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Corporate and Social Responsibility Report 2006

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Environmental sustainability

Climate Change - CO₂ and energy

We recognise that climate change is one of the greatest environmental challenges facing mankind and we fully endorse the agreements made by governments and international bodies to tackle this problem, most notably the Kyoto Protocol.

We are determined to reduce the carbon intensity of our global operations. Our response to climate change is a key part of our commitment to sustainable growth. One way we do this is by better control of our use of energy which is good for the environment and also makes good business sense.

We are also reducing the climate change impact of our manufacturing sites by switching from carbon intensive fuels, such as coal, to ‘cleaner’ fuels like natural gas and ‘bio-fuels’.

Using a range of technologies has also helped us reduce our carbon intensity. This includes energy efficient steam boilers, energy efficient lighting, variable frequency inverter speed controllers, better thermal insulation, building management systems and Combined Heat and Power (CHP) or co-generation plant.

We are trying to make our production processes more effective as a whole which should result in further energy efficiency and an improvement in our environmental performance.

For example, faced with a need to increase production, our Meito Adams factory in Japan reduced its electricity and gas consumption by investing in co-generation facilities that capture and use exhaust heat. And at our Thane site, Cadbury India switched to generating steam and chilled water through burning ‘carbon neutral’ bagasse briquettes, made from the waste products of the sugar industry. Burning bagasse briquettes has reduced the site’s net CO₂ emissions by 99% taking into account the atmospheric CO₂ absorbed by the sugar cane as it grows.

With the new gum factory that we are building in Poland, we also have an opportunity to do things differently. We plan to reduce the process energy load and implement a mix of options for energy supply that reduce our carbon footprint.

Seven of our plants based in the European Union (EU) will need to meet the requirements of the EU Emissions Trading Directive. We have therefore been in discussion about the various National Allocation Plans and what this means for each of our sites. All seven sites have plans and programmes in place to reduce the energy intensity of their operations (which is the main driver of our carbon dioxide emissions).

Transport

The carbon dioxide emissions from our use of transport are much smaller than emissions from our manufacturing processes. At Cadbury Schweppes, therefore, our main priority has been reduction programmes at our manufacturing sites. Transport, however, is a key consideration, as the current focus on “food miles” shows. Our distribution management teams are focused on maximising the efficiency of our distribution operations in order to reduce both costs and emissions.

Water

Water is a precious resource. Supplies are under pressure from growing populations, over-consumption and from industrial and agricultural use and pollution; competition for clean water is intense. Growing scientific evidence shows that climate change is likely to impact significantly on the future availability of water. Some areas of the world will be subject to more droughts while others will be flooded by rising sea levels. Our goal in this area is to minimise the impact of our water use.

At Cadbury Schweppes, we depend upon the supply and quality of water, since both confectionery and beverages use water in the production processes. Water is the main ingredient of our beverages and its use is directly related to our production volumes. However, the manufacture of confectionery requires more water than beverages, with water used for cooling and heating and for washing and rinsing equipment and surfaces. Producing safe food and beverages demands top hygiene standards and water plays an important role here.

We have an Environment Health and Safety Standard specifically focused on "Water Management". It sets out actions that our sites need to take to minimise their usage of water. The varied measures taken include education campaigns, flow pressure reducing devices, elimination of leaks and highly advanced water recycling systems. Inevitably our production processes create wastewater which may contain materials such as sugar, flavourings, acids, soaps and fats. We ensure that this is suitably treated before being returned to the natural environment. In some cases we treat wastewater ourselves on site before directing it to rivers or lakes, and in other cases there is some onsite pre-treatment before the water is fully treated by the local wastewater treatment plant operator. We also work to reduce our year-on-year wastewater. We aim to minimise the environmental impact of our water usage.

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