South African Breweries - Corporate Accountability Report 2002

An Article from Business Respect, Issue Number 36, dated 11 Aug 2002
By Mallen Baker

"In the complex, fast-changing global economy of today, well run, responsible business can be a tremendous force for good." Graham Mackay, Chief Executive, SABmiller

South African Breweries has long been a name to conjure with in the context of corporate social responsibility. It has now entered its fifth year as a CSR reporter, at the end of a year that has seen its acquisition from Philip Morris of Miller - hence the renaming as SABmiller.

The latest report has just been released and is available - with some perseverance and ingenuity - to download from the company's website (for some reason, our downloads seemed to grind to a halt after a while - make sure you're using a browser that can pick up where it left off if a download is interrupted).

The SABmiller report has been produced according to the GRI guidelines and has followed the structure faithfully, reporting against economic, environmental and social impacts. Information is clearly narrated, with a mix of policies and principles and performance information.

SAB has operations in 25 countries and directly employs 33,230 people, with many thousands more in associate companies - 25,000 in China alone. Taking into account the 'value chain' of suppliers, contractors, distributors and retailers, well over a million people are dependent on the business for their livelihoods.

In terms of its approach to customers and products, the company has the following guiding principles:

SAB provides brands and services of consistently high quality and value.
SAB provides brands and services of consistent high quality and value, to meet the needs and standards of its consumers and industry customers worldwide.
SAB is committed to providing products which are safe for their intended use.
SAB advertises and promotes its products in an honest and ethical manner, which respects the values of its consumers' societies.
SAB aims for continuous improvement at all levels in the group by encouraging employees to be creative, innovative and open to new ideas.

In terms of measuring the full range of its economic contribution, SAB uses the "cash value added" system - reviewing where the money it makes actually goes. On this basis, it reports that the wealth it has created as been distributed accordingly:

Employees (19.3%), State Treasuries (40.5%), Lenders (5.3%), Shareholders (12.7%), Community investment (0.3%), Retained to invest in future growth (21.9%). How significant is it that, at 0.3%, the amount put into community investment is on the low side? The balance of distribution highlights the various ways in which the company contributes to society - wealth to employees, cash to governments in the form of tex receipts, etc. The answers, of course, are difficult to arrive at purely from aggregate figures such as this.

Of course, a key test for a company such as this is how well it engages with the potential negative impacts of its core product - in this case, alcohol. Sure enough, the company covers the issue of responsible drinking in its report.

During the year, SAB has reviewed and formalised its groupwide policy on alcohol. This sets out the standards each operating company should adhere to in promoting responsible drinking and in helping to combat alcohol abuse.

According to the report, the majority of SAB companies are actively engaged in public awareness activities at national level. These tend to resolve around contributions to drink/drive campaigns and alcohol abuse programmes.

In Poland, for instance, campaigns by Kompania Piwowarska include "Don't sell alcohol to teenagers" messages addressed at shop assistants and the free distribution of alcohol level meters.

The range of activities across the group suggests genuine commitment - although it is probably the case that the programmes does not yet feature as being as visible or as well focused as some that would be considered to be best practice. Camelot's action on vendors who sell to underage gamblers comes to mind - as does the move by some brewers to promote responsible drinking on bottles.

The company has an even greater challenge on the question of HIV/AIDS. As it notes in the report "South Africa is experiencing an HIV/AIDS epidemic. In 1990, according to the Medical Research Council (MRC), the prevalence was less than 1%. By 2000, the level had reached 25%, one in four of the population, and the MRC (www.mrc.ac.za) has estimated that in the decade after 2000, some four to seven million people will die as a consequence."

SAB describes its AIDS strategy as "comprehensive", and quotes in support the example of Alrode brewery, which "launched its new HIV/AIDS programme by using 'industrial theatre' to gain the attention of employees. The 45 minute performance highlighted the effects of the disease on peoples' lives and provoked a question and answer session afterwards with clinical staff. The company's approach is based on raising awareness, offering education and monitoring illness. Employees and pensioners, who are members of the SAB Medical Aid Society are entitled to support, information, medication including antiretroviral therapy and hospitalisation where necessary."

There is no doubt the company has been as proactive as most of its contemporaries in addressing the issue. Whether it will feel itself - now that Anglo American has taken its position in providing retrovirals for all affected employees - pushed to go further will be a point of some interest.

Expectations on the company are doubtless higher because of its excellent reputation to date. For instance, SAB was named the 'best company to work for' in South Africa, in a study by the leading business weekly, the Financial Mail, in November 2001. SAB reports that it receives around 11,000 unsolicited CVs each year in Johannesburg alone - the company employs some 5,500 in South Africa.

On the environmental side, the company continues to improve its performance in most areas. It is improving its efficiency in terms of electricity and water consumption, and in terms of its effluent discharge. There have been group systems introduced to measure the use of carbon dioxide waste and recycling, and it is steadily undertaking a programme to implement the environmental management system iso14001 across its sites.

Throughout the report, the policies and guiding principles of the company are given in relation to each issue, and prove to be a model of straight forward aspirations and commitments.

Nevertheless, the report is not as fully satisfying as it could be. Although it covers many of the indicators of the GRI, and provides an indicator index to help you locate each by page number, data and narrative are often mixed together in one flowing text, and it is not so easy to pull out what have been the trends in performance over the recent years. The company could do more to provide useful context to the information it gives, which would help to understand the facts that it reports.

Also, it doesn't convey the same target-driven push for continuous improvement that many other reports of this kind do. The publishing of performance against targets, targets for the next year and their rationale, would be very welcome.

That being said, SAB is clearly one to watch. As the largest brewer to serve markets in developing countries, its commitment to CSR may be an important driver in setting standards.

Story link http://www.sab.co.za/results/ccr2002/pdfs/SAB_CCR_report.pdf

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