Bacardi’s greenhouse gas intensity fell by six percent in FY 2012, and its water use efficiency improved by 11 percent, beating goals set for the year, according to the company’s latest sustainability report.
The drinks maker says it had a goal of a 1 percent improvement in both metrics.
Water use, sourcing and discharges
In fiscal 2012, water use at Bacardi production facilities remained essentially static year-on-year at 1.65 billion liters, but efficiency improved substantially due to increased production volumes. The company has improved water efficiency by 44.4 percent since 2006, and cut water use by 49.4 percent on an absolute basis, through water-efficiency equipment, water recycling systems and operational improvements, the report says.
For example, the company’s plant in Beaucaire, France, optimized its cooling water system, modified its cleaning systems to eliminate unnecessary equipment rinsing, and invested in a new water treatment system that reduced reject water by two-thirds. The plant cut water use per unit of production by nearly 8 percent, and by half since FY 2006, with the added benefit of improving energy efficiency by 27 percent over the same six-year period.
The company’s water data does not include its malt whisky distilleries, which use water for distilling and production, along with a large quantity for cooling, although this water does not come into direct contact with production and therefore does not create wastewater. Bacardi says it is developing a method for measuring this water use separately and will include it in future reporting. In FY 2013, it is targeting a 1 percent improvement in water use efficiency.
The report does not say how Bacardi’s water discharges changed over time. It does say that 43 percent of used process water was discharged to bodies of water following on-site treatment, while 38 percent was discharged to municipal treatment facilities (for a total of 1,470 million liters of discharged water in FY 2012) and 19 percent (or 340 million liters) went to beneficial land applications. Last year Bacardi's direct treated wastewater discharges included 3,500 metric tons of biochemical oxygen demand (BOD) and 4,300 metric tons of total suspended solids (TSS).
Greenhouse gases and energy
In 2012 Bacardi cut its GHG intensity by 6 percent year-on-year, for a total of 32 percent since 2006. Its total GHG emissions rose 6 percent to 95,600 metric tons, due to growth in production and increase in non-renewable energy use, although absolute GHG emissions fell by 33 percent over the six-year period.
In FY 2013, the company is targeting a 1 percent reduction in GHG emission intensity.
Around two-thirds of the 2012 GHGs were direct emissions from fuel use at Bacardi operations, and one-third came from Bacardi’s electricity use. The company’s total energy use increased by 7 percent in FY 2012 from the previous year, and fell by 24 percent since 2006.
Bacardi says it is now recording and monitoring GHG emissions from business travel and third-party transport and production activities, estimating that 12,000 metric tons of GHG emissions resulted from bulk transport and 10,000 metric tons from business travel by air. It says data on emissions from business transport by rail and car and from contract production are not yet available.
The company also notes, in the waste and packaging section of its report, that about half the lifetime carbon footprint of its products come from the manufacture of glass used in its packaging.
Shifting focus to renewables
Bacardi says that in FY 2012, it changed the focus of its energy-reduction efforts, beginning to concentrate more specifically on reducing the portion of energy from non-renewable sources. It says that in FY 2012, it increased renewable energy use by 15 percent year-on-year.
The company estimates that 18 percent of its total primary energy is renewable, up from 7 percent in FY 2006. The 18 percent is made up of 6 percent renewable electricity, provided under exclusive renewable electricity contracts, and 12 percent biogas.
“Primary energy” is a combination of direct energy consumption and estimated indirect energy – the fuel needed to generate its electricity, assuming a 33 percent efficiency for electricity generation and transmission – plus a figure equivalent to the additional fuel that Bacardi would have consumed without its renewable energy use.
Interestingly, the company seems to put itself at a disadvantage by counting all electricity supplied from the power grid as “non-renewable,” even if it contains a significant amount of renewable energy. For example, most of Brazil’s power comes from hydro-electricity, but the company still considers this non-renewable. The only sources it counts as renewable are on-site resources such as wind and biogas, and contracted renewable energy from third-party providers.
The report doesn’t provide details of steps Bacardi has taken to increase renewable energy generation or improve energy efficiency in the past year, although it does note that its rum bottling plant in Tultitlán, Mexico, has significantly improved its energy efficiency over the past six years, now requiring only 45 percent of the energy previously used to produce one case of product. At the plant, Bacardi has improved the efficiency of bottling lines, replaced older light fixtures with LED units and motion detectors, and installed solar water heating to provide hot water for the cafeteria and offices.
Methodology changes
In fiscal 2012, the company says it refined and simplified its method of calculating energy, water and GHG intensity, working with accounting professors from North Carolina State University. This “Bacardi Efficiency Index Method (BEIM)” uses the common accounting practice of flexible budgeting: for each metric, the company calculates the performance that it would have achieved during the year without any efficiency improvements since its 2006 baseline. It then compares this against actual performance, and multiplies by 100 to provide an efficiency index figure.
Bacardi says it is the first company to apply this method to monitoring environmental metrics. It has now applied the revised method to its data going back to 2006, and this year’s report presents the restated data. All the restated data are within 7 percent variance of the data reported using its previous efficiency calculation method, Bacardi says.
Waste and packaging
In FY 2012, the company generated 153,460 metric tons of non-hazardous waste, a 15 percent increase on fiscal 2011. It attributes the rise to increased production, particularly of distilled products. Hazardous waste, which accounted for 0.02 percent of total waste production, was down 5 percent to 35 metric tons in FY 2012.
Bacardi says it recycles or reuses most of its waste, or recovers it for beneficial uses such as fertilizer and animal feed.
Since glass accounts for about half of its products’ carbon footprint, Bacardi says reducing the amount of glass used is a major priority. In FY 2012, “right-weighting” projects decreased its packaging weight by just over 6,000 metric tons, and it cut packaging weight by 7.1 percent – or just under 23,000 metric tons – since 2008, mainly by reducing the weight of glass bottles. Bacardi estimates that this saved about 9,370 metric tons of CO2 per year.
It has developed a sustainable packaging manual that outlines how its innovation, packaging and marketing teams can continue to incorporate sustainability considerations into packaging design and manufacture. The company says it completes many packaging redesign projects each year. In the US, it changed the 1.75 liter BACARDÍ Classic Cocktail bottle from glass to PET, reducing the bottle weight by over 90 percent, and in FY 2012 this saved about 790 metric tons of glass and 298 metric tons of CO2.
Other environmental issues
Bacardi Limited facilities reported a total of 81 minor releases in FY 2012, and no significant environmental spills or releases, defined as events that require reporting to a government authority, attract public or media attention or otherwise result in observable or quantifiable harm to the local environment. The company says it had no significant fines – defined as above $5,000 – for environmental non-compliance during the year.
In fiscal 2013, the company says it will develop a plan to achieve its interim target of sourcing 50 percent of sugarcane from Bonsucro-certified sources by 2017. It is aiming for 100 percent by 2022.
The report offers a clear GRI index, using X and check-mark logos to show which indicators the company did and did not address. Bacardi self-declared the report at Level B.
