Simon Boas Hoffmeyer is the Sustainability Director of the Carlsberg Group. Simon has a background in strategy, business development, PR and communications, and has been developing business-driven sustainability solutions for the last ten years. He is responsible for the development and implementation of the Carlsberg Group’s sustainability programme Together Towards ZERO. GlobeScan co-CEO Christophe Guibeleguiet recently spoke with Simon about making sustainability relevant and accessible for consumers and how to develop partnerships to achieve concrete sustainability goals.
Based on your experience, and looking back at the last two to three years, what major transformations have you seen related to sustainability in large companies?
Globally, the sustainability transformation is led by companies. However, we cannot talk about sustainability without talking about governments and policy developments. With the financial crisis (2008-2011), the development of the sustainability agenda slowed down for a few years. The crisis has not only impacted business, but people’s personal lives and when you’re unsure about getting food on the table, then it’s quite difficult to think about the state of the world. The failure of the Copenhagen summit where no agreement was reached really resulted in some pessimism both from governments in terms of their ability to reach agreements, and from business thinking that it doesn’t really help to come to the table with strict and ambitious targets if the legislators are not at all able to come together and do what is necessary. The Paris summit was the turning point where the mood shifted from “well, we can do everything we can but it probably won’t be enough” to “this might actually happen, and we can actually do this together.” The collaboration between the private and public spheres then became the key driver of transformation and optimism.
Has the launch of the SDGs changed anything in the way large companies manage their sustainability strategy and engage with stakeholders?
The SDGs have succeeded in bridging the public and private sectors and keeping the energy up. The Millennium Goals were not very well communicated or adopted by businesses even though they were quite a success; they were more a government instrument to put sustainability or development on the agenda. The SDGs come with a more global perspective. They offer the same language to both public and private entities. They are the world’s biggest materiality assessment.
If they had been approved and came out in 2012, we would have seen much less support and engagement in the SDGs. But now there is a momentum and the SDGs will actually make a difference and be adopted because they respond to a trend in society. We can clearly see that with the rise of consumers’ purchase from sustainable companies. Companies are now thinking that the SDGs are good for business, if not right at this moment, then definitely in the medium term.
The SDGs also help to crystallise initiatives and to look at issues in a more constructive manner. For example, looking at how the circular economy is bringing a new dimension to sustainable production and consumption, or how SDG 17 on partnerships helps to drive collaborations. It has never really been spelled out in this way in the past. The SDGs have introduced new, more contemporary and relevant topics on the global agenda while at the same time being totally relevant for business.
You have launched this year a comprehensive sustainability program “Together Towards Zero” with ambitious goals for 2022 and 2030. What are Carlsberg Group’s overarching goals with this program and how does it align with the SDGs?
The “Towards Zero” program was based on a materiality assessment on what we felt was important to our business, and what our stakeholders thought was relevant for our business. The SDGs were one of the factors we took into account when defining the topics we were looking at. We do not have an overview of how all the SDGs are impacting our business. We’re saying that the SDGs related to our material issues are the ones we’re focusing on and not the full range of SDGs. For example, the SDG related to access to clean and renewable energy is of course something of absolute importance to achieve our targets of zero carbon by 2030 in our breweries, and an example of how we’re using the language and the impact of the SDGs directly in our strategy.
To be frank, we would still be focusing on clean and renewable energy if it had not been in the SDGs simply because it makes business and sustainability sense. The SDGs are a very strategic input but are not the driving force of what we focus on at Carlsberg, which is based on our own materiality.
The Towards Zero program is our approach towards sustainability for our entire business including the value chain. We’ve created it because we wanted the sustainability program to be a key part of our corporate strategy. Our materiality assessment, which included carbon impact in our supply chain, CO2 from the thermal energy heat and electricity of our sites, concerns related to underage consumption of alcohol, and safety of our employees, helped us to define a program relevant and simple and yet holding the depth necessary for our global company to be taken seriously. We arrived at four areas integrated towards Zero: 1) achieving zero carbon footprint 2) zero water waste (eliminating water waste in our breweries), 3) zero irresponsible drinking (making sure we’re not part of any encouragement for irresponsible consumption of our products) and 4) zero accident culture.
These four areas are more than just ambitions. Our management team wanted us to be extremely concrete and asked us to set long-term targets towards 2030 because they believed that in order to make these changes we needed to start looking at it already today.
This also means that you have to assess your business cases in a different way: if we make an investment now and we have to achieve a target in 2030, what does this mean to the depreciation of our investment? Which additional externality costs do we see appearing in the late 2020s versus now? We also wanted short-term targets because we can’t just sit down and then expect that someone fixes this in 2028. So we also set targets for 2022 which means we have to start today.
What role does purpose play in Carlsberg Group’s corporate strategy?
Our purpose, “Brewing for a Better Today and Tomorrow,” crystallises our action and guides our strategy. It shows what it means for us to be a responsible business. This really comes from our founder’s vision. He donated the entire company before he died to a foundation that gives all of the money back to society, and still to this day, a big share of Carlsberg is owned by this foundation and they hold the majority of the votes.
We’ve asked ourselves what the founder would do if he was living today. There was no doubt that he would want Carlsberg to take an active stance on Brewing for a Better Tomorrow. For example, by applying the Science Based Targets Initiative methodology to our carbon targets and committing to targets living up to the more ambitious target in the Paris agreement of 1.5 degrees instead of 2.0, we think we are honouring our founder’s mentality.
Purpose has given us an internal language on why we’re doing this; it ensures that we have the values represented in our business cases. It also helps to accept that we don’t know everything today, that the world will change, that the rate of innovation is not defined, and that there is uncertainty built into achieving our targets. We accept that because we’re a purpose-driven company with a long-term plan.
Recent political events in Europe and North America have shown a clear social and cultural divide among public opinion with a rise of populist views. Should business respond to this and join the debate?
I believe that any privately owned entity should do what they feel is right. From our perspective we let actions speak louder than words so we are putting a lot of value into showing the way with actions. For instance, is it possible for a global company with a global supply chain to decarbonise? It is a challenge, but we’re setting the direction. What business can and should contribute to is showing it’s possible through concrete actions to make an impact and bring its contribution. Then if people and companies want to join in on the political debate from a pure policy perspective, that’s also perfectly fine, but at Carlsberg we just like to show the way with real actions and achieve our targets, showing for instance how new technology we implement helps consumers with different consumption experiences that are delivering on both sustainability and product quality.
We’ve recently seen a rise in shareholder activism – for instance, Dan Loeb with Nestlé, 3G with Unilever, to name only a few . To what extent could these activities affect the trend towards more sustainable business? Is the triple bottom line framework at risk?
Businesses should be true to who they are and maximise benefits and profits for shareholders and wider society. The triple bottom line is very much what business should be all about. That should be the nature of any business. For Carlsberg, we look at it as a balanced approach that includes materiality-led actions to deliver for the business, society and the environment. The triple bottom line is a framework that defines the type of company we are, how we stick to our vision and help ensure that we show the way through concrete actions on a global scale.
Looking ahead, what do you think will be the next major sustainability challenges that business in general will face?
The planetary boundaries discussion will be much more widespread in the coming years as the science around it starts developing, and this will have an impact on business. I think we will start discussing topics that are much more detailed than what we have seen with the carbon discussion. Science is the keyword I see popping up within the world of sustainability, with the Paris agreement and the Intergovernmental Panel on Climate Change. We start to see science-based target initiatives being rectified both by businesses and major NGOs, and this trend will guide how businesses manage and talk about sustainability over the next five years.