Q&A: Andy Wales, sustainable development chief, SABMiller

Water scarcity is a business-critical issue for multinational brewing giant SABMiller. We talk to sustainable development chief Andy Wales to see what's on tap.

Andy Wales is head of sustainable development at SABMiller, the brewing and bottling conglomerate whose beverage portfolio includes famed beer brands Miller and Peroni.

Wales is responsible for identifying social, economic and environmental issues within his company's strategies, from water scarcity to local farming.

SmartPlanet spoke to him about water footprinting and stewardship in the food and beverage industry.

SP: This month, you were in Bonn, Germany for the Water, Energy, Food Security Nexus conference. What is industry saying about water as an increasingly scarce resource?

AW: It's been an emerging concept over the last two or three years. We face significant water scarcity challenges through 2030 -- there's a significant gap. That demand for water is being driven by a demand for energy and food as the population grows and people get wealthier and want a higher quality of living.

There are some tradeoffs and connections that we must be aware of, and we must make strategy at the government level. You can look at it on a national level and also on a company level. We're working with the WWF on our water footprinting efforts and we also have very strong energy efficiency drives internally.

If you look on the brewing company level, you see opportunities and tradeoffs. To achieve our water target we have to become more efficient in the brewing process, which is essentially heating and cooling liquids. If we do that less, we save energy. The nexus is becoming important at all these levels.

Our work is all in the context of our broader approach to sustainable development, which grows into our business strategy to grow out profitability in a sustainable way.

SP: What role does a large company like SABMiller play at Bonn?

AW: If you go back 15 or 20 years, you had a lot of NGOs screaming about climate change. It took many years before business started to respond credibly to the threat of climate change. What's very different now is when an issue arises, you see the leading NGOs like WWF and progressive companies who understand because they operate at a global level working together to scope out what the risks are for business and ecology together, and seek to impact government policy to reduce the impact of those risks.

They're making the case to governments that they should take water more seriously as a threat to economic growth. We will see between a 40 percent gap by 2030 in terms of demand and supply. Different sectors will need to take different steps: mining, agriculture, domestic users. What you're seeing is a range of global companies seeing the scale of the challenge ahead of governments because they're operating all over the world. They are seeking to change the [conversation]. What's been surprising is how welcoming they've been to that.

SP: What are the challenges?

AW: There are three. The first is that you have big, progressive companies on board -- SABMiller, Coca-Cola, Nestle -- leading coalitions toward activity at the national level. But when you get to the regional level -- the watershed level -- it's critical that a mass of companies get on board to develop solutions. They can only really be achieved if you get a number of different companies, owners and municipalities involved. In India, we're working to recharge the aquifer that we draw from. We have to work with local farmers and others who operate in the watershed to be equally responsible with water. The challenge is getting a critical mass to do that at the watershed level.

The second challenge is getting governments to understand that it's a national security issue, an economic issue. This conference in Bonn is important. Our third parter in our watershed partnerships is GIZ, the German department of [sustainable development]. They really get it. There are governments around the world taking more time to get it.

Third, we must make the complexity of the nexus more digestible. It's easy to get lost in the tradeoffs and the connections. We've done a lot of communications internally with our 70,000 employees around the world: what water means at SABMiller, what water means in their home lives.

SP: How have economic troubles in Europe and elsewhere affected the conversation?

AW: Clearly, in the very short term -- the last month, the next month -- the sovereign debt discussion in Europe has taken so many leaders' time, and has taken much of their attention in the run up to [the COP17 climate conference in] Durban.

If you look a bit longer [term], the discussions around resource scarcity have not been derailed, but in fact are more focused. The theme of "How do we couple resource efficiency to support economic growth?" is actually a rich vein, I think. I wouldn't say that [economic turmoil] has slowed it down; it has given it a very healthy focus to make sure the output of these green conversations are much more relevant to core economic growth.

SP: 2012 is just around the corner. What's on tap for SABMiller's sustainability efforts?

AW: Internally, there's a huge push from our technical communities to achieve our carbon and energy footprints. They're challenged to rethink their focus to get the same high quality beer, but change their processes. In Nottingham, U.K., we have a "Brewery of the Future" research center to look at extreme brewing in difficult circumstances and different ways of brewing.

We are trying to build out this water partnership further. In South Africa, we're looking at the hop farm area in George to remove non-indigineous trees in that watershed, which use a lot of water in a water-stressed area. The other is improving water infrastructure.

Third is understanding on the supply-chain side, working with barley farmers to make them more efficient.

All of them build up to the evidence base that we can use as a company to say, "This is what we need to change the world."

Editor's note: The original version of this interview incorrectly indicated that SABMiller was working with Bali farmers; it is barley, not Bali. Additionally, the original version indicated there was a 17 and 30 percent gap in global water demand and supply; it is actually 40 percent. Both have been amended.

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