Diageo is creating shared value in their supply chain, from glass to grain

The long-term success of communities, businesses, local environments and economies is interdependent and interconnected. At Diageo, our distilleries and breweries are at the heart of the communities where we work while our farming networks underpin community development and growth around the world.

To achieve the global Sustainable Development Goals, businesses have an important role in creating shared value that enables growth. This ranges from minimising environmental impact and promoting environmental stewardship to developing communities, safeguarding rights and creating employment. We invest in long-term, actively managed community programmes that serve critical local needs such as community empowerment, skills development and clean water. Building long term, sustainable opportunities is particularly important, all the more so when creating opportunities in low-income areas. 

Diageo’s contribution is not just about our responsibility as a good neighbour; it is about enabling our business to flourish. Businesses designed to drive returns for shareholders – while creating value for customers, employees and communities – also create a strong foundation for economic growth and sustainable development.

A tangible example of the shared value we create is our approach to supply chains. From grain to glass, Diageo connects the various points along our supply chain to ensure that we contribute to local economies and create mutual benefit for all those who participate in our business. In Africa, we create wealth directly through our operations and indirectly through our broader network of agricultural suppliers. We work with 45,000 smallholder farmers in Africa who collectively provide more than 70% of our raw materials on the continent, and we are aiming to increase this amount to 80% by 2020.

Our Sourcing for Growth partnership works with farmers in Ethiopia to strengthen the value chain for barley – a high opportunity crop, especially when connected to commercial brewing. Collaboration is an essential part of this: we work in partnership with the Ethiopian government and the local NGO TechnoServe through our subsidiary Meta Abo Brewery.

Farmers in Ethiopia have access to funding, knowledge and technical training, which provide entry points into the market and the ability to compete effectively. The growing trend in using digital technologies such as tablets and mobile phones is proving an effective way to gather and manage information from thousands of smallholder farmers, and is especially useful for overcoming the challenges of accessing know-how and market information in pilot schemes.

A network of 6,000 local smallholder farmers now have individual contracts with Meta Abo, which sources half its raw materials from smallholders. By 2017, we aim to source 100% of Meta Abo’s cereal raw materials in Ethiopia. Through Sourcing for Growth, we have seen productivity rise by as much as 50%.

The benefits of a robust, reliable supply chain are huge for Diageo. However, strengthening the wider socio-economic environment in which we work also delivers value. With a global outlook, applied at the local level, community investment programmes can have tangible, long-term impacts for all involved.

Take Learning for Life, a Diageo programme that aims to transform the lives of people throughout the communities where we operate. Focused on adult education, the programme is implemented in partnership with local education, government and training organisations. Through these partnerships, education creates a ripple effect that positively impacts thousands of individuals, families, communities and ultimately, entire societies. Learning for Life has already trained over 110,000 people across 40 countries throughout the Americas and the Caribbean. Impact assessments have shown that most students gain secure jobs and their incomes increase 300%-400%, making a huge difference in poor communities.

Another example of our work to transform communities is the Plan W programme, a community-investment initiative in which Diageo has invested $10m (£6.9m) to empower women through skills training. Our goal is to empower women across all socio-economic groups, giving them opportunities to develop skills that bring economic benefits. So far in the Asia-Pacific Region, the initiative has empowered over 100,000 women and indirectly impacted over half a million people.

Delivering successful programmes like these creates real, tangible benefits for communities, helps to build markets, strengthens supply chains and creates confidence in sustained, long-term growth. However it is only through partnerships – with local governments, NGOs and other local stakeholders – that we can deliver meaningful results that have sustained positive impacts. 

Click here for a video Q&A with David Croft.

Content on this page is provided by Business Call to Action, and originally appeared on the The Guardian Business and the Sustainable Development Goals Hub