Ahead of the Ethical Corporation’s Responsible Business Summit 2014, Bacardi Limited’s global technical director, Stuart Lowthian, and global sustainability director, Dave Howson share their views on the future of sustainability and management.
Stuart Lowthian is global technical director at Bacardi Limited. He has played an instrumental role in developing and implementing the company’s environmental management systems since joining the company in 2006. He has previously held technical roles at Allied Domecq, Campbell’s Soup and Unilever.
Dave Howson has worked for Bacardi Limited for more than 15 years, initially as a procurement expert. In his current position as global sustainability director, he has overseen Bacardi Limited’s ‘Good Spirited’ sustainability strategy, which was unveiled in February this year on the Company’s 152nd anniversary. The strategy focuses on four key elements: sourcing, packaging, low impact operations and workforce engagement.
Ethical Corporation: Bacardi Limited launched a new-look sustainability strategy earlier in the year. What are the main drivers for the company’s sustainability commitment?
Stuart Lowthian: We absolutely believe that sustainability is a core part of our business strategy for the future. Issues such as water stewardship, responsible sourcing and so on are not only important from a business growth perspective, but it is the right thing to do as well.
We’re a brand-led business after all and we sell to consumers for whom sustainability is an important issue. Our large retail customers are exactly the same. A reputation for sustainability is key to attracting future talent as well. Potential new recruits go onto the internet and find out about us. Many of them want to be part of a business that puts sustainability at the heart of its operations.
Finally - and I say this with no apologies – becoming more sustainable saves us money. We estimate that our energy efficiency measures have generates cost reductions of $10 million per year. Decreasing our water consumption is also saving us a couple of million dollars. This is good business; it helps drive growth.
Ethical Corporation: What are some of the key focus areas of Bacardi’s sustainability efforts?
Stuart Lowthian: As a beverage company, we use a lot of water. Yet we live in an increasingly resource-constrained world. So high water use may not be acceptable in the future, particularly in some of the world’s more water-stressed areas. We know that we need to address water management issues right now. The same rationale applies to our greenhouse gas emissions, as it does to responsible sourcing. As the largest privately-owned spirits company in the world, we want to be in a leadership position.
Ethical Corporation: Bacardi makes much of its commitment to responsible marketing. Why is this?
Stuart Lowthian: You’re right. Responsible marketing is hugely important to us. We are interested in people enjoying our products, of course. But we obviously don’t want people to drink to excess. It’s not in our interest, and it’s not in their interest either. So promoting responsible consumption is absolutely at the core of what we do. In fact, we’re happy when people drink fewer, but better quality, alcohol products.
Ethical Corporation: Bacardi recently published its sixth annual sustainability report. How would you summarise your approach to reporting on these issues?
Stuart Lowthian: We have always tried to be as open as possible in all our reports. What our stakeholders tell us is that they are very encouraged when we convey not only qualitative case studies but quantitative information as well. You’ll see in all our reports that our metrics and our targets provide a common thread throughout. Each year, we show how we got on with our targets over the previous twelve months - whether we achieved them in fully or only partially – as well as explaining what our targets look like for the year ahead. In summary, we set out to be as transparent as possible.
Ethical Corporation: Presumably sustainability targets play an important part of your engagement strategy within the company too?
Stuart Lowthian: Yes, certainly. Targets enable our people to be clear about what the company’s direction is and where the sustainable business opportunities lie. At an individual level, all Bacardi’s senior managers have clear targets too. Sustainability metrics are built into my salary, for example. Measuring our performance enables us to celebrate our successes as well. While we’ve been fortunate to have plenty of these, of course we have setbacks too. And it’s important to acknowledge this and respond to it. At the same time, we’re sensitive not to overload people with too many requests for information.
Ethical Corporation: What kind of timeline does Bacardi place on its sustainability targets?
Stuart Lowthian: As a company, we set visions for 2017 and 2022. So we have these longer-term goals that make it very clear what the direction of travel is. But backing these up, we have annual targets that enable us to track on-going progress through the year. So far, this strategy has served us well. Since 2006, for example, we have achieved a 54% reduction in our water consumption, and our greenhouse gases are down by a quarter. In the year ahead, we’ll be looking to review our next five-year plan and we’ll move ahead in a similar way, with annual targets.
Ethical Corporation: How is Bacardi’s sustainability strategy driving change in the company’s operations?
Dave Howson: Our Aberfeldy distillery in Scotland provides a great example. We’re introducing a large-scale biomass boiler in the facility, which is going to be taking our emissions at that site down by 90% during the course of the coming year – that’s equal to a reduction of over 5,900 tonnes of carbon dioxide. That’s a big change for us.
Ethical Corporation: Apart from internal targets, how else do you look to communicate with employees on the subject of sustainability?
Dave Howson: Since we’re a global brand with nearly 6,000 employees and more than 200 brands, we’re using an intranet to bring to life actions from across the company. The site has the capability to post news and share what people are doing. We’ve found that video and other visually rich content is a great way of engaging employees. That way, our people in Scotland or Spain, can see how our rum facility in Cataño, Puerto Rico, is recycling concrete or reusing retired rum barrels as woodchips.
As well as piquing the interest of employees, it leads them to try something similar in the facilities where they themselves work.
As part of our Good Spirited sustainability programme, we’re also preparing to roll out a new initiative under the Million Acts of Green banner. It’s based around a calculator on our intranet platform. The calculator computes the benefits derived from individuals’ sustainable behaviours, from washing at low temperatures to cycling to work or car sharing. The idea is to encourage our people to form teams and compete around sustainability themes.
Ethical Corporation: Does Bacardi have an informal network of sustainability advocates within the business?
Dave Howson: Yes. We call them ‘Green Champions’. These are employees who are passionate about green issues and bring this passion into work with them. It’s not a formal position, so they aren’t necessarily involved in operational or environmental functions within the business. At present, we have more than 30 such champions and that will only grow as we have lots more people who are energised and want to get involved.
Ethical Corporation: You will be speaking at the Responsible Business Summit on 19-20 May about sustainability measurement, among other topics. What will be your key message to attendees?
Stuart Lowthian: It’s important to recognise that we don’t measure for measurement’s sake. Instead, we use sustainability metrics to drive actions that improve our overall performance. That’s our approach and it’s served us well. In the same way, when things don’t go as well as we’d hoped, we’re able to interrogate why and make changes for the future.
Stuart Lowthian and Dave Howson will speak at the prestigious Responsbile Business Summit (May 19-20, London) – the biggest European forum on corporate sustainability best practice. The summit brings together over 40 top CEOs and senior business leaders to share their best practice on how to leverage sustainability in driving efficiency and innovation in business. Sainsbury’s, SABMiller, Bupa, TJX, Carillion, Orange, British Land are among the other 250+ already confirmed attendees. For more information – download the Summit brochure here.
Bacardi RBS 2014 Sustainable Strategy
May 2014, London, UK
Make sustainable innovation add to your bottom line. 15+ CEOs and C-Suite from leading multinationals plus heads of CSR will discuss the future of sustainability