Food, Soft Beverages, Alcohol & Tobacco
Heineken N.V. Global Corporate Affairs
PO Box 28
1000 AA Amsterdam
- Carbon Disclosure Project (CDP) Climate Change C-Rank,
- Water B-Rank
- Dow Jones Sustainability Index Score 73/100,
- FTSE4Good ESG Rating 3.9/5,
- Euronext Vigeo – Benelux Top 20,
- Morgan Stanley Capital International Index A Rating,
- Sustainalytics Position 11 out of 173,
- Dutch Transparency Benchmark 34th Ranking out of 500
- Dutch Association of Investors for Sustainable Development benchmark for Tax transparency 17th Rank.
CHIEF SUSTAINABILITY OFFICER
Name: Stacey Tank
Report created by Muge Acar
Established in 1864 by the Heineken family, Heineken has a long and proud history and heritage as an independent global brewer. They brew quality beers, build award-winning brands and are committed to enthusing consumers everywhere.
Heineken N.V. is a Dutch brewing company, founded in 1864 by Gerard Adrian Heineken in Amsterdam. As of 2017, Heineken owns over 165 breweries in more than 70 countries. It produces 250 international, regional, local and specialty beers and ciders and employs approximately 73,000 people. With an annual beer production of 188.3 million hectolitres in 2015, and global revenues of EUR 20,511 billions in 2015, Heineken N.V. is the number one brewer in Europe and one of the largest brewers by volume in the world.
Led by the global brand Heineken®, the Group has a powerful portfolio of more than 300 international, regional, local and specialty beers and ciders.
- Premium Brands – International brands portfolio is comprised of Amstel, Desperados, Sol, Tiger, Tecate, Red Stripe, KruŠovice and Birra Moretti.
- Craft and Variety Brands – International craft brands include Affligem, Mort Subite and Lagunitas, are supported by craft line extensions such as Brand IPA in the Netherlands, and Birra Moretti Regionale in Italy, strong local craft brands such as Beavertown in the UK and La Cibeles in Spain.
- Low and No-Alcohol Brands – Low and no-alcohol brands include non-alcoholic beers, radlers, dark and clear malts and malt-based energy drinks.
- Ciders – Cider brands include Strongbow Apple Cider, Orchard Thieves Cider, Stassen, Bulmers, Old Mout.
Company Sustainability Activity
Heineken believes in sustainability as a driver for business success, and in business as a positive force for change. Their sustainability strategy – Brewing a Better World – is one of the four business priorities. It unites their global brands to respect people and the planet and drives them to pioneer ways they can help tackle society’s challenges.
Heineken’s sustainable development strategy, Brewing a Better World, includes 2020 targets in six key areas. Through this strategy, they are determined to contribute to the UN Sustainable Development Goals (SDGs). Their focus areas are linked with specific SDGs and their targets, to ensure that they make a meaningful contribution to the common global goal to end poverty, protect the planet and ensure prosperity.
- 33% decrease in water consumption since 2008
- 49% decrease in carbon emissions since 2008
- 39% reduction in accident frequency
- 95% of Heineken® markets now dedicate 10% of their media to responsible consumption campaigns
- Heineken aims to reduce average water consumption in breweries in water-stressed areas to 3.3 hl/hl and to 3.5 hl/hl in all breweries
- The company aims for significant water balancing by their production units in water-stressed areas
- All of their wastewater volumes will be treated – by them or by a third party – before being discharged into surface water
REDUCING ENVIRONMENTAL FOOTPRINT
- Heineken will reduce CO2 emissions from production by 40% to 6.4 kg CO2-eq/hl (vs. 2008)
- They aim to reduce CO2 emissions from distribution by 20% in Europe and the Americas (vs. 2010/11)
- Heineken aims to reduce the CO2 emissions of their fridges by 50% (vs. 2010)
- They aim to have at least 50% of their main raw materials to come from sustainable sources
- Their goal is to deliver 60% of agricultural raw materials in Africa via local sourcing within the continent
- Heineken will be 95% compliance with their Supplier Code Procedure
- Reduce accident frequency by 20% vs 2015 (1.38 per 100 FTE)
- Full compliance with Life Saving Rules
- Heineken will invest 10% of their media budget in their responsible consumption programmes, in every market where they sell and advertise Heineken
- Every market in scope will have a relevant and active partnership aimed at addressing alcohol related harm
- Heineken aims to provide ingredient and nutrition information on pack and online for all beer and cider brands produced and sold in the EU; on pack or online – outside the EU
- Fully balance the water that is used in their products, in water stressed areas
- Work collectively with other stakeholders
- Maximize reuse and recycling in water-stressed areas
- Treat 100% of wastewater of all breweries
- 2.8 litre per litre beer produced, for breweries in water-stressed areas
- 3.2 litre per litre for all breweries worldwide
REDUCING ENVIRONMENTAL FOOTPRINT
They are committed to reducing their CO2 emission impact across the entire value chain by 2030, in line with the Science Based Target Initiative. Their approach focuses on high impact areas:
→ Production: through their Renewable Energy program and continued improvements in energy efficiency. Heineken committed to increase the share of electric and thermal renewable energy in production to 70% by 2030.
→ Packaging: by implementing their Sustainable Packaging Strategy with their suppliers, focused on the 5R’s: Renew, Reduce, Recycle, Reuse and Rethink.
→ Logistics: by optimizing routes, supporting suppliers to adopt low carbon technologies and investing in innovative solutions.
→ Cooling: through a new approach that includes setting clear energy efficiency specifications for assets (fridges and draught beer equipment) and assuring they have the right asset in the right place.
→ Processing (malting and adjuncts): by developing and implementing energy efficiency and renewable energy program with their suppliers.
→ Agriculture: through a holistic approach that includes piloting projects with farmers and suppliers to deliver CO2 emissions reduction and water management.
- Heineken reduced their average water consumption in water-stressed areas to 3.1hl/hl and to 3.4hl/hl in all breweries
- Heineken’s 15 of 24 sites in scope have begun to implement water balancing projects
- 97% of their wastewater is treated before discharge, but they had 10 sites still without a treatment plant
REDUCING ENVIRONMENTAL FOOTPRINT
- Heineken had a 49% reduction in CO2 emissions in their breweries since 2008, to 5.3kg CO2-eq/h
- They reduced their emissions from distribution by 13% (29% in Americas and 10% in Europe, including Russia)
- Heiniken purchased almost 100% green fridges. They reduced CO2 emissions by over 50%
- 37% of Heineken’s main agricultural raw materials came from sustainable sources
- 44% of agricultural raw materials used in Africa was regionally sourced from within the continent
- Heineken had a 97% compliance with four-step Supplier Code Procedure
- Accident frequency reduced by 39% to 0.84 accidents per 100 FTE
- Heineken has 92% in the breweries and 95% outside production compliance with Life Saving Rules
- 95% of markets in scope invested at least 10% of Heineken® media spend in responsible consumption campaigns
- 35 of 37 of their markets in scope (95%) have a partnership aimed at addressing alcohol related harm
- 91% of their beer and cider brands in scope had ingredients, nutrition and Alcohol by Volume (ABV) information on pack and/or online
United Nations Sustainable Development Goals
United Nations SDGs Compliance
- Heineken has committed to provide a safe work environment and to avoid harm to people. This includes developing robust safety standards, tools and procedures and a strong safety culture that promotes safe behaviors.
- ‘Safety First’ is their number one Company behavior and the name of their Group safety strategy. They are focused on preventing fatalities and serious accidents in their operations; their Life Saving Rules are mandatory across all operating companies. Centers of Excellence are helping operating companies to address key safety risks.
- Heineken installs telematics in all owned and leased vehicles to improve driver safety.
- They are committed to making a positive contribution to the communities where they source, live, work and sell their products. their biggest contribution comes through their core business – providing jobs, supporting livelihoods and paying taxes.
- They support social and economic wellbeing through investments in local entrepreneurship, education, community initiatives, as well as donations and employee volunteering.
- The HEINEKEN Africa Foundation supports the health and wellbeing of communities by providing vital access to healthcare and clean water.
- Heineken business depends on freshwater and may be significantly impacted by the risks of water stress and scarcity. They have focused on reducing water use in production and investing in wastewater treatment plants.
- They have started balancing the water they do not return to the watershed in water stressed areas. Improving the health of local watersheds is at the heart of their 2030 water strategy, Every Drop.
- Drop the C is their CO2 reduction strategy for 2030. It focuses on reducing their carbon footprint across the entire business.
- Packaging is a major contributor to their carbon footprint, and they are setting clear design and production rules for recycling and increasing the recycled content of packaging.
- Heineken depends on a responsible, transparent supply chain to grow their sustainable business and manage their risks. Much of their impact occurs during the growing of raw materials. They aim to develop sustainable agricultural supply chains around the world to increase volumes of sustainable raw materials.
- Heineken supports development of best farming practices to improve productivity and food security, especially in Africa where they are increasing local sourcing.
- The company expects their suppliers to adhere to the HEINEKEN Supplier Code to create a sustainable future for their business, the people they employ and the environment.
- They believe alcohol, when consumed in moderation, can be part of a well balanced lifestyle.
- They encourage consumers to drink responsibly through their global marketing, sponsorships, partnerships and behavior change programs– which they activate at scale around the world.
- Heineken has a strict Responsible Marketing Code, to ensure their products are enjoyed in a responsible way.
- Heineken thinks customers should have access to ingredients and nutrition information for all their beer and cider brands, whether it is legally mandatory or not, so they can make informed choices about their products.
Secondary SDG: 2
Heineken has made substantial efforts towards incorporating sustainability throughout their business. This is seen in their targets and reduce CO2 emissions, reduce waste, and managing water use.
Heineken has certifications for a part of its locations, has good listings and has clear objectives along with progress in sustainability and lastly is transparent with the numbers provide in their annual reports.
However, they lack important certifications and awards that could boost their dedication to sustainability and therefore they are rated as a C.
Analyst Outlook: Neutral
The company has provided very clear information and is very transparent as it gives access to a lot of information. But some concerns are raised about the truth of those information. In an article in The Guardian by Oliver Van Beenmanin reveals the the sexual harassment cases and low payment problems that arises in Heineken’s business in Africa.
- Even though Heineken has a great set of goals and have made progress on them their business done in Africa has been questionable.
- Olivier van Beemen in his book; Heineken in Africa: A Multinational Unleashed surfaces some of the transactions and dealings that has been going on in production of Heineken in Africa. It shows that the lawlessness in many countries in Africa enables Heineken to sell and advertise its drinks without the hassle of regulation. There is also the issue of safety in the work environment in Africa and according to a 2017 statement from Heineken, its African operations account for 26% of “on-site incidents and accidents (minor+serious+fatal)”. There was also the issue of Heineken’s “beer promotion girls”, who are young women hired to help increase sales in bars. In 2000, a group of aid organisations in Cambodia was worried about the risk these women faced in doing their job. They spoke of promotion women as being similar to “indirect sex workers” who earned very little and and they were often harassed, pressured into having sex with customers and ran the risk of contracting HIV.