Corporate and Social Responsibility Update 11 September, 2006 This material may be deemed to include forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934. These forward-looking statements are only predictions and you should not rely unduly on them. Actual results might differ materially from those projected in any such forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by the forward-looking statements. In evaluating forward-looking statements, which are generally identifiable by use of the words “may”, “will”, “should”, “expect”, “anticipate”, “estimate”, “believe”, “intend” or “project” or the negative of these words or other variations on these words or comparable terminology, you should consider various factors including the risks outlined in our Form 20-F filed with the SEC. Although we believe the expectations reflected in forward-looking statements are reasonable we cannot guarantee future results, levels of activity, performance or achievements. This presentation should be viewed in conjunction with our periodic interim and annual reports and registration statements filed with the Securities and Exchange Commission, copies of which are available from Cadbury Schweppes plc, 25 Berkeley Square, London W1J 6HB, UK. 1
Transcript
Corporate and Social Responsibility Update11 September, 2006
This material may be deemed to include forward-looking statements within the meaning of Section 27A of the US Securities Act of
1933 and Section 21E of the US Securities Exchange Act of 1934. These forward-looking statements are only predictions and you
should not rely unduly on them. Actual results might differ materially from those projected in any such forward-looking statements,
which involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of
activity, performance or achievements to be materially different from any future results, levels of activity, performance or
achievements expressed or implied by the forward-looking statements. In evaluating forward-looking statements, which are
generally identifiable by use of the words “may”, “will”, “should”, “expect”, “anticipate”, “estimate”, “believe”, “intend” or “project”
or the negative of these words or other variations on these words or comparable terminology, you should consider various factors
including the risks outlined in our Form 20-F filed with the SEC. Although we believe the expectations reflected in forward-looking
statements are reasonable we cannot guarantee future results, levels of activity, performance or achievements. This presentation
should be viewed in conjunction with our periodic interim and annual reports and registration statements filed with the Securities
and Exchange Commission, copies of which are available from Cadbury Schweppes plc, 25 Berkeley Square, London W1J 6HB, UK.
1
Todd StitzerChief Executive Officer
2
3
Cocoa Growing in Ghana
4
Our CSR framework
Our progress
Our Goals and
Commitments to 2010
Today’s Agenda
5
Q&A and Break
• Neil Makin, External Affairs Director
• David Croft, Director of Ethical Sourcing
• Alex Cole, Corporate Responsibility Director
Today’s Agenda – Panel Discussion
6
CSR Framework
• Main Board CSR Committee
- Comprises all Board members
- CSR a regular feature at Board and Chief Executive’s Committee
• “Our Business Principles”
- Annual communication and sign-up process
- Managers responsible for employee behaviour
• Human Rights and Ethical Trading Policy
- Applies both to employees and suppliers
7
CSR Framework
• Food Issues Strategy Group and Food
Issues Strategy into Action Group
• Environment, Health and Safety Steering
Group
• Human Rights & Ethical Trading Working
Group
• Diversity & Inclusiveness Leadership
Team
• The Cadbury Schweppes Foundation
(corporate giving)
• Compliance Steering Group
The Five Pillars of CSR Steering and Working Groups
CSR embedded in Cadbury Schweppes’ day-to-day operations
8
CSR Framework
• Shared learnings from our colleagues
• Peer group benchmarking
• NGOs and local communities
External Stakeholders
• Shareowners
• Forum for the Future
• The Corporate Citizenship Company
• Business for Social Responsibility
• Business in the Community
• The Institute of Business Ethics
Industry Initiatives
• International Cocoa Initiative
• Roundtable on Sustainable Palm Oil
• International Business Leaders’Forum
• Alliance for a Healthier Generation
9
Our Economic Contribution
£9.8 millionCommunity Investment
£199 millionInterest
£257 millionDividends
£341 millionGovernment
£1,186 millionEmployees
of which:
£2.4 billion“Cash Value Added”
£(4.8) billionLess Paid to Suppliers
£7.2 billionTotal Sales
10
Marketing, Food and Consumer Issues
• Food Issues Strategy Group established in 2003
• Twelve Point Action Plan responding to consumer health trends
(2004)
- Includes Global Marketing Code of Practice, with specific reference to children
• Contribute to understanding consumer health trends
PILLAR 1
11
The Twelve Point Action Plan
PILLAR 1
• Products and Innovation
• Marketing
• Portion Sizes
• Labelling
• Vending
• Consumer Insight
• Education
• Community
• Business Partners
• Employees
• Science
• Other stakeholders
12
Responding To Consumer Needs
PILLAR 1
13
Responding To Consumer Needs
PILLAR 1
14
Responding To Consumer Needs -Labelling
PILLAR 1
15
Ethical Sourcing and Procurement
• Approximately one half of spend on ingredients and packaging
• 40,000 suppliers worldwide
• Ethical Sourcing Strategy aims
- To build on our ethical sourcing standards with supply chain partners
- To develop sustainable sourcing programmes for agricultural raw materials
PILLAR 2
16
Suppliers: Ethical Sourcing Standards
• Ethical Sourcing Standards include:
- Core labour rights and dignity at work
- Safe and healthy workplace environment
- Fair remuneration
• Supplier Tiers
- Tier 1: held discussions and engaged with over 80%
- Tier 2: 70% confirmed abiding by policy and standards
- Tier 3: advised of standards through contracts
• Ethical Sourcing Director appointed in 2005
PILLAR 2
17
Ethical Sourcing and Procurement: Cocoa
• Majority of cocoa sourced from Ghana; also Cote d’Ivoire, India, Indonesia and Nigeria
• Founder member of International Cocoa Initiative (ICI)
- Established 2002
- Certification process introduced in July 2005
- Certification to be introduced to at least 50% of West African cocoa farms by July 2008
• Member of the Sustainable Tree Crops Programme
• “Ghana Wells” well building programme
- 419 water wells built or under construction
PILLAR 2
18
Environment, Health and Safety
• 2004 - EHS standards updated, based on international ISO and
OHSAS standards
• 2005 – EHS data collection independently assessed by the
consultancy ERM, and at Group level by Deloitte
• Details shown in CSR report and appendix
• Continuing to invest in systems, processes and facilities to improve
performancePILLAR 3
19
Food Safety and Quality
• Our product safety processes based on Hazard Analysis and Critical
Control Points (HACCP) process
- Based on principles approved by the WHO
• UK product recall created concern
• Using lessons to drive process improvement across Cadbury
Schweppes
- UK processes being modified to prevent recurrence PILLAR 3
20
Human Rights and Employment Standards
• Human Resources Standards closely aligned to Human Rights and
Ethical Trading Policy
• Policies shaped by Human Resources Leadership Team
• Diversity – monitored via Equal Employment Opportunities and
Diversity surveys and global Employee Climate Survey
PILLAR 4
21
Global Employee Climate Survey
2004
(10,000 employees surveyed)
Commitment: 3.4 out of 4
Engagement: 3.1 out of 4
2005
(55,000 employees surveyed)
Commitment: 3.3 out of 4
Engagement: 3.0 out of 4
PILLAR 4
22
Cadbury Schweppes Employer Awards
PILLAR 4
23
Community Investment Strategy
• Growing Community Value around the World
• Formalised globally in 2002
• Key elements are:
- Build community investment into mainstream business practice
- Contribute 1% of pre-tax profits
- Include community objectives in the development of brands, people and the sustainability of our business
- Report details of community investment annually through our financial reporting system
• Total investment of nearly £10 million in 2005
PILLAR 5
24
Community Investment Examples
PILLAR 5
25
Our Response to a Changing World
• Providing products to reflect the changing choices and needs of our
consumers
• Strengthening our value chain
• Increasing customer recognition that our brands reflect our values
PILLAR 5
New Goals and Commitments on Sustainability
26
Goals and Commitments to 2010
• Increase product choices for consumers,
including reduced fat, sugar and salt
alternatives, for core brands
• Improve nutritional labelling information
for consumers including responsible
consumption messaging, and support
initiatives that promote physical activity
Commitments:
Goal One: Marketing, Food and Consumer
Contribute to consumer diet, health and lifestyle
solutions
Goal:
27
Goals and Commitments to 2010
• Sustainably source at least half of our key
agricultural raw materials, such as cocoa, sugar,
palm oil, and gum arabic, for core brands
• Ensure our suppliers meet our ethical sourcing
standards
Commitments:
Goal Two: Ethical Sourcing and Procurement
Maintain ethical sourcing standards, and develop
sustainable agriculture programmes
Goal:
28
Goals and Commitments to 2010
• Achieve top quartile performance for health
and safety
• Develop reliance on renewable energy, reduce
use of carbon-based fuels, and use 100%
recoverable or biodegradable packaging
Commitments:
Goal Three: Environment, Health and Safety
Minimise the environmental impact of our
businesses, and embed a zero accident culture
Goal:
29
Goals and Commitments to 2010
• Attain 25% female representation in our
executive management
• Consistently achieve top quartile Employee
Climate Survey results
Commitments:
Goal Four: Human Rights and Employment Standards
Nurture our Company as “The Place to Be”, where
diverse colleagues are proud to work, and are
committed and engaged
Goal:
30
Goals and Commitments to 2010
• Build on and develop partnerships across the
business to help address global social, economic
and environmental concerns linked to the
Millennium Development Goals
• Contribute at least 1% of pre-tax profit for
Community Investment as a group and per
region, year-on-year
Commitments:
Goal Five: Community Investment
Help create prosperous, educated, inclusive and
healthy communities
Goal:
31
The Responsibility Pyramid
Competitive Strategy
Sustainable Growth
Reputation Enhancement /
Issue Management
Risk Avoidance
32
Conclusion
Pursue commercial goals and behave in line with values
• Be a responsible, well-run company
• Deliver consistently superior profits over the long-term
Performance driven, values led
32
Appendix AGoals and Committmentsto 2010 - Progress
Goals and Commitments to 2010Goal One: Marketing, Food and Consumer - Progress
Performance not to standardProgress, but room for improvementGood progress
Support for physical activity
Self-regulation on marketing and advertising
Improved labelling
Improved choices
Promoting responsible consumptionProgress:
Contribute to consumer diet, health and lifestyle
solutions
Goal:
36
Goals and Commitments to 2010Goal Two: Ethical Sourcing and Procurement - Progress
Performance not to standardProgress, but room for improvementGood progress
Procurement Colleague Training• Numbers trained on our supplier
assessment and procurement processes
Identified Tier 2 Suppliers• Confirmed in receipt of policies and
standards and will abide by them
Identified Tier 1 Suppliers• Policy and Standards discussion
• Confirmation that they will abide by them
• Performance risk assessment and areas for improvement identified
Progress:
Maintain ethical sourcing standards, and
develop sustainable agriculture programmes
Goal:
37
Goals and Commitments to 2010Goal Three: Environment Health and Safety - Progress
Performance not to standardProgress, but room for improvementGood progress
CO2 equivalent emissions (kg*)
Energy use (kWh*)
Water use (m3*)
Wastewater discharge (m3*)
Solid waste (kg*)
Fatal accidents (number)
Lost Time Injury frequency rate
(LTIFR) per 200,000 hours)
Progress:
Minimise the environmental impact of our
businesses, and embed a zero accident culture
Goal:
38
Goals and Commitments to 2010Goal Four: Human Rights and Employment Standards - Progress
Performance not to standardProgress, but room for improvementGood progress
