How the United Nations' Sustainability Goals Shaped Diageo’s Future
by Theresa Christine Johnson on 01/25/2021 | 4 Minute Read
Detailing a sustainability action plan for 2030 wasn’t something that the leadership at Diageo just thought of one day—these things don't just materialize out of thin air, after all.
It’s yet another check-in and chance to set goals as the multinational alcoholic beverage company has done for years. “I’ve been with Diageo for four years,” said Perry Jones, Diageo’s president of supply for North America. “They started doing goals like these at least six years before I got here. Diageo is very much about being a good steward with what we’ve been entrusted in this world. It’s embedded in the culture.”
Diageo’s 2020 Sustainability Report revealed successes like reaching hundreds of thousands of people with community outreach programs and significantly increasing water efficiency. But with 2020 officially behind us, how is this global spirits company looking forward?
Diageo wants to continue its progress and recently announced a 10-year sustainability action plan which focuses on three key aspects—all of which align with the United Nations' Sustainable Development Goals. The UN created these to act as ”the blueprint to achieve a better and more sustainable future for all.” The word “sustainability” often brings environmental issues to mind, but these goals from the UN holistically consider sustainability, taking into account other aspects like poverty, inequality, and social justice.
The first of Diageo’s goals revolve around promoting positive drinking. Of course, from the makers of brands like Johnnie Walker, Captain Morgan, and Smirnoff, this may seem a bit odd. They make booze. Isn’t their goal to sell as much of it as possible?
“We encourage our consumers to drink better, not more,” Perry explained. “We have materials out there around the impact of alcohol. So yes, we’re in an industry, but we push moderation to hopefully change the way the world drinks for the better.”
Diversity and inclusion rank high on the list of ongoing objectives for Diageo as well. Over the next ten years, they hope to increase the ethnic background in leadership and have at least 50% of all leaders being women. Ultimately, Perry said, it’s about creativity. A wider variety of thought processes and more diverse thinking makes the company more competitive. And since they operate in 180 countries, it only makes sense to want to have people from all different backgrounds leading the way.
When it comes to environmental sustainability, Diageo plans to support smallholder farms, contribute to community water projects, and even further reduce the amount of water used in every drink they make. As for packaging, by 2030, their plastic will come from 100% recycled content, and all of their packaging will be widely recyclable. Arguably, and more exciting, is the organization's ability to invest in more boundary-pushing, sustainable packaging options that don’t rely on plastic at all, like the paper Johnnie Walker bottle.
“As a part of the work we've done with Johnnie Walker, there has been a partnership developed with a group called Pilot Lite, which is a venture management group,” added Perry. “They're launching a company called Pulpex Limited, which will be a new world-leading sustainability packaging technology company. And we're collaborating with them, and others, on how we continue to move our packaging to a more sustainable process.”
In moving Diageo forward to a net-zero carbon goal, they are building a new distillery in Lebanon, Kentucky, that will run at net zero from day one. “Across the entire site, there will be no emissions, even if you look at how we’re moving materials,” Perry said. “Using electrode boilers as a renewable energy source, we have a model that we know works.”
Perry explained that taking what they have at the Lebanon, Kentucky distillery into existing distilleries or future ones will be dependent on the local market—in places where renewable energy is not possible, they may have to offset with carbon credits. They have their eye on that net-zero goal, though, not just at their distilleries but also at their bottling facilities and offices.
Ten years to achieve these goals may seem like ages away, but implementing changes across a global company inevitably takes time (in some cases, multiple decades). Since consumers now, more than ever, prefer sustainable brands, companies need to respond rapidly and outline plans that put them on a path towards a brighter future. But they shouldn’t do it just for their consumers or because other brands are doing it, too. These 2030 (and beyond) goals shouldn’t be performative but will mean the most when they come from within the organization.
“It comes back to the premise of why you set these goals,” Perry explained. “Our focus has been around that commitment to building a sustainable society that aligns with the United Nations. Can other companies benefit from it as a marketing tool? Probably some could."
"These investments are not small investments," he added. "We do it because we believe it's the right thing to do.”