Annual Report - SABMiller

40 Sustainable development SABMiller plc Annual Report 2010Sustainable developmentSustainable development is fundamental to our business success.We have a clear and well-embedded approach that is delivering tangiblebenefits for our business and the communities in which we work.A positive role in societyWe believe that the most effective way forSABMiller to meet its sustainable developmentobjectives is by maximising the success ofthe business.We are clear that our business is not somethingseparate from society. It is, at one and the sametime, an employer, a customer, a supplier anda taxpayer. The interests of SABMiller and thewider community are therefore inextricably linked.Our activities provide high-quality productsthat society wants and enjoys. As longas markets are free and competitive, ourbusiness will succeed if we manage ourrelationships well, use resources efficientlyand meet the needs of our consumers andthe communities in which we operate.A robust approach to sustainable developmentunderpins our ability to grow and our licenceto operate. A well-managed and growingbusiness is good for wider economicdevelopment, leading to greater employment,more taxes paid and greater investment in localeconomies and communities. An analysis ofour economic contribution has been publishedin our sustainable development report.In 2009, we announced a major transactionin South Africa to support our long-termcommitment to Broad-Based BlackEconomic Empowerment which will createapproximately 40,000 shareholders, includingemployees and local retailers. We have alsocreated a charitable foundation to benefitthe wider community. More information onthis can be found on page 8.Making partnership a centralpart of our approachWe recognise that by building strong andequitable partnerships we can create morevalue for our business and make a greaterdifference in our markets than if we workedin isolation. Moreover, as one of manyplayers that have a role to play in buildinga successful community, we endeavour tobuild strong relationships with local partnersto address the issues that we face together.We encourage our businesses to directlydevelop specific partnership projects withNGOs, governments and communities whichwill protect or enhance their ability to operateor create new value. Working with thesegroups often provides us with additionalinsight and local knowledge that enable usto be more effective. By working with us, ourpartners are able to harness the scale of ourbusiness and access accumulated expertiseto help implement meaningful programmes intheir local communities.Integrating sustainabledevelopment into business strategyFor SABMiller to achieve competitiveadvantage – and ultimately better profitability– sustainable development needs to bepart of what we do every day. It needs tobe integrated into our decision-making andthe way we run our business.To better reflect our long-standing commitmentto sustainable development we have revisedone of our four strategic priorities that guidethe management of our business. One ofthese priorities is now ‘to constantly raisethe profitability of local businesses,sustainably’. Further details on this andthe other strategic priorities can be foundon page 3.Management within our local operatingbusinesses, regional hubs and at a group levelare responsible for ensuring that sustainabledevelopment is taken into account as partof their business planning and management.Progress is overseen by regional and groupCorporate Accountability and Risk AssuranceCommittees (CARACs).This strategic focus is underpinned by our10 sustainable development priorities. Thesedefine the key issues for our business andhave been developed through extensiveconsultation internally, and also with externalstakeholders. The priorities also support ourcommitment to the 10 principles of the UNGlobal Compact and contribute to the UN’sMillennium Development Goals.Locally and globally we focus our resourceson the priorities which we believe are themost material for our business. As a resultwe have established three global focusareas, namely alcohol responsibility, waterand enterprise development. We believe thatthese are the issues which have the potentialto impact all parts of the business and whichare best tackled through harnessing thescale and expertise across SABMiller.Discouraging irresponsible drinkingThroughout our business we promoteresponsible consumption as part of ourday-to-day activities, whether designingmarketing campaigns, developing newproducts or out in the market selling ourbeers. We strive to ensure our employeesunderstand the risks that arise fromirresponsible drinking and we expect highstandards from them – over 75% of ouremployees are now trained in the six coreprinciples of our Alcohol Framework.In 2009 we were proud to sign up to GlobalActions on Harmful Drinking – a plan of actionsigned by the CEOs of 10 global beer, wineand spirit producers – to help combat theharmful use of alcohol in developing markets.We believe that consumers should receiveaccurate and balanced information aboutirresponsible alcohol consumption and wehave launched a number of targeted informationcampaigns across the world. We havecontinued to promote TalkingAlcohol.com andadded a new module called ‘Open the Facts’to assist parents in discussing alcohol withtheir children.Water FuturesWater scarcity represents a significant longtermrisk to parts of our business, as well as tosome of the communities in which we operate.It is a complex issue, with many differentfactors at play that cannot be addressedonly within the boundaries of our breweriesor bottling plants. Consequently, we haveadopted a flexible and multifaceted approach.In 2009, SABMiller joined a consortiumof business partners, including McKinsey& Company and the International FinanceCorporation, to examine the challengesof water scarcity around the world. Thesubsequent report – Charting our WaterFuture – launched in November, shows howgrowing water scarcity can be mitigatedaffordably and sustainably.In partnership with WWF, we have pioneeredthe technique of water footprinting within ourvalue chain, which we use to identify andfocus our actions on the specific issuesrelevant for breweries most at risk. Buildingon this work, we launched our first globalpartnership, Water Futures, with WWF.Further information on this partnership canbe found on page 19.Investing in local suppliersEnterprise development supports the long-termgrowth and stability of both our business andthe economies in which we operate. In procuringits raw materials, SABMiller combines thescale advantages of global sourcing with therecognition that using local suppliers can alsobenefit the business commercially.Local sourcing is often far more cost-effectivethan importing raw materials, and encouragingenterprise in our supply chains contributesto the local economies in which we work.During the year we bought crops from28,590 local smallholder farmers, an increaseof 34% compared with last year. Furtherinformation on this can be found on page 19.