What Brands Can Learn from Diageo’s Sustainability Journey
Transforming a business to reduce its environmental impact and embrace sustainable practices isn’t a quick fix, but a journey of a thousand steps. Diageo, the beverages giant behind brands like Guinness, Johnnie Walker and Smirnoff, has been on that journey since 2008, and it’s forced it to innovate and make difficult decisions. It has been scrutinising its supply chain - last year it launched a pilot in regenerative farming for its Guinness business and announced a new hydrogen-powered glass furnace to reduce the impact of glass bottle production. And when it comes to marketing, it has rolled out brand activism training across its marketing teams to ensure that they’re equipped to talk about green issues in a responsible way. . And on Earth Day, Diageo will be switching on a huge field of solar panels in Scotland to power its packaging plant at Diageo Leven.
LBB’s Laura Swinton caught up with a Diageo spokesperson to find out more.
LBB>What inspired Diageo to prioritise sustainability?
Diageo> Sustainability has long been a priority of Diageo and our work on it started in 2008. Environmental sustainability is key to our long term business success and we have a responsibility to care for the people and planet around us.
LBB> And what have been the key lessons you've learned as a business since embarking on this journey?
Diageo> We set our 2030 sustainability targets with an innovation gap built into them as we know we need to stretch ourselves to reach them. We’ve learnt partnership working is core to us making progress on our targets, and that reaching those targets will be a challenge and will take a change in approach across our business.
LBB> How does Diageo ensure that each brand can adjust to fit into those sustainability objectives in a way that works for that part of the business?
Diageo> The work our brands do on sustainability is guided by our corporate sustainability goals in Society 2030. All the sustainability action they take ladders up our commitments on packaging and waste, water and carbon.
LBB> Baileys has been accredited as a B Corp - what have you learned from this process and is it something you're considering rolling out across more Diageo brands?
Diageo> We’re really proud of Baileys for being B-Corp certified and it’s definitely a robust process to the accreditation, so is well-deserved. We’re learning through Baileys on the process and benefits of being B-Corp certified before taking a decision on the rest of our brands.
LBB> Diageo has been getting really granular on the environmental impact of its supply chain, and there’s quite a bit of innovation involved. For example you’ve been working with Encirc on the use of hydrogen to produce glass bottles with a reduced environmental impact, producing 200 million for brands like Captain Morgan’s, Tanqueray and Smirnoff. How is Diageo enabling that level of innovation?
Diageo> Innovation is central to us achieving our 2030 goals. The hydrogen powered furnace is an example of the power and outcome of working closely with our suppliers and partners to embed sustainability across our supply chain. We’re really excited that by 2030, up to 200 million of our bottles will be net zero, which is a huge achievement in the glass industry. We also foster innovation through our Diageo Sustainable Solutions programme. This gives innovators who we don’t currently work with, to provide a solution to sustainability challenges that we put out to them. It generates new ideas and ways of working to help us tackle the trickiest issues.
LBB> How are you tracking the impact of these innovations and ensuring buy-in across the organisation?
Diageo> All sustainability reporting is in our Annual Report and ESG Reporting Index, which includes innovation work on sustainability. All employees across the business have a responsibility for helping us achieve our corporate goals, and achieving our sustainability goals is as important as delivering our financial performance. Our senior leadership group is responsible for the delivery of a subset of our ESG targets via our Long Term Incentive Plan, which helps us to embed that accountability across our business.
LBB> Diageo has some great green initiatives underway, transforming its supply chain, from regenerative farming to net zero glass bottles - but how are you thinking about the balance between talking about these projects, sharing knowledge with the need to avoid overclaiming and greenwash?
Diageo> Greenwashing is a real reputation risk when talking about sustainability. We have a robust approach to our sustainability comms and ensure that all comms on sustainability are approved by our CR and legal teams to validate the claims. Claims are only made where we have validation.
LBB> On this, Diageo has invested in sustainability training for marketers - why was that so important and what are some of the key principles or takeaways from this training?
Diageo> It’s important that everyone knows the role they can play in helping us achieve our goals, but to also have the confidence in doing so.
LBB> What are some of the challenges that the team has been navigating in putting that training into action and implementing the insights on a company-wide level?
Diageo> We’re using the training to build our marketing team’s confidence in talking about sustainability. A key challenge has been giving them the confidence to talk about it credibly without the threat of greenwashing. We’ve also recently rolled out a partnership with the Said Business School at Oxford to educate our top 600 leaders on sustainability, both within Diageo and outside of it, so they can make the connections between the work we do and the difference this can make externally.
LBB> What advice would you have for marketers that are still wrestling with all of this?
Diageo> It’s an exciting but difficult space! If you’re ever not sure on putting something out on sustainability, ask your experts and listen to their advice. Also, read around what others are doing in sustainability marketing and see where companies are being caught out for greenwashing and what you can learn from this.
