Preserving our planet

A commitment rooted in the Group’s DNA

 

As the outgrowth of brands that have strong ties to their native regions and that process agricultural raw materials, Pernod Ricard remains deeply committed to preserving the environment.

Our principles governing respect for the environment were inherited from Paul Ricard, the Group’s founder, who in 1966 established the Observatoire de la Mer, which later became the Paul Ricard Oceanographic Institute. Located on the island of Les Embiez, off France’s southern coast, the institute aims to raise awareness and improve our protection of the Mediterranean Sea. 

Today, Pernod Ricard plays an active role in preserving marine biodiversity and combatting pollution at sea.

Find out more about the Paul Ricard Oceanographic Institute 

The need for environmental governance

Each stage in the lifecycle of our products has a direct and indirect impact on our environment. This impact is exacerbated by climate and environmental phenomena that pose numerous risks to our operations, including our procurement of raw materials and our water management in particular. Using the knowledge we have acquired, the Group has defined an environmental policy in the form of a “Roadmap for 2020” that sets out our environmental principles, our priorities for action and our objectives. This roadmap is based on five priorities. 

This policy covers the group's entire value chain and all its business activities, from upstream procurement, production and market distribution to the end of the product's life. The Group's Environmental Policty is based on five areas of commitment:

- roll-out of an effective environemental management system,

- promotion of a sustainable agriculture and biodiversity protection,

- preservation of water resources, 

- reduction in energy consumption and carbon footprint,

- development of sustainable products and a reduction in the impact of waste.

It is directed to all stakeholers, starting with all employees across the world, as well as numerous suppliers and partners.

This roadmap is founded on four pillars, each with specific actions and precise milestones to be achieved by 2020. These pillars are as follows : governance, supply chain, resource stewardship, brands and consumers. The Group's ambitions by 2020, the associated goals and the achieved progress by pillars are detailed in the Registration Document.

Our environmental policy is demanding and certified: 96 % of the production sites operated by the Group were certified to ISO 14001 representing 99.7 % of the volumes. All our production and distribution affiliates are dedicated in environment protection.

Roadmap for 2020: Promote sustainable agriculture and preserve biodiversity

Since all of our products are made from agricultural raw materials, we encourage practices that are friendly to the environment, both in our own agricultural operations (primarily our 6,500 hectares of vineyards) and in our purchasing from suppliers (nearly 2.3 million tonnes equivalent in products each year). To do that, the Group relies on local guidelines that, in particular, call for:

-    more limited use of fertiliser, and a preference for pesticides that are less hazardous to the environment;
-    reduced water consumption, notably through drip irrigation methods;
-    preservation of soil and biodiversity;
-    training and support for farmers with regard to sustainable farming practices. 

 

Eighty three percent of our vineyards are certified according to environmental standards. These include :

- Sustainable Wine Growing New Zealand (SWNZ),

- EntWine Australia,

- Sustainable Winegrowing Alliance (CSWA) in the United States, 

- Synergia and ISO 14001 in Spain,

Best practice established by Cognac and Champagne producers and ISO 14001 in France.

 

As for the purchase of agricultural products, the Group's actions are centered on:

- the application of the Responsible Procurement process (see the paragraph on "Involvement of the Group's partners in its S&R commitments"),

- the identification of environmental and social risks in agricultural activities.

 

- The Absolut Company and wheat growing : in Sweden, The Absolut Company is exclusively supplied with locally-produced wheat, in line with stringent sustainable agriculture standards,

- Yerevan Brandy Company: in Armenia, our affiliate Yerevan Brand Company supplies wine growers products which comply with the environmental standards in France (Bureau national interprofessionnel du Cognac), then collects packaging waste which are destroyed by an approved company. It also supplies growers with efficient sprayers which reduce the amount of crop protection products.

- Ricard and sustainable agriculture: in France, a major part of the fennel used for the production of Ricard is grown by farmers in Provence in accordance with sustainable agriculture principles: this highly fragrant plant fosters the development of entomofauna, in particular bees, thus helping to maintain biodiversity.

Pernod Ricard develops projects in protecting the biodiversity on the agricultural land where the Group operates vineyards and encourages its affiliates to undertake projects to preserve biodiversity. Seventy-eight per cent of the vineyards have implemented a biodiversity preservation programme.

Some affiliates have been conducting particularly significant biodiversity measures for several years now:

- In the humid regions of Kaituna, the Group’s affiliate has conducted a programme to regenerate nine hectares of land, aiming to establish the original ecosystem (restoration of soil, reintroduction of local species, etc.). The affiliate has also contributed to the protection of a local falcon species thanks to a fund supported by the donation of one New Zealand dollar for each bottle of wine sold from the Living Land range,

- In Australia, measures of biodiversity protection and preservation of indigenous ecosystems in the Jacob's Creek river basin,

- In France, the growing of yellow gentian, whose root is a key ingredient in the Suze recipe, has been the subject of research programmes to enable its production in specialised farms, thus ensuring the protection of 50,000 wild plants every year.

Roadmap for 2020: Preservation of water resources

Water is the basic ingredient in our products. With the threat of increased scarcity, water stewardship is one of our top priorities.

In September 2010, Pernod Ricard endorsed the CEO Water Mandate from the United Nations, a public/private initiative designed to help companies develop, implement and publicise their environmental policies and practices regarding water.

Each production site uses four methods to optimise its water resource management and preserve water quality and availability:

-    measure consumption;
-    verify that the site’s water use is not endangering resources;
-    take action to reduce consumption and to reuse and recycle water;
-    provide for effective treatment of wastewater before it is discharged into the natural environment.

These actions are critical for affiliates located in geographical regions where water reserves are endangered.

Indirect water consumption – i.e., consumption resulting from the production of agricultural raw materials or packaging materials – as well as the Group’s electricity use also affect water resources. We use a water footprint calculator to assess the impact generated by our suppliers.

 

Production sites reduced their water consumption per unit by 17% between 2010 and 2016.

 

Good practice

Irish Distillers has reduced its water consumption per litre of pure distilled alcohol by 35% as a result of investments in the new Midleton distillery, which enabled the implementation of numerous optimisation measures, including the reuse of cooling water from the fermenting units as process water.

Our sites are classified according to four risk categories: high, moderate to high, low to moderate and low, based on an aggregate index which combines various individual indicators of physical, regulatory and reputational risks.

Four sites are located in or in the immediate vicinity of high-risk areas. These four sites account for less than 1% of the Group’s total consumption and are divided between two countries (India and Mexico);

 

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Best practice:

In India, where water is an important local issue, Pernod Ricard India has built rainwater tanks covering an area of 32,000 m2 on Grampanchayat
(local government) land in Waghadevnager. This water will be used by the villagers and will provide farmers with reserves to irrigate their fields
and supply their livestock with drinking water.

The Group’s facilities use several types of procedures to reduce the organic content of water and make it suitable for reuse or for release into the natural environment: these include methanisation with micro-organisms to produce biogas, aerobic lagoon treatment, membrane filtration, and the use of plants to purify water in so-called “filter garden” systems.

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The Group’s ultimate water footprint is equal to 675 million m3 per year, of which 99% is related to supplies of farm raw materials. Other elements of the production chain – including direct water consumption on industrial sites – only represent approximately 1% of the total.

Globally, Pernod Ricard challenges relating to the availability of water relate primarily to our agricultural suppliers: they vary significantly from region to region and should therefore be dealt with at local level, taking specific climatic conditions into account.

Roadmap for 2020: The fight against climate disruption

Pernod Ricard acts in two ways:

-  by measuring our carbon footprint at each stage in the production chain,

-  by taking steps to reduce our CO2 emissions:

         • at our production sites (Scope 1 and Scope 2 emissions),

         • and indirectly at our suppliers’ sites, through eco-friendly product design and an optimised logistics chain (Scope 3 emissions).

In 2013, the Group assessed the total carbon footprint of its activities using the methodology set out in the GHG Protocol. This evaluation confirmed the major role of purchases of farm raw materials (grains, grapes, wines, spirits, etc., which account for 35% of the total footprint), and purchases of packaging (chiefly glass and cardboard, accounting for 31% of the total). Transport accounts for 19% of the total. Finally, emissions linked to energy consumption at production sites (Scopes 1 and 2) are only responsible for 15% of the Group’s total footprint.

 

At production site level, actions are based on four levers to increase energy efficiency:

‹‹ - continuous monitoring of energy consumption;

‹‹-  in-depth energy assessments, with the setting of energy-efficiency targets;

‹‹-  roll-out of consumption reduction programmes requiring the management of processes and utilities, and which may result in significant investment;

- ‹‹ implementing energy management systems.

Between 2010 and 2016, energy consumption per unit produced fell by 19%.

 

Good practice

in Scotland, since 2006 Chivas Brothers has undertaken an ambitious plan to reduce consumption at all its sites by investing in more efficient equipment (third-generation thermo-compressors, etc.) and by implementing energy recycling measures in its processes. There has been a reduction of around 21% in the energy consumption per litre of pure alcohol produced in all Chivas Brothers production sites since 2010.

 

The share of renewable energy in this energy mix is 11%, with around two-thirds in the form of renewable energy certificates (sites using 100% renewable electricity) and one-third resulting from the countries’ energy mix. This share of renewable energy rose by 68% between 2009/10 and 2015/16, largely as the result of the purchase of renewable energy certificates.

Good practice

The site Nashik in India installed more than 5,000 m2 of solar panels on the roofs of its production buildings in 2015, with an installed capacity of 345 kW.

Over the long term, we have seen a sharp fall in CO2 emissions per unit: 25% between 2009/10 and 2015/16, which is mainly explained by the policy of energy efficiency improvement on the production sites and the gradual move towards an energy mix that includes less carbon.

Good practice

in Sweden, The Absolut Company has been working for many years towards achieving environmental excellence. Initially, the Nöbbelöv distillery’s industrial process was subject to every type of optimisation, making the distillery one of the most energy-efficient in the world.
Subsequently, the affiliate replaced its carbon energy sources with cleaner energy: the three production sites are now powered by renewable electricity, and the oil-fired boiler at the Ahus bottling site was replaced by the use of district heating, leading to a fourfold reduction in site emissions. Finally, in order for the distillery to
become carbon neutral, the affiliate committed to a carbon offsetting programme, thereby helping to reduce the volume of CO2 emissions equivalent to its own residual Scope 1 and 2 emissions.

“Indirect” emissions are those caused by the suppliers of products and services purchased (mainly packaging, raw materials and logistics services).

The Group’s eco-design process, which has been in place since 2008, helps to reduce CO2 emissions linked to packaging, but also those related to the logistics chain. 

The logistics teams are actively involved in reducing the Group’s environmental impacts. The team works at several levels: choosing the type of transport, planning and finally optimising loads.

- ‹‹Choice of transport type
The Group estimates that nearly 80% of all transport involved in producing and distributing its products from the factory to the first customer is by sea, this method of transport consumes a particularly low amount of energy. The remaining 20% is optimised thanks to planning of loads and
routes.

-‹‹ Load optimisation
The size and format of containers are selected and harmonised in order to facilitate optimisation in loading vehicles. Load sharing is also favoured in order to increase lorry load rates.

 

Good practice

As the land transport is substantial in the United States, Pernod Ricard is a member of the "Smart Way Transport Partnership" programme, helping to reduce the CO2 emissions generated in transporting the affiliate’s products.

 

Roadmap for 2020: Develop sustainable products and reduce the impact of waste

The environmental impact of our operations begins during the product design stage and continues throughout each product’s lifecycle. In order to shrink that footprint, Pernod Ricard follows eco-design principles when developing new products or packaging, and specifically focuses on waste generated during the production chain. That kind of sustainable management is something that consumers expect from our brands. 

We pursue this strategy in two complementary ways.

-    We follow eco-design principles for our packaging. This includes:

     - evaluating the environmental footprint of each product;

     - choosing sustainable, recyclable packaging materials;

     - reducing the quantity of materials used (glass, cardboard, and plastic);

     - participating in waste packaging collection systems in support of recycling.

-    We reduce, recycle and recover waste at our industrial sites, with the goal of reaching our target of zero waste disposal and reducing our volume of incinerated waste.

The Group introduced its eco-design process in 2006 and it has now been rolled out through the following drivers:

  • the Environmental Policy, which defines the Group’s eco-design commitments;
  • ‹‹steering the process by rolling out the Group’s Environment Roadmap, which sets out the actions to be taken by 2020: this will be carried out with members of the main departments involved in eco-design (CSR, Operations, Marketing);
  • ‹‹an interactive eco-design tool for Marketing, Product Development and Procurement teams;
  • ‹‹monitoring of key indicators to track the implementation of the process: a product Life Cycle analysis software that enables the main Brand Companies to evaluate the environmental impact of their new developments;
  • ‹‹ongoing collaboration with Pernod Ricard suppliers and customers to improve the environmental impact of packaging throughout its life cycle.

In rolling out its Environmental Roadmap, the Group planned a target of 100% of recyclable consumer packaging by 2020.

 

Good practice

The Absolut Company launched a lighter version of the brand’s iconic bottle in 2015, with an average weight saving of 13% depending on the format, at the same time as increasing the level of quality as perceived by the consumer.

 

The production sites generate various kinds of waste:

  • ‹‹ packaging waste (glass, paper, cardboard and plastics);
  • waste arising from the transformation of farm raw materials (grape marc, stalks, sediment, etc.). Only those items sent to landfill or for incineration are considered as waste, with the other fractions being recovered as by-products (primarily animal feed);
  • ‹‹waste produced by the site’s activities (sludge from treatment plants, office waste, green waste, etc.).

In 2016, over the 35,366 tonnes of waste generated, 32,273 tonnes were recycled via different processes , - a recycle rate of 91%.  

In addition, 2,724 tonnes had to be sent to landfill and 369 tonnes were incinerated.

For the period 2009/10 to 2019/20, the Group has set itself a target of working towards “zero waste to landfill”. 

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Good practice

 

In France, the company Revico recovers the vinasses produced at Martell & Co’s cognac distilleries to transform it into biogas.

 

In Mexico, the Arandas distillery has developed an original process for the treatment of agave residues generated from the distilling of tequila,
enabling them to be transformed into compost and organic fertiliser.