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Executive summary

We are addressing the growing global water challenge internally within our operations, and externally in the communities where we operate and beyond.

For Diageo the water challenge is most acute in Africa, where the UN predicts that 50% of the population will face water scarcity by 2025. We are proud of our strong presence in and commitment to Africa – which accounts for about 14% of our total net sales but 84% of our organic growth. We expect this growth to continue, but with increased production comes increased demand on water management, an especially important problem in a region where we have identified that around half of our production sites are located in water-stressed1 areas. Africa therefore is currently the most important, but by no means the only, focus of our water programme.

Performance against targets

This year we increased our investment and commitment to water poverty2 in our local communities and are proud of these results. However, addressing the impact on water of our direct operations remains challenging. While we have made progress against our targets, we need to accelerate our rate of improvement if we are to reach our 2015 goals. This will be a key priority for us next year.

Our results are summarised in the tables below. Please see the relevant sections for the commentary on each result.

DIRECT OPERATIONS

Target
by 2015
This year’s performance
2010 - 2011
Cumulative performance
2007 – 2011
Achievement
Improve water efficiency by 30% Improvement of 3.0%. For more information click here.
Improvement of 15.8% In progress
Reduce water wasted at water-stressed sites by 50% Reduction of 5.6%. For more information click here.
Reduction of 9.0% In progress
Reduce the polluting power of wastewater by 60%, measured in biological oxygen demand (BOD) Increase of 31.3%. For more information click here.
Increase of 25.6% Off track

COMMUNITY INVOLVEMENT

Target
by 2015
This year’s performance
2010 - 2011
Cumulative performance
2007 – 2011
Achievement
Improve access to safe drinking water for 8 million people in Africa Approximately 1 million people benefited. For more information click here.
Approximately 5 million people benefited In progress
 

Strategy

3_2_1_strategy

Last year we consolidated and simplified our water activities into our Blueprint Water Framework. Designed to effect substantial, sustainable and measurable change, the strategy is based on three platforms:

  • Operations: we work to reduce our impact on water in our production facilities and supply chains. This involves:
    • Improving water efficiency in our facilities
    • Absolute reduction on water use at water-stressed sites
    • Reducing the polluting power of wastewater3 from our facilities
    • Engaging directly with suppliers in water-stressed countries where we operate, to encourage more sustainable strategies for agriculture.
  • Community involvement: we aim to improve access to water where we operate by supporting the stewardship of water resources. Launched in 2006, our Water of Life programme aims to enable access to clean drinking water, and where possible sanitation, to approximately 1 million people a year across Africa.
  • Collective action and advocacy: we work with others to accelerate progress on the UN Millennium Development Goals for water and sanitation. Through the concerted efforts of our employees, consumers, customers, suppliers, NGOs, governments and other businesses we work to raise awareness and deliver targeted initiatives in this key area.
 

Highlights of the year

  • Safe Water for Africa: we launched this innovative programme in partnership with the Coca-Cola Foundation, WaterHealth International and the International Finance Corporation towards a goal of expanding sustainable access to clean water across the continent.
  • Water recovery in Kenya: East Africa Maltings Ltd was awarded a GREENiQ Gold Medal (an internal commendation given to sites that meet our water targets) for its water recovery project in Kenya which improved water efficiency at this water-stressed area by 36.1% compared to our 2007 baseline. Read more
  • Technological improvements to our Cameronbridge distillery, Scotland were implemented, resulting in a 12% reduction in the amount of water required to make a litre of spirit.
  • Water survey: we completed a water survey at each production site to identify where technology and ways of working can be improved to achieve best practice in water management.
  • Other initiatives: several smaller initiatives in particular locations have made a difference to our environmental performance there, such as keg consolidations in Dublin and laser printer replacing labels in Argentina.
 

Outlook

After further refining our methodologies this year with the support of external consultants, we now have a greater understanding of our baseline – particularly of our water management in water-stressed areas, and of how we manage effluent. This should help us improve performance against our targets in the coming year.

Our community investment will continue to support and complement our work in our operations, so that we can reduce our impact on watersheds and improve access to safe drinking water in the regions where we operate.

We plan to step up our support for local collective action to share best practice with other organisations fighting water poverty. And we will continue to explore ways of working collaboratively with governments, local water users, NGOs and communities to make progress towards long-term solutions to the water challenges in our affected markets.

Footnotes

1Diageo’s definition relates to risk of operational disruption due to water scarcity and the UN’s Water stress occurs when annual water supplies drop below 1,700 cubic metres per person. When supplies drop below 1,000 cubic metres per person per year, a country faces water scarcity for all or part of the year.

2Water poverty is defined as the state of not having sufficient water for basic needs because it is not available.

3’Wastewater’ is defined by our Environmental Leadership Team as ‘All water leaving site as trade effluent’. It does not include the following water that leaves the site:

  • Wastewater used for agricultural purposes (eg irrigation) that are associated with Diageo’s processes
  • As moisture in spent grain, yeast, kieselguhr or other solid wastes
  • As water in gaseous form
  • As precipitation via storm drains
  • As discharges via foul sewer
  • Having been used for cooling purposes and returned to source without any chemical alteration.