Methodological issues for the beer sector

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In 2007, the Dutch NGO Natuur & Milieu (N&M) performed a research on sustainability in the Dutch beer market. The report (sorry, in Dutch) helped us to frame our criteria, and made us consider specific methodological issues again. Below a summary:

The environmental issues in the beer sector, as listed by N&M:
- Energy use, efficiency and carbon emissions (for our beer ranking, we have adopted 8 criteria)
- Use of raw materials, with the environmental issues and origin (for our beer ranking, we have adopted 4 criteria)
- Water use (for our beer ranking, we have adopted 4 criteria)
- Waste and packaging (for our beer ranking, we have adopted 2 criteria)

N&M concluded that comparing the beer brands based on CSR reports was practically impossible. The methodological concerns raised by N&M were (2007):
- Lack of standardization in reporting
- Inconsistencies within the reports

As it seems, big improvements have already been made since 2007, with a leading role for GRI and rating agencies that advice investors on ESG levels of their investment portfolios. Almost all beer brands report at least on the most important metrics, indicating that the sector is heading towards a level playing field and comparing companies and brands gets more trustworthy over time. Still, standardization and verification levels of the reports will always be an challenge and an important point of attention for rating agencies when comparing CSR reports.

Further remarks made by N&M are:

- Beer companies report on their full scale, often covering more than one brand. So there is no differentiation for country or brand level.
- Some brewers also produce soft drinks, and do not report their results for beer separately.

The issue of the companies that cover more than one brand not only applies to the beer sector, but all sectors. Read further for our practical method how to deal when brands are part of a group. The issue of soft drinks is for example valid for Heineken N.V. sustainability reports, covering beer and softdrinks. The lack of brand-specific information, or separately reported data for beer and soft drinks performances, leaves us no choice than the best guess: select the average performances as reported on the corporate level.

Already in 2007 N&M concluded that the differences in performances between the large beer brands were very small. Further, the use of environmentally preferred raw materials was the weak point of the sector. Based on first results of our rankings, both conclusions seem still applicable to the beer sector.