Where is Business? A personal view.• Generally recognises that this thing called Sustainability is important• Has decided to do something about it - so we all have “Sustainability Reports” and associated action plans1. Carbon: now understood: it’s easy; reducing carbon often means reducing energy, which reduces £££. This is GOOD.2. Water: coming up the agenda quickly: is perhaps an even more clear and present danger than carbon. Certainly in agri-food related companies.3. Biodiversity and Ecosystem Services? I spoke to the CEO and he said “er ... what is that ... bored now, move on. Now, where’s my ROI, EPS, and EBITDA, you know, simple stuff I can understand easily!”
Biodiversity19 Sourec: WWF Living Plant Index, 2010
So what are Business’ requirements• Relevant MAYBE ...
So what are Business’ requirements YES, BUT WHY? CO2• Tangible
So what are Business’ requirements YES• Material
So what are Business’ requirements• Risk Understood ALWAYS
So what are Business’ requirements ABSOLUTELY!• Simplicity
Ecosystem Services Project“What are we seeking to achieve? The markets component of the Ecosystem Services Project will define a range of ecosystem services that can be bought and sold through a new currency/commodity such as a carbon, water quality, salinity or biodiversity credit. Once commodities for ecosystem services are defined we will actively work with catchment communities to find buyers who are willing to invest in environmental services. The relationship between ecosystem services, environmental commodities and funding mechanisms is depicted in the diagram below.” Q. What happens when the markets begin futures trading and the price falls?
Heineken• World’s 3rd largest brewer• > 70 countries with Heineken breweries• > 70,000 direct employees and their families• > 20 Olympic sized swimming pools of beer per day• > €15,000,000,000 turnoverAnd we’re 1/3rd the size of the largest!
A new approach Positively IMPACT the role EMPOWER IMPROVE thethe Continuouslyour Journey of beer Enabling our people and in society communities in which of operate environmental impact we our brands and business We have defined 5 Key enablers that will • In 2010, double,of markets to long-term be fundamental to meeting20 million, a By 2015, 100% to EUR out have the Our journey is summarised by ambition: for the Heineken direct help • By 2020, reduce a third party to and play partnership with specific Africa funding or part in reducing alcohol 1 fossil fuels Foundation, enabling EUR related harm indirect CO2 emissions from million Brewing investment per year thereafter • in our breweries to 6.4 kg CO2/hl all In 2010, introduce incentives for • By 2015, include a culturally appropriate a Better Future senior management on sustainability • Ensure access tospecific waterbasic • By 2020, reduce pre-defined, responsibility message on all brands targets healthcare for 100% of employees 3.7 consumption in our breweries to and • dependants Continue 100% adherence to rules on • hl/hl 2010, every market to have three From Responsible Commercial year sustainability plan • By 2020 achieve 60% local sourcing of Communication • Starting 2010, 100% of all replacement Our long-term ambition is To be the raw materials in Africa technology • By 2015 100% of green fridges based on markets to produce World’s Greenest Brewer • Continue 100% adherence(20 rules on local sustainability reports to in 2010) • Aim for a accident and incident-free alcohol at work • By 2020 aim for water neutrality of work environment water-stressed areas breweries in • Renewed Supplier Code based on new • Partner with industry to address issues approach • Implement reduce and self employee • Continuallyand driving, new regulation of drinking audit a track the CO2 and non-commercial alcohol rights policy • footprint oflevel brands throughout the Executive our Governance model Improve Empower Impact value chain We have built our • By 2020mapindustry to ensure effective Partner with the economic impact of our programmes around Continuously improve Empower our Positively impact • business on developing markets CO2 self2020, develop the concept of By regulation the environmental people and the the role of beer neutral brewery and implement in at three strategic least three sites impact of our brands communities in society imperatives and business in which we operate We have grouped our 23 programmes into 6 Green Green Engaging Heineken Responsible Partnerships core initiatives Employees Cares Consumption for Progress Brewer Commerce Governance, Senior management incentives, Reporting & transparency, Supplier code, Communication & engagement
In an Ecosystem Service context? Fermentation: the brewer’s ecosystem Pure water for beer Use of by-products By product processing Treatment of effluent Logistics Pure water for beer Barley, apple, hop production Thrown away packs Alcohol awareness Responsible drinking
To take forwards• Simplify the message• Align at the top: IUCN, WBCSD and in UK across all Government depts.• Make it clear how the different interpretations link together• Build consensus and capacity• Ensure that in all communications “it” has – Relevancy – Materiality – Tangibility – Simplicity – Risks• And all in business language
TEEB: Key Action Points for BUSINESS1. Identify the impacts and dependencies of your business on biodiversity and ecosystem services (BES)2. Assess the business risks and opportunities associated with these impacts and dependencies3. Develop BES information systems, set SMART targets, measure and value performance, and report your results4. Take action to avoid, minimize and mitigate BES risks, including in- kind compensation (‘offsets’) where appropriate5. Grasp emerging BES business opportunities, such as cost-efficiencies, new products and new markets6. Integrate business strategy and actions on BES with wider corporate social responsibility initiatives7. Engage with business peers and stakeholders in government, NGOs and civil society to improve BES guidance and policy