Exclusive: Heineken’s sustainability chief on navigating the net zero maze
Richard Kriel, of Heineken South Africa, opens up to NZI about why and how the multinational is working its way to net zero
As investors, managers, policymakers and other industry insiders gather in South Africa for the biggest-ever net zero conference on the continent, Net Zero Investor is on the ground to identify the challenges that corporates and asset owners are currently facing.
One of the best-known names at the young event is Heineken, the international brewer that owns around 250 global beer and drink brands around the world.
In South Africa, Heineken dominates the market with a range of beer offerings, including Heineken, Amstel, Radler, Windhoek, Tafel Lager, Jack Black, Soweto Gold, Camelthorn, Stellenbrau and Strongbow Cider.
At the event in Cape Town, NZI sits down with Richard Kriel, the multinational's strategic projects & sustainability head for South Africa, to zoom in on investor pressure, the company's net zero ambitions and the added value of impact investing.
We are gathering here in South Africa to talk about the need to become greener, as well as net zero considerations vs profit margins and growth. Is there a lot of pressure from shareholders to become greener and more sustainable?
Ha! We apply a great deal of pressure on ourselves as a global corporate organisation and manufacturer to abide by our Brewing a Better World commitments, but beyond that we work in country with great sustainability needs and issues that, through our good business practices, we can assist in alleviating.
For example South Africa is a water scarce country – so it makes sense for us to play our part in water reclamation and reuse. In addition, we are a fossil-fuel reliant country, with our national power primarily generated by coal, which has led to national electricity supply issues – it makes sense for us to use sun light – which we have plenty of, to power our brewery and reduce the national electricity load.
Globally customers and businesses expect other businesses to move sustainability matters to the forefront and we believe we are doing this as well as showcasing to our South African government our moves to better use SA’s national resources.
You mentioned the 'Brewing a Better World' initiative, its goal is to reach net zero, carbon emissions, in all your production sites by 2030. What progress have you made so far?
The first steps in our South African net zero journey has been focusing on efficiency within the brewery. The intent being to get the brewery to benchmark levels for electricity and thermal usage first before looking at replacing the non-renewable sources.
This is a continuous journey and involves using global best practices to improve our systems and implement new technology where applicable. Subsequent to this we have also implemented our first phase of a 6.5MW Solar PV plant to supplement the Brewery electricity supply.
The next projects are currently being scoped and involve Biomass Boilers to supply heat by using our own waste streams as well as concentrated solar to add to the high demand during the sun light hours.
Let's return to your shareholders for a minute. Many asset owners, such as pension funds and institutional investors, increasingly demand more detailed ESG data, so they can understand and monitor sustainability efforts better. Do you recognize that trend?
Indeed we do acknowledge this trend and the need to make progress on ESG goals more visible. We do however also appreciate that our investors see this sharing as opportunities to work together and find solutions to improve rather than use them as punitive measures to limit funding.
The need for companies to deliver on ESG goals is a collective action and one that requires everyone acknowledging the importance of a running a truly sustainable business and the challenges that lie therein.
Let's briefly zoom in on impact investing. How much attention would you say Heineken and your wider industry players pay to this?
In recent years I believe impact investing has taken a much higher focus within the industry, and as Heineken, it is no longer a supporting pillar but at the core of our EverGreen Strategy. Companies need to ensure they look after the people and environments in which they operate. This is needed to survive as a business with resources such as water, gas and electricity becoming more and more scarce globally.
This also applies to our employees as we need to have an inclusive and diverse culture that attracts the right talent and gives them an environment in which they can flourish. As times have changed and it is no longer the employee trying to sell their skills in an interview but more what a company can offer their future employee to attract them to their business and what they stand for.
The consumers and market are also changing and a company’s strong sustainable agenda and presence is now a base requirement and not an additional value add. All these factors drive the need to invest towards delivering on ESG and give it the attention it deserves.
Finally, at the end of last year, Heineken announced that a new solar power plant at the South African arm of Heineken will supply 30% of a brewery's electricity demand. Can you tell us a bit more about that investment?
Yes sure, Heineken South Africa took a big step moving closer to reducing carbon emissions in all its operations, by launching a solar power plant at its Sedibeng brewery, just outside Johannesburg. The solar plant began producing power in May last year and is the largest freestanding solar plant powering a brewery in South Africa, and the largest within the Heineken group.
The solar plant boasts over 14,000 panels with an energy capacity of over 6.5MW providing 30% of the brewery’s electricity demand. The 19ha project will generate over 17,000MWh per annum. The plant, which has an estimated lifespan of 25 years, has been undertaken in partnership with The SOLA Group, a vertically-integrated provider of renewable energy solutions in South Africa. This embedded grid-connected solar project incorporates single axis tracking technology that enables the panels to move with the rise and setting of the sun. The construction process took approximately 7 months to reach completion.