Our ambition is to be one of the most sustainable beverage companies and to be THE PREFERRED CHOICE for the future. We will convert our energy consumption to renewable energy in the entire value chain and we will work with our partners on reducing CO2 emissions and lowering the impact from packaging material through recycling, while having a positive social impact. By having joined the Science Based Target initiative (SBTi) we are committing not only to decarbonize in line with the Paris goals, but also to deliver transparent and verified data on our progress for 2030 for scope 1, 2 and 3 and for net zero later. We will reach our targets by:
- Shifting to renewable energy
- Becoming circular
- Engaging with our entire value chain
Renewable energy sources
We will increase our renewable energy use towards 2030, starting from our own production and gradually increasing demands on suppliers.
Royal Unibrew is setting ambitious targets on carbon emissions. From our own production (scope 1 and 2) we aim at being carbon emission free in 2025, and for the entire supply chain (scope 1, 2 and 3) reducing our footprint by at least 50% in 2030. We have decided on several initiatives to reach these ambitious targets, but we also acknowledge that implementation of new, not yet available, technologies are key to succeed.
Royal Unibrew’s principles for decarbonization have not changed. Drivers are efficiency improvements, transitioning from fossil-based to renewable energy or adding renewables to the grid. Royal Unibrew partners with external specialists to conduct energy audits aiming at having a catalogue of best practices, feasibility studies and a number of approved projects by the end of 2022.
Today, 25% of Royal Unibrew’s CO2 footprint from scope 1 and 2, excluding logistics, is renewable energy based, covered by RECs (Renewable Energy Certificates). We will gradually phase out RECs and replace with either our own renewable energy projects or PPAs (Power Purchase Agreements).
Projects reducing approximately 70% of our production related carbon footprint (24 mio kgCO2), are progressing or planned for the period 2022 to 2024. We have projects running at our largest productions sites, installing a solar park in Faxe, Denmark, delivering renewable energy to cover approximately 40% of the power consumption, and transforming our fossil based thermal energy to 100% biobased at our Lahti site in Finland utilizing our spent grain from production and biogas from a near-by landfill. Furthermore, projects to transition from fossil-based to biobased fuel, from thermal energy to electrical, and installation of solar panels fully implemented by 2024 are already planned in Denmark, Latvia and Lithuania. In addition, we continue the purchase of RECs (Renewable Energy Certificates) or in 2022 PPAs. We do, however, still need to identify options for the remaining 30%, primarily fossil-based thermal energy.
A top priority in 2022 is to finalize the roadmap for our 2025 scope 1 and 2 decarbonization target, which in turn will form the basis of creating a roadmap for our 2030 scope 3 target – science-based and contributing to limiting global warming to 1.5 C. Our ambition to become emission free also translates into new demands for our suppliers and partners across the entire value chain.
In 2021, the CO2 impact from production, packaging materials and distribution was 36 million, 143 million and 38 million kg CO2, respectively. Essentially unchanged from 2020 in absolute amounts but with an improvement per produced unit of 2% for packaging material. The reduction for packaging materials is triggered by the increased content of recycled material.
The carbon footprint for our production was reduced by 28%, measured as kg CO2 per produced volume, from the base year 2015 to 2021. This shows that we are on the right track for our short-term target of 30% in 2022 compared to 2015. Between 2020 and 2021, the kg CO2 per produced volume decreased with 7%. Thus, the efficiency of our production continues to improve year-on-year. The CO2 reduction is a result of the ongoing energy optimizations at the production sites.
Greening of distribution
Transportation is another area where sustainable technologies, especially for heavy duty transportation are still rather immature.
We are conducting several projects to optimize distribution within our own fleet, and with our forwarders, such as combining optimal locations for distribution hubs with proximity of alternative lanes or alternative fuel sources. At our Headquarter in Faxe we installed charging stations to support employees’ choice of electrical vehicles (EV) or hybrid cars. 15% of our company cars are currently EV or hybrid. Furthermore, in 2022 we introduce at least two electrical trucks and one biogas fueled truck.
Water remains a priority
Water is our most important raw material and therefore water preservation and water quality are key to us. All our wastewater is treated before emission to meet the requirements. Reducing water consumption remains a priority and the consumption of water per hl has decreased by 3% from 2020 to 2021. The water intensity from 2015 to 2021 reduced 7%, organically.
Royal Unibrew’s production facilities are not located in high or extremely high water stressed areas. Withdrawal of water in low and medium-low water stressed areas constitutes approximately 47% of the total water consumption. We only use municipal or own well water at our sites.
We have several projects aiming at preserving freshwater ecosystems. One is at the Lake Vesij rvi, close to our brewery in Lahti, where 500 kg trout was released in 2021. Another example is in Latvia, where Royal Unibrew just signed a longterm agreement with WWF to cooperate on preserving the rivers of Latvia.
- Transform and electrify production
- Demand renewable energy in the supply chain
- Optimize energy and water consumption
- Committing to the Science based Target Initiative
We want to become circular across the value chain by engaging suppliers. We will close the material loop, reduce the strain on resources and reduce our footprint.
In the beverage industry product circularity depends to a high degree on closing the loop for packaging material (primary, secondary and tertiary). The elements are to remove, reduce, reuse and recycle material. To succeed in our strategy it is, however, pivotal that food-grade packaging material such as r-PET, is not down-cycled for non-food applications.
100% recycled PET
We already provide several of our own brands in 100% r-PET bottles. Together with our partner PepsiCo, we are committed to reach 100% r-PET already by the end of 2022.
The food safety requirements for primary packaging material (e.g., glass bottles, PET bottles and cans) are stringent as it is key to protect our products. The entire packaging system, e.g. bottles, crates, trays and wraps ensures there is no harm to our products during distribution, and packaging is therefore also key for product protection and avoiding food waste. Thus, the packaging systems are complex, and substituting or eliminating elements such as plastic wrap or down-gauging require careful testing to ensure continued stability.
Royal Unibrew is applying all the circular principles for our packaging material. We are on track for our overall goal of 100% reusable, recyclable, or recycled material in 2025. In principle, we use only mono materials today. Mono materials can easily be separated, sorted, and recycled in clean fractions such as glass, PET, carton, aluminum, etc.. However, our juice portfolio, and bag-in-box concept for soft drinks, contributing approximately 4% of sales volume (measured organic) in 2021, are currently provided in more complex laminated materials. While the recyclability of these materials may be improved over the next couple of years, we will however, also be looking at alternatives. Packaging material will be a focus area also for the acquired sites.
As an example of removing material a new can line in Faxe, Denmark, is under construction and is expected to be commissioned in May 2022. This line will enhance flexibility and application of new packaging concepts, where plastics may be eliminated or replaced by cardboard. Thus, enabling the transition from fossil-based materials to bio-based materials.
We continuously cooperate with our suppliers on reducing the weight of material balancing food safety, transportation stability and environmental requirements. Over a 10–12-year period reductions in PET, aluminum and recently cardboard material, represents a reduction of 8,600 ton CO2 per year.
We take our producer responsibility very seriously. We will continue our support to DRS in our major markets to increase the return rate further and look for solutions to avoid packaging waste in other markets with more immature systems. We have just initiated an investigation on how Royal Unibrew can support development of waste infrastructures or deposit return systems in our export markets with poor or non-existing frameworks.
- Eliminate unnecessary packaging (incl. plastics)
- Source recycled packaging material
- Become the sustainable partner
Supplier road map
We engage with our entire value chain to reduce carbon emissions in scope 3 and minimize negative environmental impact and social impact.
We have a large share of our footprint (environmental and social) outside our own direct control. Therefore, we engage and cooperate with our supply chain to reduce the footprint and to increase supply chain transparency.
By 2030, the target is a 50% reduction of the entire supply chain’s CO2 emissions, and no later than 2023 all of Royal Unibrew’s critical suppliers must have signed the responsible procurement principles and an agreement with a defined road map to reduce their carbon footprint (60% has signed in 2021). This, in combination with the current general consensus on possible technological advances in the relevant sectors until 2030, make us believe it is a realistic target.
Royal Unibrew recognizes that responsible sourcing is a journey where improvements are achieved through collaboration with our suppliers. In 2021, we reviewed our policies and strengthened our requirements based on discussions with key suppliers. Specific terms regarding circular design and waste minimization, energy management, decarbonization and carbon intensity targets applicable to all (strategic) suppliers were added. For critical categories such as packaging material and agriculture-based raw material, we emphasized requirements such as management of water, biodiversity and adherence to community and traditional rights as well.
Our supply chain procedures were also reviewed. We believe, we have a robust system based on due diligence, risk assessment and periodic review of performance.
Our risk based approach to supplier management triggers self-assessment questionnaires as well as audits, if the supplier due diligence indicates elevated risks, e.g. of human rights violations. In 2022, we are stepping up on especially supplier of agriculture based raw materials, where we recognize human rights may be at risk.
The majority of direct materials and services are currently sourced in Europe (75%). With our recent acquisition of Solera, our product base will not only expand, but the geographies from where we source, especially for the wine category, will become more diversified.
Royal Unibrew has always cooperated closely with suppliers and other partners to improve our products as well as production and process performance. To reach our targets, it is pivotal on the one hand to build on these well-established relations and strengthen them further and on the other hand to identify and establish new partnerships for sustainable development.
- Further develop responsible procurement principles
- Road map for CO2 reduction in transportation, packaging, agriculture and sales refrigeration