Environmental topics
We want to be THE PREFERED CHOICE for the future, and it is our ambition to be one of the most sustainable beverage companies globally.
We are in the process of converting our energy consumption to renewable energy in the entire value chain, and we collaborate with our partners and other stakeholders to reduce CO2 emissions as well as our use of resources by fostering a circular mindset and ensuring biodiversity. All this while contri-buting to society. We apply a precautionary principle to ensure that factors which may present an environmental or climate risk are monitored, avoided or mitigated.
Royal Unibrew’s environmental and climate policy aims to minimize potential impacts on the environment and climate by reducing resource consumption such as energy, water, materials, as well as the associated emissions, to protect biodiversity and ultimately to do no harm. Our environmental policy applies to Royal Unibrew and our suppliers.
We have ambitious environmental and climate targets that are well-integrated in our management processes and systems. Systematic monitoring allows us to make continuous improvements and communicate our performance both internally and externally.
Our overall KPIs for the environment remain unchanged with a maintained focus on climate and circularity but with underlying targets established for water and the interconnection to biodiversity. We have, however, added a SBTi approved 1.5°C target for scope 3 alone, with a 50% reduction target in 2030 compared to 2019.
Royal Unibrew has reviewed the impact materiality in 2023. The material topics and impact assessment are unchanged; however, water stewardship has been assessed as having a higher impact. We have conducted a thorough assessment of the financial materiality of climate change in relation to transitional and physical risks.
Climate and energy
We will increase our renewable energy use toward 2030 by starting with our own production and gradually increasing demands on suppliers and engaging in partnerships.
Our commitment to environmental sustainability is unwavering, and we are fully aware of the critical role businesses play in addressing climate change. The SBTi approved our scope 1, 2 and 3 targets in 2023 in alignment with the overarching objective of limiting global warming to 1.5°C as outlined in the Paris Agreement. We have submitted our FLAG target (50% reduction in 2030, compared to 2019); no-deforestation and net-zero target for 2040 for SBTi approval in 2024.
Our targets are not a one-size-fits-all solution but are tailored to our industry. We have conducted comprehensive sector-specific assessments to understand our industry’s unique challenges and opportunities in addressing climate change. We recognize that addressing climate change requires collective action, and we are encouraging our peers, suppliers, and partners to embrace similar commitments. Basically, we are dependent on efforts in the entire value chain, sharing of data and collaboration to reduce impacts.
Royal Unibrew’s principles for decarbonization are unchanged, and the primary drivers are efficiency improvements and transition from fossil fuels to renewable energy and adding renewables to the grid. In 2023, we further developed our road maps for decarbonization and energy efficiencies. For scope 1 and 2, where our target is to be 100% emission free by the end of 2025, excl. distribution and biogenic emissions, we have capex projects and capex plans in place to support implementation. In 2023, we had a total of DKK 76 million capex allocated to climate, which is a significant increase from 2022.
The energy efficiency measured as energy consumption per produced hectoliter declined organically by 0.5% to 20.4 MWh/hl in 2023. Efficiency measured relative to net revenue was 2.0 MWh/DKK in 2023, which is an improvement of 5% compared to 2022.
Today, 44% of Royal Unibrew’s energy consumption in scope 1 and 2, excl. logistics, is based on renewable energy from our own production or Renewable Energy Certificates (REC). Projects ensuring a reduction of almost 100% of our carbon footprint (36.2 million kg CO2 excluding Amsterdam Brewery, San Giorgio and Vrumona) from our production are progressing or planned for the period of 2024 to end of 2025. The main projects include installation of solar cells, heat pumps and bio-based or electrical boilers. Royal Unibrew is not regulated through EU’s Emissions Trading Scheme (ETS), and we have not financed carbon credits or carbon removals. We do not currently apply internal carbon pricing.
Despite of the war in Ukraine resulting in a temporary switch from natural gas to oil at our sites in Faxe, Denmark; Toronto, Canada; and Bergen, Norway, in the beginning of 2023, the kg CO2 per produced volume decreased organically by 9% in 2023. This decline is an expression of the effects of Royal Unibrew’s transformation from fossil-based to renewable energy based.
Our absolute scope 3 emissions (mkgCO2) in 2023 were at level with our 2019 base year. When looking at the efficiency measured as mkgCO2 per hectoliter, we have reduced the impact in all parts of the value chain except for transportation. The predominant reduction is at our breweries covering scope 1 and 2. For packaging materials the reduction is related to a significant increase of the recycled content of cans, and despite of an increase in the PET contribution as we temporarily switched to a higher content of virgin material.
Biodiversity
The impact of climate, pollution, land use and water use changes on biodiversity and loss thereof is increasingly articulated as a major challenge, at least in the same order of magnitude as climate.
New legislation such as the EU Taxonomy and CSR directive address this as well as several initiatives like the Science Based Targets for Nature (SBTN) and the Taskforce on Nature-Related Financial Disclosures (TNFD). The beverage industry is dependent on agricultural raw materials such as barley, sugar and corn, primarily sourced locally, but also forest-based products such as cardboard, carton, paper and land-based excavation of filter material (kieselguhr). As a consequence, Royal Unibrew assesses biodiversity to be material.
In 2023, we updated our review of our physical locations’ vicinity to nature protected areas or protected species under the Natura 2000 umbrella. The review demonstrated that we are not located in Natura 2000 areas. We will work on stepwise to expand the assessment to the entire value chain, especially upstream.
We have elaborated the climate-related impacts from raw materials and fiber-based packaging during preparation of the proposal for FLAG related CO2 targets to SBTI. Adjusting our initial scope 3 calculation for purchased goods and services with 59 mkgCO2 from FLAG in 2019. Furthermore, we are now committed to zero-deforestation.
Royal Unibrew realizes that target setting on biodiversity requires more work. We spent 2023 to further educate ourselves, and we are leaning toward targets for sustainable agriculture based on concepts such as nature positive methods and methods such as regenerative farming focusing on water consumption and use of chemicals as well as social aspects. We will formulate targets in 2024.
Water stewardship
Water is our most important raw material; therefore, water preservation and water quality are key focus areas for us.
Royal Unibrew’s production sites are not located in extremely high water stressed areas, except for a small site in Estonia (0.04% of total consumption). Withdrawal of water in low and medium-low water-stressed areas constitute approximately 53%. Water consumed is either based on municipal supply or water from own wells. At a couple of our production sites scarcity of water or capacity of wastewater treatment plants may become limiting factors for growth.
All wastewater is treated prior to emission either at privately owned or public wastewater treatment plants upholding the stipulated requirements.
Our consumption of water per hectoliter declined organically by 1% between 2022 and 2023. The water intensity measured as water consumed per hectoliter from 2019 to 2023 has been reduced by 6%, organically.
Reducing water consumption remains a priority. We continue our efforts to improve water efficiencies, and we are investigating opportunities to reuse more water at our major production sites. In addition, projects aiming at restoring freshwater ecosystems continue at the Lake Vesijärvi in Lathi, Finland, and in Latvia where collaboration with the World Wide Fund for Nature (WWF) also entails education in the society at large.
Circularity and waste
Circularity in the beverage industry starts with packaging materials and closing the material loop
In the beverage industry, resource consumption and circularity, apart from water, is closely connected to packaging materials from manufacturing via filling and distribution to end-of-life – and to a lesser extent loss and scrap of products as well as waste generated in production. Closing the loop of packaging materials (primary, secondary and tertiary) is key, but also removing, reducing, reusing and recycling materials are important. The impact materiality within this area is considered unchanged from 2022. Packaging materials serve a critical role of protecting the beverages and avoiding food waste. Food safety requirements for primary packaging are stringent, as it is vital to protect our products and ultimately consumer health. The entire packaging system ensures there is no harm to our products during distribution. Therefore, our approach to circularity is founded on the primary purpose of packaging materials’ ability to protect the products.
Royal Unibrew is applying circular principles in the design of packaging materials and systems. We are on track toward our overall goal of 100% reusable, recyclable, or recycled materials in 2025. 96% of the materials we use today are mono materials. Mono materials can easily be separated, sorted, recycled or reused in clean fractions, such as glass, PET, carton, aluminum, etc. However, a few concepts such as our juice portfolio and bag-in-box concepts for wine and soft drinks as well as certain plastic-based kegs are not yet recyclable or recycled. These concepts contributed approximately 4% of the sales volume in 2023. While recyclability may be improved in the next couple of years, we will also be looking for alternatives.
We are committed to converting to a higher content of recycled materials both in our plastic and fiber-based packaging in accordance with our 2025 targets. However, in 2023 we slowed our conversion rates down on targeted materials. We have registered challenges especially in the quality and cost of rPET, and we also experienced challenges with the robustness of both shrink film and corrugated cardboard in distribution. Based on our learnings, we have decided to investigate recycled content further, as more materials needs to be added to ensure stability in our current systems. Subsequently, we need to establish the optimum between environmental, technical and protective properties for packaging materials.
Our sector is characterized by using reusable (e.g. kegs, glass bottles) and recyclable packaging systems, and the systems are in many markets supported by strong deposit return systems, (DRS) where return rates are above 90%. We are therefore well prepared for our extended producer responsibility and the new EU legislation on packaging and packaging waste. In less mature markets, we are looking to drive solutions. Reuse and recycling concepts at our customers and venues are currently being tested for washable cups, and also collection and recycling of rPET cups at festivals as well as recycling plastic kegs using DRS are being tested. We continue to work on projects to reduce the amount of material used with the limitations and restrictions mentioned above. We continue to look at substitution of plastics by implementing more filling lines that operate with paper or cardboard solutions such as keel clip. Circularity principles are also applied to our production waste, where 92% was recycled in 2023. Organic byproducts and organic waste are utilized 100% for food, feed or biogas.
In 2024, we will continue our work on implementing circularity principles more broadly in our supplier management processes in relation to equipment, building materials, etc.
Zero
We are comitted to zero-deforestation
