David PatersonHead of Public Affairs & CSRHEINEKEN UK

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Brewing a Better World Brewing a Better World Brewing a Better World Brewing a Better World HEINEKEN’s approach to sustainabilityHEINEKEN’s approach to sustainabilityHEINEKEN’s approach to sustainabilityHEINEKEN’s approach to sustainability

About HEINEKEN UKAbout HEINEKEN UKAbout HEINEKEN UKAbout HEINEKEN UK

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About HEINEKEN UKAbout HEINEKEN UKAbout HEINEKEN UKAbout HEINEKEN UK

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We’re the We’re the We’re the We’re the fourthfourthfourthfourthlargest pub operator largest pub operator largest pub operator largest pub operator with around with around with around with around 1,100 1,100 1,100 1,100

pubspubspubspubs

More than More than More than More than 95% of 95% of 95% of 95% of our beerour beerour beerour beer sold in sold in sold in sold in

the the the the UK is brewed in the UK is brewed in the UK is brewed in the UK is brewed in the

UKUKUKUK

Our commitment to growing a Our commitment to growing a Our commitment to growing a Our commitment to growing a responsible and sustainable business responsible and sustainable business responsible and sustainable business responsible and sustainable business

has been recognised by has been recognised by has been recognised by has been recognised by Business in the CommunityBusiness in the CommunityBusiness in the CommunityBusiness in the Community

Brewing a Better World Brewing a Better World Brewing a Better World Brewing a Better World –––– A business A business A business A business prioritypriorityprioritypriority

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EnergyEnergyEnergyEnergy

WaterWaterWaterWater

SourcingSourcingSourcingSourcing

Responsible Responsible Responsible Responsible ConsumptionConsumptionConsumptionConsumption

CommunitiesCommunitiesCommunitiesCommunities

Health & SafetyHealth & SafetyHealth & SafetyHealth & Safety

Doing

Good

Boost

ImageImageImageImage

Save

CostCostCostCostMitigate Mitigate Mitigate Mitigate

RiskRiskRiskRiskRetain

ResourcesResourcesResourcesResources

Licence–

to-

OperateOperateOperateOperate

SellSellSellSell

ourourourourbeers to

moremoremoremoreconsumers

Sustainability = Sustainability = Sustainability = Sustainability = ValueValueValueValue CreationCreationCreationCreation

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Source: Carbon Footprint Baseline Model – 2011 data, 23 OpCos, , weighted average, data per 15.10.2012

Agriculture 8%

Malting 6%

Brewing 17%

Packaging + end of life 31%

Distribution 9%

Cooling 29%

Legend

We know the impact of agriculture has a We know the impact of agriculture has a We know the impact of agriculture has a We know the impact of agriculture has a significant impact on our carbon footprint significant impact on our carbon footprint significant impact on our carbon footprint significant impact on our carbon footprint

Sustainability is integrated across our supply Sustainability is integrated across our supply Sustainability is integrated across our supply Sustainability is integrated across our supply chain, from barley to barchain, from barley to barchain, from barley to barchain, from barley to bar

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Protecting Protecting Protecting Protecting water water water water resourcesresourcesresourcesresources

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SmartDispenseSmartDispenseSmartDispenseSmartDispense: less waste, less energy & the : less waste, less energy & the : less waste, less energy & the : less waste, less energy & the perfect chilled pint in a Great British Pubperfect chilled pint in a Great British Pubperfect chilled pint in a Great British Pubperfect chilled pint in a Great British Pub

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• Revolutionised draught dispense

• Engineering innovation unique to HEINEKEN UK

• Identified dual waste & quality issue:

– Up to 90% of energy to cool the cellar is waste, and 75% of water

– Poor hygiene and cleaning standards & lack of expertise

• SmartDispense: the solution:

– Less frequent line cleaning saves the averagepub around 12,000 pints of water

– Reduces energy use by up to 90%

Sustainability: a commercial opportunity Sustainability: a commercial opportunity Sustainability: a commercial opportunity Sustainability: a commercial opportunity

• Critical that we work together with our customers and lessees across our entire supply chain

• Paid-for line cleaning service introduces new revenue stream for HEINEKEN

• Critical to sell in cost-saving for publicans as well as environmental and quality benefits

• Differentiator for HEINEKEN in the marketplace: passion for quality

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Reducing Reducing Reducing Reducing COCOCOCO2222 emissionsemissionsemissionsemissions

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Tadcaster now home to largest solar Tadcaster now home to largest solar Tadcaster now home to largest solar Tadcaster now home to largest solar installation at any UK breweryinstallation at any UK breweryinstallation at any UK breweryinstallation at any UK brewery

• Investing in renewable energy key to achieving our 2020 target: reducing C02 emissions in production by 40% worldwide

• 4,000 solar panels generating 876 megawatt hours (“MWh”) each year, enough to power 185 homes

• Combined with biogas on site, 8% of site’s energy use will now come from renewable sources

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Sourcing Sourcing Sourcing Sourcing sustainablysustainablysustainablysustainably

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BaBFBaBFBaBFBaBF Commitment Commitment Commitment Commitment | | | | Raising Farming Standards Raising Farming Standards Raising Farming Standards Raising Farming Standards

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Aim for sustainable sourcing of

2015201520152015 2020202020202020

• 20% of barley

• 40% of hops

• 60% of apples

Minimum 50% of main raw materials supplied

Based on Based on Based on Based on Mass Balance PrincipleMass Balance PrincipleMass Balance PrincipleMass Balance Principle

Our global commitment: 50% of raw Our global commitment: 50% of raw Our global commitment: 50% of raw Our global commitment: 50% of raw materials sourced sustainably by 2020materials sourced sustainably by 2020materials sourced sustainably by 2020materials sourced sustainably by 2020

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Our Sustainable Sourcing strategyOur Sustainable Sourcing strategyOur Sustainable Sourcing strategyOur Sustainable Sourcing strategy

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Definition | Definition | Definition | Definition | Sourced sustainably Sourced sustainably Sourced sustainably Sourced sustainably

- Generally accepted standard for non-segregated supply chains

- Retain flexibility for appropriate quality blends

- Keep input cost stable

- Raise bar for overall farming rather than stimulate development of niche market

Rationale

Rationale

Rationale

Rationale

HEINEKEN Claim:HEINEKEN Claim:HEINEKEN Claim:HEINEKEN Claim:

Definition | Definition | Definition | Definition | Sustainable VolumeSustainable VolumeSustainable VolumeSustainable Volume

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“Any agricultural product in scope of the Sustainable Agriculture program, that has

been: (1) cultivated in accordance with an approved Code of Practice and (2) has

been allocated to HNK by our supplier, in accordance with the mass balance

approach”

Approved Codes of Practice

SAI Principles & Practices -FSA Code of Practice

3rd party benchmark

Volume contractually allocated to

HNK in acc with mass balance

approach

SAI Principles & Practices (P&P) SAI Principles & Practices (P&P) SAI Principles & Practices (P&P) SAI Principles & Practices (P&P) | | | | Farmer Self Assessment Farmer Self Assessment Farmer Self Assessment Farmer Self Assessment

SOCIETY (PEOPLE)

•Food Quality & Safety

•Rural, Social,

Economic conditions

•Working Conditions

•Training

ENVIRONMENT

(PLANET)

•Soil treatment

•Water usage and

depletion avoidance

•Biodiversity

•Energy

ECONOMY

(PROFIT)

•Farmers Income

•Food Supply

•Optimisation of

Benefits

•Diversification

FARMING SYSTEMS

•Site Selection and

Management

•Yield, Variety,

Fertiliser

•Planting Material

•Crop Management

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“Efficient production of safe, high quality agricultural products, in a way that protects and improves the natural environment, the social and economic conditions of farmers, their employees and local communities, and safeguards the health and welfare of all farmed species.”

• All of the barley we use for the beers we brew in the UK is grown in the UK

• As of 2014, 100% of they barley we buy from the UK is now Red Tractor certified

• In the UK, working with our partners, we want to take this commitment to sustainable supply chain to the next level

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Barley | Barley | Barley | Barley | What we’re doing in the UKWhat we’re doing in the UKWhat we’re doing in the UKWhat we’re doing in the UK

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• We use around 30% of the UK’s apples in our ciders

• Worked with many of our apple farmers in Herefordshire for up to three generations

Apples | Apples | Apples | Apples | What we’re doing in the UKWhat we’re doing in the UKWhat we’re doing in the UKWhat we’re doing in the UK

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• Orchard Management Programme provides farmers with platform to share best practice, advice and guidance amongst the apple farmer community, including on sustainability issues

• Annual Golden Apple awards to celebrate examples of best practice

• In 2014, we’ve trialled a self-assessment questionnaire based on SAI principles for our farmers to complete

• Will be rolled out to meet our target to source 60% of bittersweet apples sustainably by crop year 2015

Apples | Apples | Apples | Apples | What we’re doing in the UKWhat we’re doing in the UKWhat we’re doing in the UKWhat we’re doing in the UK

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Improved soil fertility prevents erosion, i.e. less risk of decreasing yield

French Coopération (Arvalis affiliate): wildflower meadows stimulate biodiversity � less risk of diseases

12% yield increase, £200/acre benefit as a

result of compost as

natural fertilizer

The Proof of the Pudding... | The Proof of the Pudding... | The Proof of the Pudding... | The Proof of the Pudding... | Best PracticeBest PracticeBest PracticeBest Practice

SAI standards inspired the German hop farmers to define a common code for sustainable agriculture.

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