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Performance and outlook

Whether through our direct operations, our local investment or our advocacy for change, we are proud of the contribution we make to our communities.

Our stakeholders expect global companies like Diageo to demonstrate a contribution to socio-economic development in the communities in which they operate. This is especially true in markets that may not have well developed regulatory environments and look to the private sector to collaborate through good business practices. In this way, our strong commitment to our communities helps us build relationships with the stakeholders we rely on, and directly supports our growth strategy.

Key metrics

We measure our impact on our communities in a variety of ways, but primarily have used targets to measure the impact of our community investment. As we continue to expand our approach to socio-economic development, we will further consider how best to measure our short- and long-term impacts.

Progress against socio-economic development targets
Target by 2012 2012 performance Cumulative performance Achievement
Contribute 1% of operating profit to charitable causes every year Contributed 0.9% n/a Not achieved
Target by 2015
Source 70% of raw materials used in African operations from Africa Achieved 56% n/a On track
Improve access to safe drinking water for 8 million people in Africa Approximately 1 million people benefited We have supported 200 projects supporting water infrastructure since 2006, and are currently re-evaluating our measurement and evaluation of this programme On track
Target by 2016
Train 100,000 people through our Learning for Life programme worldwide 12,639 people trained 63,638 people trained since 2008.
70-80% of Learning for Life students secure employment upon graduation
On track

Local wealth creation

There are many ways that our business created wealth for its local communities this year.

  • Diageo employed an average of 25,698 people in 2012, with 39% from emerging markets in Africa, Latin America and Asia Pacific. This percentage is expected to grow as we expand our business in emerging markets.
  • We are one of the largest tax contributors in Kenya
  • We recognise the importance of local sourcing and actively measure our progress against a target to source 70% of raw materials for African production sites from Africa by 2015; this year we sourced 56%.
  • Some of our subsidiaries are publicly listed on local stock exchanges, where investors receive dividend payments and potential capital growth. In total we have over 100,000 local shareholders in emerging markets through the following companies: Guinness Nigeria, East Africa Breweries Ltd, Guinness Ghana Breweries, Seychelles Breweries and Red Stripe in Jamaica.

You can read more about the economic impact of our business, in local wealth creation.

Community investment

As shown in the key metrics table above, our impacts in community investment are measured through progress against targets managing inputs such as investment, or outputs such as the number of people benefiting from a given programme.

This year, we invested around £28.7 million which amounts to 0.9% of our operating profit excluding exceptional items. While just shy of our 1% target, our community investment increased each year and currently excludes investment in the socio-economic development activities that we run without charitable partnerships.

Contributions were given through a variety of means including long-term corporate-wide flagship programmes, brand-led or cause-related marketing, foundation grants or local donations of time, money and product.

The key areas of investment focus on responsible drinking, access to clean water, education and training and social entrepreneurs. We measure performance of these longer-term investments through targets shown in the table above for all programmes except social entrepreneurship. This year we financially supported 82 social entrepreneurs and delivered training to 70. We are developing formal targets for this programme, and will report progress against them next year.

Other investment is split by a variety of causes, important to our local markets and communities. It includes contributions to The Thalidomide Foundation Ltd in Australia and the Thalidomide Trust in the United Kingdom in support of a legacy commitment. These contributions are distinct from the litigation settlement achieved in July 2012 in Australia. Read more about our community investment.

Advocacy

This year we worked with others to promote change on a range of issues from anti-corruption to food and water security to accountability and transparency in business journalism. For example, in Nigeria, we signed up to the Convention on Business Integrity (CBI), a Nigerian organisation that asks businesses to adhere to and be measured by its Code of Business Integrity to move Nigeria towards a 'visible zero tolerance' for corruption. We are also signatories of important mandates such as the CEO Water Mandate, endorsed by the United Nations, and the New Alliance for Food Security and Nutrition, endorsed by the African Union, the World Economic Forum and the G8. Finally, for the ninth year in a row, Diageo ran the Africa Business Reporting Awards (DABRA), aimed at strengthening local business media by encouraging openness, accountability and transparency. Read more about our advocacy.

Outlook

In the coming years we aim to improve our methods for measuring our impact on local sustainable development, both how we measure our community investment and how we measure the overall impact of our operations.

While measuring the overall impact our operations have on local communities is challenging, we are exploring methodologies, particularly with regard to our economic impact. We plan to start measuring this in certain markets, beginning in Africa with Ghana, Kenya and Nigeria.

Moreover, we will continue to focus on establishing socio-economic development programmes that meet the needs of our stakeholders. To help inform this work, we aim to extend the sustainability and responsibility strategy workshops we launched this year to new markets to understand what issues are important both to local stakeholders and to Diageo.

Reporting frameworks in this section