SUSTAINABILITY REPORT 2020 ENVIRONMENT, Carlsberg Group

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SUSTAINABILITY REPORT 2020 ENVIRONMENT, Carlsberg Group
SUSTAINABILITY
  REPORT 2020
                 ENVIRONMENT,
                 SOCIAL & GOVERNANCE
                 DISCLOSURES
SUSTAINABILITY REPORT 2020 ENVIRONMENT, Carlsberg Group
CARLSBERG GROUP SUSTAINABILITY REPORT 2020   2

INTRODUCTION
Welcome to the                           INTRODUCTION......................................... 3                         FIND OUT MORE

Carlsberg Group’s                        TOGETHER TOWARDS ZERO ................. 9
                                                                                                                                                                    SUSTAINABILITY REPORT
                                                                                                                                                                    + SUMMARY
Sustainability                                    ZERO
                                                                                                                                                                    This full Sustainability Report provides
                                                                                                                                                                    detailed information on our strategy,
Report for 2020                                   CARBON
                                                  FOOTPRINT ...................................... 10
                                                                                                                                                                    governance, partnerships and
                                                                                                                                                                    performance. The Summary includes
                                                                                                                                                                    extracts from this report to provide an
                                                  ZERO
                                                                                                                                                                    overview of our approach and progress.
Here we present an update on                      WATER
progress on our Together Towards                  WASTE ............................................... 20
ZERO programme as we work with                    ZERO
our people and partners to achieve                IRRESPONSIBLE                                                                                 Annual Report
ZERO carbon footprint, ZERO water                 DRINKING ......................................... 27                      Our Annual Report focuses on our
waste, ZERO irresponsible drinking and                                                                                        financial performance. It includes
                                                  ZERO                                                                     information on sustainability that is
a ZERO accidents culture. We explain              ACCIDENTS
                                                                                                                                    most pertinent to investors.
how we do business responsibly to                 CULTURE .......................................... 35
support these goals and our business
strategy. And we provide information     RESPONSIBLE BUSINESS ...................... 41
on sustainability governance.
                                         GOVERNANCE AND
                                         TRANSPARENCY ..................................... 51                                                                      Website
                                                                                                                                                                    Carlsberggroup.com hosts our reports
                                                                                                                                                                    and policies, as well as showcasing
                                                                                                                                                                    stories on our biggest sustainability
                                                                                                                                                                    achievements.

                                                                                                                                 Social media
                                                                                                             We share our latest sustainability           carlsberggroup.com              @carlsberggroup
                                                                                                                      stories on social media
                                                                                                                        throughout the year.              @carlsberggroup                 Carlsberg Group
SUSTAINABILITY REPORT 2020 ENVIRONMENT, Carlsberg Group
Introduction

                                                                                                    CARLSBERG GROUP SUSTAINABILITY REPORT 2020 INTRODUCTION     3

MESSAGE FROM OUR CEO

                                        2020 has been an incredibly              organic decline in operating profit to    DKK 956m to support research, arts,
                                        challenging year for our                 3.1%. We ended the year with              culture and civil society, including
                                                                                 reported revenue of DKK 58.5bn,           DKK 109m specifically for COVID-19
                                        business, our customers and
                                                                                 operating profit of DKK 9.7bn and         relief efforts.
                                        our people all around the                free cash flow of DKK 5.1bn.
                                        world.                                                                             Our purpose is brewing for a better
                                                                                 Despite the challenges posed by           today and tomorrow. Despite the
                                        Through it all, we have remained         COVID-19, our strategic priorities        immense and immediate threat to
                                        resilient, buoyed by our strong          and ambitions remain intact, and we       human health, I am encouraged to
                                        performance over the past few years.     have continued to invest in our           see that the global pandemic has
                                                                                 brands. While volumes sold have           sharpened the world’s focus on the
                                        I would like to thank each and every     declined overall, we have seen            long-term sustainability of the
                                        one of our people for their role in      growth of 1% in our craft & speciality    planet too. We must not lose sight of
                                        continuing to support our business       brews and 11% in our alcohol-free         this overriding objective and I joined
                                        and our customers through these          brews.                                    other leading CEOs in urging
                                        tough times.                                                                       governments to ensure their recovery
                                                                                 Our financial performance and             efforts support the Paris Agreement’s
                                        During the year, our top priority was    SAIL’22 business strategy are             1.5˚C climate goal.
                                        the health and wellbeing of our          underpinned by our ongoing
                                        employees, while at the same time        commitment to responsibility and          At Carlsberg, we have our own
                                        taking the actions required to protect   sustainability.                           ambitious targets to cut carbon
                                        the financial health of our business                                               emissions and water waste, and we
                                        this year and capture long-term          This year, we increased our support       will not let COVID-19 throw us off
       We are on track                  growth opportunities for the future.     for local communities – including the     course. We are on track to meet our
to meet our ambitious                                                            hard-hit hospitality industry – and       2022 targets, and since 2015 we
sustainability targets for              The market decline and prolonged         transformed production lines to help      have reduced our brewery emissions
2022 and we will not let                on-trade closures in many markets        meet unprecedented demand for             by 39% and our water use by 18% for
COVID-19 throw us off course.           led to an 8.4% organic decline in        hand sanitiser. The Carlsberg             every hectolitre of beer produced.
                                        revenue, but our relentless focus on     Foundation, together with the New         From 2015 to 2019, we cut our
                        Cees ’t Hart,
               CEO, Carlsberg Group     cost efficiencies and early              Carlsberg Foundation and the              beer-in-hand emissions by 7%.
                                        intervention enabled us to limit the     Tuborg Foundation, also donated
SUSTAINABILITY REPORT 2020 ENVIRONMENT, Carlsberg Group
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 INTRODUCTION        4

Achieving these targets as we work       accidents culture. Our efforts           steadfast in our commitment to                      ABOUT THIS REPORT
Together Towards ZERO will help us       towards achieving all four ambitions     uphold the principles of the UN                     Our annual reporting suite comprises three
mitigate risks to our business that      play a critical role in the success of   Global Compact. With the creation of                reports: our Annual Report, this Sustainability
will be amplified by climate change      our business now and in the future –     the Carlsberg Sustainability Advisory               Report and a Remuneration Report. Each
in the future. I am pleased to see the   not only by addressing risks but by      Board, we are inviting external                     includes content tailored to its specific audience
increased focus on ESG risks and         creating opportunities for growth.       experts to provide an “outside in”                  and cross-references to the other reports
opportunities by our stakeholders,                                                view to help us stay true to the                    where relevant. Download all the reports at
including investors, which will          Our burgeoning range of alcohol-         values of our founder, challenging                  carlsberggroup.com.
contribute to creating progress at the   free brews has delivered 11% growth      ourselves to constantly strive for
pace and scale needed.                   in sales volumes this year as more       better as we work towards our                       This Sustainability Report describes our
                                         people embrace healthy balanced          ambitious targets.                                  approach and performance on our most
This year, for the first time, we are    lifestyles in the wake of the                                                                material social, environmental and ethical
reporting in line with the               pandemic. We also want consumers         I am convinced that driving progress                issues for the financial year 1 January to
recommendations of the Task Force        to enjoy our alcoholic products          Together Towards ZERO will help                     31 December 2020.
on Climate-related Financial             responsibly and reached our target       Carlsberg keep brewing for a better
Disclosures to better understand and     to include messaging about               today and tomorrow as the world                     It covers all Carlsberg Group subsidiaries in
act on climate-related risks and         responsible drinking on all packaging    recovers from COVID-19.                             which we have a controlling stake and possess
opportunities for our business.          two years early.                                                                             more than 50% of the voting rights, across
                                                                                                                                      31 countries, including 86 breweries and soft
Climate change is also increasing        The success of our business depends      Cees ’t Hart                                        drinks production sites (together referred to as
water risks and our ground-breaking      on our people, and their health and      CEO, Carlsberg Group                                “breweries” in this report) and two malting
water risk scenario analysis with        safety remains our top priority. As                                                          plants. See page 74 for more on our reporting
WWF is helping us target action to       well as supporting them through the                                                          scope and methodology. Selected data on key
sustain essential water supplies –       challenges of the pandemic, we have                                                          performance indicators is subject to limited
both for our breweries and for the       stepped up our efforts to embed safe                                                         assurance by PwC (see page 90).
communities whose water resources        behaviour and continued to drive
we share. Our innovative partnership     down accident rates by a further 19%                                                         This report serves as our annual
with Desolenator will use renewable      across the business in 2020. But this                                                        communication on progress to the UN Global
energy from the sun to create access     progress was overshadowed by the                                                             Compact and as our statutory statement on
to clean water for thousands of          death of a contractor during                                                                 corporate social responsibility in accordance
people in an area of India stricken by   dismantling work at a former                                                                 with section 99a of the Danish Financial
the effects of both climate change       production site. Any accident is one                                                         Statements Act.
and COVID-19.                            too many and this tragedy
                                         strengthens our resolve to get to                                                            Our actions to contribute to the UN Sustainable
ZERO carbon footprint and ZERO           ZERO.                                                                                        Development Goals are signposted in relevant
water waste are key ambitions in our                                                                                                  sections and summarised in the Governance
Together Towards ZERO                    Carlsberg was founded over 170                                                               and transparency section (see pages 59-65).
programme, alongside ZERO                years ago on a strong sense of social
irresponsible drinking and a ZERO        responsibility – and we remain
SUSTAINABILITY REPORT 2020 ENVIRONMENT, Carlsberg Group
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 INTRODUCTION      5

EXTERNAL PERSPECTIVES

The Carlsberg Sustainability Advisory
Board (CSAB) was established and                  I am pleased to be part of                    It has been my utmost                          Since 1847, Carlsberg and
held its first meetings in 2020 to        the CSAB and have the opportunity              pleasure and privilege to be a                 its people have remained true to the
provide additional “outside in”           to follow – and influence – the                part of the CSAB, which has allowed            founder’s heritage, aspirations and
perspectives directly to our CEO and      Carlsberg sustainability journey.              me to contribute my consumer                   responsible way of working. The
senior executives. We invited the                                                        trends expertise for a higher cause.           decade leading to 2030 will
three external members to provide         From my perspective it is a genuine                                                           be dynamic and challenging.
feedback on our sustainability            improvement journey that seeks to              It’s heartening to see how the
approach and performance.                 continuously raise the bar, focusing           Together Towards ZERO initiative               To transform itself whilst securing
                                          on the material issues. Much has               is more than just a CSR campaign;              business continuity and success will
See page 53 to find out more about        been done in recent years, which               but a well-crafted strategic plan              not be an easy task. Well-supported
the CSAB, their feedback and our          allows us to set high ambitions.               to lead Carlsberg towards a more               by a bold company purpose, with its
response.                                 All companies are today truly at an            sustainable future.                            ambitious Together Towards ZERO
                                          inflection point with regard to ESG                                                           sustainability programme and strong
We also completed an update of our        and sustainability, and it is clear to         Looking ahead, I’m hopeful that the            commitment from its leadership and
materiality assessment, analysing         me that Carlsberg is stepping up to            executive leadership of Carlsberg              staff, Carlsberg is ready for the job.
the greatest risks and opportunities      this challenge.                                will be able to set new standards
for our business. This included an                                                       for how business success will be               The CSAB will play its part, acting as
                                                                      Knut Haanaes,      measured – not just by financial               a sparring partner for the leadership
internal survey across a range of                              Professor of Strategy,
functions and geographies, as well                        Lundin Sustainability Chair,
                                                                                         metrics and shareholder value, but             team and helping to stay in sync with
as a series of interviews with external                         IMD Business School      by the organization’s impact on                expectations of the outside world.
stakeholders.                                                                            people and planet.                             Companies must adapt to survive,
                                                                                                                                        and we will challenge the speed and
                                                                                                                 Acacia Leroy,          scale of sustainability implementation,
See page 57 for more about our                                                                       Greenhouse Labs Manager,
materiality assessment and our most                                                                               Deloitte SEA
                                                                                                                                        advising on the tough dilemmas and
material issues.                                                                                                                        trade-offs on the way Towards ZERO.

                                                                                                                                                                       Frank van Ooijen,
                                                                                                                                                    Independent Sustainability Consultant
SUSTAINABILITY REPORT 2020 ENVIRONMENT, Carlsberg Group
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 INTRODUCTION   6

OUR BUSINESS

Carlsberg is one of the world’s       by 1% and alcohol-free brews by        through domestic sales, exports and       together with the New Carlsberg
largest brewery groups. In            11%, although the overall volumes of   licensing agreements.                     Foundation and the Tuborg
                                      beer we sold declined due to the                                                 Foundation, granted DKK 956m to
2020, we produced almost
                                      impact of various COVID-19             We deliver value to our shareholders      support scientific research, arts,
117 million hectolitres (hl) of       restrictions.                          and society, and support sustainable      culture and civil society, including
quality beers and beverages.                                                 development, through the                  over DKK 109m towards COVID-19
                                      More than 40,000 employees help        contribution we make to economies         relief efforts.
Our 100+ consumer brands include      us produce, transport and sell our     around the world (see graphic).
international premium brands such     beer. We have 88 sites in Western                                                See our Annual Report for more
as Carlsberg, Grimbergen, 1664 and    Europe, Eastern Europe and Asia.       Our majority shareholder, the             information on our business and
Tuborg, as well as strong local       Our products reach consumers in        Carlsberg Foundation, uses its            financials at carlsberggroup.com/
brands. In 2020, we increased sales   over 100 countries around the world    dividends for wide societal benefit. In   reports-downloads.
volumes of craft & speciality brews                                          2020, the Carlsberg Foundation,
SUSTAINABILITY REPORT 2020 ENVIRONMENT, Carlsberg Group
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 INTRODUCTION   7

TOGETHER TOWARDS ZERO
At Carlsberg, we are brewing                        brewing for many more years to       issues. It also enables us to capture    irresponsible drinking and ZERO          Development Goals (SDGs) where
for a better today and                              come. See our Annual Report for      opportunities by meeting growing         accidents culture. Identified through    we can have the greatest impact.
                                                    more on our SAIL’22 strategy.        consumer demand for more                 a materiality process (see page 57),
tomorrow. That is our purpose.
                                                                                         sustainable products and healthier       these are the areas where we can         We partner with suppliers, NGOs and
                                                    Our Together Towards ZERO            choisces.                                have the biggest impact on               others in our industry to make
We have been brewing for over 170                   programme helps us mitigate long-                                             sustainable development through our      progress Together Towards ZERO.
years. Doing business responsibly                   term risks and make our business     The programme sets out                   business and our partnerships. We        Our steadfast commitment to doing
and sustainably will help us stay on                more resilient by tackling global    transformative targets to drive action   have aligned our ambitions and           business responsibly underpins
course to achieve our SAIL’22                       challenges such as climate change,   in four priority areas: ZERO carbon      targets to the UN Sustainable            progress in all four priority areas.
strategy, deliver value for                         water scarcity and public health     footprint, ZERO water waste, ZERO
shareholders and society, and keep

1   Beer-in-hand data for 2015-2019. See page 88.
SUSTAINABILITY REPORT 2020 ENVIRONMENT, Carlsberg Group
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 INTRODUCTION   8

SUPPORTING
PEOPLE THROUGH
THE COVID-19 CRISIS
The COVID-19 pandemic has               research, arts, culture and civil
impacted lives and livelihoods          society.
worldwide, with far-reaching health
and economic consequences.              CALLING FOR A LOW-CARBON
                                        RECOVERY
During these unprecedented and          As we work to respond to COVID-19
challenging times, we prioritised the   challenges and reset our business for
health and wellbeing of our people      the future, we know society must
(see page 39) and stepped up efforts    also do the same and we are
to support our customers and            determined to play our part in
communities.                            supporting a low-carbon recovery.

HELPING COMMUNITIES STAY                Together with the Science Based
STRONG                                  Targets initiative and 150 other
We transformed brewery production       leading businesses, we called on
lines to produce alcohol for hand       governments around the world to
sanitiser. We donated equipment and     align their COVID-19 recovery
alcohol-free beverages to support       efforts with the latest climate
healthcare workers. And we ran          science. We also joined business
campaigns to support the hard-hit       leaders and investors in urging the
hospitality sector. See map for local   European Union to put the European
examples.                               Green Deal at the core of its recovery
                                        package.
We made corporate contributions
and Carlsberg teams around the
world raised funds for local
organisations. In addition, the
Carlsberg Foundation, together with
the New Carlsberg Foundation and
the Tuborg foundation, donated DKK
109m during the crisis to support
SUSTAINABILITY REPORT 2020 ENVIRONMENT, Carlsberg Group
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 INTRODUCTION   9

TOGETHER
TOWARDS ZERO
Our ambition is to achieve ZERO
carbon footprint, ZERO water
waste, ZERO irresponsible drinking
and a ZERO accidents culture. We
are making good progress towards
our targets by working in partnership
Towards ZERO.

IN THIS SECTION
ZERO carbon footprint ..................................... 10
ZERO water waste ............................................. 20
ZERO irresponsible drinking ........................... 27
ZERO accidents culture .................................... 35

                                                                    MAKING OUR BEER
                                                                    MORE SUSTAINABLE
                                                                    Watch our video to find out how our Together Towards ZERO
                                                                    programme helps us produce our beer more sustainably, enables
                                                                    consumers to enjoy it responsibly and keeps our people safe.
SUSTAINABILITY REPORT 2020 ENVIRONMENT, Carlsberg Group
ZERO Carbon Footprint

                                                                                                                   CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT                           10

                         ZERO
                         CARBON
                         FOOTPRINT

The world is facing a climate                          glass – what we call beer-in-hand
                                                       emissions – by 30% by 2030 (from
emergency that threatens
                                                       2015 levels).
people, the environment and
our business.                                          Beyond our own operations, we
                                                       work with partners who supply our
Governments, businesses and                            ingredients, packaging, logistics and
individuals must take action now to                    refrigeration. Together, we are
help prevent the worst effects of                      supporting sustainable agriculture,
climate change. We are determined                      making the transition to lower-
to do our part by cutting the carbon                   carbon transport and cooling, and
footprint of our operations and our                    creating packaging solutions like our
entire value chain.                                    Snap Pack and Green Fibre Bottle.

Our ambitious targets, approved by                     Extreme weather and shifting rainfall
the Science Based Targets initiative                   patterns as a result of climate
in 2017, are in line with the latest                   change pose a direct risk to our
climate science to limit global                        brewing operations and to the crops
warming to 1.5˚C. In 2020, we                          and water we need to make our
joined other leading companies in                      products. This year, we signed up to
urging governments to ensure their                     the Task Force on Climate-related
COVID-19 recovery efforts align with                   Financial Disclosures and are
the Paris Agreement’s 1.5˚C goal and                   applying its recommendations to
calling for European Union leaders to                  better understand and report on
embrace a 55% carbon emissions                         these risks. We were also included in
reduction target by 2030.                              the CDP A List of global corporate
                                                       leaders for transparency and action
We are making strong progress on                       on climate risks and opportunities.
our 2022 targets to switch to 100%
renewable electricity, eliminate use
of coal and halve carbon emissions
at our breweries as we drive progress
towards ZERO carbon brewing by
2030. Eliminating emissions from
our breweries will help us cut our                       7.2 & 7.3    13.1 & 13.3   17.16 & 17.17    12.2, 12.5,
value chain footprint from field to                                                                 12.6 & 12.9
                                                                       See SDG index, page 59.
1   Emissions from driving a car 20,000 km a year at                                                                         We have discontinued our target specifying 30 supplier partnerships as collaboration
    a rate of 130 g CO2/km = 2.6 tonnes CO2/year                                                                             with suppliers has become such an integrated part of our approach. See page 16.
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT       11

                                                                                                                                        Our farm is one of the leading farms in the
                                                                                                                                Yaroslavl region and has grown brewing barley for
                                                                                                                                several years. Thanks to the Carlsberg Group, our
                                                                                                                                experience turned out to be a success: the harvest
                                                                                                                                almost tripled within three years. The barley must meet
                                                                                                                                specifications and grows under regular monitoring that
                                                                                                                                allows it to reach high quality. Carlsberg Group
                                                                                                                                specialists provide consultations and always assist us
                                                                                                                                with expert advice.”
FEATURE: ZERO CARBON FOOTPRINT IN ACTION                                                                                           Nikolay Minakin, Head of Kurdumovskoye farm, Yaroslavl, Russia

PROMOTING SUSTAINABLE AGRICULTURE
THROUGH CROP INNOVATION
Scientists at the Carlsberg Research     ground-breaking research into         resilient traits such as greater         integrate those varieties into our beer   current elite varieties. Their yield is
Laboratory in Copenhagen have            climate-tolerant crops. In the last   tolerance to drought and heat            supply chain.                             approximately 10% higher than
been exploring the boundaries of         decade, we have invested more than    waves, deeper roots and the ability                                                varieties developed locally in Russia.
crop science and perfecting the art of   DKK 50m in research on breeding       to grow in saline soils.                 Barley bred to produce higher yields
brewing since 1876. Today, they are      new sustainable and climate-                                                   also has a lower climate impact           We set requirements for these
turning their attention to sustainable   tolerant raw materials, as well as    We are now partnering with local         because the same amount can be            farmers on fertiliser use and hold
agriculture to reduce climate risks in   advances in hop, yeast and brewing    breeders in Australia to see how the     grown using less fertiliser, which        field days to prepare them to harvest
our supply chain.                        processes.                            new crop varieties cope in extreme       takes a lot of carbon to produce. In      the benefits of future innovations
                                                                               drought and adverse soil conditions.     Russia, the 70 farmers who supply         from our lab.
Barley is an essential ingredient for    Our scientists have isolated more     The varieties that grow best will form   our Baltika breweries are using
our beer – and the focus of the lab’s    than 40 candidates for barley         a pipeline for barley breeding, and      barley varieties developed by our lab
                                         varieties that display climate-       we will work with partners to rapidly    that are more sustainable than
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT     12
           ZERO
           CARBON
           FOOTPRINT

ELIMINATING                                                 sites to track progress. In 2020,
                                                            carbon emissions totalled 563,000
                                                                                                                         SWITCHING TO RENEWABLE
                                                                                                                         ENERGY
BREWERY                                                     tonnes.                                                      We are well over halfway towards our
                                                                                                                                                                                                                  WHAT WE
EMISSIONS                                                                                                                goal to source 100% of electricity for
                                                                                                                                                                                                                  MEAN BY ZERO
                                                            We are switching to 100% renewable                           our breweries from renewable sources
Our global Environmental Policy
supports our progress towards ZERO
                                                            electricity, eliminating use of coal and                     like the sun and wind by 2022. To                                                        CARBON
                                                            adopting best practices and advanced                         ensure a robust approach to the
carbon emissions from our breweries.                        technologies in production processes.                        measurement and use of renewable
                                                                                                                                                                                                                  FOOTPRINT
It sets out our commitment to robust                                                                                     electricity, we are members of the                                                       Brewery emissions: We aim to
environmental standards with                                In 2020, we reduced relative emissions                       RE100, and apply their technical                                                         eliminate carbon emissions from our
particular focus on energy and                              at our breweries by 12% to 4.3 kg CO2                        criteria when working with renewable                                                     88 sites – including breweries and
emissions as well as water, waste and                       per hl from 4.9 kg CO2 per hl in 2019.                       electricity – see overview of approved                                                   malting sites – by 2030. To help us
packaging.                                                  That is a 39% reduction since 2015,                          renewable electricity types below. In                                                    drive progress towards this absolute
                                                            well on the way to our target of 50%                         2020, we reached 64% (up from 56%                                                        target and improve production
We manage our 86 breweries and two                          by 2022. Overall, across our breweries                       in 2019). Our breweries in China                                                         efficiency on the way, we aim to
malting sites as part of our integrated                     and malting sites we have cut our                            achieved 100% this year, joining all our                                                 halve emissions per hectolitre (hl) of
supply chain, using best practice                           absolute emissions by 33% since 2015.                        breweries in Western Europe, which                                                       production from our 86 breweries –
environmental management systems                            This is a saving of 283,000 tonnes of                        achieved this target several years ago.                                                  including breweries, soft drink and
to drive continuous improvement.                            CO2, equivalent to taking 109,000                                                                                                                     water plants, but excluding malting
These systems are certified to the ISO                      cars off the road for a year1.                               Most of our renewable electricity                                                        sites – between 2015 and 2022.
14001:2015 standard at 79 of our                                                                                         comes from the grid through the
breweries, and energy management                            We are on course to eliminate                                purchase of renewable electricity                                                        Both targets include Scope 1 and 2
systems at 19 sites are also certified                      emissions from our breweries and                             certificates, totalling 570,077 MWh                                                      emissions and exclude owned
to ISO 50001.                                               malting sites by 2030.                                       in 2020. At eight of our sites, we                                                       logistics and distribution, which are
                                                                                                                         generate renewable power from on-                                                        included in our beer-in-hand target.
We collect environmental data from                                                                                       site solar panels. We are also
across all our breweries and malting                                                                                     exploring options to buy renewable                                                       Beer-in-hand emissions: We aim to
                                                                                                                                                                                                                  reduce our value chain (beer-in-
                                                                                                                         RE100 OPTIONS FOR RENEWABLE ELECTRICITY                                                  hand) emissions per hl of beer
                                                                                                                         To achieve 100% renewable electricity, a company                                         produced by 15% by 2022 and 30%
                                                                                                                         may choose from the following options:
                                                                                                                                                                                                                  by 2030 from our 2015 baseline.
                                                                                                                         Self-generated electricity                                                               These reductions cover Scope 1, 2
                                                                                                                         1. Generation from installations owned by the company
                                                                                                                                                                                                                  and 3 emissions from: growing and
                                                                                                                         Purchased electricity                                                                    malting raw materials; brewing,
                                                                                                                         2. Purchase from on-site installations owned by a supplier
                                                                                                                                                                                                                  packaging, distributing, and chilling
                                                                                                                         3. Direct line to an off-site generator with no grid transfers
                                                                                                                         4. Direct procurement from offsite grid-connected generators
                                                                                                                                                                                                                  our products; and handling our
                                                                                                                         5. Contract with suppliers (green electricity products)                                  packaging waste after use.
                                                                                                                         6. Unbundled energy attribute certificate purchase
                                                                                                                         7. Other options

1 Emissions from driving a car 20,000 km a year at a rate of 130 g CO2/km = 2.6 tonnes CO2/year.
* 2020 data within PwC's assurance scope. 2015-2019 data assured in prior years (see previous sustainability reports).
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT       13

electricity directly from wind and solar   certificates. In Switzerland, 52% of all
producers through power purchase           heat generation came from renewable
agreements.                                fuels, including 27% from ethanol
                                           extracted while producing our alcohol-
Our site at Farris in Norway achieved      free beer.
zero carbon emissions in 2020,
switching from fuel oil to renewable       TRANSFORMING BREWING
electricity. Globally, eight of our        EFFICIENCY
breweries are now carbon-neutral,          Our breweries continued to break new
powered by 100% renewable electricity      boundaries for efficiency and
and thermal energy.                        innovation in 2020.

By targeting 100% renewable                In Asia, we cut the amount of heat our
electricity for brewing, and through       breweries use by 13% from 2019
our membership of the RE100, we            through investments in bottle washing
aim to encourage our industry peers        and energy recovery systems.
and suppliers to make the same switch
to renewables.                             In Western Europe, we installed new
                                           brewhouse heat recovery systems in
ELIMINATING COAL                           Estonia and Lithuania that cut heat
In 2020, we converted a coal-fired         use by over 10%.                           CASE STUDY
boiler at our Okocim brewery in
Poland to run on biogas generated on       In Eastern Europe, we added                OUR SCIENTISTS PURSUE
site and, if necessary, natural gas.
That leaves just one site where we still
                                           recuperative heat exchange units in
                                           Ukraine and reduced brewhouse              TOMORROW’S ZERO CARBON
use coal, our Aurangabad brewery in
India. Plans to convert the coal-fired
                                           evaporation in Russia.
                                                                                      SOLUTIONS
boiler at this site to run on biomass      Climate and water risks to our             Post-doctoral researchers at the Carlsberg           energy-saving solutions at our breweries
have been delayed due to an extended       business are connected and so are          Research Laboratory are using next-generation        without disrupting current production. The
COVID-19 lockdown in India, but we         many of the solutions. For example,        technology to bring us a step closer to a ZERO       scientists are already trialling interventions
aim to complete this in 2021.              the new advanced water-recycling           carbon future.                                       that could help our brewery in Ukraine cut
                                           plant at the Fredericia brewery in                                                              energy use by up to 15%.
Many of our breweries have replaced        Denmark, operational in 2021, will         In 2020, the talented members of our Young
coal and natural gas with innovative       halve water consumption, and biogas        Scientists Community created a “digital twin”        They are also evaluating early-stage
technology to harness carbon-neutral       generated from the wastewater              brewery in close collaboration with colleagues       technologies with the potential to save energy
thermal energy. In 2020, 28 breweries      treatment process will replace around      from our integrated supply chain and Baltika in      and carbon at our breweries globally, including
made use of biomass, biogas                10% of the site’s natural gas              Russia. This unique virtual tool will enable us to   solar-assisted brewing, heat pump integration
extracted from on-site wastewater,         consumption.                               simulate new ideas, brewing techniques and           and energy from spent grain.
renewable district heating or biogas
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT     14

CUTTING OUR                            In 2020, we conducted our most
                                       extensive analysis yet of our global
BEER-IN-HAND                           value chain carbon footprint, based     We have worked closely with Carlsberg                               REPORTING ON
EMISSIONS                              on the European Commission              on their supply chain emission                                      CLIMATE-
                                       guidelines and with support from the
                                                                               calculation model since 2016, and the
We look beyond the brewery gates
to understand and reduce the climate
                                       Carbon Trust. Suppliers representing
                                                                               work we did this year sets new                                      RELATED
                                       more than 60% of our spend provided
impact of our products across the      in-depth product-level data on the      standards for Scope 3 emissions                                     FINANCIAL RISKS
value chain – from growing and         emissions they generated to provide     accounting and measurement. The                                     AND
malting grain to brewing, packaging,                                           model we have developed together
transporting and cooling our
                                       ingredients, packaging and transport
                                       for our beer.
                                                                                                                                                   OPPORTUNITIES
products. We call this our beer-in-
                                                                               uses very granular data for each value
hand emissions.                                                                chain step. This enables Carlsberg to                               Recognising the increasing risk of climate
                                       The results showed that our value
                                       chain emissions in 2019 totalled 6.8    track, measure and reduce its Scope 3                               change to businesses and communities
MEASURING OUR VALUE CHAIN              million tonnes of CO2-equivalents       emissions on a market, regional and                                 across our regions, in 2020 we
FOOTPRINT                                                                      global level with great precision, which                            broadened our analysis and reporting in
                                       (CO2e). For every hectolitre of our
We cannot manage what we do not                                                                                                                    this area by aligning with the
                                       beer that consumers enjoyed, it took    puts the company at the forefront of                                recommendations of the Task Force on
measure. We conduct in-depth           56.4 kg of CO2e to do everything
assessments of our carbon emissions
                                                                               Scope 3 accounting.”                                                Climate-related Financial Disclosures
                                       needed to put the beer in their hand.
across the value chain every three                                             Myles McCarthy                                                      (TCFD).
                                       That is 7% less than in 2015, putting
years, using leading best practices    us almost halfway towards our 2022      Director Implementation, The Carbon Trust
and the Greenhouse Gas Protocol.                                                                                                                   Using the TCFD reporting framework, we
                                       goal of 15%. We will use the data to
                                                                                                                                                   will continue to improve our
                                       help identify and implement the
                                                                                                                                                   understanding and disclosure of the
                                       actions needed to achieve our target.
                                                                                                                                                   medium- and long-term impact of
                                                                                                                                                   climate change on our business.

                                                                                                                                                   Our first disclosure according to the
                                                                                                                                                   TCFD reporting framework is included in
                                                                                                                                                   our 2020 Annual Report (page 36),
                                                                                                                                                   available at carlsberggroup.com/
                                                                                                                                                   reports-downloads.

                                                                                                                                                   It provides a brief summary of our
                                                                                                                                                   governance, strategy, risks, metrics and
                                                                                                                                                   targets in relation to climate change with
                                                                                                                                                   links out to more information in this
                                                                                                                                                   Sustainability Report and elsewhere.
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT      15

The graphic illustrates our progress
across each stage of the journey
from field to glass. It shows that we
have significantly cut carbon from
our brewing and cooling, and made
some progress on packaging and
transport. However, emissions
generated from agriculture – over
which we have least control – have
risen slightly.

Methodologies for value chain
footprinting continue to develop, and
in our latest analysis we updated our
2015 baseline to reflect the
improved methodology, greater
availability of primary data, and
additional sector guidance on both
calculations and emissions factors
from the Product Environmental
Footprint Category Rules (PEFCR)
and the Beverage Industry
Environmental Roundtable (BIER).
This resulted in a 12% increase in our
2015 baseline.

THE SCIENCE BEHIND OUR CARBON                 Industry GHG Emissions Sector Guidance           We were early adopters of the product             reduction target – exceeding the 67% required
ACCOUNTING                                    (Version 4.1), developed by the Beverage         environmental footprint guidelines, developed     by the Science Based Targets initiative.
We conduct a comprehensive analysis of our    Industry Environmental Round Table (BIER).       by the European Commission for measuring a
                                                                                                                                                 Adopting globally recognised best-practice
global beer-in-hand carbon footprint every                                                     product’s environmental footprint. And we
                                              Detailed data from our suppliers enables us to                                                     standards gives us confidence that we are
few years, using stringent processes that                                                      apply the relevant parts of these specific
                                              track emissions by market down to product                                                          gathering science-based information to inform
enable us to identify and conduct reduction                                                    product rules for beer to measure our
                                              group level. In total, we collect primary data                                                     our efforts to reduce our carbon footprint and
activities specific to each market.                                                            corporate value chain footprint.
                                              for more than 60% of our spend, covering our                                                       mitigate climate-related risks to our business.
We adhere to the rigorous GHG Protocol for    wide-reaching value chain from raw materials     Seventy-five percent of our Scope 3 emissions
                                                                                                                                                 Read more about the methodology on page 88.
Scope 1, 2 and 3 emissions and the Beverage   to point of sale.                                are covered by our 2030 beer-in-hand carbon
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT   16

PARTNERING TO SHRINK OUR                  Together with O-I Glass, a supplier of   Our own packaging – including glass       that can make them last three times
SHARED FOOTPRINT                          our Western European markets, we         and plastic bottles, cans, kegs,          as long.
With 87% of our value chain carbon        localised production of our Grimbergen   plastic wrap and cardboard boxes –
footprint outside our operations and      bottles in France at an energy-          generates 41% of our beer-in-hand         Many of our breweries support local
direct control, partnering is key to      efficient plant. The bottles are made    emissions. This is by far the largest     initiatives to boost recycling rates for
reducing our beer-in-hand emissions.      using almost 80% recycled broken         part of our value chain carbon            packaging. In 2019, Baltika launched
                                          glass and delivered to our nearby        footprint.                                19 partnerships to operate 10,000
We collaborate with partners who          Kronenbourg brewery by train, a                                                    recycling containers in 50
supply our ingredients, packaging,        lower-carbon emission alternative to     To cut the climate impacts of             municipalities across Russia. And in
transport and refrigeration on            trucks.                                  packaging, we invest in innovation        2020, the powerhouse brand
efficiencies and innovation that drive                                             and promote reuse and recycling. We       expanded its trial with retailer
down their carbon footprint and ours.     Some of our key suppliers have           are also developing industry-leading      VkusVill to install vending machines
For example, partnerships are helping     adopted their own carbon-cutting         solutions to reduce our plastic           in St. Petersburg and Moscow stores
us drive progress in areas such as        roadmaps that support our 2022 and       packaging, which can have a wider         where consumers can drop off used
sustainable packaging and switching       2030 targets to reduce our beer-in-      environmental impact, particularly if     cans and plastic bottles – the first
to renewable energy.                      hand footprint. Examples include two     it ends up in the world’s oceans (see     initiative of its kind in the country.
                                          major beverage can suppliers, Ball and   feature on next page).
Originally, we set a fixed target to      Crown.                                                                             We are also experimenting with
enter into 30 partnerships with                                                    Aluminium cans are the containers         product packaging to reduce our
suppliers to reduce our shared carbon     In 2020, Ball completed two long-        we use most for our products and          carbon footprint. With our supplier
footprint by 2022. Partnerships have      term renewable energy agreements         account for the biggest share of our      DS Smith, we are testing stronger,
now become such an integral part of       for 93.4 MW of new wind energy           emissions from packaging. This year,      thinner cardboard boxes that could
our approach that we have decided to      and secured additional Guarantees of     we partnered with suppliers to            cut raw material use and related
stop tracking the number of               Origin to address 100% of its energy     continue reducing their weight, use       emissions from a multipack by
partnerships and focus on their impact.   load in Western Europe moving            more recycled content and improve         around 20%. In 2020, we started
                                          forward. Meanwhile, Crown has            recycling rates after use. Our beer-      trialling the boxes at our brewery in
This year, we were able to obtain         launched new goals to halve its          in-hand analysis showed we cut            Falkenberg, Sweden.
primary data input on greenhouse gas      operational emissions and source         emissions from cans by around 17%
emissions from suppliers representing     60% of its electricity from renewables   from 2015 to 2019 – a testament to
more than 60% of our spend to inform      by 2030.                                 the impact we and our suppliers can
our beer-in-hand carbon footprint                                                  have when we work together.
analysis.                                 RETHINKING PACKAGING
                                          High-profile campaigns and new           Around the world, we support well-
More than 98 companies in our supply      regulations have put the                 established and efficient bottle return
chain have joined the Science Based       environmental impacts of packaging,      systems for consumers with high
Targets initiative, 12 of which account   and particularly plastics, in the        collection rates. In some markets we
for more than 13% of our total carbon     spotlight.                               wash and refill returnable glass
footprint and have a significant direct                                            bottles. And in Malaysia we
impact on our beer-in-hand targets.                                                implemented a protective coating
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT    17

FEATURE

SPOTLIGHT ON PLASTICS
We are continuing our efforts to         packs of cans together. It is now in     The Green Fibre Bottle, made from       launched a trial in Sweden and            savings will total 200 tonnes of CO2e
reduce, recycle and avoid plastics.      use in Denmark, Estonia, France,         sustainably sourced wood fibre, has     the UK.                                   a year. Meanwhile, in 2020, Bon
                                         Germany, Latvia, Lithuania and the       the potential to offer a more                                                     Aqua in Finland launched 100%
In 2020, we partnered with suppliers     UK.                                      sustainable alternative not only for    We are also innovating in our use of      recycled PET bottles, joining our
to extend our revolutionary Snap Pack                                             beer, but for other drinks and liquid   recycled plastics for product             Imsdal brand in Norway, which
technology to three more markets.        We are getting closer to a “paper”       products. We were joined by other       packaging. We now use shrink film         moved away from virgin plastic in
Launched in the UK in 2019, Snap         beer bottle that can be launched         leading companies in the project, all   made of 100% recycled plastic in          2019. And we launched the first PET
Pack cuts plastic by up to 76% per       commercially, with a trial planned for   of which have made good progress        Denmark, Finland, France, Norway,         bottle-recycling machine in Belarus
multipack by replacing plastic shrink    2021 pending regulatory approval         this year: Coca-Cola has launched its   Poland and Sweden. For the Karhu          together with supermarket and waste
wrap or rings with glue dots that hold   with our technology partner, Paboco.     first prototype and Absolut has         brand in Finland alone, carbon            collection partners.
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT    18

PROMOTING SUSTAINABLE                    The energy used to malt grain for        making up around 70% of the fleet         Russia, Sweden, Switzerland and          From 2021, we will introduce energy
AGRICULTURE                              our beers – by our suppliers and at      globally.                                 Ukraine.                                 management systems in all
The second biggest share of our          our own malting plants in Russia –                                                                                          replacement fridges, where feasible,
value chain climate impact – 25% of      accounts for around 3% of our total      Outsourcing most of our outbound          CUTTING IMPACTS FROM                     to reduce electricity use and related
emissions – comes from growing,          value chain emissions. Between           logistics enables us to make              COOLING                                  carbon emissions. This will require
malting and processing ingredients       2015 and 2019, we reduced carbon         efficiency gains, including higher fill   Most of our products are best            additional investment from us, but it
for our beers and other beverages.       emissions from malting processes by      rates, by transporting our products       enjoyed chilled. The fridges and beer    will save our customers energy and
                                         19% for every hectolitre of beer         alongside others. We set clear            coolers used for our beer and            money – and help us reach our 2022
Our business depends on a long-          produced. This was achieved through      sustainability requirements in our        beverages in bars, restaurants and       and 2030 targets.
term, sustainable supply of crops,       decarbonising efforts at our own         contracts with logistics providers. For   retail stores account for 9% of our
mainly barley and rice. We generally     plants and by our supplier Viking,       example, they must train drivers to       beer-in-hand footprint.
purchase barley as a commodity.          which has converted a large part of      maximise fuel efficiency, and track
While we only work directly with         its heat generation to sustainable       fuel use and emissions.                   We work closely with two major
farmers in one country, Russia, we       biomass.                                                                           suppliers, Frigoglass and Klimasan,
support sustainable agriculture more                                              In some markets, where we operate         to adopt the latest market
broadly in several ways.                 MAKING OUR LOGISTICS                     our own fleets, we use telematics         technologies and solutions, switching
                                         SMARTER                                  programmes to monitor and improve         to more energy efficient fridges and
We invest in next-generation crops       The logistics of getting our beer from   our drivers’ awareness on the road.       refrigerants that have a lower
through the work of scientists at the    breweries to warehouses and on to        These have helped to cut emissions        climate impact. This proactive
Carlsberg Research Laboratory. Their     bars, restaurants and retailers by       by improving fuel efficiency, as well     approach, combined with more
ground-breaking efforts, highlighted     road, rail and sea account for 12% of    as reducing accidents and vehicle         electricity from renewable sources in
on page 11, include developing           beer-in-hand emissions.                  wear and tear. In 2021, new route         national grids, reduced our
climate-tolerant and high-yield                                                   planning software will reduce our         refrigeration emissions by 21% from
varieties of barley.                     Emissions from transport decreased       road mileage, further cutting             2015 to 2019.
                                         by 12% between 2015 and 2019. We         emissions. In 2020, we took delivery
Our beer-in-hand analysis enables        plan to take advantage of improving      of the first of our fleet of 26-tonne     The fridges and beer coolers we
us to identify drivers of emissions,     technology to make our fleet more        electric trucks in Switzerland – the      provide to our retail customers last
which we will work on factoring into     sustainable.                             first of their kind manufactured by       around eight years on average. To
our purchasing decisions in the                                                   Renault Trucks.                           minimise their carbon footprint, all
future. For example, higher-yield        At our warehouses, whenever we                                                     new models we buy must use LED
crops can significantly reduce carbon    replace machinery such as forklift       Even at its most efficient, transport     lighting and refrigerants such as
emissions from agriculture. This         trucks we aim to switch from natural     by road is a relatively high-carbon       hydrocarbons that have a lower
means we may buy grain from              gas and diesel to electric models,       solution. We therefore look for           climate impact than
regions that produce higher yields       and from lead acid batteries to more     opportunities to transport products       hydrofluorocarbons. In 2020, 97% of
even if this involves transporting our   efficient lithium ion batteries. To do   by train wherever national rail           fridges and beer dispense equipment
raw ingredients over longer              this, we also need to invest in          networks allow. In 2020, we               purchased through our central
distances, since it reduces overall      suitable infrastructure for charging     continued to use rail in Denmark,         procurement team used low-
carbon emissions.                        electric vehicles. We now have over      France, Kazakhstan, Norway,               climate-impact hydrocarbons & LED
                                         1,550 electric powered forklifts,                                                  lightning.
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO CARBON FOOTPRINT          19

ZERO CARBON FOOTPRINT: OUR PROGRESS & TARGETS
PLANNED ACTIONS FOR 2020                                          STATUS                PROGRESS IN 2020                                           PLANNED ACTIONS FOR 2021                               2022 TARGETS 1              2030 TARGETS

Breweries

                                                                                        We converted a coal-fired boiler at Poland’s Okocim
Phase out coal at our two remaining coal-fuelled                                        brewery to natural gas. Plans to convert the coal          Convert the boiler at our Aurangabad brewery in        Zero coal at our
sites.                                                                                  boiler in India to biomass were delayed due to             India – our last remaining use of coal – to biomass.   breweries
                                                                                        COVID-19.

                                                                                                                                                   Explore additional on-site generation and power
Increase use of renewable heat and electricity through
                                                                                        We increased electricity from renewables to 64% (up        purchase agreements to secure renewable electricity
sourcing renewable power (such as international                                                                                                                                                           100% electricity from
                                                                                        from 56% in 2019) primarily by investing in more           for all regions for 2022.                                                          Zero carbon emissions at
renewable energy certificates and power purchase                                                                                                                                                          renewable sources at our
                                                                                        renewable energy certificates. 28 breweries now                                                                                               our breweries
agreements), biogas generation and on-site solar                                                                                                                                                          breweries
                                                                                        operate fully or partly on biomass or biogas.              Explore increasing use of renewable electricity for
projects.
                                                                                                                                                   heating.

                                                                                                                                                   Increase use of biogas from wastewater to replace
                                                                                        We upgraded equipment at breweries in China,               natural gas.
                                                                                                                                                                                                          50% reduction in carbon
                                                                                        Estonia, Lithuania, Russia and Ukraine, and reduced        Explore low-carbon alternatives with heat and gas
Upgrade equipment to improve heat recovery.                                                                                                                                                               emissions at our
                                                                                        heat usage where possible by optimising production         suppliers to reduce carbon emissions.
                                                                                                                                                                                                          breweries
                                                                                        processes.                                                 Support research on new renewable heat
                                                                                                                                                   technologies.

Beer-in-hand

                                                                                        We completed a detailed analysis based on supplier         Engage with major packaging and malt suppliers to
                                                                                        input in line with the Greenhouse Gas Protocol (and        support their transition to renewable electricity.
Update beer-in-hand carbon footprint analysis using                                                                                                                                                       15% reduction in beer-in-
                                                                                        European Commission guidelines specific to beer).          Continue to pursue reductions in carbon emissions
2019 data.                                                                                                                                                                                                hand carbon footprint
                                                                                        This showed a 7% emissions reduction per hl from           in the areas identified for all steps of the value
                                                                                        2015 to 2019.                                              chain, from growing crops to packaging,
                                                                                                                                                   transporting and chilling our beer.
                                                                                                                                                                                                                                      30% reduction in beer-in-
                                                                                                                                                                                                                                      hand carbon footprint
                                                                                        We engaged with refrigeration partners on low-
                                                                                        climate-impact cooling, with farmers in Russia to
Support local market teams with tracking and                                                                                                       Introduce energy management systems in all
                                                                                        improve barley yields, with suppliers to extend                                                                   100% low-climate-
reducing beer-in-hand carbon footprint and engaging                                                                                                replacement fridges, where feasible, to reduce
                                                                                        sustainable packaging solutions to more markets, and                                                              impact cooling
with suppliers to reduce joint carbon footprint.                                                                                                   electricity use and related carbon emissions.
                                                                                        with logistics partners to improve the efficiency of our
                                                                                        product transport.

      Fully                Partially           Not
      achieved             achieved            achieved

1   We have discontinued our target specifying 30 supplier partnerships as collaboration with suppliers has
    become such an integrated part of our approach. See page 16.
ZERO Water waste

                                                                                     CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO WATER WASTE   20

                       ZERO
                       WATER
                       WASTE

Water shortages directly                  hectolitre (hundred litres) of beer.
affect communities and our                We have already achieved an 18%
business.                                 reduction through best practice
                                          efficiency and water treatment
Many parts of the world face              upgrades at our breweries. And we
increasing water scarcity challenges      will accelerate progress with state-
as the effects of climate change          of-the-art water-recycling
trigger droughts and alter rainfall       technology.
patterns. As soon as 2025, two
thirds of people worldwide may be         In 2020, we updated our water risk
dealing with water shortages. And by      assessment for 81 of our 86
2050, almost half of global GDP           majority-owned breweries and
could come from areas facing high         finalised a ground-breaking scenario
water risk.1                              analysis with WWF to prepare for
                                          future risks to our business. The
Water is an essential ingredient in       findings will help us prioritise actions
our products, and other key               as we work with partners to protect
ingredients, such as grain and hops,      and improve water supplies for the
need it to grow. Put simply, no water     communities whose resources we
means no beer. With 17 of our             share. We disclose our management
breweries located where water risk is     of water risks to the CDP and
high, our focus on pushing the            achieved an A- rating in the latest
boundaries of efficiency and              assessment.
technology is both a business and a
sustainability priority.

Industries like ours have a big role to
play in safeguarding water supplies
wherever we operate. That is why
we have set ambitious global targets
for ZERO water waste.

By 2030, we aim to halve the
amount of water used to make every              6.1, 6.2, 6.3   17.16 & 17.17
                                                6.4, 6.5, 6.6
1   Source: WWF, October 2020.                    See SDG index, page 59.
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO WATER WASTE         21

                                                                                                                                         Since ages a communal well has been our
                                                                                                                                 village’s water source. Day in day out, we took buckets
                                                                                                                                 of water from that well home for drinking, cooking and
                                                                                                                                 personal hygiene. Every day we anticipated the
                                                                                                                                 completion date [of the Huda project] to be able to
FEATURE: ZERO WATER WASTE IN ACTION                                                                                              access freshwater for our daily life.”
                                                                                                                                                                               Villager, central Vietnam
IMPROVING WATER QUALITY
AND ACCESS IN VIETNAM
Brewed and bottled in central           public taps are available, they often   First, we identified the communities     we accelerated expansion to support
Vietnam for 30 years, our popular       run dry.                                most in need, then we collaborated       over 14,000 more people as the
Huda brand is deeply rooted in its                                              with local people to plan how best to    COVID-19 pandemic made the need
local communities.                      The brewery put our commitment to       provide clean, reliable fresh water.     for reliable clean water even more
                                        safeguard shared water resources        Projects included installing or          urgent.
Many people across the region still     into action – bringing clean water at   repairing water pipelines, reservoirs,
get their drinking water from           the turn of a tap to almost 20,000      wells, pumping stations, filter tanks,   Huda’s highly effective approach
unhygienic wells or ponds, store        people. We partnered with local         water flow meters and a concrete         offers a useful template as we
rainwater or are forced to buy costly   authorities to construct new water      dam.                                     partner to extend water projects in
bottled water to avoid drinking from    infrastructure in five provinces,                                                priority areas across Asia to fulfil our
contaminated supplies. Even where       including Thua Thien Hue, where the     The projects we completed in 2019        2030 target to safeguard shared
                                        brewery is based.                       serve around 5,500 people. In 2020,      water resources.
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO WATER WASTE     22
           ZERO
           WATER
           WASTE

ELIMINATING                                              To meet our 2022 target (see box)
                                                         and reduce our reliance on fresh
                                                                                                                   • India: Our Mysuru brewery was
                                                                                                                     recognised as a noteworthy water-
WATER WASTE                                              water, we will combine continued                            efficient unit in the 2020
                                                                                                                                                                                   WHAT WE
FROM BREWING                                             efficiency upgrades with investments                        Confederation of Indian Industries
                                                                                                                                                                                   MEAN BY ZERO
OPERATIONS                                               in wastewater recycling and reuse.                          National Awards for excellence in
                                                         We are building an advanced                                 water management.                                             WATER WASTE
We employ best practices and the                         wastewater recycling plant in
latest technologies to continually                       Denmark and are assessing the                             INNOVATING TO REUSE
improve the efficiency of our 86                         opportunities for other breweries.                        WASTEWATER
                                                                                                                                                                                   Breweries: We aim to progressively
breweries and avoid any water being                                                                                Treating and reusing wastewater
                                                                                                                                                                                   eliminate water waste in our
wasted. Our focus on efficiency                          IMPLEMENTING BEST-IN-                                     offers huge potential to shrink our
                                                                                                                                                                                   operations by reducing water use at
reduces costs and the risks to our                       CLASS EFFICIENCY MEASURES                                 water footprint, while creating biogas
                                                                                                                                                                                   all our majority-owned breweries
business, as well as delivering                          We maintain rigorous environmental                        for our heat use. We have 58
                                                                                                                                                                                   (including soft drinks and water
sustainability benefits.                                 management standards at all our                           wastewater treatment plants in
                                                                                                                                                                                   plants, but excluding malting sites).
                                                         breweries (see page 12) that support                      operation at our breweries.
                                                                                                                                                                                   All our operations at these sites are
In 2020, it took 2.8 hl of water for                     continuous improvement. To drive
                                                                                                                                                                                   covered, including offices, production
our breweries to produce 1 hl of                         progress towards our targets, our                         At our Fredericia brewery in
                                                                                                                                                                                   and warehousing.
beer. That represents a 7%                               breweries invest in making water-                         Denmark, we are investing in
improvement on 2019, saving more                         intensive cleaning and production                         advanced recycling technology that
                                                                                                                                                                                   Our targets are to reduce relative
than 1,100 Olympic swimming pools                        processes more efficient. Highlights                      will make it the world’s first brewery
                                                                                                                                                                                   water use by 25% by 2022 and by
of water. Overall, the water                             from 2020 include                                         to virtually eliminate water waste.
                                                                                                                                                                                   50% by 2030 compared with the
efficiency of our breweries has                                                                                    Once operational, the new water-
                                                                                                                                                                                   2015 baseline performance of 3.4
improved by 18% since 2015.                              • Vietnam: The Phu Bai brewery                            recycling plant will halve water
                                                                                                                                                                                   hectolitres (hundred litres) of water
                                                           installed two new bottle washers                        consumption at the brewery, cutting
                                                                                                                                                                                   used to produce 1 hectolitre of our
                                                           that, combined with best practice                       the amount of water used to produce
                                                                                                                                                                                   beer and beverages (3.4 hl/hl).
                                                           water management, have helped                           each hectolitre of beer from 2.9 hl to
                                                           cut water use from 3.24 to 2.48                         1.4 hl.
                                                                                                                                                                                   Communities: We will begin
                                                           hl/hl of beer produced. This will
                                                                                                                                                                                   partnering to safeguard shared
                                                           save the equivalent of 75 Olympic                       Construction of the plant began in
                                                                                                                                                                                   water resources for communities in
                                                           swimming pools per year.                                2020 and the Danish Minister for
                                                                                                                                                                                   areas identified as high-risk by 2022
                                                                                                                   Higher Education and Science
                                                                                                                                                                                   and have a partnership in place in all
                                                         • China: Our Dazhulin brewery is at                       attended a ceremony at the site (see
                                                                                                                                                                                   high-risk areas by 2030.
                                                           the forefront of implementing                           quote on next page), along with our
                                                           Carlsberg operating practices in                        partners in DRIP – the public-private
                                                           water management (see feature on                        partnership behind the project.
                                                           next page).

* 2020 data within PwC's assurance scope. 2015-2019 data assured in prior years (see previous sustainability reports).
CARLSBERG GROUP SUSTAINABILITY REPORT 2020 ZERO WATER WASTE      23

Other significant progress included
building a state-of-the-art
wastewater treatment plant at our       We want to make
Shumen brewery in Bulgaria, which       Denmark a green and
will begin operating in 2021. In        sustainable pioneer
Eastern Europe we built three
                                        country, and one of the
wastewater treatment plants, in
Novosibirsk, Rostov and St.
                                        things that means a lot to
Petersburg. In India, our Alwar         me is how we make more
brewery introduced a rooftop            green research work in
rainwater harvesting system and         society. Here in Fredericia,
extended wastewater recycling. A        you have done it, across
new water-recycling plant planned
                                        business, government and
for our Kolkata brewery was not
installed due to COVID-19
                                        researchers.
lockdowns.                              Ane Halsboe-Jørgensen
                                        Danish Minister for Higher Education
Looking further into the future, our    and Science
Young Scientists Community – a
team of postdoctoral researchers                                               CASE STUDY
based at the Carlsberg Research
Laboratory – developed a promising                                             WATER WASTE DETECTIVES
prototype that will reduce the water
and chemicals needed for brewery
cleaning.                                                                      Our dedicated team at the Dazhulin brewery          water. Based on this analysis, the team
                                                                               in China has made it their mission to               introduced measures such as reusing water in
MEASURING EVERY DROP                                                           dramatically reduce water waste. The brewery,       cleaning processes and using less water in
We source water for our operations                                             one of our priority sites for water risk, is        bottle washing and pasteurisation. These have
from municipal supplies, boreholes at                                          located within the Yangtze river basin.             delivered big results for little additional cost.
our own sites and surface water. We
continually monitor intake at both                                             The team scrutinised brewing and packing            In just four months, the team reduced water
site and global level to drive                                                 processes, checked all water pipes to detect        used in beer production by 18% – from 2.7 to
improvements and understand                                                    any leaks, inefficiencies or blind spots, and       2.2 hl/hl. Dazhulin’s striking success brings the
broader performance trends. In                                                 installed more water meters to get a fuller         brewery close to achieving our 2022 target to
2020, our total water consumption                                              picture of water use in specific areas of           explore going below 2.0 hl/hl at sites in areas
decreased by 8% to 33 million m3.                                              production.                                         of high water risk. We are now sharing the
                                                                                                                                   team’s approach and lessons learned as best
                                                                               They also asked employees at every level to         practice across our breweries.
                                                                               use their experience to share ideas for saving
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