April 24, 2013

Now on Tap: How SABMiller is Brewing a Better Future in Bogota

Today marks the launch of the Landscapes Initiative’s “Reducing Risk: Landscapes Approaches to Sustainable Sourcing” report. The report aims to demonstrate how a landscape approach can benefit businesses and supply chains by mitigating risks. Best practices are highlighted in three case studies, each an example of a unique approach to proactively managing environmental and social risks at the landscape level. The following is the second of these cases.

Spanning 6 continents and crafting over 200 brands of lagers, pilsners, hefeweizens, to name a few, SABMIller is the world’s second highest grossing brewery. To maintain such high profitability, SABMiller has needed to be innovative and think ahead of the curve across all aspects of the business landscape. Though many organizations are just beginning to see the profitability in turning environmental costs into financial investments, for the past 5 years SABMiller has been committed to generating “inclusive growth” which achieves both economic growth and social development through the efficient usage of scarce natural resources.

In order to push for “inclusive growth”, SABMiller developed the Ten Priorities: One Future. The priorities are wide ranging in scope, but all seek to positively impact both the workers and natural resources which SABMiller uses in the production of its products. Within the priorities of “Water” and “Energy & Carbon”, the two biggest goals are to reduce water usage and fossil fuel emissions by 25 percent and 50 percent by 2015 and 2020, respectively. But how best to accomplish this monumental task? SABMiller believes that the most effective and efficient way of achieving their priorities is by providing support for these initiatives from a central point but allowing the planning and action to reflect local needs. Furthermore, SABMiller understands that the only way to reach the aforementioned goals is by looking beyond just the individual hop fields and breweries and seeing how they interact in the broader landscape. These principles, combined with a landscape approach, are best exemplified through SABMiller’s work in Colombia, among other case studies that are featured in the report.

Deforestation and degradation for agricultural purposes near the upstream water catchment negatively impacted water quality coming into the Colombian capital of Bogota. From a business perspective, the declining water quality created additional costs for the Aqueduct and Sewage Company of Bogotá, who passed on the costs to water users, including SABMiller. Recognizing the solution to escalating costs lay in addressing unsustainable practices in the water catchment, Bavaria, SABMiller’s Colombian subsidiary, spearheaded a collaborative effort to identify shared risks and joint solutions to address them. Working with the World Wildlife Fund (WWF) Colombia, The Nature Conservancy, Colombia’s National Parks administration, and the Aqueduct and Sewage Company of Bogotá, Bavaria developed a model to predict the cost of water purification and established a collective fund for stewardship activities to reduce excessive sediment delivery into the Chingaza and Tunjuelo Sumapaz rivers.

Additionally, the partnership worked on mapping the catchment and identifying future user demand among stakeholders to better plan future development of the area.  Due to the partnership’s efforts, over 2 million tonnes of sediment were prevented from entering waterways, saving roughly US$458,000 per year in treatment costs and US$3.5 million per year across the entire water supply system. Because of these cost reductions, the Aqueduct and Sewage Company of Bogota has passed on these savings to companies utilizing the watershed, including Bavaria.  So with a watershed perspective and multi-stakeholder approach, SABMiller has shown that what is good for the environment can also be good for the bottom line.

Related Reading
Olam International and the Triple Bottom Line in Action – Landscapes Blog

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