Introduction to self – and thanks for the opportunity to share Diageo’s approach to water and specifically waste water management in Scotland
Given its importance our Blueprint Water Strategy takes a holistic approach to water in our supply chain, through our own operations, in our communities and through collective action. The three pillars of this Strategy are:Operations: Reducing water impacts in production facilities and supply chains. Activity within this platform includes improving water efficiency and decreasing water pollution across production facilities and engaging directly with suppliers in water stressed countries where we operate to encourage more strategies that promote sustainable agriculture.Community involvement: Working to reduce water poverty where Diageo operates by becoming a positive contributor to the stewardship of water resources, achieved through watershed protection and sustainable water management.Collective action: Collaborating with others to accelerate progress on the water/sanitation Millennium Development Goals while educating consumers and stakeholders on the value of water. Our first step was to understand where and what the impact on water is in Diageo’s value chain.So we have undertaken water footprinting for some of our brands – looking at both water use and water pollution. The results confirmed that the most significant water use in our value chain by a long stretch is in agriculture. This is obviously widely recognised but the importance of robust reliable data is paramount. We understand much more about our impact on water in our direct operations but are working towards a more detailed understanding of the impact in agricultural use and consumer use – ultimately, you cannot manage what you cannot measure
Like many businesses we have set challenging environmental targets. Using a 2007 baseline we announced five key targets of which three are related to water performance – reflecting the priority of sustainable water management to the business.Targets are a means to an end but have been very effective in focusing minds – collating accurate data, measuring consistently and accurately (for the first time we reported water and carbon in our Annual Report last year), sharing best practice, looking for solutions from the experts, embedding cultural change and overall improving our performance. In our online 2011 Sustainability & Responsibility Report we reported our cumulative water performance for 2007-2011:Water efficiency: improved by 19.0%Water wasted at water stressed sites: reduced by 14.5%Polluting power of wastewater: increased by 11.2%Obviously the wastewater performance stands out – a particular victim of our increased production – but nearly 70% of this derives from one site – Cameronbridge Distillery in Scotland – and we have an innovative solution – more on this in a moment.So we are absolutely focused on achieving these targets, which have been key to embedding and driving a culture of continuous improvement in our environmental performance. And so far our F13 performance indicates we are heading in the right direction against all our targets, but a continuous pipeline of projects and investment is required to sustain this progress.
And much of our new investment in manufacturing includes a focus on environmental sustainability including water – pushing the boundaries of new technology– here I’ve highlighted three new facilities – two in Scotland and one in the US Virgin Islands – where the priority for sustainable water management is embedded in new capex projects and has demanded new standards in sustainability for distilling – a challenge which has required new thinking, innovation and collaboration to deliver. And we are building strong capabilities in this area. The experience we have gained can be replicated as we implement other ground breaking solutions elsewhere in our operations. ROSEISLE (a £40m investment) - Products: Scotch whisky - Environmental Specs: 13,000 tonnes of carbon avoided/yr100% reduction in polluting power of effluentST CROIX (a £110m investment) - Products: Captain Morgan (US) - Environmental specs: 15,000 tonnes of carbon avoided/yr90% of process wastewater recycled100% reduction in polluting power of effluentCAMERONBRDIGE BIOENERGY PLANT (a £65m investment) - Products: Grain whisky - Environmental Specs: Planned 56,000 tonnes of carbon avoided/yr30% of process wastewater recycled100% reduction in polluting power of effluent – going a long way to helping us meet our 2015 target
An our third pillar for our Blueprint strategy is Collective Action – possibly the most important in terms of overall impact - we can’t work in isolation – the scale of the issue demands collaboration – collaboration with industry, businesses, communities, NGOs, governments and everyone else driven by the common goal to accelerate progress on water and sanitation. This requires new ways of working – forging new partnerships that meet multi-dimensional priorities and ultimately deliver improved water security for all. Here are a few examples of some of the collaborative initiatives we’ve been involved with - Water Business Imperative is a series of business roundtables led by Diageo, held across Africa (Cameroon, Ghana, Kenya, Nigeria and South Africa) and at the UN Global Compact Leaders Summit in New York, to support the UN Global Compact CEO Water Mandate’s aim of advancing existing corporate practice around water and identifying the role businesses can play in supporting effective and fair water policies.Working in partnership with IBLF, the next stage for this initiative is the formation of Water Business Networks (WBNs) made up of those concerned about water issues and committed to making inputs to water policies and strategies, monitoring policy implementation, monitoring business water and wastewater benchmarking/management etc.But sector collaboration is also important – working together on common issues and sharing best practice – and the beverage industry is benefiting from strong collaboration on water through the Beverage Industry Environment Roundtable – BIER. The primary focus on which is to develop industry-specific methods and data to support analysis of environmental impacts relevant to the beverage sector. Annual publication of water efficiency benchmarking across approximately 1500 beverage sites – and a new practical perspective on water accounting – are just two examples of where competitors – whether it is Coca Cola and PepsiCo, Heineken and Carlsberg or Diageo and Pernod Ricard – are collaborating effectively – on data and methodologies which contribute to the development of global standards and on the creation of tools that enable the identification and implementation of practical solutions.And CDP Water Disclosure Project – now in its third year (2012 Global Water Report published in late October) and with 60% of the world’s top 500 companies participating, it is fast becoming the most meaningful and systematic water reporting tool which allows investors and other stakeholders to understand how companies are building water into their core business strategies, and enables leading practices can be shared. Diageo will continue to participate and strongly encourages other companies across all sectors to do likewise.
In conclusion – what have we learnt – what is the water challenge for businesses - firstly to state the obvious – sustainable water management is critical to the future sustainability of our business.In Diageo, like many other businesses, we have adopted a holistic approach – it’s not about being altruistic – it’s about recognising the complexities of integrated, sustainable water management and the benefits of adopting an integrated approach as we continue to grow our business.We are addressing the global water challenge internally within our operations and externally in our supply chain and in communities where we operate (and beyond) – but we need to learn more – the full impact across our whole value chain – and we need to decouple the impact we are having on sustainable water management whilst we are growing our business – using new technology and driving innovation - and in doing so we will need to work more with others – familiar and new partners.So if there is one single simple message to take away from this quick run through Diageo’s approach it is that collaboration is essential – for everybody.
Wastewater – SupportingBusiness GrowthBCSD Water Conference, Glasgow16 November 2012 Duncan Stewart Sustainability Manager Cameronbridge Distillery
Water footprinting– key areas of impact Water Use Water Pollution 3
Delivering against 2015environmental targets Water efficiency Water wasted at stress locations Waste water (11.2)%
New technology– a new era for sustainable distilling Roseisle, Scotland • 13,000 tonnes of carbon avoided per year • 100% reduction in polluting power of effluent St Croix, US Virgin Islands • 15,000 tonnes of carbon avoided per year • 90% of process wastewater recycled • 100% reduction in polluting power of effluent Cameronbridge, Scotland • Planned 56,000 tonnes of carbon avoided per year • 30% of process wastewater recycled • 100% reduction in polluting power of effluent 5
Cameronbridge Distillery • Distillery founded in 1834 by John Haig • Major expansions in 1989, 1999 & 2009 • Distillery products include Grain Whisky for Blending, Tanqueray Gin, & Smirnoff Vodka • 2012 Record production week of >2,000,000 la.Wheat Water Malted Barley Yeast steam COOKING MASHING FERMENTATION DISTILLATION WAREHOUSE / LTP > 3 years 6 Spent Wash
Bioenergy - Overview To CIP Biogas Water Spent Wheat Wash Dewatering Anaerobic Distillery Belt Press DigestionMalted Barley Yeast Solids Energy FF Boilers Electricity Steam Steam Turbine BFB Boiler Water RecoveryGRID Firth of Forth
AD and Water treatment Biogas to Boiler Degassing Tank To Membrane Spent 2nd Bio-Reactor Wash Separator Belt Press Polishing Downer Compartment Riser 1st Separator Expanded bed Solids to Compartment Boiler DistributionTo Distillery Systemfor Cleaning FiltrateOnly Membrane Tank Reverse (Ultra-Filtration Aeration Tank Anoxic Tank Osmosis (RO) Membranes)ToBioenergyPlant Firth of Forth
Lessons Learnt• Do not underestimate the complexity of Water Chemistry.• Have an agreed defined water quality standard to and from process• Benchmark existing applications of proposed process• Ensure verification of any trial work before project design.• Leave sufficient time for Contract negations if outsourcing project.
Collective Action- Collaboration• Water Business Imperative Roundtables in Africa• Beverage Industry Environment Roundtable• CDP Water Disclosure Project• UN CEO Water Mandate
The challenge for business• Adopting a holistic approach• Decoupling water impact from business growth• Innovation to drive change• New ways of working with new partners• Collaboration – common issues, collective solutions