There’s something brewing at the major beer brands - and it isn’t beer. As the global thirst for environmentally and socially responsible businesses grows, breweries are rethinking their business models in order to make their operations more climate conscious.

In this article, we assess how well some of the world's top beer brands are doing. Using our custom-made ESG (Environmental, Social, and Governance) framework, we’ve rated Carlsberg, Heineken, Guinness, Krombacher, Peroni, and Duvel and provided each company with a score based on their efforts in areas such as carbon emission reduction, energy efficiency, employee welfare, and transparency.

A fair disclaimer regarding all the beer brands involved: these are the companies with well-established ESG reports, showcasing efforts to lead the industry in sustainability. While there’s still room for improvement across the board, these brands are setting benchmarks in transparency and responsibility in the brewing sector.

The ESG Framework: A breakdown of categories and indicators

Our ESG framework is based on an elaborate analysis and evaluates breweries based on several environmental, social, and governance indicators, with scores ranging from 1 to 10, where 1 indicates minimal or no effort and 10 reflects excellence in sustainability. Here’s a breakdown:

Environmental indicators:

1. Carbon emissions reduction: This measures a brewery’s initiatives to reduce greenhouse gas emissions, including its use of renewable energy and carbon-neutral or carbon-negative practices.
2. Energy efficiency: Focuses on improvements in energy use, such as switching to renewable sources and optimizing energy consumption during production.
3. Water management: Evaluates water conservation efforts, wastewater treatment, and water recycling initiatives.
4. Sustainable packaging: Assesses the use of eco-friendly packaging, such as recyclable or biodegradable materials, and the reduction of single-use plastics.

Social indicators:

1. Employee welfare and labor practices: Examines labor conditions, fair wages, and health and safety standards for workers.
2. Diversity and inclusion: Looks at the company’s commitment to promoting diversity in the workplace, with an emphasis on gender equality, racial diversity, and inclusive hiring practices.

Governance indicators:

1. Transparency and ESG reporting: Assesses how openly the company discloses its sustainability and ESG initiatives through public reports.
2. Regulatory compliance: Measures adherence to environmental and social regulations, both locally and internationally.
3. Stakeholder engagement: Evaluates the brewery’s involvement with stakeholders such as investors, customers, and employees in their sustainability strategies.

ESG performance scores

Using this framework, each of the six breweries received a final score based on their overall performance across all indicators. Below are the results:

1. Carlsberg Group (Denmark) – Score: 8.56

Carlsberg stands out as the leader in sustainability among these six breweries, focusing on achieving net-zero carbon emissions and advancing its social and governance efforts. The company’s innovative use of technology and commitment to net-zero make it a standout in the brewing industry.

Environmental (Score: 8.75)

• Carbon emissions (10): Leading the industry with a target of carbon neutrality by 2040, ahead of the Paris Agreement. Targets aligned with the 1.5°C goal, verified by SBTi.
• Energy efficiency (8): Utilizing advanced technologies like digital twins and large-scale battery storage, though data on savings is lacking.
• Water management (10): Excellent water efficiency with systems recovering up to 400,000 liters weekly, aiming for even lower consumption by 2030.
• Sustainable packaging (7): Reducing aluminum usage by 5%, but packaging accounts for 45% of the carbon footprint, with more improvements needed in recycled content.

Social (Score: 8)

• Employee welfare (8): Strong engagement (82%), comprehensive health and safety, flexible work, and global parental leave. However, inclusivity and manager support need attention.
• Diversity & inclusion (8): 30% women in leadership by 2024, LGBTQ+ inclusion, but supply chain workers report lower satisfaction with diversity initiatives.

Governance (Score: 8.67)

• Transparency & ESG reporting (9): Adheres to global standards like CDP and SBTi, preparing for CSRD compliance in 2024.
• Regulatory compliance (9): Strong adherence to laws with 98% of compliance controls rated effective.
• Stakeholder engagement (8): Engages regularly with investors and suppliers, but external engagement could be expanded.

Carlsberg excels in environmental leadership and governance transparency, while social aspects like diversity and packaging sustainability show room for growth.

2. Heineken (Netherlands) – Score: 8.44

Heineken ranks just behind Carlsberg, with a focus on energy efficiency and carbon emissions reduction, as it continues to increase its use of renewable energy and invest in energy-efficient brewing processes. The company’s efforts in sustainable packaging, particularly its initiatives to reduce single-use plastics, are also noteworthy. In the social category, Heineken performs well in diversity and inclusion, with active policies to promote workplace diversity. Its transparency in reporting and compliance with regulations further bolster its governance score.

Here's a breakdown of its performance in environmental, social, and governance categories:

Environmental (Score: 8.5)

• Carbon emissions reduction (9): Heineken achieved a 34% reduction in Scope 1 and 2 emissions since 2018 and uses 45% renewable energy. It's on track for 2030 net-zero goals, though Scope 3 emissions remain difficult to track.
• Energy efficiency (8): Initiatives like switching from steam to hot water reduced energy consumption by 20%, but overall energy use increased slightly in 2023.
• Water management (8): Heineken aims to replenish 100% of water in high-stress regions by 2030, though 32 sites still face ongoing water stress challenges.
• Sustainable packaging (9): 99% of packaging is recyclable, with a goal of 50% recycled content by 2030. However, bottle caps and secondary packaging still need improvements.

Social (Score: 8.5)

• Employee welfare (9): Heineken achieved 100% fair wage certification globally and introduced initiatives to improve health, safety, and well-being. However, equal pay and gender balance at senior levels need more attention.
• Diversity & inclusion (8): Women represent 28% of senior management, and Heineken promotes LGBTQIA+ inclusion. Yet, there are still gaps in gender balance at leadership levels.

Governance (Score: 8.33)

• Transparency & ESG reporting (10): Heineken provides transparent ESG disclosures, including its carbon footprint, and participates in global reporting initiatives like CDP.
• Regulatory compliance (7): While Heineken generally complies with international standards, it faced allegations of 'slave labor' practices in Brazil in 2023.
• Stakeholder engagement (8): Heineken involves suppliers in sustainability efforts through programs like SLoCT, but needs deeper collaboration to address Scope 3 emissions.

3. Guinness (Ireland) – Score: 8.00

Guinness performs strongly across most environmental and social indicators, particularly in energy efficiency and carbon emissions reduction, as the brewery has made strides in reducing its carbon footprint. However, while the brand is making progress in water management, it has room for improvement compared to leaders like Carlsberg. On the social front, Guinness demonstrates good employee welfare practices and solid stakeholder engagement. However, its diversity initiatives are less comprehensive than those of Heineken or Carlsberg, slightly lowering its social score.

Below is a breakdown of its performance across environmental, social, and governance categories:

Environmental (Score: 7.75)

• Carbon emissions reduction (7): Guinness aims for net-zero emissions by 2030 and has reduced direct emissions by 18% at its St. James’s Gate Brewery over the past decade. While renewable energy use and zero-emission vehicles are being adopted, challenges remain with Scope 3 emissions.
• Energy efficiency (7): The company has reduced energy usage by 41% since 2007 and plans to switch entirely to renewable energy by 2030. However, it lacks detailed interim targets.
• Water management (8): Guinness excels in water efficiency, halving usage at its main facility since 2007 and setting ambitious goals for further reductions, especially in high-stress areas by 2030.
• Sustainable packaging (9): Guinness operates a highly circular system with 99.5% of packaging recyclable and reusing kegs for up to 30 years. Continued efforts are needed to reduce plastic usage and innovate further.

Social (Score: 8)

• Employee welfare (8): Guinness has made strides in labor practices and diversity, with 39% of leadership roles held by women, surpassing its targets. It has also been involved in significant community projects. However, transparency on wage practices and broader gender balance in leadership needs improvement.
• Diversity & inclusion (8): Guinness, through Diageo, is committed to inclusivity, achieving strong female leadership representation. The company has programs aimed at supporting diversity within its supply chain and communities.

Governance (Score: 8.33)

• Transparency & ESG reporting (8): Under Diageo’s "Society 2030: Spirit of Progress" framework, Guinness provides detailed sustainability reporting. However, more frequent updates on Scope 3 emissions could improve transparency.
• Regulatory compliance (9): Guinness demonstrates strong adherence to international sustainability standards, particularly in water and emissions management, further solidifying its governance score.
• Stakeholder engagement (8): The company actively engages stakeholders through regenerative farming initiatives and partnerships aimed at decarbonization. Broader, structured engagement across global operations, particularly in emerging markets, could strengthen its impact.

Overall, Guinness excels in water and packaging sustainability and shows strong governance practices, but it must focus on Scope 3 emissions reduction and improving gender balance across leadership roles.

4. Peroni / Asahi (Italy/Japan) – Score: 7.89

Peroni, owned by Asahi, is a solid performer in sustainable packaging, showing notable innovation in using eco-friendly materials. The brewery’s energy efficiency initiatives are commendable, though not as advanced as those of Carlsberg or Heineken. In terms of social responsibility, Peroni scores well in employee welfare but has room to grow in terms of diversity and inclusion. Its governance performance is boosted by adherence to regulatory compliance, but there is a need for more transparent ESG reporting.

Below is a summary of its performance across environmental, social, and governance categories:

Environmental (Score: 7.75)

• Carbon emissions reduction (8): The Asahi Group has committed to carbon neutrality by 2050 and aims for a 70% reduction in Scope 1 and 2 emissions by 2030. Peroni will benefit from these efforts, with plans to use 100% renewable electricity in Europe by 2025, though Scope 3 emissions remain a challenge.
• Energy efficiency (8): Peroni benefits from Asahi's energy efficiency initiatives, including renewable energy transitions and a 1% annual CO₂ reduction target at production sites. However, the shift to renewables is still in progress in certain regions.
• Water management (7): Peroni is working within Asahi's goal to reduce water usage by 20% by 2030, with a commitment to responsible water stewardship. However, the full implementation of these measures, especially in water-stressed regions, is ongoing.
• Sustainable packaging (8): Peroni is part of Asahi's broader goal to use 100% eco-friendly packaging by 2030, with progress in reducing plastic content and increasing recyclability. The challenge remains to move towards fully circular packaging systems.

Social (Score: 7)

• Employee welfare (7): Asahi has a strong commitment to employee well-being, safety, and inclusivity, which extends to Peroni. However, public reporting on specific welfare metrics could be improved.
• Diversity & inclusion (7): Peroni benefits from Asahi's efforts to promote diversity, equity, and inclusion, with ongoing initiatives to increase leadership diversity. While progress has been made, further advancements in leadership representation are necessary.

Governance (Score: 8.67)

• Transparency & ESG reporting (8): Asahi provides regular and detailed reports on sustainability efforts, including carbon reduction, water management, and packaging. Peroni benefits from this transparency, though more frequent updates on social initiatives could provide a fuller picture.
• Regulatory compliance (9): Asahi adheres to international environmental and social standards, including the Science Based Targets initiative (SBTi) and the UN's climate goals, ensuring Peroni's compliance with best practices.
• Stakeholder engagement (9): Peroni, under Asahi’s broad stakeholder engagement practices, actively involves investors, customers, and employees in sustainability initiatives through interviews, plant tours, and community outreach.

Overall, Peroni is making strong progress towards its environmental goals, particularly in energy efficiency and packaging. However, ongoing challenges around Scope 3 emissions and further progress in diversity and leadership representation are areas for improvement.

5. Krombacher (Germany) – Score: 7.78

Krombacher has made significant strides in water management, leveraging its location near natural water sources to promote water conservation. Socially, Krombacher is committed to employee welfare, but like Peroni, it could enhance its diversity efforts. In governance, the brewery demonstrates strong compliance with regulations but lacks comprehensive stakeholder engagement.

Here’s a breakdown of its performance in environmental, social, and governance categories:

Environmental (Score: 7.75)

• Carbon emissions reduction (8): Krombacher achieved carbon neutrality across its entire value chain in 2021 via the "ZNU goes Zero" initiative. This was supported by reducing emissions through a combined heat and power plant and offsetting the remainder through climate projects like peat forest restoration in Borneo. However, a reliance on carbon offsetting rather than further reducing direct emissions leaves room for improvement.
• Energy efficiency (10): The brewery excels in energy efficiency, implementing renewable energy solutions and using a combined heat and power plant to optimize energy use across its brewing processes.
• Water management (7): Krombacher reduced its water consumption per hectolitre of beer to 3.81 hl, which is lower than the industry average. However, compared to some competitors, its water use per unit of beer remains higher, leaving opportunities for further improvement.
• Sustainable packaging (6): Krombacher relies heavily on Germany's robust reusable packaging system, using returnable bottles and kegs. However, there’s a need for innovation in reducing plastic use in secondary packaging and enhancing their overall circular economy practices.

Social (Score: 7)

• Employee welfare (7): Krombacher fosters a family-friendly corporate culture, with a focus on employee health, safety, and motivation. However, there is limited public reporting on broader diversity, equity, and inclusion initiatives.
• Diversity & inclusion (7): Krombacher promotes a family-oriented work environment but lacks comprehensive diversity and inclusion policies, especially compared to global competitors. More transparency and active promotion of diversity within the workforce would improve its standing.

Governance (Score: 8.33)

• Transparency & ESG reporting (8): Krombacher provides detailed sustainability reports that track progress in carbon reduction, energy efficiency, and water conservation. They also partner with independent organizations to verify their environmental impacts. More detailed reporting on social metrics, particularly diversity, would offer a fuller picture.
• Regulatory compliance (9): The brewery complies with stringent regulations, including the German Purity Law for beer and various environmental and species protection efforts. It maintains high standards in both product quality and regulatory adherence.
• Stakeholder engagement (8): Krombacher engages stakeholders through local and global environmental projects and partnerships with organizations like WWF. More proactive engagement with their supply chain stakeholders could further enhance sustainability throughout their operations.

Overall, Krombacher performs well in energy efficiency and carbon neutrality but faces opportunities for further improvement in water management and social responsibility reporting, especially around diversity and inclusion.

6. Duvel (Belgium) – Score: 7.56

Duvel is dedicated to sustainable packaging and reducing its environmental footprint, but would benefit from stricter carbon emissions reduction and energy efficiency targets, where more aggressive goals are needed. In terms of social performance, the company ranks well in employee welfare but shows room for improvement in diversity. Governance is a mixed bag for Duvel: while it complies with regulations, its transparency and stakeholder engagement lag behind larger competitors like Carlsberg and Heineken.

Below is a detailed breakdown of its performance in the environmental, social, and governance categories.

Environmental (Score: 7.5)

• Carbon emissions reduction (8): Duvel Moortgat is dedicated to minimizing its carbon footprint, aiming to reduce reliance on fossil fuels by exploring renewable energy sources such as biomass, biogas, and solar heat. The brewery in Puurs-Sint-Amands generates 100% of its electricity from renewable sources and engages in tree-planting initiatives to support carbon removal. However, there is a need for ongoing attention to effectively reduce Scope 3 emissions, which arise from suppliers and logistics.
• Energy efficiency (8): The brewery has invested in energy-efficient technologies, including optimized equipment and heat recovery systems. There is a strong focus on enhancing logistics processes to further improve energy efficiency, which is crucial for achieving broader sustainability goals.
• Water management (6): Duvel Moortgat emphasizes responsible water use and implements measures to reduce water consumption in brewing processes. Their commitment to water stewardship is commendable, but the brewery could benefit from greater transparency regarding specific water efficiency metrics and goals.
• Sustainable packaging (8): The brewery promotes a circular economy by reducing packaging weight and increasing the use of returnable packaging. They aim for all primary packaging to be recyclable and recycle materials extensively. Nonetheless, challenges remain in eliminating single-use plastics and achieving complete circularity in packaging.

Social (Score: 7)

• Employee welfare (7): Duvel Moortgat prioritizes a healthy and enjoyable work environment, focusing on talent development, diversity, and employee safety. While the initiatives are strong, additional metrics on employee satisfaction and retention could provide a clearer picture of workplace culture.
• Diversity & inclusion (7): The company is committed to enhancing diversity and inclusion within its workforce, fostering a culture that values diverse perspectives. However, providing specific diversity statistics and progress reports would help better assess the effectiveness of these initiatives.

Governance (Score: 7.67)

• Transparency & ESG reporting (8): Duvel Moortgat is committed to transparency, regularly updating stakeholders on sustainability progress and aligning strategies with international standards like the Paris Agreement. However, some areas could benefit from more frequent updates or detailed disclosures about specific goals and outcomes.
• Regulatory compliance (8): The brewery adheres to local and international regulations concerning environmental impact and labor practices, showcasing robust governance structures. While no significant compliance issues have been reported, the brewery does not exceed the requirements set by local laws.
• Stakeholder engagement (8): Duvel Moortgat actively engages with stakeholders, especially through community projects and environmental initiatives. Strengthening engagement with suppliers on sustainability practices could enhance overall effectiveness.

Overall, Duvel Moortgat performs well in sustainability, particularly in its environmental initiatives and stakeholder engagement. There are opportunities for improvement in water management, employee metrics, and supplier engagement to further enhance its sustainability impact.

Conclusion

Overall, Carlsberg and Heineken lead the charge in sustainable brewing practices, with strong performances across environmental, social, and governance categories. Guinness, Peroni/Asahi, Krombacher, and Duvel follow closely, each excelling in specific areas but showing room for improvement in others. The growing emphasis on sustainability in the beer industry signals a positive trend, as companies take more serious steps to reduce their environmental impact, improve labor practices, and increase transparency.

As consumer demand for eco-friendly and socially responsible products continues to rise, breweries that prioritize sustainability will not only benefit the planet but also secure long-term market competitiveness.