Bacardi's latest report is comprehensive to the point of being laborious, but it's rewarding for the determined reader

At 174 pages, Bacardi’s 2013 Corporate Responsibility Report, available online and as a downloadable PDF, is incredibly comprehensive – perhaps a little too much so. It is structured around the five pillars of Bacardi’s corporate responsibility programme – “marketplace”, “environment, health and safety”, “responsible sourcing”, “people” and “philanthropy and community investment” – covering the entire value chain from the sourcing of raw materials through to consumption of the company’s products.

With such depth and breadth of information, simple navigation and a clear structure are essential. All the pillars are colour coded and follow the same format: message from a leader within the business (available as a video), strategy for that pillar, targets and progress, and subsections for each material issue. This structure provides clarity for the reader, and click-through navigation makes the website easy to use and understand.

The PDF, however, does not provide the same functionality and it is time-consuming to find specific information. Surprisingly, the report follows G3 while many reporters have already moved from 3.1 to G4.

The videos from members of Bacardi’s leadership, including president and chief executive Edward D Shirley, show a strong top-level commitment to Bacardi’s corporate responsibility programme. Albeit in less than one minute, Shirley delivers important messages about the company’s 2013 activities.

Bacardi speaks directly to its stakeholders’ interests. The company has taken time to understand what is most important to them, and conducted thorough stakeholder research to inform its strategy and approach for each pillar. This included one-on-one interviews and independent research with each of the company’s key stakeholder groups, a task clearly outlined in the opening section.

This research feeds into the materiality assessment, conducted biannually. The resulting matrix reflects the pillars of the strategy, confirming the relevance of each to stakeholders and the business, and giving the strategy greater credibility. The matrix is repeated at the beginning of each section, perhaps unnecessarily.

Bacardi is the largest privately held, family owned spirits company in the world, with a number of iconic brands in its portfolio. As such, it carries huge influence. With responsible marketing and product responsibility coming out on top in the materiality assessment, Bacardi tackles the issue head on.

The first pillar of the programme, “marketplace”, discusses strategies to avoid marketing that promotes inappropriate alcohol consumption, and to reinforce the responsible drinking message. There are four pages on Bacardi’s flagship responsible drinking campaign, “Champions Drink Responsibly”, endorsed by tennis champion Rafael Nadal. Additional campaigns and programmes across 13 countries show that Bacardi is taking advantage of the reach it has to promote the responsible drinking message.

In response to environmental challenges, Bacardi has made good progress. Over the seven years to 2013, it halved water use, cut energy use by one-quarter, and reduced greenhouse gas emissions by one-third. Despite some impressive and stretching long-term targets, interim goals like a 1% improvement in water use efficiency seem too easily achieved. With increased energy emissions affecting Bacardi’s progress in reducing GHG emissions, the company is careful to communicate honestly. The report emphasises the importance of informing stakeholders of this concern and the actions taken.

Supplier standards

Bacardi sets high standards for suppliers. It has made significant strides towards embedding responsible sourcing within the procurement function, and aims to further develop its sustainable procurement strategy throughout 2013. Direct suppliers are required to meet responsible sourcing standards based on principles set by the ILO, UN and Ethical Trading Initiative, and must be a member of the Supplier Ethical Data Exchange (known as Sedex) or complete a vendor qualification process involving quality checks and a questionnaire.

Alongside this rigorous selection process, the company takes a targeted approach to its supply chain. In 2013, Bacardi reduced the number of suppliers it works with by nearly 40%, removing some of the complexities. In addition, responsible sourcing risk assessments of the raw materials used in products has allowed it to focus on areas with the highest risk of environmental and social challenges. Looking ahead, Bacardi aims to work directly with suppliers after audits are completed, helping them to continue to meet standards and improve performance.

Case studies scattered throughout represent Bacardi’s global business, and prove it has some interesting stories to tell. Unfortunately, they are told and displayed poorly. Alcohol marketing is all about storytelling and one would expect Bacardi to have the narrative skills to bring its sustainability story to life, but alas not.
The title of the report claims “Our Spirit is Clear”.

The company’s commitment to sustainability and extensive work across its value chain certainly come across strongly, and the report is a useful repository. But a stiff drink is needed if you intend to read it all.

Snapshot

Follows GRI? Yes, GRI3.

Assured? No

Materiality analysis? Yes

Goals? Yes

Targets? Yes

Stakeholder input? Yes

Seeks feedback? Yes

Key strengths? Comprehensive

Chief weakness? Too long.

Pleasant surprise? Videos from leaders.

Pete Statham is a consultant and Stephanie Drilon a researcher at Context Europe.
Pete.Statham@contexteurope.com
Stephanie.Drilon@contexteurope.com
www.contexteurope.com

 

alcohol  annual report  Bacardi  sustainability reporting 

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