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Sustainable DevelopmentReport 2006

June 2006

At SABMiller, our measure of success is more than just brewing great beer.We focus on building first choice brands, nurturing partnerships with ourdistributors, our customers and our communities, and on being a responsibleemployer and global citizen.

Our core business activities can create jobs, create markets for entrepreneursand train and educate our employees and others who touch our business. It is also critical that we address social and environmental issues such aswater availability, our carbon footprint, our supply chain standards and theimpacts they have on the business.

Our 2006 Sustainable Development Report marks a step change in the waywe approach what we previously called corporate accountability, following areview of our sustainable development strategy.

2 Highlights3 About us4 Why it makes sense5 Foreword by the CARAC chairman6 Chief Executive’s statement7 SABMiller’s new sustainable development strategy8 The 10 sustainable development priorities9 Discouraging irresponsible drinking10 Using less water11 Reducing our energy and carbon footprint12 Packaging reuse and recycling13 Working towards zero waste operations14 Supply chains that reflect our values and commitment15 Respecting human rights16 Bringing benefits to the communities we serve17 Contributing to the reduction of HIV/Aids18 Being transparent in reporting our progress19 Governance and management20 Assurance statement from The Corporate Citizenship Company21 Contacts and further information

Front cover: In Zambia we are buying locally sourced sorghum to produce a quality, affordable and healthy beer – Eagle Lager.

2 SABMiller Sustainable Development Report 2006 June 2006

Highlights during the year ended 31 March 2006

During the year we continued to make progress in the areas most relevant toour business:

We completed the review of our sustainable development strategy, identifyingthe 10 sustainable development priorities (listed on the inside front cover). This has given focus and a renewed commitment to long-standing activitieswithin our global businesses.

We continued to make a positive contribution to the ongoing discussions onhow to address irresponsible drinking more effectively on a global, regionaland local basis.

We have continued to increase efficiency in our use of water, energy, wasteand packaging, resulting in a lower impact on the environment. For example,we reduced our average group water consumption from 4.75 hectolitres ofwater per hectolitre of beer last year to 4.60 hectolitres, against an industryaverage of 5.0 hectolitres.

We have introduced responsible sourcing principles which are beingformally embedded in our supply chain.

We focused on reducing the stigma surrounding HIV/Aids infections,aiming to create an environment where employees feel safe to disclosetheir HIV positive status.

Our contribution to local communities continued to strengthen our positionwithin the areas in which we operate through better motivated employeesand an improved reputation among customers and suppliers. During theyear we invested US$19 million (0.76% of profit before tax) in communityprogrammes. In addition, we made contributions to programmes to addressHIV/Aids and discourage irresponsible alcohol consumption.

We passed on all four categories of the Johannesburg Stock ExchangeSocial Responsibility Investment Index (governance, social, environmentand ethics) and we moved from a score of 59.57% in 2004 to a score of78.74% in the 2005 Business in the Community Environment Index (UK).


SABMiller has brewing interests or major distribution agreements in over 60countries spread across five continents. Our markets range from developedeconomies in Europe and North America, to fast-growing developing marketssuch as China and India. Our brands include international premium beers suchas Peroni Nastro Azzurro, Pilsner Urquell, Miller Genuine Draft and Castle Lager,as well as popular local brands such as Miller Lite, Aguila, Tyskie and Snow.

EuropeOur development into mainland Europe began in1995 with the acquisition of Dreher in Hungary.We are now one of the region’s leading brewerswith operations in eight countries: Canary Islands(Spain), Czech Republic, Hungary, Italy, Poland,Romania, Russia and Slovakia.

South AfricaThe South African Breweries Ltd is our originalbrewing company. Founded in 1895, SAB Ltd has since become one of South Africa’s leadingcompanies as well as Africa’s largest brewer. The soft drinks division of SAB Ltd is SouthAfrica’s largest producer of products for The Coca-Cola Company.

Africa and Asia We have brewing or beverage interests in 29African countries. In 11 of these countries: Angola(soft drinks only), Botswana, Ghana, Lesotho,Malawi, Mozambique, Swaziland, Tanzania,Uganda, Zambia and Zimbabwe, we havemanagement control. We have brewing interests in 18 countries through our strategic alliance with Castel and we have a minority shareholdingin Kenya.

In Asia we have major interests in China and India, and we have recently agreed to enter Vietnam.

North AmericaWe acquired the Miller Brewing Company, theUSA’s second largest brewer, in 2002, and haverecently completed a three-year turnaround plan,establishing a platform for future growth.

Latin AmericaWe initially invested in El Salvador and Hondurasin 2001, gaining full ownership in 2005. Also, in 2005, we completed a merger with GrupoEmpresarial Bavaria, the second largest brewer inSouth America. This has extended our operationsin the region to Bolivia, Colombia, Costa Rica,Ecuador, Panama and Peru.

NORTH AMERICA

LATIN AMERICA

EUROPE

SOUTH AFRICA

ASIAAFRICA

SABMiller’s brewing operations

Countries in which SABMillerhas brewing interests

It makes sense for a company the size of SABMiller with operations spreadacross five continents, to understand our social and environmental impacts and,more than that, to have plans in place to ensure we minimise negative impactsand optimise positive ones. Our overriding commitment within our sphere ofinfluence is to discourage irresponsible drinking and to promote responsibledrinking by those who have chosen to consume alcohol beverages.

The objective of our social and environmentalprogrammes has been to secure economicbenefits for all our stakeholders; not only thelocal communities where we grow rawmaterials and brew beer, but also for ourshareholders, who benefit from a sustainablebusiness and a return on their investment.Our ability to be successful and profitable is inextricably linked with the health andprosperity of the communities in which we operate. These benefits are in addition to the basic desire to minimise our negativeimpact on the global eco and social footprintand to ensure that SABMiller has asustainable future.

Behaving responsibly also has other‘softer’ benefits including improved employeemorale, better relationships in communitieswhere we operate and enhanced brandreputation. All have a direct impact onSABMiller’s profitability.

The global parameters of the businessgeographically and the wide ranging socialand environmental issues that it covers,mean that, whereas there are some areas of excellence, there are also some areaswhich require improvement. SABMiller iscommitted to improving its performanceacross all the priorities it has identified.



Successful, profitable businesses contributetowards the needs of global and localcommunities as well as to shareholders.Our investment leads to job and productcreation, stimulating greater demand. Thisresults in more tax and excise duties paidout and, potentially, to further investmentand job creation. With this kind of virtuouscircle successful businesses can help lift people out of poverty, particularly indeveloping countries. This year we haveinjected US$3,730 million in the form of taxand excise duties into the economies wherewe operate. We employ 53,772 peoplepaying them US$1,723 million. In additionwe have contributed US$19 million directlytowards specific corporate socialinvestment initiatives. The relationshipbetween the company and our communities is crucial. Eighty percent of our earningscome from developing countries.

To ensure that success and profitabilityare sustainable, businesses must addresssocial and environmental issues that canpotentially impact future growth. For us this includes water resources, HIV/Aids and irresponsible drinking. The effects of climate change and drought in some

countries, combined with the industry’sdependency on water, the spread ofHIV/Aids leading to business risk outside of Africa, and the social and reputationalimpact of irresponsible drinking are all keyissues for the company and its future.

Neither the business community norSABMiller alone can be responsible forthese issues. However, working inpartnership with non-governmentalorganisations (NGOs), local communitiesand governments, we can create a powerfulforce for positive change and there aremany examples in this report which providesome optimism. For example, working with HIV/Aids organisations and localcommunities in Africa has helped ustowards our goals of managing the diseaseand combating the stigma which surroundsit. It is also enabling the company to use itsexpertise in other markets where HIV/Aidsis becoming a business risk.

At SABMiller we believe it is importantto talk to our stakeholders. The newsustainable development framework wasdiscussed at a meeting with global externalstakeholders at a meeting in Cape Town inMay 2006 and earlier we held a workshop

with the Chatham House Africa programmeon HIV/Aids. On our discouragingirresponsible drinking priority, we continueto work with the World Health Organisation,other NGOs and industry bodies to promoteresponsible drinking.

With brewing interests in 29 Africancountries, we already have a track recordfor contributing towards the creation of local businesses and contributing to thedevelopment of the business environment.We are proud that this has been reaffirmedby a commitment of US$2.5 million to theInvestment Climate Facility over a five-yearperiod. This payment will help the ICF domore to create business environments inAfrica that will encourage internationalinvestment and generate sustainablebusiness opportunities for small businessesand entrepreneurs.

With our achievements and lessonslearnt by the business in the field ofsustainable development, in conjunction withthe results of the sustainable developmentstrategy review, I am confident that we willsee further positive progress in the next year.

Robert FellowesSenior Non-Executive Director,SABMiller plc and CARAC Chairman

Robert FellowesSenior Non-Executive Director,SABMiller plc and CARAC Chairman

Foreword by the Chairman of the CorporateAccountability and Risk Assurance Committee(CARAC)


Graham MackayChief Executive, SABMiller plc

The new group-wide sustainabledevelopment framework has given us aclearer structure to ensure that global andlocal sustainable development priorities donot undermine our overall business strategicobjectives. Our purpose has been to helpeach company in the group to understandthe risks and opportunities that key globalenvironmental and social issues pose to ourbusiness. Through effective managementwe will ensure that our operationalefficiencies are maximised, our local andglobal reputation at a group and brand levelis enhanced or at least protected, and that we have a business which, through itscommercial success, is making a positivecontribution to sustainable development.

Whilst some of the detail of oursustainable development strategy is thesubject of consultation, all of our operationsare aware that environmental and socialissues are integral to our day-to-day workand that our programmes are not just ‘goodfor the community’ but good for profitability.Waste is extra cost, HIV/Aids can mean thatwe have to recruit from a smaller talentpool, using energy without understandinghow much carbon we are producing mayprove, in the future, to be expensive.

Whilst effort has been invested at group level to reassess our sustainable

development framework, our operationsaround the world continue to showimprovements in these areas. We havecontinued to reduce our water consumptionper hectolitre of beer produced and wehave contributed more towards corporatesocial investment. We have taken ourHIV/Aids awareness, testing and treatmentprogrammes out into local communities aswell as working with our own employees,and many of our operations have carriedout successful and extensive campaigns to discourage irresponsible drinking.

We recognise that we will face morechallenges ahead in the areas of oursustainable development priorities and I am committed to ensuring that we havestrategies and plans in place to improve ourperformance. We have many opportunities to show, through our leadership and actions,the benefits that addressing sustainabledevelopment issues can bring to us and to our local and global communities.

Graham MackayChief Executive, SABMiller plc

Statement by the Chief Executive of SABMiller plc


SABMiller has a long history of embracingsocial and environmental initiatives but webelieve that with the rapid expansion in thesize of the group in recent years we willbenefit from the reassessment of ourstrategy to address them.

The main thrust for developing theframework has been identifying the 10sustainable development priorities, draftingposition statements for each of them andconsulting with all our operations to ensurethat they reflect local realities as well asgroup concerns. This year we will bemaking a more thorough evaluation ofwhere every company in the group isregarding our 10 priorities and helping themto find the best process for embeddingthem into their business strategies.

We plan to consistently monitor ouractions and achievements against thepriorities and to work towards a higher levelof transparency of our performance. Inaddition, through internal communication ofthe framework we can formally transfer thelessons learned from our best projects toother operations in other areas of thebusiness, particularly those with similarenvironments.

Our website, www.sabmiller.com, will bethe main repository for public information onour sustainable development policies andactivities. We are also inviting feedback onour sustainable development framework tohelp inform its development as changingsocial and environmental impacts occur. Aswell as our report, which will be publishedannually on the website, we will regularly

update our sustainable development pageson the latest progress being made within the 10 priorities.

Next year our focus will be on embeddingthe framework in existing and newly acquiredcompanies and helping them measure theirachievements against each of the prioritiesand their agreed goals, dependent on therelevance of the priorities in their country.

The 10 sustainable development prioritiesThe 10 sustainable development prioritiesidentified by the strategic review of ourcorporate responsibility programme are:

The need to:

discourage irresponsible drinking

make more beer but using less water

reduce our energy and carbon footprint

have a vibrant packaging reuse andrecycling economy

work towards zero waste operations

have supply chains that reflect our ownvalues and commitment to sustainabledevelopment

have respect for human rights

bring benefit to the communities we serve

contribute to the reduction of HIV/Aidswithin our sphere of influence

be transparent in reporting our progresson these environmental and socialsustainable development priorities

Dr Alan Knight, Head of Corporate Accountability

“Our new sustainable development framework builds upon the work that has been achievedalready by SABMiller on the issues that aremost relevant to us. More importantly, it hasgiven us structure for the future to ensureconsistency around the group, and toencourage local empowerment.”

SABMiller’s new sustainable development strategy


The sustainabledevelopment priorities

Nearly 380 Ugandan residentsfrom Nile Breweries’ localcommunity were tested in asingle day at our HIV/Aidsclinic. SABMiller is using itsexpertise and knowledge of HIV/Aids impacts within the business to help ourneighbouring communities.

To optimise the use of watersome of our operations use recycled water to washcrates. In Poland water is nowrecycled from the bottle rinsingprocess which has saved bothwater and electricity costs.

In Uganda and Zambia wehave developed a quality,affordable beer made fromlocally produced sorghum,pulling thousands of smallscale and commercial farmersinto our supply chain. EagleLager now has a substantialshare of the beer market inboth countries.

In Honduras 40% of thepopulation live below thepoverty line so it isunsurprising that children workto help support their families.At our Azunosa sugar plant we introduced an educationprogramme for children to give them additional skills andto stop them working in thesugar cane fields during theharvest season.


Every six months each operation reports to the CARAC on its contribution to thispriority and includes information on internal training, responsible drinkingmessages to consumers, working with the trade, and details of relationships with government and public healthorganisations. In addition, the reports cover country specific issues related toalcohol, list complaints received and action taken as a result of the complaints.

Our Alcohol Manifesto and Code ofCommercial Communication introduced twoyears ago continue to be systematicallyembedded across the organisation. Alreadymuch planning has gone into introducingthe Manifesto into the newly integratedoperations in South America and this effortwill continue throughout the next year. Thebi-annual reports mentioned above providea system to monitor compliance. TheAlcohol Manifesto and Code of CommercialCommunication are available on thewebsite, www.sabmiller.com.

Working with stakeholdersWe have been actively involved at grouplevel in the discussions on alcohol alongwith other industry bodies and non-governmental organisations and many ofour operations around the world, includingHonduras, Czech Republic, Poland,Lesotho, South Africa, Tanzania, Zambiaand the USA, work with local governmentand public health organisations on generalalcohol-related themes or specific activities.

Working with local traders is animportant link in the chain when it comes to responsible drinking. In South Africa, aspart of its taverner training programme, SABhas developed ‘The Responsible Trader’module which covers the environment inwhich alcohol is served, the consequencesof alcohol abuse, social responsibility,behavioural cues of people under theinfluence, intoxication rate, legislation andmuch more. The training material is picturebased and interactive and has beensuccessful in educating 5,000 localtaverners of all backgrounds and languageson issues around irresponsible drinking.

Our programmesAll our companies, including our smalleroperations, are active in discouragingirresponsible drinking. Our company in the

The need to discourage irresponsible drinking As a multinational companywhich sells 176 million hectolitres of beer a year, SABMiller is proactive indiscouraging irresponsible drinking. Alcohol consumption by those not at risk canbe compatible with a healthy, balanced lifestyle but excessive drinking, drinkingwhen pregnant, underage drinking and drinking and driving, for example, impactnegatively on society in many ways. It is therefore in our interest to make everyeffort to discourage irresponsible drinking within our sphere of influence.

Canary Islands, Compania Cervecera deCanarias is an active member of theBrewers of Spain and has collaborated on athree-pronged approach targeting differentkey audiences – young people aged 18-25,parents of children aged 6-13 years andvehicle drivers. Each campaign focuses onthe potential harm of irresponsible drinkingand is organised in conjunction withrelevant academic institutions andgovernment departments.

In the Czech Republic the companyused SMS text messaging and musicfestivals to reach consumers. With the SMSsystem they were able to input their alcoholconsumption and personal physical detailsand from this they received an individualreport by SMS with the relevant bloodalcohol limit and the potential risks ofconsumption. This information was providedby a medical, not-for-profit organisation.

We believe that we have a positive roleto play along with others in society toencourage responsible alcohol consumptionand help to combat alcohol abuse. We willcontinue to work with local communities,government and public health organisationsto achieve our aims.

A number of projects are currentlyunder way examining issues like consumereducation, responsible retailing and labellingand these will be completed within thecurrent financial year.

Responsible retailingMiller worked with BrandeisUniversity and the ResponsibleRetailing Forum to launch theRespect 21 ResponsibleRetailing Programme inSeptember 2005. It is studyingthe effectiveness of retailing bestpractices to prevent unlawfulsales of alcohol to minors andalso reinforces the parental rolein preventing underage drinking.

‘Alcohol – Underage Access Denied’ campaignIn Poland we worked with relevant government authorities, retailersand taverners to launch a campaign to prevent underage drinking. A marketing awareness campaign which included a carrot and stickapproach of awarding shop assistants certificates and yellow warningcards respectively, achieved its goals of reducing sales to underagepeople. In post campaign research, 75% of the stores which workedclosely on the project did not sell alcohol to minors and neither did91% of stores which were awarded certificates. Although furtherwork is required, those surveyed believed that the campaign was avaluable initiative which reinforced the prohibition of selling alcohol to underage people.

Draw The LineThe Draw the Line campaign inSouth Africa was launched inDecember 2005 and includedconsumer messages overtlydiscouraging underagedrinking, drinking and drivingor drinking when pregnant. The campaign included TV,billboard and radio coverageand point of sale material atover 40,000 outlets.


The need to make more beer but using less water Water is a preciousnatural resource, a fact more apparent in countries which have minimal rainfallor sustained droughts. Even in Europe the water levels in reservoirs areshrinking and people are becoming more aware of wasting water. The issuesof water scarcity are likely to become more complex and less predictable asthe impact of global climate change is felt. According to environmentalexperts, we can expect to see changes in global weather patterns includingmore intense droughts and flooding which will threaten already scarce freshwater supplies.

Impact on SABMillerAlthough water scarcity is moving higher upthe environmental agenda, it is not a newissue for SABMiller given our roots in Africaand because of our dependency on theresource. Water is the main ingredient ofbeer and raw materials, such as barley andsugar, rely on water availability. According to United Nations data, around 52% of ourcurrent production volume originates fromplants operating in countries that havesome nature of water vulnerability and thisis expected to increase.

There is also a growing demand on water and water quality to meet theneeds of increasing populations, especiallythose in developing countries, and this iscontributing to the higher price of water to reflect its true value.

Three action areasTherefore we have identified three mainareas where we need to take action. Weneed to continue to reduce the amount ofwater we require to produce a unit of beer.We need to engage with our suppliers toresearch and gain a better understanding ofour extended water footprint. Finally, ouroperations must consider the needs of thecommunities in which they operate to avoidpotential conflicts over water use.

In the last year we have reduced ouraverage group water consumption from4.75 hectolitres of water per hectolitre ofbeer to 4.60 hectolitres against an industryaverage of 5.0 hectolitres.

Over the last 25 years, SABMiller andthe brewing industry as a whole have madesubstantial progress in reducing their waterconsumption by about 25% on average.

As an example of reducing waterconsumption, many of our operationsrecycle water from the beer-making processfor secondary uses such as gardenwatering, floor and general cleaning andcrate washing.

For 2006 we will continue to focus onreducing our water consumption but a newpriority will be to understand our extendedwater footprint in the supply chain.

Using less water in AmericaThe Miller Irwindale breweryinstalled two external wortboilers which only need cleaningonce rather than four times aday, reducing water usage by1.67 million gallons a month.The Milwaukee brewery is using10% less water than last yearby optimising cellar cleaning,pasteuriser balancing and otherwater conservation measures.

Motivating employeesMany operations have foundthat creating awareness of water reduction targets among employees is morelikely to result in targets beingmet. Operations in Botswana,Zambia, India, Romania andSouth Africa are all undertakingemployee communicationprogrammes.

Recycled water to wash cratesSome operations use recycledwater to wash crates. InPoland, water is recycled fromthe bottle rinsing process andhas saved both water andelectricity costs. In SouthAfrica, water previously used tosterilise beer filters, is recycledand this has reduced effluentcosts and water consumption.

Using recycled water to wash crates in Poland.


The need to reduce our energy and carbon footprint Organisations suchas the Intergovernmental Panel on Climate Change and other science bodiesbelieve there is no longer doubt that climate change is happening. Around theworld energy usage and its impact on climate change has moved from beinga scientific theory to a political reality with governments increasingly usingfinancial tools such as taxes and emission caps to discourage the use ofcarbon-based fuels so that they can meet their carbon reduction targets.

We appreciate the impacts that ouroperations and our value chain have onclimate change through the combustion of fossil fuels and the generation of othergasses related to global warming. We arealso aware of the impact that climatechange could have on our business, forexample in Africa where rainfall is predictedto reduce by about 30% and in India where it may increase by the same amount.

What SABMiller can doIt is in our interest to be proactive inmitigating emissions to international bestpractice through energy saving, the use ofinnovative technologies and understandingthe wider picture of carbon management.We need to use alternative fuels wherepossible and engage with initiatives aimedat reducing carbon emissions to reduce ouroverall carbon and energy footprint.

In addition to measuring direct andindirect carbon emissions, we haveidentified four key areas which ouroperations will adopt as appropriate:

Plant energy efficiency, moving towardsoptimal usage within the confines ofexisting technical and productionconstraints and seeking to recover wasteprocess thermal energy where possible

Evaluating the potential of renewableenergy, such as solar, biomass and biogas

Carbon management and trading byevaluating the commercial value fromjoining voluntary industry reductioninitiatives

Undertaking carbon footprintingresearch to gain a broaderunderstanding of carbon emissionsthroughout our supply chain

All our European operations are working on projects aimed at improving energyefficiency, particularly those subject toindustry emission caps. Miller is a memberof the US-based Climate Leaders group – a voluntary industry initiative through whichcompanies make commitments to reducetheir carbon dioxide emissions. SAB inSouth Africa has signed a letter ofunderstanding with the Department ofMinerals and Energy to reduce its energy

Kill-a-WattOne of our breweries anddepots in South Africa launched‘Operation Kill-a-Watt’ aimed at reducing electricity usage by10%. Savings are achieved bymanaged switching off of airconditioning, lighting andgeysers. Staff are part of thecampaign – they can swap fivestandard light bulbs for energysaving bulbs for use at home.

Recovering energyNew brewhouses beingintroduced in Mwanza,Tanzania and Maputo,Mozambique include a heatrecovery system on the wortkettle. The recovered energy(as steam) is sent to an energyrecovery tank from which it (aswater) is used to pre-heat thewort of the next brew.

Reducing our energy impactsIn the Czech Republic theupgrade of the waste watertreatment plant at VelkéPopovice resulted in 70% lessenergy used, a 60% sludgereduction and fewer emissions.

consumption by 15% by 2010, while ourAfrican and Asian operations have madesteady progress in reducing their overallenergy usage.

Last year we consumed a (weighted)average of 163 Mj of energy per hectolitreof beer brewed, compared to 172 Mj/hl inthe previous year.

In 2006 we will change the emphasisfrom measuring energy usage to exploringopportunities for managing our total carbon output.

The waste water treatment plant at Velké Popovice.


The need to have a vibrant packaging reuse and recycling economyThere are both social and commercial pressures to encourage business tocontribute to the establishment of packaging reuse and recycling markets toreduce the volumes of packaging which end up in landfill sites or as litter inurban and rural areas.

The packaging value chainThere is an increasing pressure onbusinesses to take preventative action inboth the pre-consumer and post-consumerpackaging value chains.

At the beginning of the chain we have aresponsibility to ensure that our packaginghas the lowest possible environmentalimpact, including design, recycling or reuse. Therefore we are engaging with ouroperations and our suppliers to ensure weexplore a range of actions including the useof lightweight packaging and the removal of heavy metals.

Action on the groundFor example, at Miller recycled glass nowaccounts for more than 30% of thematerials used to make new bottles, savingmore than 8,400 tonnes of glass a month.At SAB in South Africa, the recycling ofdisused plastic crates has resulted in areduction of the amount of raw materialsrequired from 5,500 tonnes to 1,000tonnes. New technology at Miller hasreduced the weight of cans by 45% and in the Czech Republic, the weight of onebottle range has been reduced by 22% andanother by 13%. In terms of the presenceof heavy metals, we have defined a heavymetal (lead, mercury, cadmium andhexavalent chromium) concentration limit of 100ppm in line with EU packaginglegislation which applies to all operations.Where possible we endeavour to reducethese levels even further.

To encourage recycling, ZambiaBrewing (ZBL) has helped to set up anindependent plastic recycling businesswhich has created 40 jobs and its newcrates now consist of 75% recycled plasticmaterials. ZBL is also helping three localentrepreneurs set up a glass recyclingbusiness. Bottles that are no longer suitablefor bottling beer are turned into glasswarewhich small businesses can sell to localbars.

Our operations are also encouraged towork towards adopting a cradle-to-gravelife cycle approach to understand thesignificant environmental impacts of aparticular packaging substrate and this willinform packaging and technical managerson the best packaging option, from anenvironmental impact perspective, for theindividual markets.

The focus for 2006 will be to ensurethat the sustainable aspects of packagingare incorporated into technical, operationaland corporate affairs strategies and plans inour operations across the world.

Lighter PETMiller has introduced a newbottle which has reduced theweight of PET (polyethyleneterepthalate) used. In addition,rather than use an aluminiumclosure, Miller opted for thepolypropylene closure to aidrecycling.

More uses for PETIn South Africa, ABI, our soft drinks business, has beensupporting a PET recyclinginitiative. Since January 2005more than 7,000 tonnes of PETbottles have been collectedand have been converted intopolyester resin to make videotapes, fleece jackets andcarpets.

Bottles for cashSAB’s glass recycling initiativein the Limpopo province inSouth Africa has set up 16collection points where villagersand taverners can exchangeempty non-returnable bottlesfor cash. During the first year of operation it is estimated that 40 tonnes of glass will be collected.

New lighter weight PET bottles for Miller.


The need to work towards zero waste operations There is an onus onbusinesses to reduce the amount of wastes they produce from both anenvironmental and cost perspective. The increase in consumption in all partsof the globe has been mirrored by the increase of solid waste being generatedin homes and manufacturing plants. At the same time, the availability of sitesto receive these wastes is decreasing to the extent that governments areincreasingly introducing legislation to encourage waste reduction or recycling.

With the exception of packaging which isthe focus of a separate priority, the majorityof wastes that are produced in breweriesare recyclable or reusable to some extent.By volume the largest proportion of ouroperational waste is organic by-productsfrom the brewing process, followed bysecondary and tertiary packaging wastesgenerated on site.

The remaining wastes are more or lessevenly distributed through various othercategories. All classified waste groups (ofwhich 12 categories are identified), arerecycled or reused internally or externally in varying degrees, with the exception ofhazardous wastes and refrigerants, in whichlimited recycling takes place, but all aredisposed of appropriately.

Minimising wasteOur aim is to minimise waste as far aspossible. Our emphasis will be on theminimisation of waste production followedby the recycling and reuse of waste. Forexample, 99% of our organic wastes arereused. Glass cullet from our packaginglines is returned or sold to bottle suppliersor glass manufacturing industries, plasticcontainers and cartons are sold on to staffor the local community, waste plastics areused by the plastic industry, used metalsare used by iron foundries and boiler ash is sold to brick manufacturers or used onroads. In the US, Miller has reduced theamount of waste sent to landfill by 40% by educating employees on recycling,removing recyclables from the wastestream, utilising waste with waste to energyrecovery equipment and improvingmaintenance on recycling equipment.

Where we cannot avoid waste, wedispose of it responsibly by ensuring it isremoved from site by approved vendorsand disposed of at approved wastedisposal facilities. Some of our operations in Africa do not have access to approvedlandfill sites and this is a problem we areaddressing. We segregate wastes in amanner that prevents cross contaminationand ensure that special wastes are handledappropriately, including receiving safedisposal certificates from contractors in thecase of hazardous wastes. Operations arealso taking measures to phase out the use

of refrigeration (and other equipment)containing CFCs or related ozone depletinggases and new equipment will not containCFCs or related gases.

Our operations are also encouraged to engage with their supply chain partners to research potential upstream wasteminimisation before goods arrive at thefacility.

In 2006, in addition to objectivesoutlined above, we will be focusing onsharing examples of best practice andensuring that other operations know theyexist and, where feasible, act upon them.

Reuse not refuseIn South Africa, spent yeast is sold to the manufacturers of health foods and savouryspreads while the spent grainis sold to farmers as animalfeed. The Ibhayi brewery inPort Elizabeth donates aportion of its spent grain tolocal farmers every month.

Innovative multi-useAt the Miller MilwaukeeBrewery, bulk glass bottle truck shipments use air bags to prevent breakage. The one-way bags weighing 5 lbs hadpreviously gone to landfill butby working with the supplierthey were converted to reusablebags which reduced costs andavoided 17 tonnes of landfillwaste per year.

Heavy duty donationsMiller purchases diatomaceousearth (which is used in thefiltering process) in bulk heavy duty sacks which werepreviously landfilled. A balerwas installed for compactingthe empty sacks and the bagsare now donated to a localbusiness for reuse.

Reusable air bags protect bulk glass shipments at Miller.


The need to have supply chains that reflect our own values and ourcommitment to sustainable development A supply chain which is bothresponsible and efficient should result in reduced costs, improved quality and provide a competitive edge, as well as being sustainable.

We spend over US$6,600 million withsuppliers around the world and we supportindirect jobs in the supply chain, retail anddistribution networks. Therefore we need to monitor the standards operated by ourdirect suppliers and encourage them toconsider the impact of their own buyingbehaviour regarding ethical andenvironmental practices.

The Responsible Sourcing PrinciplesAs part of the review of our sustainabledevelopment strategy, we have developed a set of responsible sourcing principles.Details of the principles can be found onour website within the supply chain positionstatement.

We are committed to promotingresponsible procurement standards and willadhere to these agreed principles to give usa consistent approach across the group,but with flexibility built in to cater forindividual markets.

Getting it rightSome operations are involved in proactivesocial, economic and environmentalinitiatives when dealing with the supplychain. For example, SAB empowersdisadvantaged South Africans in Taung and Vaalharts to become commercial barleyfarmers by providing start-up grants,training and advice in agriculture andbusiness as well as guaranteed crop pricesat the start of the season. Started in theearly 1990s, SAB supported 221 farmerswithin the scheme in 2005.

Another positive initiative has been thetransfer of the successful business model ofEagle Lager from Uganda to Zambia. Manypeople in Africa cannot afford alcohol from theformal market and some of them make theirown crude unrefined alcohol, with obvioushealth implications. This informal market is nottaxed and the government does not receiverevenues from sales. We have developed aquality, affordable beer made from locallyproduced sorghum and have received fromthe Zambian government a lower excise taxrate (from 70% to 35%), thus making the beer more affordable for consumers. This beer has captured a 15% share of theZambian market and has created a newmarket for sorghum as a cash crop, pullingabout 2,000 small scale and commercialfarmers into our supply chain.

Black Economic EmpowermentWe fully support the objectives of BEE in South Africa which cover directempowerment (ownership and control),human resource development (employmentequity and skills development), preferentialprocurement, enterprise development andindustry-specific corporate socialresponsibility.

For example, in April 2006 SABannounced the sale of 40% of its crown(bottle top) manufacturer, Coleus Packagingto the Nokusa Consortium in a BlackEconomic Empowerment (BEE) transaction.

Next yearIn 2006 we will more closely assess ouroperations and how they work with theirsupply chains. We will be measuring themagainst the responsible sourcing principles to ensure our businesses abide by them.

Local sourcingSAB has moved the sourcing of200 tonnes of hops from Europeto George in South Africa andour businesses in Mozambiqueand Tanzania have shifted fromimports to locally sourced sugar.These operations are the firstindustrial sugar users to do so in these countries.

Working with minoritybusiness enterprises (MBEs)Miller Brewing spent US$103million with MBEs, 8.0% morethan the previous year. Thecompany met its overall spendtarget of 4.0% and breweriescontinue to seek opportunitieswith new minority ownedbusinesses as well as growingtrade with established ones.

Creating a local marketIn India a scheme is developinga high quality barley maltindustry, using a co-operativemodel to give economies ofscale for farmers and thebrewery. It is expected tobecome self funding after year three with gross marginsimproved by better yields and pricing and lower supplychain costs.

We will also continue to evaluate projectsthat benefit both the business and thesustainable development programme with a view to replicating the projects inother markets to improve the social andenvironmental performance of our suppliers,big and small.

The ‘Growing in Partnership’ project in India – barleytrials to test quality and yield.


The need to have respect for human rights The challenge for any globaloperation is acknowledging and respecting the diverse cultures and laws indifferent markets. At the same time responsible companies, like SABMiller,have to respect the values of the international community which areembedded in the Universal Declaration of Human Rights.

As with many of our other priorities, weneed to ensure an overall standard ofbehaviour across all our operations whichadheres to our group values but also has the flexibility to reflect the cultural and geographical diversity of individualoperations.

Human rights principlesWithin the new sustainable developmentframework, we have identified nine keyprinciples which outline how we respect the human rights of our employees in theworkplace and of the people with whom we do business. These principles link andcomplement the principles outlined in oursupply chain position statement.

The human rights position statement,available separately on our website,provides more detail on the principles but in summary they are:

Freedom of association and recognitionof the right of collective bargaining

Prohibition of forced and compulsory labour

Abolition of child labour which is illegal,socially unacceptable or leads to loss of educational opportunity

Intolerance of discrimination

Establishing fair and competitive wagesand benefits

Providing safe and healthy workenvironments

Employee security

Community commitment

Supplier guiding principles

We are committed to these human rightsprinciples whether in the course of existingbusiness or in the assessment anddevelopment of new business opportunities.In countries where human rights may becompromised due to the prevailing politicalor social climate, every precaution is takento ensure that our operations do notcontribute directly or indirectly to humanrights abuses. In some countries wherehuman rights abuses can occur, we willnever be complicit in abuses. We will dowhat we can to support the rule of law anduphold proper standards.

Taking the long-term viewIn all countries we will promote a culture of honesty and openness and encourage,not penalise, the identification of any areaswhere our operation or our businesspartners fall short of these principles. Wewill take a long-term view and work withpartners, suppliers, other businesses,communities and governments to realiserespect for human rights. Human rights can be a difficult and sensitive issue andthere are no quick solutions.

If we become aware of potential issuesor receive allegations, we will address them, investigate internally and if necessary,participate co-operatively with an external investigation. We also have a ‘whistleblowing’ process which isavailable to all our operations to provide aconfidential means of highlighting issues.

One WorldOur operation in the CzechRepublic supports the ‘OneWorld’ festival which is one ofthe largest and most importanthuman rights film festivals inEurope. It aims to foster mutualunderstanding betweencultures, heighten awarenessabout human rights andpromote global responsibility.

Educating childrenIn Honduras it is common forchildren to work, but cuttingsugar cane for hours and notattending school wasunacceptable. In April 2005 welaunched a programme to givechildren new skills, including how to grow produce which they can sell, and to stop theiremployment in the sugar fields.

Health and safetyAll our companies have health and safety programmes which followgroup recommendations. They are required to report their health andsafety performance to the group at least annually and this information isprovided to the Corporate Accountability and Risk Assurance Committee(CARAC). The majority of our plants have established health and safetycommittees which are an important link between managers and workersto ensure suitable safeguards are in place. Our African and Asian hubincludes health and safety indicators in its manufacturing excellenceprogramme through which breweries are audited annually and actionplans drawn up for improvement. Miller and SAB also have very activehealth and safety programmes, including detailed compliance audits.

Because of the complexity of humanrights situations in many of the countries inwhich we operate, we will be working withour managers in Africa and Asia during2006 to understand more fully the issuesthat exist in each country, how these issuesare managed locally and whether gapsexist, and if they do, we will address them.


The need to bring benefits to the communities we serve It makescommercial sense to invest in the well-being of the communities where we operate, as our prosperity and that of the community is co-dependent.Employees, suppliers and customers come from the community and theeconomic success of the company generates employment, taxes and excisefor the community.

Corporate social investment at SABMillerWe define corporate social investment (CSI)as any investment we make in the localcommunity to enhance its well-being thatwe would not have otherwise made in thedirect running of our business. This includes“a contribution/investment of cash,knowledge, employee time and equipmentto people or communities to enable them toflourish and to help sustain an environmentin which we can be a successful business”.

From direct CSI we do not expect anyfinancial pay-back and the contributions are motivated by supporting the well-beingof communities and acting as a goodcorporate citizen. In some countries thisform of support is preferred but in othermarkets more sophisticated forms ofindirect CSI are more welcome becausethey are considered to be more sustainable.

Indirect CSI is more commerciallyfocused and is an opportunity where aninitiative with a clear business objective isshaped to increase the social benefit itoffers to local communities.

Our CSI programmes are aligned to thecompany vision, mission and values and to our sustainable development priorities at the same time as complementing localcommunity and stakeholder priorities.

Three group themesSABMiller has targeted three areas foraction. The first area is sustainable enterpriseand entrepreneurship development whichbuilds on existing projects in agriculture andsocial enterprise. For example, the long-running Kickstart campaign in South Africacontinues to provide young people fromdisadvantaged backgrounds a combinationof business skills training, intensive mentoringand seed capital. Ninety percent of grantwinners for the last three years are still inbusiness today. Kickstart also focuses onrecruiting entrepreneurs whose businessescould become potential equity suppliers tothe company.

The second area reinforces our relianceon water. Initiatives will be developed in regions which suffer from water scarcityor poor quality and this will be a focus fornext year.

The third is HIV/Aids. Where prevalencerates are higher than 5%, HIV/Aidsawareness elements should be

incorporated into HIV/Aids communityprogrammes.

For data collection, companies measuretheir direct and indirect CSI and calculatethat sum as a percentage of pre-tax profit.CSI contributions are not linked to sales of product and they exclude responsiblealcohol consumption programmes andHIV/Aids programmes for employees andtheir dependents. These programmes arebudgeted for separately.

CSI programmes are evaluated andmonitored to ensure that they delivermeasurable, sustainable community and business benefits. Partnerships are encouraged which leverage other resources to be contributed to existing or new programmes.

During the year our group-widecorporate social investment contributionincreased by 10% to US$19 million.

Keeping healthyIn India a healthcare projecthas focused on education insanitation and preventativehealthcare to villagesneighbouring our largestbrewery. With public healthcentres the project has trainedhealth workers and formedcommunity based organisationsso they can manage aspects of the project themselves.

At the grass rootsMiller is involved in GrassrootsSoccer which is an internationalnon-profit organisationdedicated to training Africa’sstrongest role models,professional soccer players, to teach African children andteenagers about HIV/Aidsprevention.

Citizens’ ChoiceThe main CSI programme in the Czech Republic is Citizens’Choice which provides grantsto NGOs and regionalinstitutions focusing oneducation, health and socialwelfare, environment andculture. In the last four years theprogramme has granted nearlyUS$1 million and has supportedmore than 100 projects.

For this year a focus will be to find moreaccurate ways to measure indirect CSI bothin terms of benefits to local communitiesand to the business.

The judging panel discusses the applications for theCitizens’ Choice grants.


The need to contribute to the reduction of HIV/Aids within our sphereof influence HIV/Aids is a human tragedy for the individuals affected, theirfamilies and the whole community. It also affects our business, especially inAfrica, through availability of skills, the health and well-being of our employeesand customers and the perception of our company in local communities.

The extent of the HIV/Aids pandemic andrelated socioeconomic consequences insome countries requires us to manage thisas an operational and reputation priority.Africa, where the cost and impact ofHIV/Aids has been most significant, is our top priority but the progression of theepidemic in India, China and Russia is alsoof concern.

SABMiller prioritiesOur key areas of focus have been tomanage existing infections throughvoluntary counselling and testing, offeringmanaged healthcare which includes freeanti retro-viral treatment where necessaryfor employees and their direct dependents and preventing new infections througheducation programmes.

A key principle of our HIV/Aids work is to respect the rights of our employeesand to ensure that their medicalinformation will be treated in the strictestconfidence. We will not discriminateagainst employees on the grounds of theirHIV status but at the same time ourexperience shows that medical self-management, based upon informedunderstanding, is an essential element incombating and managing the disease.Ignorance can be dangerous and result indelays in early and accurate diagnosis andtherefore prompt and appropriate care.

We will address HIV/Aids within theframework of operational constraints,policies and procedures as well asapplicable legislation.

Each operation is categoriseddepending on the prevalence of HIV/Aidswithin the country and is required toimplement minimum standards. More detail is available separately on our website under the HIV/Aids positionstatement but, in summary, surveys andmonitoring, education programmes,voluntary counselling and testing arecovered within the category ratings.

Eradicating the stigmaOur goal is to eradicate the stigma whichsurrounds HIV/Aids and to create anenvironment where employees feel safe todisclose an HIV positive status. Testamentto the effectiveness of the ‘ConfrontingPrejudice and Stigma Campaign’ is the

increasing number of employees who arewilling to share their HIV/Aids status withtheir colleagues, confident that they will be supported rather than shunned.

Our operation in Zambia has been one of our most active participants in theHIV/Aids programme. Employeeinvolvement is around 80% - one of thehighest in the group. Zambia last yearextended its voluntary counselling andtesting and treatment programmes intolocal communities which resulted in 1,500people being tested in one day.

In 2006 we will continue our work inAfrica and consult with potentially at riskoperations in other regions to understandhow our experience may benefit thembefore the business impact of this diseasebecomes more evident.

Driving out HIV/AidsTo extend our sphere ofinfluence into the supply chain,we have included HIV/Aidseducation into the businessskills training for our contractdrivers in South Africa. We intend to roll out thisprogramme in other countriesin Africa during 2006.

Learning moreLast year we held an HIV/Aidsworkshop in conjunction withthe Chatham House AfricaProgramme. Feedback andinsights from this workshophave contributed to thedevelopment of our HIV/Aidsprogrammes, particularly withregard to dealing with thisissue outside the workenvironment.

Local community clinicAfter conducting a needsassessment, our brewery inUganda opened its HIV/Aidsclinic to the local community.Nearly 380 residents from thelocal community were testedon the day of the launch. We worked with the UgandanMinistry of Health and NGOson this project.

Testing at the Nile Breweries’ local communityHIV/Aids day.


The need to be transparent in reporting our progress on oursustainable development priorities Increasingly companies are expected to report against relevant sustainable development trends and to provide anobjective analysis of their position and progress. Listed companies in particularare expected to provide extensive environmental and social information toorganisations such as Business in the Community, FTSE4Good and theJohannesburg Stock Exchange SRI Index. Their assessments are publishedalongside those of other companies and read by shareholders, suppliers,employees, non-governmental organisations (NGOs) and customers.

Open and honestWe have formally reported performance at group level for nine years and many of our operations report on social andenvironmental issues. Our aim is that ourreporting will continue to be accurate, open and honest. Our data gathering andreporting processes should deliver sufficientdata to report comprehensively, but withoutimposing an excessive burden on thebusiness. We have developed reportingframeworks which are Global ReportingInitiative (GRI) compatible at group level and include third party assurance.

We will continue to report on the groupperformance with a particular emphasis on global trends, compliance to externaland internal rules and guidelines, andcommunication with the financialcommunity. At a local level we will befocused on market specifics as many of our sustainable development prioritiesimpact on different markets in differentways. Individual companies will be expectedto set targets to gradually improve datagathering and use, to produce marketspecific reports and to communicateproactively with third parties.

Alongside this report on our 10sustainable development priorities, weprovide additional data reports on ourwebsite covering a range of economic,social and environment issues of concern to stakeholders. These include informationabout our economic impacts, employeesand consumer issues outside alcohol, some matters concerning relations withgovernments and a broad range ofenvironmental performance data.

For example we are committed toconstructive engagement with governmentsand their regulatory agencies, based onopen and arm’s length relationships. Given their power to tax and regulate our operations, it is important that we are active in protecting our legitimatebusiness interests. This we do openly andtransparently, without intervening in partisanpolitics. The group’s policy is that politicaldonations are only made by exception andin accordance with local laws and tosupport democracy.

To aid transparency and accountability,we also publish on our website the full

external assurance statement whichprovides an independent assessment and commentary of this report and theadditional materials against recognisedinternational standards for non-financialreporting.

The next stepsIn 2006, in addition to producing our annual sustainable development report and updating our website, we also intend to publish more bespoke reports on specialised subjects. We will also be improving our central data collectionsystems so that we will have more internaltransparency for individual operations tolearn from other operations’ experiences as well as being able to use the informationfor external communication.

Reporting progressOur operations in Poland,Canary Islands and the CzechRepublic have publishedreports on sustainabledevelopment priorities thisyear. In South Africa SABpublishes a corporate affairsreport and Miller in the US alsoregularly publishes reports.

On boardOur Africa and Asia hub held its first board level meetingsdedicated to the sustainabledevelopment priorities this year. Miller in the US holdssustainable issues meetingstwice a year and SAB in SouthAfrica holds these meetingsfour times a year. Thesemeetings are regional versionsof the group CARAC meetings.

Consulting with externalstakeholdersWe discussed our sustainabledevelopment strategy and planswith global NGOs and academicsin Cape Town in May. Stakeholderconversations such as these helpus shape our future work.

The latest environmental report from KompaniaPiwowarska in Poland.


Sustainable development governance and management Our opencommunication approach demonstrated within our transparency priority directlytranslates into our governance and management of sustainable development.

The sustainable development team atSABMiller is headed by Sue Clark, Directorof Corporate Affairs, who attends bothCARAC and excom meetings, providing theinterface between the two bodies.

Internally we collect local performancemeasures which are signed off by the localmanaging directors every six months. Socialand environmental measures are listed as part of the group’s risk managementprocesses and the corporate accountabilityand risk assurance committee (CARAC), a committee of the SABMiller plc board of directors, is responsible for reviewing

how the executive committee (excom)discharges its environmental and social duties.

Global and localThe group sets the sustainabledevelopment positions and policies whilstindividual businesses have the autonomy to decide how these are fulfilled at a locallevel. We monitor and report the sustainabledevelopment activities of all businesseswhere SABMiller has day-to-daymanagement control, either as a result of a majority shareholding or through

Sue ClarkDirector of Corporate AffairsSue Clark was appointed Director ofCorporate Affairs of SABMiller plc in2003. She has responsibility forbuilding and protecting the group’scorporate reputation and heads upinvestor relations, media relations,corporate social responsibility, politicaland trade relations, issues and crisismanagement, brand communications,corporate website and internalcommunications.

Previously, Sue was Director ofCorporate Affairs at Railtrack Group.Earlier roles include Director ofCorporate Affairs at Scottish Power,Investor Relations Manager at ScottishPower and Investor Relations Managerat National Power.

Sue has a BSc Hons fromManchester University and an MBAfrom Heriot Watt University.

Dr Alan Knight OBEHead of Corporate AccountabilityAlan Knight is responsible for the group-wide framework for sustainabledevelopment, including the 10 prioritiesdescribed in this Report.

Previously he was Head of SocialResponsibility for Kingfisher, responsiblefor co-ordinating social andenvironmental policies across the globalKingfisher Group.

For 10 years he was Head ofSustainability at B&Q, the UK’s marketleader in DIY.

Alan also co-chairs the UKGovernment’s Roundtable onSustainable Consumption and serveson the UK Sustainable DevelopmentCommission.

He was awarded the OBE in 1998for Services to the Environment.

Alan has a degree in Geology fromSouthampton University and PhD fromLondon University.

David GrantGroup Environment Policy ManagerDavid Grant is responsible for thedevelopment and integration ofcorporate environmental and supplychain strategy and policy for SABMiller.These form part of the company’sbroader sustainable developmentstrategy. David works across thebusiness in Africa, Europe and theAmericas.

Prior to joining SABMiller Davidworked in various environmentalmanagement capacities at both theNational Petroleum Refiners of SouthAfrica (NATREF), a division of SASOL,and Nissan Manufacturing (Pty) Ltd.

Jenni GilliesGroup HIV/Aids ManagerJenni Gillies co-coordinates theHIV/Aids strategy and implementationfor SABMiller. Over the past 15 yearsshe has worked exclusively in the field of HIV/Aids and has extensiveexpertise with the focus on developingand implementing best practicestrategies to manage and reduce thecost and impact of HIV/Aids in theworkplace.

Jenni has in-depth knowledge inthe transference of difficult conceptsrelating to HIV/Aids education whichhas been invaluable in her research in the psychosocial determinants ofbehaviour and attitude. The focus of her work has been to examineeducation methodologies which resultin behaviour and attitude change todevelop effective education models.

management agreements. Businessinterests which fall outside these criteria are excluded from the scope of this report,however we are active in sharing ourstandards and policies with our associatesand other business interests where we do not have direct management control.

We continue to be included in the FTSE4Good Index, Business in theCommunity Environment Index and theJohannesburg Stock Exchange SocialResponsibility Investment Index and ourreport is independently reviewed by TheCorporate Citizenship Company.


Assurance statement from The Corporate Citizenship CompanySABMiller has been reporting externally on its approach to corporate socialresponsibility for nearly a decade. This year’s report marks a clear step-changeas it puts centre-stage the company’s contribution to sustainable development,focusing on 10 priority issues identified by the board as its most importantimpact areas. Here we comment briefly on this approach; available on-line(www.sabmiller.com) is our full assurance statement which we have based on theinternational assurance standard AA1000 and the reporting principles of the GRI.

The year has seen the conclusion of areview process within SABMiller, resulting ina new strategy for sustainable developmentand – vital if progress is to be made – aclear framework approved by the executivecommittee of the board for settingexpectations and assessing performance by operating companies. During the year,the Group also revised and restated itsstatement of vision, mission and values,entitled ‘Working Together’, which wascascaded to employees around the world.An in-depth review of external and internalopinions on the full range of reputationalissues including corporate socialresponsibility was completed.

At the same time, performance by thebusiness on established accountabilityissues – reported here and through on-linedata supplements – has continued toimprove. Group-wide adherence to long-standing alcohol responsibility policiesremained good. Eco-efficiency in brewingimproved again, while indicators onemployee issues such as diversity andtraining also showed improvement. Thecompany continues to contribute to localcommunity development through itsextensive CSI programme.

Looking forward, we have identified twomain areas where we would expect future

reporting to concentrate. The first is toshow progress in the 10 priority areas byeach operating company, demonstratingstep changes in performance through anassessment process. From an externalassurance perspective, it is essential that the views of stakeholders are fullyincorporated into assessment and reportingon overall goals, current performance andfuture targets.

The second is to achieve a fullyrounded picture of SABMiller’s contributionto sustainable development. This meansdeepening the assessment in some of thepriority topics – for example a completecarbon footprint of the brewing processfrom agricultural supplies to finalconsumption and packaging disposal. It also means including more completely inexternal reporting a range of topics such asoperating companies’ competitive positionand performance in their marketplaces; how the wealth created by the business is distributed locally and internationally;relations with governments includinginfluencing the regulatory process; and the range of human capital managementissues. Many of these are already reportedon and there is scope to extend thepresentation in the more flexible and regularissue-based reporting that is now planned.

Such an approach in future will allow afull sustainability footprint to be presented.This would, we believe, show thatSABMiller’s operations have many positiveimpacts in local communities around theworld without detracting from the currentmanagement focus on priority topics whereaction in the business can most enhancethe impacts achieved.

The Corporate Citizenship Company19 June 2006www.corporate-citizenship.co.uk


Registered officeSABMiller plcSABMiller HouseChurch Street WestWokingSurrey GU21 6HSUnited KingdomTelephone: +44 (0)1483 264000Telefax: +44 (0)1483 264103

Head officeOne Stanhope GateLondon W1K 1AFUnited KingdomTelephone: +44 (0)207 7659 0100Telefax: +44 (0)207 7659 0111

Internet addresswww.sabmiller.com

We have not produced this Report as a paper document becauseof the wasted printed paper that this inevitably entails. Our researchshows us that virtually all our stakeholders have direct or indirectaccess to the internet and therefore we have taken the decision tomake our report only available as a PDF on our website. We haveensured that it is easily printable for those who need paper copies,either in its entirety or by subject.

Please contact us at [email protected] if youhave any feedback or comments on this report.

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