In conversation with Diageo’s Michael Alexander

What area will you be focusing on next in terms of sustainability?

Growth is a key focus for any business. For Diageo, this means ensuring our production facilities operate efficiently and sustainably to support the long term growth of our business. A key aspect to this is the environmental performance of our production assets – in terms of carbon, energy, water and waste – and our drive to decouple the impact we have on the environment from our continued increase in production. This will be an on-going focus for us.

We aim to fully incorporate sustainability into the business and take a more flexible, longer term approach to assessing the value of environmental investments, ultimately challenging our thinking on the optimum way of evaluating projects when we make environment related investments.

At Diageo we have an integrated approach to managing risk and environmental considerations have always been part of this. Over the last five years there has been a heightened awareness of climate change, the environment and sustainability in general. This is reflected by the increasing importance placed on these issues within Diageo and an associated increased investment, particularly within our supply chain.

What are the major changes you see happening in your industry?

There is a growing trend towards organisations collaborating with others to achieve goals that are beneficial to both them and the environment. We have some strong partnerships in place with NGO’s and also cross sector partnership with groups, which we need to continue to nurture and build upon. Collaboration of this kind is becoming ever more important if we are to make a real difference.

What’s the most exciting part of your job?

Diageo is a truly global business and this makes it a very exciting and dynamic place to work. With operations in over 30 countries there is never a dull moment with a constant stream of different issues in different markets needing to be addressed.

This, combined with the company’s genuine commitment to reducing its environmental impact and the ability to shape that commitment, means that the job is often inspiring – but of course there are always less inspiring tasks – such as end of year reporting …..

What will be the big focus in the future for the environment?

Businesses will be examining ways to tackle the problem of resource scarcity. Climate change, population growth and energy security are all contributing to increasing pressure on the planet’s resources.

As part of this, water stewardship is something that is starting to be addressed across many industries, but there is still a long way to go and 2013 will see an increase in water stewardship activity from businesses eager to decrease their water footprint and to make a positive contribution to improved water stewardship. In addition, it is clear that many businesses will be increasingly focussed on improving their understanding and managing impact of their supply chains.

What’s your top tip for employee engagement?

It’s important to make employees feel highly connected to the company’s environmental goals, and providing ways in which they can contribute as much as they can to the success of these goals. Involving them fully in the planning and development is an essential part of employee engagement.

Driving this engagement can be achieved through inspiring employees with a compelling strategy for the future, as well as recognising and valuing their individual contribution, acting on their feedback, giving them opportunities to grow and develop and behaving with integrity, including demonstrating our commitment to sustainability and responsibility.

What’s been your biggest win (environmentally)?

On the operational side our Roseisle distillery, in Speyside Scotland, is the first major distillery to be built in Scotland for 30 years and cost £45m overall – and the bioenergy plant which generates renewable energy from the co-products of distilling cost £17m.

This investment funded the site’s cutting edge green technology which combines with traditional distilling to produce 10 million litres of single malt whisky each year. Currently the distillery is using 50% less fossil fuel than a comparable site. Approximately 10,000 tonnes of CO2 per annum is being saved from the use of renewable fuels and 3,000 tonnes of CO2 saved from replacing fuel at the adjacent malting plant.

This investment reflects Diageo’s commitment to carbon emissions reduction – since 2008 we have cut our absolute carbon emissions by nearly 25% against a backdrop of increased production – we’re very proud of this but our target is 50% by 2015, so we’ve still got a big challenge ahead.

Michael Alexander is head of environment at Diageo

Read last week’s ‘In conversation with Carillion’s Tom Robinson’