How AB InBev uses 'value constellations' to tackle ESG

World’s largest brewer Anheuser-Busch InBev (AB InBev) is using collaboration across industries, governments and supplier networks to tackle the ESG agenda.

Ezgi Barcenas, chief sustainability officer at AB InBev, said the ESG challenge was so broad it required “three-dimensional” thinking to align organisations behind it.

Speaking at the World Economic Forum's annual meeting in Davos, Switzerland, she said: “Value chains are two-dimensional. To tackle these [ESG] challenges, we will have to think three-dimensionally. I like to talk about value constellations.”

Barcenas said her company had invited other large multinational corporations, such as Coca-Cola and Colgate-Palmolive, to collaborate on ESG initiatives. “There is increasingly growing understanding and momentum around, ‘Let’s get down and work together’. Three to five years ago, the conversation was around, ‘Let’s announce a new coalition, let’s announce a collective pledge’. 

“And now the companies are asking themselves, ‘What are we doing? Let’s actually look at our geographic footprint, look at the technology solutions we both want to invest in, and advance that technological development’.”

Barcenas said the social aspects of ESG should not be overlooked, giving the example of consumer recycling. “We see recycling as an environmental issue – it actually is a social issue. It’s a human issue. Increasingly what we’re seeing is the environmental, social, and economic dimensions of sustainability are really becoming very interconnected and very interlinked.”

Barcenas said AB InBev had invited startups to assist ESG initiatives their current supplier base could not handle, though they required a lot of onboarding.

“For all these things, as we’re thinking about responsibility in the supplier network, there’s so many angles you can come at it,” she added. “The focus on sustainability, we can’t just measure it with our direct relationship with our suppliers. We have to really look at it from an ecosystem point of view.”

Other speakers on the panel, entitled “Building Responsible Supply Networks” agreed. Nicola Galombik, executive director at private investment group Yellowwoods Holdings, warned against limiting global collaboration.

She said: “We are at risk of setting standards that start a whole new phase of exclusion. We are likely to set standards that suppliers cannot meet. That will either make a huge new economy of intermediaries who will suck up all the value, or actually create the end of globalisation and a complete drive to local sourcing, to localisation, that compounds the exclusion of huge parts of the world from participation in the value chain.”

Michael Süss, chairman of technology group OC Oerlikon Management AG, added: “The ability to share in the industry is different – you get 60 companies together, and they all wait for someone to come up with an example. Then they wait for them to share that example. It takes a while to realise you can bake a bigger pie, and get a larger piece, rather than scrabbling around the crust.”

George Oliver, chairman and CEO of safety equipment provider Johnson Controls, said: “Be proactive versus reactive. Supply chains have to be more focused on ESG. I believe that the momentum and commitment is there. Don’t wait - get involved. If you’re proactive and embrace it, it can become a competitive advantage.”

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