AB InBev Takes Aim at Scope 3 Emissions: Q&A with Virginia Covo

by | Feb 27, 2019

AB InBev Takes Aim at Scope 3 Emissions: Q&A with Virginia CovoAnheuser-Busch InBev’s sustainability team has been busy. Since launching ambitious new sustainability goals for 2025 early last year, the world’s largest brewer began requesting supplier data through CDP and placed an order for 800 hydrogen-electric semi trucks, and started sending leftover alcohol from their European headquarters to a biofuel plant.

Their 2025 goals cover smart agriculture, water stewardship, circular packaging, and climate action. Virginia Covo, AB InBev’s global director for sustainability supply chain, is responsible for the climate action pillar. She’s also in charge of the company’s sustainability reporting and supply chain engagement.

We recently caught up with Covo to learn about her approach to reducing emissions, particularly the indirect Scope 3 ones.

What are AB InBev’s carbon emissions goals and how were they established?

The new sustainability goals were developed through a very rigorous process. We did a materiality assessment and saw the pieces that our stakeholders care about the most. GHG emissions were identified as one of these issues so we developed goals and matched them to the UN Sustainable Development Goals. Then we engaged external stakeholders, NGOs, and the board. The goals went through approval with senior leadership and after that we launched them to the world.

In terms of our climate action pillar, we divided the goal into two parts. The first is renewables. We committed to achieving 100% of our electricity from renewable sources by 2025. In addition, we set a Science Based Target to reduce our emissions by 25% per beverage within the same timeframe.

What is your strategy for getting there?

Keep in mind that close to 80% of our emissions come from Scope 3, which is outside our walls. Packaging contributes to one third of our emissions globally. Then we have agriculture, product refrigeration, and logistics.

We identified the categories where we could make a positive change. An example is packaging. Our circular packaging goal is that, by 2025, we want our primary packaging to be returnable or made from majority-recycled content. If you increase the recycled content in the packaging, emissions automatically go down.

In PET, we have seen that technology advance to a point where we can increase our recycled plastic content without losing the characteristics we need.

Which other aspects of those emissions are you tackling?

We have a plan for logistics. Our Green Logistics program has been in place at the company for almost six years now. We have been reducing our emissions year after year. With a baseline of 2013, we were able to reduce our emissions from distribution by 16% by 2017.

Now we want to increase our system by 25% so we are going farther — optimizing our routes and looking at transport. With Nikola Motor Company, we contracted 800 trucks in the US to replace our dedicated fleet that goes between the brewery and the warehouses. We’re replacing 100% of that fleet in the United States, which is approximately 30% of our total fleet in the country.

In Europe, we signed major deals with several partners to develop electric trucks. In Brazil, we ordered 1,600 trucks from Volkswagen and we’re piloting five trucks in São Paulo.

For supplier engagement, we are looking at how to increase recycled content, how to decrease GHG emissions, and how to transition into renewable electricity. In addition, we have our 100+ Accelerator led by Maisie Devine. We issued our first set of challenges last year and have seen interesting startups that can contribute to climate action.

Could you share some of the results so far?

The trucking pilot with Nikola starts in April, and we’re optimistic that it’s going to bring great results.

In terms of brewing, last year we launched a patent estimated to reduce our operational emissions by 5% where it is implemented. This technology creates gas bubbles without needing a lot of heat and water, reducing energy usage at our breweries.

Also this year we got an A on CDP Supply Chain. It’s our first year so we are pretty excited.

What are your biggest challenges?

One is glass recycling. Glass is very difficult to recycle because you need to separate the colors and it is heavy. So how do we increase glass recycling — especially flint glass, which is transparent — and how do we educate people to separate it? We are currently working through these challenges.

Another is challenge is agriculture. We have our Smart Barley Program that shares best practices with all of our farmers. These initiatives translate into carbon reductions, but there is no protocol today that helps us account for those activities. I know the community is working on developing that guideline.

Anything else?

In November, I launched a platform called Eclipse to engage with our supply chain because climate change is something we are all facing. We want to share this with the community, influence our supply chain, and make a positive impact. To date, we have about 20 suppliers signed up that make up a large portion of our supply chain, but we want to go further to make a difference in fighting climate change.

Virginia Covo will be speaking at the 4th Annual Environmental Leader & Energy Manager Conference (ELEMCON) May 13 – 15, 2019 in Denver.

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