Diageo releases ESG Reporting Index

Governance plays a vital role in the company’s ambition to be among the forerunners in the Indian Consumer Product Goods (CPG) industry on ESG and create enterprise value.

Diageo India, the country’s leading beverage alcohol company, released its first ESG Reporting Index outlining the progress made in line with its global 10-year ESG action plan – Society 2030: Spirit of Progress. The Reporting Index is developed in accordance with the ‘Comprehensive’ level of the globally acclaimed GRI Standards (2021) and is focused on sharing the impact across three key objectives of Society 2030: Spirit of Progress including pioneering grain-to-glass sustainability, promoting positive drinking and championing inclusion and diversity. The Index plays a vital role in helping deliver the Company’s mission, managing ESG risks, seizing opportunities and promoting sustainable development.

In addition to the GRI standards, the Index also maps Diageo India’s performance with the UN Sustainable Development Goals (UNSDGs), United Nations Global Compact (UNGC) Principles and the Sustainability Accounting Standards Board’s (SASB) standards for the alcoholic beverage industry which recommends disclosures on material issues. These include energy management, water management, responsible drinking & marketing, packaging lifecycle management and environmental and social impact of the supply chain, among others.

Commenting on the ESG Reporting Index, Hina Nagarajan, Managing Director & CEO, Diageo India said, “I am immensely proud of the progress we have made over the past year on our Society 2030 goals in areas such as Water Stewardship, Waste Management and Circularity, Safety Performance and Corporate Governance. I believe that this Index will enable us to report transparently on our ESG progress as part of our corporate disclosure and further strengthen our commitment and delivery on these critical aspects.’’

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Key highlights of Diageo India’s ESG Reporting Index 2022 include:

Pioneering grain-to-glass sustainability focuses on ensuring that people, suppliers, communities, customers, consumers and society thrive as a result of our business by:

• Preserving water for life: Diageo India is working to replenish more water than it uses in the water-stressed sites across its operating locations in India through wetland restoration, desilting ponds, building check dams, rainwater harvesting and tree plantation. The company has created a capacity for replenishment of 4,62,182 cubic metres of water annually and 84,000 litres/day of potable water under its Water, Sanitation and Hygiene (WASH) program. In addition, Diageo India has improved water use efficiency in distilleries by 25% and in packaging by 22% against the target of 40% by 2030.
• Accelerating to a low carbon world: Diageo India is close to achieving its 2026 goal of Net Zero Carbon status across Scope 1 by reducing emissions from the use of fossil fuel in operations and on Scope 2 emissions associated with electricity purchased. The company has slashed its Greenhouse Gas emissions by 95% versus 2007 and eliminated the use of fossil fuels across its operations by switching to biomass-based energy. Furthering its aspiration to leverage 100% renewable energy across its operations, Diageo India has doubled its in-house solar energy generation capacity from 1.3 MW to 2.6 MW and achieved over 98% renewable energy use status in its operations. The company has also launched an afforestation drive to plant 80,000 trees to offset residual greenhouse gas emissions. Diageo India is supporting raw material and packaging material suppliers to switch to renewable and low-carbon fuel alternatives to reduce scope 3 emissions and is focusing on lowering supply chain emissions by 50% ahead of its 2030 target.
• Becoming sustainable by design: The company is committed to becoming plastic waste neutral. To this effect, Diageo India has collected and recycled 21,000 metric tonnes of plastic waste. In addition, the company continues to focus on increasing the recyclable content in plastics. Our efforts have resulted in 97% of recyclable plastic used in consumer packs. With various initiatives in place, the company is well-positioned to achieve 100% recyclable content in plastics ahead of its target in 2030. Furthermore, our continued efforts to maximise the use of recycled content in packaging, through multiple initiatives across the value chain have helped us achieve a significant milestone of 55% in FY22 against the 2030 target of 60%.

Responsible consumption aims at creating awareness on the hazards of drink driving, the dangers of underage drinking and alcohol misuse. Our brand-led campaigns have reached out to over 11 million consumers with messages of moderation. Some of the key initiatives undertaken during FY22 include:

• Curbing underage consumption by educating 60,000 students.
• Anti-Drink Drive by educating 84,000 consumers on the hazards of drink driving and reducing its incidence through partnerships with 5 Regional Transport Offices in 3 Indian states.
• Delivering messages on moderation to around 55,000 consumers through the DRINKiQ platform.

Championing inclusion and diversity pivots on driving a positive impact across our business, with our partners and communities, celebrating diversity and helping to shape a more tolerant society. Diageo India is working towards attracting and retaining diverse talent while creating an inclusive culture. Some of the key initiatives during FY22 include:

• The company’s ‘Learning for Life’ programme is designed to improve employment and livelihood opportunities for persons from under-represented communities. 925 students (54% women) were trained for the hospitality sector through a National Skill Development Council (NSDC) certified programme.
  More than 50% beneficiaries of our CSR projects are women. The initiative helps drive economic empowerment by enabling them to contribute to society in equal measure to their male counterparts.
• Project Saksham provides long-term support for the employment and development of people with disabilities. 42 people with disabilities across four manufacturing units are a part of this program.
• During the year, 48% of new hires were women and the Inclusion and Diversity score based on an internal employee engagement survey was 89%. In addition, the company aims to have 33% women representation within the organisation and 50% in the Leadership Team by 2025.
• The company introduced market-leading policies and guidelines to nurture inclusive and diverse workplaces including the Family Leave Policy, Domestic & Family Abuse Guidelines, Prevention of Sexual Harassment and Thriving Through Menopause.

Governance plays a vital role in the company’s ambition to be among the forerunners in the Indian Consumer Product Goods (CPG) industry on ESG and create enterprise value. It is the foundation of Society 2030: Spirit of Progress and includes doing business the right way, strategic thinking about the long-term value and impact we create, and the risks and opportunities of our operating environment and business model. To this effect, some of the key initiatives include:

• The Board is comprised of diverse, experienced and seasoned professionals with adequate representation of independent directors including the Chairperson of the Board.
• The newly constituted CSR & ESG Committee of the Board is playing a key role in advising Diageo India on its ambition to Lead India CPG on ESG to create Enterprise Value.
• ESG Governance is being driven through cross-functional teams with representatives from various functions to manage ESG performance across operations. In addition, this team is driving performance based on the 25 identified ESG goals and is presenting the progress to the Board’s CSR and ESG Committee every quarter. Furthermore, the company has started linking the achievement of the ESG goals with the variable compensation paid to the top executives including 6 ESG goals with higher materiality impact.