Diageo has committed to invest £180 million (US$217million) in renewable energy resources across its African sites, the British multinational alcoholic beverages company has announced.
According to the world’s second largest distiller, the move is to ensure its breweries are the most carbon and water efficient.
This commitment represents Diageo’s largest environmental investment in a decade confirming its commitment to reducing its carbon footprint and addressing climate change.
The investment will touch 11 of Diageo’s African brewing sites where it will deliver new solar energy, biomass power and water recovery initiatives.
It is also targeting to bring new infrastructure designed to improve the long-term sustainability of Diageo’s African supply chain in seven countries.
“We believe this is one of the biggest single investments in addressing climate change issues across multiple sub Saharan markets. It demonstrates the strength of our commitment to pioneer grain-to-glass sustainability and to positively impact the communities in which we live and work,” Diageo’s CEO Ivan Menezes said.
“We have a responsibility as a local manufacturer and employer in Africa to grow our business sustainably, creating shared value and this significant investment continues our work to provide sustainable solutions for our local supply chains,” Menezes added.
The investment includes a commitment to switch to renewable energy at three African breweries in Kenya and Uganda.
New biomass boilers will replace heavy fuel oil using sustainable fuel alternatives such as wood chip and rice husks to create steam power for the breweries, reducing carbon emissions by 42,000 tonnes (the equivalent of taking tens of thousands of cars off the road).
It will also include new water recovery, purification and reuse facilities across five sites in Africa, including Kenya, Uganda and Nigeria, saving over two billion cubic litres of water a year.
Solar installations will also provide renewable electricity at 12 breweries across six countries. These solar panels will produce up to 20 per cent of each brewery’s electricity demand.
It will cover 11 sites in seven countries including Kenya, Uganda, Tanzania, South Africa, Seychelles, Nigeria and Ghana.
In Kenya, Diageo’s new brewery in Kisumu, Kenya’s third largest city, has already had solar power and water treatment facilities installed to ensure its operations have minimal impact from their start.
With 100 per cent renewables and cutting edge water efficiency, the management says it believes Tusker will be the most environmentally sustainable brewery in Sub-Saharan Africa.
Diageo Chief Executive, Ivan Menezes, added:“We’ve set ourselves ambitious environmental targets, aligned with the United Nations global SDGs and our efforts to deliver on these by 2020 continues at pace. Progress has included a forty five per cent reduction in our carbon emissions and a forty four per cent reduction in our water consumption over the past decade, while we also now look to the future and how we extend beyond 2020 with this investment.”
Meanwhile, the Diageo Africa Business Service Centre (ABSC) has announced a review and re-organisation which will significantly alter its structure, with Nairobi being affected.
The Nairobi-based centre is one of five shared service centres Diageo has globally, and the only one in Africa.
It runs back-office processes required to enable Diageo’s finance, supply, human resources, sales and marketing teams to focus on their core roles.
“The business services requirements and processes across Diageo Africa are changing and as such Diageo will be conducting a review of the centre to determine where best to locate technical services roles for Africa in either Europe or Asia,” the firm said in a statement to newsrooms.
This will lead to the transition of roles to other service centres. The review and change process will take place over a six month period and conclude in March 2020.
East Africa Breweries Limited (EABL) is directly talking with all its employees in the ABSC who may be affected and will be providing regular updates through the review process over the coming months, the management has said.
“It is important to note that this is a Diageo global business services process which does not affect EABL core functions which will remain unaffected and in fact, are in a period of growth and expansion,” it said in the statement.
Persons familiar with the process told The Exchange, Diageo has outsourced all its financial, accounting and analytical work to Bangalore, India and Budapest, Hungary.
The parent firm to EABL however says commitment to invest and expand its business activities in Kenya and the East African region remains steadfast.
“In the last five years alone, we have invested over Ksh40.2 billion across East Africa to expand our production capacity, as we continue to grow the business. With investments in our Nairobi brewery and our plants in Uganda and Tanzania, we have also just finalised the construction of the Ksh15 billion KBL Brewery in Kisumu, announced in 2017 and completed ahead of schedule,” the management said.
“This investment has spurred new economic activity and we estimate that it will produce over 110,000 direct and indirect jobs,” it said.
Headquartered in London, it has offices on six continents. Diageo’s brands Smirnoff ,the world’s best selling vodka, Johnnie Walker, Baileys (the world’s best selling liqueur) and Guinness.
Diageo has a primary listing on the London Stock Exchange (LSE) and is a constituent of the Financial Times Stock Exchange 100 Index, also called the FTSE the. It has a secondary listing on the New York Stock Exchange.