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SAB Sustainable Development“Ten Priorities – One Future”

Andre Fourie – Head: Sustainable Development23/08/2012

The South African Breweries Limited: Introduction

Founded in 1895

SAB Ltd is the South African operation of SABMiller plc

Historical birthplace of SABMiller plc

Became SABMiller plc in 2002

More than 200 beer brands SABMiller employs more than 70 000 people Operates in over 75 countries One of the world’s largest bottles of Coca-Cola

products

SAB’s soft drinks division is ABI

Winning the Sustainable Way

• Our business make its greatest contribution to society by delivering high quality products that our customers enjoy

• In doing so, we are creating jobs, paying taxes and building the skills base

• We are also demonstrating that business growth and sustainable development can be mutually reinforcing rather than in conflict

• We integrate sustainable development into the day to day management of our business through our Sustainability Assessment Matrix (SAM) system

We are guided by Ten Sustainability Priorities

Encouraging responsible drinking

Making more beer using less water

Reducing our energy and carbon footprint

Packaging reuse and recycling

Working towards zero-waste operations

We are guided by Ten Sustainability Priorities

Encouraging enterprise development in our value chains

Benefiting communities

Contributing to the reduction of HIV/Aids

Respecting human rights

Transparency and ethics

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Responsible TraderOwner driversResponsible marketing

SD Approach- value chain touch points

Enterprise developmentWater stewardshipSustainable farming

Crop Cultivation & processing

Energy & carbonWaterWaste Packaging wasteRecycling

Brewing Sales & Distribution

Responsible alcohol useHIV/AidsCSIHuman rightsTransparency & ethics

Consumer & society

Suppliers

Energy use Water useWaste PackagingHuman rights & ethicsLocal sourcing

SD Measurement and Performance

Sustainability Assessment Matrix (SAM)

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Best practice: Achieving what is currently considered to be global best practice in a particular field.

Developing leadership: Applying a comprehensive approach including innovative tools and widespread engagement.

Progressing: Ensuring consistent performance is achieved in a particular field.

Minimum standard: All operations must achieve level 1 as it represents management of the key sustainable development risks we are facing today. The Executive Committee has mandated that where operations do not meet level 1 currently, they must implement a plan to reach this level as soon as possible.

Leading edge: Performance that represents genuine global leadership on an issue.

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SAB Performance for F12 (Four year trend - SAB)

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Level Assessment Results: By Hub

TRINITY SD PRESENTATION -ZUG

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Clear Accountabilities & Management Framework

Corporate Accountability& Risk Assurances Committee[CARAC]

SABMillerBoard

SABCARAC

EuropeCARAC

AfricaCARAC

AsiaCARAC

SABMiller Executive Committee

LATAMCARAC

1. Promote responsible use of alcohol

Embed Employee Alcohol PolicyLive the Example Lead through Responsible Marketing

Industry Leadership (ARA)

Implement Responsible Trading Policy

Lead Co-Regulation

Drunken Driving Programme

Tavern Intervention Programme

Real Impact

Projects

Reality Check CampaignComms You decide Youth Campaign

2. Making more beer using less water

In the brewery - examples

Water cascading at Alrode Brewery

Energy from waste water at Newlands Brewery

Treating effluent using ecological technology at Ibhayi Brewery

In the supply chain - examples

Shared water risk on the hops farms

Saving water through better barley irrigation

Engaging our suppliers

In the community - examples

Wilge River-before SAB funded Water Trust

Wilge River at Frankfort-after first 15km cleared

Tshirunzini community Solar water pump

Strengthening water governance

Water Futures: Corporate Stewardship GIZ and WWF

Polokwane Municipal Partnership -effluent focus

Strategic Water PartnershipNetwork

• Target to reduce CO2 emissions by 50% per hectolitre by 2020

• SAB reduced yearly electricity consumption across its breweries by 17%

• Installed high-efficiency lighting and solar geysers at all production plants and introduced metering to create a culture of awareness

• Reduced water temperatures used in bottle cleaning, improved compressor footprint and installed high efficiency motors

• Refrigeration systems have been optimised by introducing variable -speed drives on condensers

3. Reducing our energy and carbon footprint

4. Packaging, reuse and recycling

• Nearly 90% of our beer sold in returnable bottles

• We seek a consistent and sustainable approach to the design, reuse and disposal of all the packaging we use

• The packaging we use is integral to how we present our products to consumers. More importantly, it preserves the quality of our beer and keeps it safe for consumers’ enjoyment

• We select packaging that is fit for purposes, while also taking account of its environmental impact from manufacture to disposal

Case Study: Miller Genuine Draft Light -weighted packaging

• In the context of limited global resources, SAB is looking for new and innovative manufacturing solutions

• Nampak Cartons & Labels and SAB are leading the way by lightening the load on our environment

• The innovative Miller Genuine Draft new light-weighted cluster pack has been down gauged from 380gsm to 350gsm

• This pack allows SAB to use around 7.9% less carton board per year – a saving of 51 tons of paper annually on the MGD pack

5. Working towards Zero Waste

• We are seeking ways to eliminate or reuse waste

• Spent yeast is sold to manufacturers of health foods and savoury spreads;

• Farmers purchase spent grain for animal feed;

• Malt dust, spent grains and other organic waste is sold for pet food;

• Segregated broken glass bottles are recycled and turned into new bottles; and waste water is used to generate energy and produce fertiliser;

• Crates are crushed and recycled

6. Encouraging Enterprise Development in our Value Chains

• We recognize that our influence extends beyond our immediate operations to include those of our value;

• We'd aim to build sustainable small businesses into our value–chain and support the communities in which we work;

• The Taung small-scale barley farmers scheme produces 1000ha of barley through 100+ local producers)

• SAB provides operational support such as soil preparation, planting and spraying advice and harvesting

• Production loans for small scale farmers at interest rate of prime less 1%

• SAB is a guaranteed market for malting barley

Enterprise Development Case Study

Owner Driver scheme

• Over 550 independent drivers to form their own companies to distribute products.

• About 70% of deliveries are carried out by owner-drivers, many who have gone on to own more than one vehicle.

• The programme empowers drivers, develops sustainable businesses and jobs, and allows SAB to develop superior routes to market.

7. Benefitting communities

• Our CSI activities aim to improve the quality of life for local people;

• We are supporting entrepreneurship and aim to make a valuable contribution in the communities in which we work;

• The prosperity of our business is closely aligned to the health and well-being of the communities in which we work;

• Soul is an outreach response to welfare issues, evaluating requests on humanitarian merit;

• Soul also provides a mechanism for employees to get involved with worthy projects in their communities

Case Study: SAB KickStart

• Launched KickStart Youth Entrepreneurial Programme in May 1995;

• Qualifying candidates are equipped with business skills training, mentorship and funding;

• More than 23 000 young entrepreneurs assisted with business support and mentorship;

• Grant funding of over 62 million; • Over 80% of grant recipients are

still in business after three years and many have grown into multi-million rand organizations.

8. Contributing to the reduction of HIV/Aids

• We are working to contribute to the reduction of HIV⁄AIDS within our sphere of influence.

• Our internal approach is based onvoluntary testing and counseling to all employees, spouses and up top three dependents. Free ARV treatment and monitoring. Ongoing professional counseling support.

• Project Promote, in partnership with the National Department of Health and the South African Business Coalition on HIV⁄AIDSSAB will distribute 845 million condoms to local taverns in an attempt to avert more than 1.6 million new HIV⁄AIDS infections.

9. Respecting Human Rights

• SAB recognizes that it has a duty to respect and promote the values of the international community, notably the United Nations Universal Declaration of Human Rights (UNDHR)

• SAB actively promotes:o Freedom of association and recognition of the right of

collective bargaining.o Prohibition of forced and compulsory Labouro Abolition of child labouro Intolerance for discriminationo Establishing fair and competitive wages and benefito Providing safe and healthy work environmentso Employee securityo Community commitmento Supplier guiding principles

10. Transparency and ethics

• Transparency and open reporting on its activities are important to SAB because consumers want to know that our beers and soft drinks are of consistently high quality;

• Employees want to work for a company that they know is honest and committed to behaving responsibly;

• High standards of ethical behaviour and transparency underpin all that we do;

• We therefore place a high value on reporting and communicating in an open and honest way with all our stakeholders.

11. Health and Safety

SAB has a fully functional and designated Risk Management Team who assist in the facilitation of risk management requirements in the operational environment. This scope covers:

• Occupational Health and Safety• Business continuity• Security Management/fraud/stock loss• Investigations• Insurance• Environmental• Fire and explosion protection• Corporate governance and ethics• Contractors

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• SAB is Level 4 BBBEE contributor

• The SAB Foundation has to date invested into 45 micro-, small- and medium-size enterprises- a combined total of 352 jobs created

• Zenzele Employee Trust has allocated shares to 10,000 employees who have received a cumulative R107,72 million in dividends

• Shares were allocated to 29542 retailers who have received a cumulative R115.78 million in dividends to date.

12. Transformation