Risk Management (continued)
Product safety
and integrity
Supply chain
continuity
Increased scrutiny of society
on companies
O O Qs
Report of the Executive Board^^^M Report of the Supervisory Board
What could happen
Poor quality or contamination of HEINEKEN
products, be it accidental or malicious, could
result in health hazards, reputational damage,
financial liabilities and product recalls.
Recent developments
Changes to the environment, such as increased
knowledge of the potential food contaminants
previously unheard of, growing consumers'
concern on food safety and a more complex legal
environment in certain jurisdictions, makes control
of food safety more challenging.
What are we doing to manage this risk
HEINEKEN has established a comprehensive
Company-wide Quality Assurance programme
covering employee competences, production
standards, recipe governance, suppliers' governance
and production material risks. Continuous
improvement is achieved through global
compliance monitoring and systematic gap-closing.
HEINEKEN anticipates on new legislation and
emerging risks aided by our partners, suppliers
and external scientific institutions and assures
implementation of measures to avoid such risks.
Should a risk materialise, global recall and crisis
procedures are in place to mitigate the impact.
What could happen
Disruptions in the supply chain could lead to
inability to deliver products to key customers,
revenue loss and brand damage. Significant
changes in the availability or price of raw
materials, commodities, energy and water
may result in a shortage of those resources
or increased costs.
Recent developments
Availability of natural and other resources is limited
and also largely impacted by various effects such
as political instability, climate change, in particular,
growing water scarcity (and its effects on crop
yield and grain prices and availability). Markets and
governments are required to take actions to adapt
and timely respond to these changes and thus,
prevent, interruption of production, significant losses
of revenues and increased costs for business.
What we are doing to manage this risk
Business continuity plans have been developed
for HEINEKEN's key brands in all key markets, and
back-up plans are in place in operating companies.
Business resilience is further strengthened through
ownership of several strategic malteries, long-term
procurement contracts, water management plans
and central management of global insurance
policies. Taking a long-term approach, HEINEKEN
has a strategy focussed on Watershed health to
protect water resources, Sustainable sourcing in the
priorities of its Brewing a Better World sustainable
development programme.
Explore Further:
- Protecting water resources, pages 124-127
- Reducing CO2 emissions, pages 128-133
- Sourcing sustainably, pages 134-136
Financial Statements
Sustainability Review
Heineken N.V. Annual Report 2019
Other Information
What could happen
Public and employee scrutiny on HEINEKEN
when not conforming to society's expectations in
mitigating its environmental, social and corporate
governance impact (including e.g. CO2 emissions,
water circularity, water balancing, plastic pollution,
brewery waste and sufficient support of local
communities) can lead to significant reputational
damage to the Company or to the brands.
Recent developments
There are greater expectations and more scrutiny
both from external stakeholders and our employees
on the actual environmental, social and corporate
governance impact we create. Companies
face growing pressure to keep a high bar in the
contribution they make, measures they take to
address climate and other sustainability risks, as well
as share consistent and transparent information that
allows us to assess their sustainability performance
and benchmark them versus peers in their industry.
What are we doing to manage this risk
HEINEKEN has set clear strategies (e.g. our global
Every Drop and Drop the C programmes,
regional plastic strategies) and is committed to
(benchmarked) targets to address the growing
needs and expectations. ESG performance is
disclosed in a combined annual report, our website
and social media channels. To make sure we
respond timely and adequately to the increasing
society requirements HEINEKEN monitors trends
and developments in the environmental, social
and corporate governance (ESG) area across
the globe. Besides, HEINEKEN continuously
performs a company reputation research,
actively listens to (social) media and works closely
with experts, such as NGOs, universities and
governmental organisations.
Explore Further:
- Reporting basis and governance of non-financial indicators, page 148
- Every Drop, pages 124-127
- Drop the C, pages 128-133
