tangible solutions for alcohol abuse.

And finally, if you could influence one area of sustainable business practice, what would it be?
I would say again, responsible consumption. From stakeholder engagement, we found that this is the most important material issue to them and the long-term success of our business. Responsible consumption is not only relevant to consumers, but our employees too. I am influencing our business to apply responsible labelling practices and perpetuate responsible drinking practices throughout the organisation – such that it becomes part of our culture, our DNA. I also encourage our employees to play a part in advocating this topic, by being ambassadors of responsible consumption themselves.

 




Asia | CSR

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