Our long-term sustainability strategy
One year into the strategy of being THE PREFERRED CHOICE for the future – leading the beverage industry with respect to climate action and the demand for sustainable products – our focus continues to be on reducing the impact of our operations and products and the entire value chain we are a part of, while at the same time delivering sustainable business growth.
During 2021, we transformed our strategy and objectives into concrete plans and actions to achieve our short- and longterm targets for our strategic pillars:
- Our consumers & customers
- Our products
- Our people
For each of these areas, we have defined 2025 and 2030 commitments complementing the short-term targets set in 2019. We aim for a substantial and industry-leading reduction in carbon emissions from the entire value chain, providing great tasting, healthy, nutritious and responsible products and at the same time enabling a deeply engrained safety and sustainability culture at our company. We monitor our performance closely and diligently to ensure progress and to make timely adjustments if needed.
In 2021, Royal Unibrew’s aspiration of becoming a global leader in sustainable beverages with ambitious decarbonization targets led to the decision of endorsing the Taskforce for Climate-Related Disclosures (TCFD) and committing to the science based 1.5 C climate target aligned with the Paris Agreement. We will be ready for validation of our targets by the Science Based Target initiative (SBTi) within the next 24 months.
Our dedication to take the lead in sustainability was in 2021 also recognized by a 40% improved Sustainalytics ESG rating, where we are now at low risk with an ESG risk rating of 16.9. Compared to our peers, we are amongst the top rated.
Coordinated and wide-ranging efforts are needed in order to succeed with our ambitious sustainability strategy – and we cannot do it alone. We will innovate, develop and engage in partnerships with our key stakeholders, such as strategic suppliers, major customers, consumers, local communities and our employees for mutual benefit. In general, we are on-track to deliver on our short-term 2022/2025 targets as well as on our long-term 2030 targets. Due to COVID-19, the initiative on packaging waste in the Americas, Africa and Asia is delayed.
Achievement highlights in 2021
We continued our sustainability journey in 2021. We implemented our ambitious long-term strategy, we continued our efforts to reduce the footprints and potential impacts for our consumers/customers, our products and our people, while at the same time following up on our short-term targets for 2022/2025.
NO and LOW sugar, calories and alcohol
Royal Unibrew wants to provide choice for the consumers, but we are aware of the global challenges formulated by WHO regarding obesity as well as potential alcohol abuse. We take our responsibility very seriously, in our product labelling, in our marketing of products and not the least when we develop new products. We want to offer products with great taste for every occasion, including a balanced launch of regular, no and low products in different categories.We have codified our marketing policies for promotion, advertising, and sponsorships, which are aligned with legal requirements and guidelines by the international trade associations.Between 2017 and 2021, the volume growth for no and low products significantly out-performed regular products for both soft drinks, beer, cider and RTD. For our CSD, water and energy portfolio, this is also reflected in a 8% general reduction in calory content per 100 ml across our markets during the same period.
96% of our packaging materials is now reusable, recyclable or recycled.48% of our PET bottles are made of recycled material, irrespective of size, design or brand. Several brands are already in 100% such as Egekilde, Faxe Kondi, Novelle and Bauskas Alus.We continue to work on material reduction. In the past 12 years, we have down gauged packaging materials corresponding to 8,600 ton CO2 per year.All our primary packaging contains information on material, recycling and deposit return, which is one of the ways we engage with consumers to close the loop. The effect can be measured by the return rates, where the average return is above 90% and increasing year-on-year.A new filling line for cans is currently being constructed in Faxe. It will support introduction of cardboard solutions enabling replacement or elimination plastics for several of our SKUs already in 2022.
Improving Efficiency year-on-year
Royal Unibrew has succeeded in lowering the carbon intensity of our production year-on-year. From 2015 to 2021, we have had a decrease of 28% kgCO2/hl while having a volume increase of 32%. Our success is a combination of our keen focus on energy efficiency projects at our production sites and change in product mix from 2019 to 2020 and 2021 due to COVID-19 with a shift from the more energy consuming brewing process to less energy consuming soft drinks production.Royal Unibrew’s production facilities are not located in high or extreme water stressed areas. However, as part of our overall ambition to produce with less impact on the surrounding environment water preservation and quality is important. 100% of all wastewater is treated. Reducing water consumption remains a priority and the consumption of water per hl has decreased by 6% from 2015 to 2021.In our recent update of our Supplier Code of Conduct, the demand for environmental & climate efficiencies have been clarified.
Investing in renewable energy – decarbonizing
Joining SBTi (Science Based Target initiative) and endorsing TCFD (Taskforce for Climate-Related Financial Disclosures) in 2021 emphasizes the importance Royal Unibrew puts on decarbonization and managing climate related risks.Two major capex projects were approved in 2021, and the projects are well under way. One project concerns construction of a solar park in Faxe, Denmark, delivering renewable energy to cover approximately 40% of power consumption at our largest site. And the other project relates to converting all heat consumption from fossil based to 100% bio based at our second largest site at Lahti, Finland, by establishing a bioreactor utilizing our byproduct supported with biogas from a nearby landfill.At all other sites we have advanced plans, which total a reduction of at least 48% of our CO2 emissions. Adding current RECs for electricity, it adds up to a total decarbonization of 70%.
Governance and Organizational development
Improving our Sustainalytics ESG score to 16.9 (low risk) from 23.7 in 2020 shows that we are on the right path regarding governance, performance and disclosures. Compared to our peers, we are amongst the top rated.Our policy on business ethics and environment & climate, respectively, were approved by the Board of Directors.Expanding our Growth Leadership Team with Group functions such as Procurement, IT, Legal and CSR to ensure the right balance between commercial and sustainability aspects.80% of our employees are ambassadors for Royal Unibrew and 100% sustainability culture is indicated in our recent employee engagement survey.Collective bargaining agreements cover all eligible employees in Royal Unibrew.