Adding up the value of sustainability in every part of a corporate strategy and decision-making sounds straightforward enough. It’s certainly laudable and essential for today’s businesses. But when you get down to brass tacks, that means changing the mindset of thousands of employees, processes and systems, not to mention external suppliers.
Yet that is exactly what British soft drinks company Britvic has dedicated itself to doing over the past few years. And its sustainability strategy, Healthier People, Healthier Planet, has won Britvic the Embedding an Integrated Strategy category in the ICAEW-backed Finance for the Future Awards for 2021.
Sarah Webster, Director of Sustainable Business at Britvic, said the Finance for the Future Awards application process was not to be underestimated.
“I hope this win represents further evidence to our stakeholders that Britvic is determined to embed our sustainability goals in our overall strategy. And internally, across investor relations, financial planning and analysis and the sustainable business team, the award has given us an enormous sense of pride,” Webster said.
On whether Britvic’s strategy has influenced its peers, Webster said it was too soon to understand the external impact, but she hoped it would. For now, the Britvic sustainability team’s focus returns to ensuring the company’s sustainability goals are entrenched in every decision, process and system that the company makes – and that includes in capital expenditure decisions.
Says Webster: “That’s all very well in theory, but when you’ve got people writing board papers, who perhaps don’t live and breathe sustainability as deeply as the finance and sustainability teams, they need a little prompting. So that’s a big goal for us.”
For the next year, Britvic will concentrate on embedding ESG into complex planning more deeply, using a carbon price, which may well be be pegged to the UK Emissions Trading Scheme, on an annual basis to ensure a level of predictability when calculating a return on investment, much as you would set annual budget foreign exchange rates for the year ahead.
Webster says it’s important to include an internal carbon price to be prepared for the introduction of a UK carbon tax. Britvic plans to use the internal carbon price in its assumptions when investing in green technology to decarbonise the business.
“If we fail to act now, we’re going to have to invest in decarbonisation, as well as paying a carbon tax. It’ll be a double whammy. We have to look at everything holistically.”
Britvic has also calculated the business’s true cost of water. The soft drinks company will be applying that cost to projects worth more than £1m. “Everyone thinks water is plentiful, and they only look at the invoice price of water – on that basis the payback or the return on investment tends to be many, many years, far longer than the normal return on investment criteria for business decision making. By bringing in the true cost of water, it makes returns more realistic.”
Historically, Britvic has primarily considered water usage within its supply chain, but water is a primary ingredient in many of its products, such as Robinsons squash in the UK, and therefore a critical commercial driver for the business.
Last May Britvic announced a partnership with The Rivers Trust through its Water Stewardship Programme. Britvic is working with its local rivers trusts to take practical action and improve the quality of waterways near its production sites. As part of this Britvic’s employees have given more than 625 hours of their time to improve local rivers in the first six months of the partnership.
This year, the soft drinks company will also be looking at impact assessment at a corporate level and at a brand level to help the brands understand their flashpoints so that they can work towards becoming net positive contributors.
Part of Britvic’s Healthier People, Healthier Planet strategy involves using the scale and reach of its brands to inspire change. To ensure transparency, and to maintain the brands reputations, the company has put in place robust governance procedures too with a new sustainable claims policy, run by its regulatory team. All labels and brand marketing must go through this team to ensure the data is correct and available to support any claim.
Last year was the second year that the sustainability strategy was included in the annual operating plan for each of the business units, including it in the quarterly business review process, which also comprises market share data, the profit and loss account and the balance sheet. Some markets fare better than others, but the sustainability and finance teams are sharing best practice across all business units.
“There’s a real sense of pride in the progress we’re making with regard to sustainable business performance and creating a solid foundation to apply financial tools and processes and governance to non-financial planning and reporting,” Webster says.
Finance and Sustainability
This summer Britvic’s finance graduate scheme will include a placement in the sustainable business reporting team.
“We want to apply the same rigour to our non financial reporting as we do to our financial reporting, and Finance are always looking ahead managing the risk of the business so it’s a natural fit going forward.”
Trade: clean growth and tech
Clean growth and the application of major emerging technologies to existing sectors are two key characteristics of trade in 2022. Add to these levelling up supported by foreign direct investment, and there are exciting future prospects for business and the prosperity of communities globally.
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