Leading Sustainable Organizations
It’s only natural that a beer company would be concerned about water. A fresh water shortage could completely hobble a brewery — after all, it takes five liters of water, on average, to manufacture one liter of beer. Yet the true scope of the issue is far deeper than that, since the vast majority of water use in the industry comes from the cultivation of crops. When SABMiller mapped its water footprint in 2009, it found that it takes 45 liters of water to produce one liter of beer in the Czech Republic. In South Africa, the number was 155.
That’s why water is one of SABMiller’s sustainability priorities. To ensure it can continue to operate, the brewer has recognized that it needs to work closely with NGOs, governments, other food and beverage companies, and the communities where it does business.
A report by the Water Resources Group projects that by 2030, humans will demand 40% more fresh water than the world can supply, a water gap that assumes average economic growth and no efficiency gains. The situation will be worse in some areas, of course, with fully one third of the world’s population expected to live in areas with severe water gaps.
“There’s clearly no way we can tackle this on our own, even in markets where we’re a very big player,” says Andy Wales (@AndyCWales), the company’s senior vice president of sustainable development. “We need to do it in partnership with others.”
Wales is optimistic that the gap can be closed, but emphasizes that companies cannot address water alone. He frequently speaks of the “water-energy-food nexus” — the fact that all three issues are interconnected, and must be addressed in a holistic way. He spoke with MIT Sloan Management Review guest contributing editor, Hannah Clark Steiman, about how the company is generating revenue from sustainable development, how it offers incentives to its employees to innovate, and why a partnership approach is critical to address the water gap.
Can you outline SABMiller’s water strategy?
We address this in three ways: firstly, we’re working on improving efficiency of our operations.