Diageo

Stakeholder engagement
The company discloses an overview of the issues raised during its stakeholder engagement activities and the channels it uses to engage with its stakeholder groups. Furthermore, Diageo is one among few companies that explains how it has responded to key issues raised by each stakeholder group and disclose specific outcomes implemented to respond to key issues for each stakeholder group, beyond its materiality assessment.

Sustainable development strategy
The company discloses its process for identifying and prioritising its most relevant sustainability impacts as well as the outcome of this process, in relation to its sustainability strategy. Moreover, it reports consistently against all its targets.

Scope 1, 2, and 3 greenhouse gas (GHG) emissions
The company has set time-bound targets to reduce its scope 1, 2 and 3 greenhouse gas (GHG) emissions and regularly reports on progress against them. The company shows leadership by aligning all these targets with a 1.5-degree trajectory while constantly reporting progress against these targets.

Plastic use and packaging waste
The company demonstrates commitment to reduce plastic use and transitioning towards sustainable packaging. Notably, it is increasing the use of recyclable plastics.

Soil health and agrobiodiversity
The company describes how it partners with farmers to help them implement regenerative projects to improve soil health and agrobiodiversity. For instance, its brand Guinness is working in Ireland with farmers of barley on a three-year farm-based regenerative agriculture pilot programme.

Water withdrawal
The company has set targets to reduce water use in its operations with a 40% improvement in water–use efficiency in water-stressed areas and a 30% improvement across the company. It regularly reports progress against the targets. Also, it discloses the amount of water withdrawn from water-stressed sites.

Responsible marketing
The company has a responsible marketing policy that covers all media channels, aimed at reducing children exposure to alcohol marketing and limiting the appeal of alcohol marketing.

Child labour
The company requires suppliers to prohibit child labour and verify the age of recruited workers. Furthermore, it works with its supply chain to eliminate child labour by training business partners on its local sourcing programme in seven countries in Africa.

Farmer and fisher livelihoods
The company highlights its commitment to sourcing local raw materials across its African markets and other regions where smallholders form part of its supply chain. It discloses that currently 68% of its raw material volume is sourced locally. Also, it states that its sourcing approach includes providing skills training and access to farming input and credit, and other support to build the smallholders’ economic and environmental resilience. Further, it has set a target to provide all its local sourcing communities with agricultural skills and resources by 2030.

Forced labour
The company prohibits suppliers from paying recruitment fees, retaining workers’ personal documents or restricting workers’ freedom of movement. Furthermore, it works with them to eliminate forced labour by means of a responsible sourcing toolkit guide, responsible purchasing practices training sessions and capacity building.

Land rights
The company has a commitment to respect ownership and use of land and natural resources and related legitimate tenure rights. In addition, it requires its business relationships to have a process to identify legitimate tenure rights holders and to negotiate with them to provide adequate compensation.

Act ethically
The company maintains a publicly available global tax strategy that is endorsed by the highest governance body. This strategy ensures that tax payments are made in accordance with all relevant laws and regulations in the countries where the company operates.

In addition to this, the company has a policy in place that strictly prohibits bribery and corruption. Furthermore, the company publicly commits to protecting personal data. The company also has a supplier code, which explicitly prohibits bribery and corruption. It makes it clear that any violation of the code of conduct may lead to the termination of the supplier’s commercial relationship with the company.

Diageo’s Speak Up whistleblowing line and web tool are available to employees, value chain partners, and communities to report concerns related to bribery and corruption. These reporting mechanisms also ensure protection against any form of reprisal.

Provide and promote decent work
The company has a publicly available policy statement emphasizing its commitment to the health and safety of workers. It also publicly states its policy of expecting its business relationships to prioritize the health and safety of workers..

The company has disclosed that 47.1% of its total direct operations workforce is covered by collective bargaining agreements. Regarding working hours, the company publicly declares that workers should not be required to work more than 48 hours in a regular work week or 60 hours including overtime. This expectation extends to the company’s business relationships as well.

The company discloses the gender distribution of its total direct operations workforce, as well as its board of directors and executive committee. Being a signatory of WEP (Women’s Empowerment Principles), the company publicly commits to promoting gender equality and women’s empowerment. It has set a target to achieve 50% representation of women in leadership roles by 2030. Furthermore, it reports that out of its 12 board members, 7 are female, resulting in a 58.33% representation of women on the board.

Respect human rights
The company publicly commits to respecting ILO core labour rights and expects its suppliers to do the same. The company has developed a comprehensive HRIA toolkit that facilitates a systematic review of their businesses to identify and assess potential human rights impacts. The company also discloses the countries in which it has conducted detailed human rights impact assessments to identify the most significant risks for its business and supply chain.

Furthermore, the company provides insight into its global system for addressing and preventing salient human rights issues, extending to its supply chain. It has conducted training programs in seven African nations to combat child labor in local sourcing programs.

The company also actively engages with stakeholders whose human rights may be affected by its activities. To ensure transparency and accountability, the company maintains a Speak Up whistleblowing phone line and web reporting tool accessible to all workers. This allows them to raise complaints or concerns related to human rights issues.

Governance and accountability for sustainable development
The company discloses a remuneration policy related to sustainability; however, it has an opportunity to link this policy to improvement in nature-related objectives and social issues. While the company states that the Board of Directors has expertise in sustainability, it has an opportunity to disclose whether its highest governance body has expertise with respect to the company’s most material sustainability topics.

Lobbying and advocacy
The company has an opportunity to disclose a list of trade associations of which it is a member. Furthermore, the company can provide a clear and detailed framework for assessing the alignment of these trade associations with its sustainability targets. Additionally, the company can report any (potential) misalignments between the lobbying activities of its trade associations and its sustainability targets.

Stakeholder engagement
While the company’s stakeholder engagement covers nutritional and social issues, it has the opportunity to include nature, including biodiversity in its engagement activities with stakeholders.

Sustainable development strategy
While the company discloses some sustainability objectives/targets including climate, social inclusion and water, it has an opportunity to establish group-wide targets for the most material parts of its value chain such as nutrition and biodiversity.

Scope 1, 2, and 3 greenhouse gas (GHG) emissions
While company reports regularly against its scope 3 emissions targets, it has reported an increase year on year.

Plastic use and packaging waste
The company has an opportunity to disclose quantitative evidence regarding plastic use reduction and use of sustainable packaging.

Soil health and agrobiodiversity
The company has an opportunity to disclose a target to improve soil health in its sourcing practices and report progress against it.

Water withdrawal
The company currently discloses the total volume of water it withdraws for some of its operations, but there is room for improvement in demonstrating a reduction in water withdrawal across all its operations. Likewise, although the company sets expectations for suppliers to reduce water withdrawal, there is an opportunity to enhance its engagement with them.

Availability of nutritious foods
The company has an opportunity to disclose evidence of reformulation efforts to reduce sugar and calories across its portfolio.

Clear and transparent labelling
The company has an opportunity to make nutritional information more visible to consumers through the adoption of front-of-pack labels and/or any other consumer-facing nutrition label.

Food safety
While the company discloses that 86% of its own operations are certified to FSSC 22000, it has an opportunity to extend the certifications to 100% of its own operations. Moreover, the company could disclose the percentage of its food suppliers that are certified to a GFSI-recognized food safety scheme.

Child labour
The company has an opportunity to disclose examples of remediation programmes when a case of child labour is found in its operations. Additionally, it could provide an analysis of trends demonstrating progress in relation to eliminating child labour from its supply chain.

Farmer and fisher livelihoods
The company has an opportunity to identify living income benchmarks and assess living income gaps for some regions or commodities.

Forced labour
For its operations, the company has an opportunity to disclose a prohibition to pay recruitment fees or related costs to secure a job, to retain workers’ personal documents or to restrict workers’ freedom of movement. Furthermore, it could provide an analysis of trends demonstrating progress in relation to eliminating forced labour from its supply chain.

Land rights
The company has an opportunity to disclose a commitment to respect ownership and use of land and natural resources and related legitimate tenure rights. Furthermore, it could describe a process at its operations and supply chain level to identify legitimate tenure rightsholders when acquiring, leasing or making other arrangements to use land and to negotiate with them to provide adequate compensation.

Living wage
The company expects its suppliers to ensure employees are paid a fair wage but it has an opportunity to determine if this is enough to maintain a decent standard of living for employees of its business relationships and their families. Also, it could disclose a target for paying a living wage across its direct suppliers. Furthermore, it could disclose the percentage of workers across its own operations or direct suppliers that are paid a living wage.

Act ethically
The company has a process for identifying bribery and corruption, but it has not disclosed the details of this process. Additionally, the company has the opportunity to create a policy that outlines its approach to lobbying and political engagement.

Currently, the company has a publicly available policy statement that states it only allows political contributions with prior approval from the relevant Global Corporate Relations and Legal Function lead. However, there is an opportunity for the company to disclose whether these contributions are made only by exception, and to provide the criteria for making them.

Furthermore, the company could also disclose its expenditures on lobbying activities. In addition, it could highlight that it requires third-party lobbyists to comply with its lobbying and political engagement policy.

Provide and promote decent work
The company currently holds official accreditation as a living wage employer in the United Kingdom, but there is a chance for it to extend this commitment to all workers across all its operations. Additionally, the company can provide transparency by explaining how it determines a living wage in the regions where it operates.

While the company has already established wage expectations for its suppliers, there is an opportunity to include a requirement for them to also pay a living wage. The company should further disclose its efforts in supporting suppliers with this payment. Moreover, the company can enhance transparency by disclosing the ratio of basic salary and remuneration between women and men in its total direct operations workforce. This information should be provided for each employee category and for significant locations of operation.