Sustainability takes on a broader meaning for organizations that interpret its meaning to encompass more than environmental stewardship. True sustainability also includes such areas as human resources, customer relations, and product lifecycle, among others.
Likewise, for food and beverage companies whose products are largely tied to water and agriculture, sustainability ultimately determines their ability to function as a viable business––as leading companies are well aware.
Recently, Diageo concluded its 2020 Sustainability and Responsibility Goals and reported on its achievements over the past five years. Perry Jones, president, North America supply, reflected on the company’s progress and how it continues to attain new milestones with regards to reducing greenhouse gas emissions, creating a more diverse workforce, and elevating its role and responsibility with regards to sustainability.
SCSparrow: While diversity is discussed in terms of internal leadership positions being held by more women, is Diageo looking to expand diversity with its suppliers, vendors, partners, potential acquisitions? In other words, looking at diversity externally as well?
Jones: Championing inclusion and diversity is a strategic priority at Diageo, both within our business and with the partners and suppliers with whom we work. We recognize that diverse suppliers can often deliver greater agility, as well as access to fresh ideas and experiences that can result in accelerated product and process innovations.
Since 2015, we have grown our Diageo Supplier Diversity Program through a dynamic and multifaceted approach, focusing on growing the number of suppliers in our portfolio and strategic relationships with them, and building internal visibility and education. In this past five years, we have tripled the amount we spend with woman-owned suppliers and doubled our spend with minority-owned businesses. We’ve also seen an enormous increase in our spend with LGBTQ-owned businesses and businesses owned by veterans.
We’re increasingly asking our existing suppliers to demonstrate their commitment to diversity. For the last two years we have asked our advertising agencies to share data on the gender balance within their organizations as well as their plans to drive inclusion and diversity. We are also taking a stand on issues through our involvement in collaborative groups such as the World Federation of Advertisers’ Diversity & Inclusion Taskforce and the United Nations Unstereotype Alliance.
SCSparrow: Diageo’s “moderation messaging” is another indication of how the consumer profile and demographic has changed, and in turn how that is affecting the wine/beer/spirits industries with regards to new packaging and products, improved visibility with regards to ingredients and suppliers, and so on. Therefore, how is today’s consumer influencing and driving Diageo’s sustainability targets and goals for the future?
Jones: Sustainability and responsibility have been a priority at Diageo for many years—our global 2020 goals were originally set in 2008 and refreshed in 2015. The 2020 targets were selected to align with the United Nation’s Sustainable Development Goals and designed to cover Diageo’s three main focus areas: reducing environmental impact, building thriving communities and promoting positive drinking. Key highlights delivered include:
- Cutting greenhouse gas (GHG) emissions from direct operations by 509,000 metric tons, delivering on its commitment to reduce absolute emissions by 50%.
- Reducing emissions by over a third (33.7%) across its total value chain, going beyond the original 30% target.
- In water stressed areas, replenished 100% of the water used in our final product.
- Ensured that over 99.5% of its packaging is recyclable and achieved 45% recycled content in its packaging.
- Achieved zero waste to landfill in all operational sites and offices.
- Supported more than 250,000 people through its projects focused on clean water, sanitation and hygiene (WASH) in 2020.
- Empowered 435,000 women to date through its community programs.
- Championed diversity such that 39% of leadership positions are now held by women, going beyond its original target of 35%.
- Reached 2 million people with moderation messages from our brands.
Diageo aims to contribute to the delivery of the United Nation’s Sustainable Development Goals in the critical decade of action leading up to 2030.
The COVID-19 pandemic has emphasized how important it is that we address issues that matter to our stakeholders and strengthen our business, deepening our connections with communities. Building inclusive, thriving communities that work for everyone is key to this. It requires us to be global champions for water stewardship and vocal advocates for a low-carbon world. It also means going further in exploring circular economy approaches, so we can make more drinks with fewer materials. We also know we must be leaders in promoting positive drinking.
SCSparrow: Can you provide more detail on how COVID-19 has impacted Diageo’s view of sustainability currently and looking forward? Are there different areas of focus? Adjustments to future targets? Any positive/negative impacts that are worth noting?
Jones: As mentioned previously, the COVID-19 pandemic has emphasized how important it is that we address issues that matter to our stakeholders and strengthen our business, deepening our connections with communities. It is within that context that Diageo announced in June the creation of the Diageo Community Fund to support social justice in America, helping Black communities and businesses recover. With a commitment of $20 million, the Fund will help address the urgent needs of Black communities and businesses who have been disproportionately harmed by COVID-19. The Fund will also support businesses, consumers and partners integral to the hospitality industry in Black communities across the U.S. This will include a combination of targeted donations supporting advocacy efforts as part of the economic recovery from COVID-19, training for business owners and employees, relief aid and more.
This is part of a broader global two-year program called Raising the Bar that supports pubs and bars as they begin to welcome customers back. Through Raising the Bar, Diageo will provide $100 million to support the recovery of major hospitality centers around the world, including, among others, New York, London, Dublin, Mexico City, Delhi, Sydney and includes the $20 million Community Fund for the U.S.
SCSparrow: Going forward, are there any areas of the supply chain, and/or the overall operations that will likely receive greater attention with regards to sustainability? What are the areas most ripe for improved sustainability?
Jones: In the coming months, we will be announcing a new set of targets to help further support in the delivery of the UN Sustainable Development Goals over the critical decade to 2030, with a focus on our three priorities: promoting positive drinking, championing inclusion and diversity, and grain-to-glass sustainability.
We will continue to be global champions for water stewardship, vocal advocates for a low-carbon world and explore circular economy approaches.