28 September 2010 | Helen Gilbert

Drinks giant Diageo plans to buy at least half the electricity used at its production sites from renewable sources by the end of next year.

The move, outlined in the firm’s Corporate Citizenship Report 2010, forms part of a wider target to reduce carbon dioxide emissions at Diageo production and supply sites and offices by 50 per cent by 2015. Diageo’s current carbon emission is about 750,000 tonnes per annum.
Michael Alexander, head of environment at Diageo, told SM that electricity accounts for between 10 and 15 per cent of the firm’s energy demand at supply sites. The goal is to buy in half this consumption from renewable sources by the end of 2011 by switching from existing to renewable tariffs, he said. “We are looking at our energy footprint globally and our supply sites [breweries, distilleries, packaging, warehousing] are the most energy hungry in terms of the consumption they use,” Alexander explained.

“We’re looking to procure renewable tariffs and the opportunity to switch tariffs. In some continents the supply of renewable energy is a developed market. In other markets it’s less well developed. We’re looking to increase our procurement of renewable energy in markets where there is a supply.”

According to Friends of the Earth, renewable sources account for approximately 5 per cent of the UK’s electricity supply and 2 per cent of its energy consumption.

Diageo, which has a total procurement managed spend of £3.5 billion, also revealed that vendors’ ethical standards pose the greatest supply chain risks. In its report, the spirit maker said it aimed to ensure that 700 of its “potentially high-risk suppliers” were assured through Sedex – the Supplier Ethical Data Exchange.