Carbon Disclosure Project

Transcription

1 Carbon Disclosure Project CDP 2012 Investor CDP 2012 Information Request Molson Coors Brewing Company Module: Introduction Page: Introduction 0.1 Introduction Please give a general description and introduction to your organization Molson Coors Board and Executive Leadership Team have identified world class corporate responsibility performance as one of the four drives of our global business strategy. Consistent with this commitment we are responding to the Carbon Disclosure Project for the sixth year. As a major global brewer, we are committed to cost effective improvements in our operations that result in more efficient use of energy, reductions in emissions and improvements in our environmental performance. Molson Coors is a leading brewer in Canada through Molson Coors Canada and in the UK through Molson Coors (United Kingdom & Ireland), and in the United States (MillerCoors). In 2008, Molson Coors and SABMiller PLC combined their US and Puerto Rico operations to form a joint venture called MillerCoors LLC. For financial reporting under US accounting standards, MillerCoors LLC is accounted for by Molson Coors under the equity method. While, MillerCoors' revenues and expenses are not reported in Molson Coors' consolidated results, Molson Coors does receive and report 42% of the net profits of MillerCoors. For our CDP reporting, we include UK and Canada emissions plus 42% of MillerCoors emissions. (Note: For intensity calculations, emissions/reported profit are used, along with emissions/revenues adjusted to include 42% of MillerCoors revenues which are not included in our financial statements per US accounting rules.) Molson Coors has evaluated and disclosed climate change risk to investors in our 10-K. 0.2 Reporting Year Please state the start and end date of the year for which you are reporting data. The current reporting year is the latest/most recent 12-month period for which data is reported. Enter the dates of this year first. We request data for more than one reporting period for some emission accounting questions. Please provide data for the three years prior to the current reporting year if you have not provided this information before, or if this is the first time you have answered a CDP information request. (This does not apply if you have been offered and selected the option of answering the shorter questionnaire). If you are going to provide additional years of data, please give the dates of those reporting periods here. Work backwards from the most recent reporting year. Please enter dates in following format: day (DD)/month (MM)/year (YYYY) (i.e. 31/01/2001).

2 Enter Periods that will be disclosed Sat 01 Jan Sat 31 Dec Country list configuration Please select the countries for which you will be supplying data. This selection will be carried forward to assist you in completing your response Select country Canada United States of America United Kingdom China India 0.4 Currency selection Please select the currency in which you would like to submit your response. All financial information contained in the response should be in this currency. USD($) 0.5 Please select if you wish to complete a shorter information request

3 0.6 Modules As part of the Investor CDP information request, electric utilities, companies with electric utility activities or assets, companies in the automobile or auto component manufacture sectors and companies in the oil and gas industry should complete supplementary questions in addition to the main questionnaire. If you are in these sectors (according to the Global Industry Classification Standard (GICS)), the corresponding sector modules will be marked as default options to your information request. If you want to query your classification, please If you have not been presented with a sector module that you consider would be appropriate for your company to answer, please select the module below. If you wish to view the questions first, please see Further Information In addition to data supplied for our operations in the countries outlined above, our scope 3 emissions data also includes data for areas of the world including Europe and Latin America where we have sales operations. As part of our commitment to full open disclosure we have attached copies of our latest Responsibility report and 10-K. Attachments CDP 2012/Shared Documents/Attachments/InvestorCDP2012/Introduction/Molson Coors 10-K1.pdf Module: Management [Investor] Page: 1. Governance 1.1 Where is the highest level of direct responsibility for climate change within your company? Individual/Sub-set of the Board or other committee appointed by the Board 1.1a

4 Please identify the position of the individual or name of the committee with this responsibility As a committee appointed by the board, the Corporate Responsibility Steering Group has been established to take responsibility for climate change and other sustainability issues within Molson Coors. The steering group is comprised of members of the executive leadership team (the highest level of management within the organisation) and nominated senior management representatives from each business unit. As a member of the steering group and executive leadership team the Global Chief Legal Officer is accountable for reporting progress to the board supported by the Audit Committee of the Board of Directors which independently reviews and approves the overall corporate responsibility plan bi-annually. 1.2 Do you provide incentives for the management of climate change issues, including the attainment of targets? Yes 1.2a Please complete the table Who is entitled to benefit from these incentives? The type of incentives Incentivised performance indicator Board/Executive board Monetary reward energy used (MJ) per hectolitre of production, along with other sustainability metrics such as water used (hl) per hectolitre of production and performance in external benchmarking indices such as CDP and DJSI Corporate executive team Monetary reward energy used (MJ) per hectolitre of production, along with other sustainability metrics such as water used (hl) per hectolitre of production and performance in external benchmarking indices such as CDP and DJSI Chief Executive Officer (CEO) Monetary reward energy used (MJ) per hectolitre of production, along with other sustainability metrics such as water used (hl) per hectolitre of production and performance in external benchmarking indices such as CDP and DJSI Chief Operating Officer (COO) Monetary reward energy used (MJ) per hectolitre of production, along with other sustainability metrics such as water used (hl) per hectolitre of production and performance in external benchmarking indices such as CDP and DJSI Management group Monetary reward energy used (MJ) per hectolitre of production, along with other sustainability metrics such as water

5 Who is entitled to benefit from these incentives? The type of incentives Incentivised performance indicator used (hl) per hectolitre of production and performance in external benchmarking indices such as CDP and DJSI Business unit managers Monetary reward energy used (MJ) per hectolitre of production, along with other sustainability metrics such as water used (hl) per hectolitre of production and performance in external benchmarking indices such as CDP and DJSI Energy managers Monetary reward energy used (MJ) per hectolitre of production Environment/sustainability managers Monetary reward energy used (MJ) per hectolitre of production Facility managers Monetary reward energy used (MJ) per hectolitre of production Process operation managers Monetary reward energy used (MJ) per hectolitre of production Public affairs managers Monetary reward energy used (MJ) per hectolitre of production, along with other sustainability metrics such as water used (hl) per hectolitre of production and performance in external benchmarking indices such as CDP and DJSI Risk managers Monetary reward energy used (MJ) per hectolitre of production, along with other sustainability metrics such as water used (hl) per hectolitre of production and performance in external benchmarking indices such as CDP and DJSI All employees Recognition (nonmonetary) energy used (MJ) per hectolitre of production Further Information A company-wide goal has been set in the area of corporate responsibility for the next four years; this incorporates the management of climate change and attainment of targets. This is factored into the results objectives at the Board and executive level and throughout the organization. Energy reduction targets are included in the Global Chief Supply Chain Officer s performance plan each year. Climate change issues are included in the incentive mechanisms of his direct reports and the functional leadership of EHS, including brewery managers. Our corporate risk management team and those responsible for procurement, operations, distribution, and sales all assess and seek to manage the risks resulting from variability in weather and adverse events. A corporate wide Energy Council reporting directly to the Global Chief Supply Chain Officer develops, plant by plant, country and global energy targets and specific projects for their achievement. Day to day management of climate change and corporate responsibility is carried out in the relevant functions across the business units. Molson Coors also encourages employees to get engaged in energy efficient initiatives. Canada & the UK hold an annual Energy Week at the breweries. We also actively seek recognition externally for our improved performance. In addition to the financial rewards we also reward employees of all levels with non-monetary rewards such as recognition through internal publications and communications in response to noteworthy activity. In 2012 we have also introduced an annual award competition where the site or individual making the greatest commitment to our sustainability goals receives recognition for the work undertaken and a trophy marking their achievement.

6 Page: 2. Strategy 2.1 Please select the option that best describes your risk management procedures with regard to climate change risks and opportunities Integrated into multi-disciplinary companywide risk management processes 2.1a Please provide further details (see guidance) The Company s Enterprise Risk Management (ERM) process identifies risks and opportunities from climate change, the scope of the risk review covers our entire business value chain allowing us to identify and respond to risks that may arise in areas of the value chain outside of our direct operations. As a result of such risk evaluation we have put in place sustainable sourcing programs and continue to work to understand the potential longer term impacts of climate change on our extended supply chain through collaboration with external research agencies and academic institutions. Every 6 months in each business unit the senior manager responsible for ERM interviews all the executives and compiles a report of identified risks & opportunities, including those related to climate. Risks & opportunities are identified at asset level and at country and BU level based upon subject matter knowledge of functional specialists, management systems reviews, interaction with trade associations, monitoring of political and media issues (through a third party) and engagement with stakeholders (including regulators, government departments, local community groups and NGOs). The report is provided to the business unit CEO and once approved is disseminated to all the CEO s direct reports. A summary of the approved business unit report is submitted to the Enterprise Leadership Team (ELT) by the Director, Global Risk Management. The Director, Global Risk Management interviews every member of the ELT about the new list and the one submitted 6 months earlier. Strategic risk and opportunity changes, trends and priorities are identified at company level. Following interviews with each ELT member, one document is produced which the CEO reviews and approves. This document is then approved by the ELT and taken to the Board for their approval. The Board reviews the document twice a year, once through the Audit Committee and a second time through a Strategic Planning Session. Every risk has an owner who is accountable for mitigation plans. Priorities are established at company and local level based upon magnitude and the time horizon of each risk. The Company has a Chief Ethics and Compliance Officer responsible for ensuring that all business units have the appropriate processes in place to identify and mitigate ethics and compliance risks. Also, the Global Chief Legal Officer and Global Chief Supply Chain Officer chair the Corporate Responsibility Steering Group which identifies corporate responsibility risks and opportunities and assesses how to manage risks from GHG emissions from our operations and identify costeffective mitigation. Additionally to help manage the risks from those GHG emissions from our JV operations and identify cost-effective mitigation opportunities, MillerCoors participates in the U.S. Environmental Protection Agency (EPA)'s Climate Leaders program. Through the Climate Leaders program, MillerCoors committed to 1) Develop a corporate-wide GHG inventory of the six major greenhouse gases and report progress annually based on detailed EPA protocols and guidance; 2) Develop a corporate GHG Inventory Management Plan based on a detailed EPA checklist to institutionalize the inventory process; and 3) Set an aggressive corporate-wide GHG emissions reduction goal to be achieved over 4 to 6 years. The EPA works closely with each company in the Climate Leaders program to review the GHG inventory and Inventory Management Plan and provide guidance in setting an aggressive GHG emissions reduction goal. All goals announced by EPA through the program are analysed to ensure they are significantly better than

7 business-as-usual and are approved by EPA senior management. 2.2 Is climate change integrated into your business strategy? Yes 2.2a Please describe the process and outcomes (see guidance) Climate change has had a significant impact on Molson Coors short term and long term strategy. As a leading global brewer climate change impacts Molson Coors in many different ways from changing consumer attitudes and customer requirements to changes in water availability and risks to agricultural raw materials due to changing climate. As a result of these impacts we have adapted our strategy to both reduce our contribution to climate change (mitigation) and to allow us to adapt to the impacts of climate change more easily. Molson Coors has set a corporate-wide, global goal in the area of corporate responsibility from ; this incorporates the management of climate change and attainment of targets. The management plan and targets are embedded in the company's annual operating plan and long range plan. Molson Coors has set an energy efficiency target 15% reduction in energy use (MJ/hl) by 2012 Year End, baseline We have also set an emission reduction target of 7% by 2012 Year End (baseline 2008).MillerCoors have set a separate energy target 15% reduction in total energy use by 2015, baseline They have also set an emission reductions target. As a partner of the USEPA Climate Leaders program MillerCoors pledges to reduce total U.S. GHG emissions by 8 per cent from 2008 to As a demonstration of our on-going commitment to sustainability we have just announced new long term targets, committing to a reduction in energy use of 25%, a reduction in carbon intensity of 20% and a reduction in water consumption of 20% by 2020 (all relative to production). These ambitious targets will ensure that we continue to build on the results delivered to date. As individual business units develop their product portfolios and capital investment plans, sustainability including climate change is incorporated into the decision making process. Our product development cycle has been developed to include a number of stage gates and at each stage the sustainability impact (including climate change and water risk) of the project is evaluated alongside other criteria to help guide our future portfolio footprint. Our single largest capital project currently planned is the redevelopment of one of our most significant breweries and the integration of sustainability and climate change into the business strategy has led to energy and carbon (mitigation) being a key theme for the project with current proposals indicating a significant improvement as a result of the project and this approach will continue to be integral to our plans as we restructure our business over the next ten to twenty years. By adopting a proactive stance with regards to mitigation of climate change and by focusing on those aspects of climate change that are important to our brewing operations and our customers we would hope to gain a strategic advantage over our competitors as customer and consumer expectations increase, regulation increases and water risks impact others. The Chief CR officer engages with the CDP and other reporting agencies and stakeholders regarding global trends in carbon policy and reporting. Each business division carries out a similar dialogue with public policy makers (elected officials and regulators) and interest groups regarding the effectiveness of current policies and likely future directions. Through our website and targeted communication we seek public input on our performance and objectives. The Corporate Responsibility Steering Group works to align corporate and business unit approaches, and to identify and share public policy best practices regarding climate change. Through the

8 EPA Climate Leaders program, MillerCoors publicly announced a long-term corporate-wide GHG reduction goal. They worked closely with EPA throughout the goal s development to ensure that the accepted goal is both achievable and aggressive compared to the benchmark for the beverage sector. This process included a benchmarking analysis conducted by EPA to compare our goal proposal against the projected GHG performance for our sector. We publish information about the risks and opportunities presented by climate change. Molson Coors evaluated and disclosed climate change risk to investors in our K. Our voluntary annual corporate responsibility reporting is on our corporate website which contains a customizable corporate responsibility report. MillerCoors LLC will be publishing a separate sustainability report in June We also report to the Dow Jones Sustainability Index. 2.2b Please explain why not 2.3 Do you engage with policy makers to encourage further action on mitigation and/or adaptation? Yes 2.3a Please explain (i) the engagement process and (ii) actions you are advocating Molson Coors is a member of the Beverage Industry Environmental Roundtable and participated in the development of the Sector Guidance for GHG Reporting. In the UK, the Company is a member of the British Beer and Pub Association trade body and have a representative on the board and also participate in number of its committees and policy forming bodies including the Environmental Panel which advises on environmental policy including energy and carbon. As a trade body the BBPA do meet with the policy makers to discuss future legislation and the potential impact of it on the brewing industry including climate change legislation and emission trading schemes. As a trade body the BBPA responds to consultation documents on future legislation incorporating the views of all its members including Molson Coors UK. Recent consultations to which Molson Coors have contributed include the response to the UK Government proposals for next phase of the UK Climate Change Agreements and European Emission Trading Scheme. Canada participates in the Beverage Industry Environmental Roundtable which has developed sector guidance on GHG accounting and reporting and engages policy makers on behalf of the industry. In the US, the company has been working with the EPA through voluntary programs such as the Climate Leaders, voluntary greenhouse gas reduction program and EPA Smartways Program. These programs encourage adaptation of fuel-saving equipment and practices in transportation. In addition, we are members of The Sustainability Consortium, a university based and led group of manufacturers, retailers, researchers, and suppliers who are developing a science-based

9 sustainability measurement and reporting system to assist with identifying product hot spots and the associated best-practices to reduce product impacts. We also have a government affairs representative in Washington, DC who is monitoring developments and working with our food industry and manufacturing industry counterparts for comments to regulators on legislative activities and their potential impact on industry and climate. In addition as part of our adaptation strategy, our local site management teams participate in roundtable discussions with local authorities to address issues such as watershed management and we have established the Molson Coors Growers group that allows us to influence farming practices. Molson Coors actively seeks to engage both local, national and international policy makers in an effort to encourage practical policies and legislation in the area of both mitigation and adaptation, as well as drive the establishment of voluntary schemes and community programs that function where legislation is missing or inappropriate. Molson Coors takes an open approach to engagement encouraging transparency and advocating collaborative working for mutual benefit, including sharing of best practice. Wherever possible we champion pragmatic, clear simple and approaches (including legislation and voluntary schemes) and are advocates of taking concrete action no matter how small rather than prolonged deliberation. We encourage our supply chain partners to use low carbon energy sources and whole life costing for energy projects where possible. Attachments CDP 2012/Shared Documents/Attachments/InvestorCDP2012/2.Strategy/Carbon strategy.pptx Page: 3. Targets and Initiatives 3.1 Did you have an emissions reduction target that was active (on-going or reached completion) in the reporting year? Absolute and intensity targets 3.1a Please provide details of your absolute target ID Scope % of emissions in scope % reduction from base year Base year Base year emissions (metric tonnes CO2e) Target year Comment MilC Scope 100% 8% This target applies to our US Joint Venture, Miller Coors

10 ID Scope % of emissions in scope % reduction from base year Base year Base year emissions (metric tonnes CO2e) Target year Comment 1+2 which makes up around 67% of our scope 1 and 2 emissions 3.1b Please provide details of your intensity target ID Scope % of emissions in scope % reduction from base year Metric Base year Normalized base year emissions Target year Comment MCBC Scope % 7% Other: kgco2-e per hl Molson Coors enterprise wide target. Target year is 2012 Year End. Our UK and Canada operations account for around 30% of our scope 1 and 2 emissions the remainder is accounted for by the Miller Coors JV. Our India and China JV operations account for less than 1% of total emissions 3.1c Please also indicate what change in absolute emissions this intensity target reflects ID Direction of change anticipated in absolute Scope 1+2 emissions at target completion? % change anticipated in absolute Scope 1+2 emissions Direction of change anticipated in absolute Scope 3 emissions at target completion? % change anticipated in absolute Scope 3 emissions Comments

11 ID Direction of change anticipated in absolute Scope 1+2 emissions at target completion? % change anticipated in absolute Scope 1+2 emissions Direction of change anticipated in absolute Scope 3 emissions at target completion? % change anticipated in absolute Scope 3 emissions Comments MCBC Decrease 7 No change 0 Reported Scope 3 emissions are anticipated to increase as reporting is now more inclusive of the entire supply chain however we believe that our activities will have a positive impact on scope 3 emissions. Scope 3 quantification of percent reduction of carbon emissions is limited at this time and remains outside of scope of target. However, Scope 3 carbon emissions are being investigated and recorded globally across the supply chain. As a result we believe that whilst the reported number may increase in the short term the actual scope 3 emissions will reduce following the introduction of our sustainable procurement program. 3.1d Please provide details on your progress against this target made in the reporting year ID % complete (time) % complete (emissions) Comment MilC MCBC We have already beaten our 2015 target by a considerable distance and as a result are reviewing our targets. Performance has been driven by energy reduction activities at our brewery locations and we continue to make this a priority focus We have beaten our target by a significant distance (21% reduction versus a 7% target) and are now setting new stretching long range targets. Performance to date has been driven by energy reduction activities at our brewery locations and we will continue to make this a priority focus as new targets come into force. 3.1e Please explain (i) why not; and (ii) forecast how your emissions will change over the next five years

12 3.2 Does the use of your goods and/or services directly enable GHG emissions to be avoided by a third party? No 3.2a Please provide details (see guidance) 3.3 Did you have emissions reduction initiatives that were active within the reporting year (this can include those in the planning and/or implementation phases) Yes 3.3a Please identify the total number of projects at each stage of development, and for those in the implementation stages, estimated CO2e savings Stage of development Number of projects Total estimated annual CO2e savings (only for rows marked *) Under investigation To be implemented* Implementation commenced* Implemented* Not to be implemented 3.3b

13 For those initiatives implemented in the reporting year, please provide details in the table below Activity type Description of activity Estimated annual CO2e savings Annual monetary savings (unit currency) Investment required (unit currency) Payback period Energy efficiency: building services Energy efficiency: building fabric Energy efficiency: building services Energy efficiency: building fabric Energy efficiency: building services Energy efficiency: building services Energy efficiency: building services Energy efficiency: building services Energy efficiency: building services Energy efficiency: processes Optimisation and upgrading of HVAC systems in Canada >3 years Improvements to insulation in packaging areas >3 years Reduction in the operating pressure of brewery steam system >3 years Improvements to insulation across a brewery in Canada years Refrigeration energy management system implementation >3 years Steam trap repairs at a UK brewery <1 year Voltage optimisation through either add on equipment or in house modifications <1 year Lighting upgrade and optimisation, including control optimisation >3 years Boiler house modifications at UK breweries including fitting of economisers, boiler mothballing and improved control of bottom blowdown. Alterations to operation of boiling copper to reduce evaporation rates <1 year <1 year 3.3c What methods do you use to drive investment in emissions reduction activities?

14 Method Comment Compliance with regulatory requirements/standards Dedicated budget for energy efficiency Employee engagement Internal incentives/recognition programs Our UK breweries are subject to IPPC permits, four UK sites are subject to the EU ETS and all of our UK sites are signatories to Climate Change Levy Agreements. Both the UK and Canadian business units have a dedicated central energy efficiency budget, which is allocated where it can do most good. Individual breweries also have their own capital allocations and R&M budgets We actively engage employees in energy and carbon reduction initiatives and in 2011 we launched "Our Beerprint as a way of engaging further. There are regular communications discussing energy and carbon issues and reduction activities and employees are encouraged to suggest ways of improving. Annual bonus payments for all employees are linked to achievement of business goals including our energy target. Over and above fiscal rewards we have introduced an awards program in 2011 that gives recognition to individuals, teams or sites that have made a significant contribution to achieving our energy and carbon reduction goals. 3.3d If you do not have any emissions reduction initiatives, please explain why not Page: 4. Communication 4.1 Have you published information about your company s response to climate change and GHG emissions performance for this reporting year in other places than in your CDP response? If so, please attach the publication(s) Publication Page/Section Reference Identify the attachment In voluntary communications (complete) In annual reports (underway) CR Report 10 k

15 Publication Page/Section Reference Identify the attachment this is our first year In voluntary communications (underway) previous year attached DJSI submission Further Information MCBC has reported this same information as part of its annual submission to the Dow Jones Sustainability Index. We also provide this information to our customers upon request and via our website. Module: Risks and Opportunities [Investor] Page: 2012-Investor-Risks&Opps-ClimateChangeRisks 5.1 Have you identified any climate change risks (current or future) that have potential to generate a substantive change in your business operations, revenue or expenditure? Tick all that apply Risks driven by changes in regulation Risks driven by changes in physical climate parameters Risks driven by changes in other climate-related developments 5.1a Please describe your risks driven by changes in regulation

16 ID Risk driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact 1A 1B 1C Cap and trade schemes Carbon taxes Fuel/energy taxes and regulations In the US, a bill for carbon cap and trade will have a significant impact on the US MillerCoors business. Because the carbon cap is not intensity based, increased production may cause a need to offset any associated increased greenhouse gas emissions. The cost of offsets may be affected by the volatility in carbon markets. Carbon legislation may also lead to less certainty in energy pricing as competition for lower emitting energy sources increases. We would expect carbon legislation in Canada to follow any US action. Since January 2008, our UK operations have participated in the cap and trade European Union Emissions Trading Scheme (EU ETS). This scheme sets annual fixed targets of carbon dioxide (CO2) emissions from the sites combustion activities and failure to meet our obligations under these regulations will require the sites to trade on the open market for additional allowances to make up the short fall or pay substantial fines. The introduction of Phase III of the scheme will see the amount of free allocations decreasing year on year and carbon credit prices rise. In the UK, our sites participate in a Climate Change Agreement (CCA) administered by the British Beer and Pub Association for the UK Government, which offsets the level of taxation, known as the climate change levy, on industrial fuels on the achievement of efficiency improvement targets. The UK Government reduced the rebate for being part of a Climate Change Agreement from 80% to 65% from 1st April 2011 this will in turn lead to an increase in fuel bills across both production sites and the wider supply chain. In Canada, based on what has occurred in the EU it is speculated that a carbon taxes could be as high as 15% of Scope 1 emission with next 5 years. The UK Government has set a legally binding target for the reduction of CO2 emissions by 80% of 1990 levels by This target will filter through into new legislation in the future to ensure that the target is met. This future legislation is likely to impact on carbon and hence energy pricing in the future as alternative energy sources (particularly alternative electricity sources) are brought on line. Increased operational cost Increased operational cost Increased operational cost 1-5 years Direct Current Direct Very unlikely Virtually certain 6-10 years Direct Very likely Low Mediumhigh Mediumhigh

17 ID Risk driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact 1D 1E 1F Emission reporting obligations Voluntary agreements Product labelling regulations and standards In Canada, employers are required to report Green House gas air emissions to the federal government under the NPRI (National Pollution Release Inventory) Regulation. In addition most jurisdictions have provincial or municipal requirements to report Greenhouse gas air emissions. There are currently no regulatory requirements to reduce greenhouse gas emissions, however it is anticipated that this will happen in the next few years. In the US there are emission reporting requirements to US EPA and individual States. There is a growing number of programmes being led by large multi-nationals to which Molson Coors are suppliers (i.e. Tesco and Wal*Mart's Sustainability Consortium) which are actively targeting CO2 emission reductions across their supply chains. The failure to actively participate in the voluntary schemes could lead to increased pressure from the customers participating or even delisting of the companies' products. In the UK, the EU is evaluating product labelling regulations and standards and product labelling is being actively promoted in France which could influence the outcome of any EU wide decision. Increased operational cost Reduced demand for goods/services Reduced demand for goods/services Current Direct 1-5 years Direct 1-5 years Direct Virtually certain Virtually certain More likely than not Medium Mediumhigh Low 5.1b Please describe (i) the potential financial implications of the risk before taking action; (ii) the methods you are using to manage this risk; and (iii) the costs associated with these actions Molson Coors believes that all regulations dealing with sustainability and corporate responsibility position us to adapt more readily to more sustainable business practices. While there will be direct costs associated with compliance, long term Molson Coors believes it will see financial benefit. The cost of compliance to current regulatory laws does not have a material financial impact on our capital expenditures, earnings, or competitive position. The risks below relate to table 5.1a. 1A Cap and trade schemes i) The total exposure would depend upon allocation methodology but if the business had to purchase carbon credits for all scope 1 emissions it would amount to a cost in the region of $6million at current prices which could rise to $12million if carbon prices reach $30 per tonne in future years, or even $24 million if carbon prices were to reach the level of $60 per tonne. However these higher levels are unlikely

18 ii) Our emissions that might be eligible for trading scheme coverage arise from onsite combustion for energy. All of our sites have a target to reduce energy use and have teams in place driving activity to reduce energy consumption. In addition our UK sites that are currently subject to the EU ETS are set up to trade between the sites as a precursor to open trading in order to avoid market price fluctuations and this would be extended to other markets as appropriate. iii) Circa $20k as a value of internal resource is devoted to trading and compliance. Capital expenditure and energy reduction team resource is attributable to corporate energy reduction goals, utilities management and brewery efficiency 1B Carbon taxes i) Failure to achieve carbon reduction targets associated with the CCA levy in the UK would result in loss of discount with a value of around 1 million. The financial impact of the introduction of similar taxes to Canada would depend upon the manner of introduction and the availability of rebates but could be as high as $3 million. ii) All of our sites have a target to reduce energy use and have teams in place driving activity to reduce energy consumption which in turn reduces exposure to energy taxes. We are also actively exploring use of energy sources that might be exempt from any such tax. iii) Circa 5k of resource allocation for administration and reporting. Capital expenditure and energy reduction team resource is attributable to corporate energy reduction goals, utilities management and brewery efficiency 1C Fuel/energy taxes and regulations i) It is difficult to predict the level of impact on energy prices however prices have risen significantly in recent years and so an increase in cost to the UK business of between 10 and 20 million is not unlikely over the next 10 years. ii) All of our sites have a target to reduce energy use and have teams in place driving activity to reduce energy consumption which in turn reduces exposure to energy taxes. We are also actively exploring use of energy sources that might be resistant to such price rises or might allow us to exploit diverging prices. Additionally procurement teams actively review energy contracts to ensure competitive tariffs. iii) 30k of procurement team resource is attributable to managing energy costs in the UK. Capital expenditure and energy reduction team resource is attributable to corporate energy reduction goals, utilities management and brewery efficiency. 1D Emission reporting obligations i) Over emitting in Canada could result in trading requirements and fines with a potential financial exposure of around $250k ii) All of our sites have a target to reduce energy use and have teams in place driving activity to reduce energy consumption. In addition site management at sites in Canada are fully aware of their emissions and as such attention is given to keeping emissions as low as possible iii) $20k allocation of resources to reporting and administration. Capital expenditure and energy reduction team resource is attributable to corporate energy reduction goals, utilities management and brewery efficiency 1E Voluntary agreements i) Delisting of products, or de prioritisation with regard to shelf space and aisle position could have implications reaching to huge sums although it is difficult to quantify. ii) Participation in customer schemes and communication of carbon reduction activity to customers. iii) Minimal cost due to resource allocation for reporting and administration. 1F Product labelling regulations and standards i) Implications of on pack labelling are complex. Artwork redesign, voiding of material in stock and on order as well as the cost of resource to compile the data and produce footprint numbers. It is estimated that to produce footprints for UK product lines would require at least one FTE and significant external resource with initial costs between 500k and 1million and similar annual costs. Material costs would depend upon lead times for implementation. ii) Membership of trade associations and industry groups that lobby government on behalf of the industry, whilst simultaneously compiling using LCA software to produce product data that should allow for lower cost implementation in the event of legislation.

19 iii) Costs are estimated at around 50k per annum, comprising of software licences, membership fees, and resource allocation. 5.1c Please describe your risks that are driven by change in physical climate parameters ID Risk driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact 2A 2B 2C 2D 2E Change in mean (average) precipitation Change in precipitation pattern Change in precipitation extremes and droughts Change in mean (average) temperature Uncertainty of physical risks Increasingly rainfall is becoming less frequent in some parts of the UK, particularly the South East corner of England which is a barley growing area. Lower rainfall levels could affect the crop growing seasons affecting barley availability. Changing rainfall patterns is affect aquifer winter recharge rates which are the main source of water supply for the UK breweries. Lower aquifer levels could lead to reduced ground water availability leading to increased costs for alternatives Flooding of the River Trent has been identified as a threat to the Burton Brewery which lies in the lowest part of the town. Any increases in the flooding patterns along the River Trent could result in the brewery being affected by flood waters which would result in production outages and major impacts on the supply chain. In Canada, droughts could cause a risk to over taxing local water infrastructure which could lead to increase cost or water restriction. Increased temperatures could increase agricultural use of water which could further reduce availability and increase costs While it is anticipated and broadly believed that climate change will have an impact in Canada, the exact extent has not been clearly determined to date. Nevertheless lower rainfall could lead to overtaxing water processing infrastructure resulting in less available water for brewing and or growing crops. Reduction/disruption in production capacity Increased operational cost Reduction/disruption in production capacity Increased operational cost Increased operational cost >10 years Indirect (Supply chain) 1-5 years Direct >10 years Direct 6-10 years Indirect (Supply chain) 1-5 years Direct More likely than not More likely than not About as likely as not About as likely as not More likely than not Medium Mediumhigh Mediumhigh Mediumhigh Mediumhigh

20 ID Risk driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact 2F Change in precipitation pattern In areas of the US, an increase in the duration and frequency of droughts has recently caused reservoir water levels to decrease. Storm intensity has also increased causing a higher risk of flooding and other disruptions. Increased operational cost 1-5 years Direct More likely than not Medium 5.1d Please describe (i) the potential financial implications of the risk before taking action; (ii) the methods you are using to manage this risk; and (iii) the costs associated with these actions Our Enterprise Risk Management team and those responsible for procurement, operations, distribution, and sales all assess and seek to manage the risks resulting from variability in weather and adverse events. The risks in table 5.1e are presented below 2A Change in mean (average) precipitation - i) Financial implications include an increase in the price paid for barley. Small changes in the barley harvest could easily result in increased costs of over $1million ii) We have established the Molson Coors Growers group to make communication of issues such as water conservation easier and to allow for sharing of good practice. Additionally we also have an experienced procurement team that is focused on buying barley at the best price and have recently developed our sustainable procurement platform that will raise awareness of climate change adaptation issues amongst procurement colleagues and suppliers. iii) The cost of developing the sustainable procurement program was approximately $100k 2B Change in precipitation pattern - i) financial implications initially are increased water charges which could be in the region of 1M (if 50% of abstracted water were replaced) however extreme cases could also lead to production disruption and activation of business continuity plans ii) All UK breweries maintain a secondary supply of municipal water. In addition each brewery has a business continuity plan that could see production moved to other sites in the event of extreme water shortage. In order to minimise exposure to water risks all breweries have water reduction targets and teams in place focused on reducing water consumption and increasing recycling of water whilst many breweries have also conducted watershed assessments iii) Capital expenditure and resources are attributed to attainment of corporate water reduction goals and improved process efficiency. Costs of watershed studies were of the region of $130k for Canada and the US. 2C Change in precipitation extremes and droughts - i) Flooding of the Burton brewery would have huge financial implications in terms of lost production, equipment damage and clean-up operations which could easily amount to in excess of $1M. Decreased availability of water to breweries in Canada due to drought conditions could result in lost production and activation of business continuity plans that could have significant costs running to in excess of $100k. ii) Burton local authorities have upgraded the town flood defence system (spending 40M to move a 1 in 100 year flood risk to a 1 in 200 year risk) and the brewery has a flood response plan in place aimed at minimising disruption and damage in the event of a flood event. The UK IT centre was also relocated from Burton to

21 Leeds to avoid any residual risk of flooding. Each site in Canada has a water reduction program and is actively looking for ways to reuse and recycle water to minimise demand and reduce exposure to water shortages. iii) Zero cost. Flood response planning has required minimal expenditure whilst water minimisation activities utilise resources attributable to our corporate water reduction goals. 2D Change in mean (average) temperature - i) Financial implications include an increase in the price paid for agricultural raw materials which could readily amount to on costs of over $1M ii) We have established the Molson Coors Growers group to make communication of issues such as water conservation easier and to allow for sharing of good practice. Additionally we also have an experienced procurement team that is focused on buying barley at the best price and have recently developed our sustainable procurement platform that will raise awareness of climate change adaptation issues amongst procurement colleagues and suppliers. iii) The cost of developing the sustainable procurement program was approximately $100k 2E Uncertainty of physical risks - i) The financial implications of overtaxing water infrastructure would be an increase in operating costs at breweries and an increase in raw material prices paid for commodities such as barley, wheat and hops. Operating cost increases could be in the range of $50k to $150k dependent upon the scale of shortage and price response. Commodity price increases are far harder to quantify, as the impact of water shortage could impact through increased water prices or even in reduced harvests, but could range to several $100k for the Canadian business. ii) We have established the Molson Coors Growers group to make communication of issues such as water conservation easier and to allow for sharing of good practice. Additionally we also have an experienced procurement team that is focused on buying barley at the best price and have recently developed our sustainable procurement platform that will raise awareness of climate change adaptation issues amongst procurement colleagues and suppliers. To manage operational risk each site in Canada has a water reduction program and is actively looking for ways to reuse and recycle water to minimise demand and reduce exposure to water shortages. iii) The cost of developing the sustainable procurement program was approximately $100k, whilst the cost of reducing water consumption in operations is attributed to corporate water targets. The cost of operational resources devoted to water minimisation can be estimated as $450k globally with additional capital spend on projects. 2F Change in precipitation pattern - i) Reduced reservoir levels range from increases in water charges to business disruption due to lack of available water to make product. Flooding events can result in brewery closure, logistics interruption and power outages all of which lead to business interruption. As a result the financial implications are difficult to quantify but could run to several $100k. ii) Molson Coors has solid backup plans (Disaster Recovery Plans) in place for weather related incidents. Each location is required to have a Disaster Recovery Plan. Each brewery has a business continuity plan that could see production moved to other sites in the event of extreme water shortage. In order to minimise exposure to water risks all breweries have water reduction targets and teams in place focused on reducing water consumption and increasing recycling of water whilst many breweries have also conducted watershed assessments iii) Capital expenditure and resources are attributed to attainment of corporate water reduction goals and improved process efficiency however during 2011 we spent over $300k on water reduction projects. Development of plans for flood management has zero 5.1e

22 Please describe your risks that are driven by changes in other climate-related developments ID Risk driver Description Potential impact Timeframe Direct/ Indirect Likelihood Magnitude of impact 3A 3B 3C Reputation Changing consumer behaviour Fluctuating socioeconomic conditions In all business units, Molson Coors is a high profile company and a large user of water and energy so it is extremely important that we maintain our reputation by ensuring that we are doing our part to be proper stewards of the resources we use by reducing our environmental foot print. Otherwise trading relationships with customers and consumers could be harmed. In all business units, Molson Coors is highly susceptible to changing consumer behaviour. Climate changes can impact consumer behaviour by reducing or increasing consumer demand for our product. Warmer weather may increase demand, while storms could significantly reduce demand. Changes in consumer buying patterns arising from labelling and communications is also an area that MCBC is watching closely. In all business units, Molson Coors is highly susceptible to fluctuations in the price of commodities. (i.e. Energy, transportation, supplies for production) Wider social disadvantages Reduced demand for goods/services Increased operational cost Current Direct More likely than not Medium Current Direct Very likely Medium Current Direct Virtually certain High 5.1f Please describe (i) the potential financial implications of the risk before taking action; (ii) the methods you are using to manage this risk; (iii) the costs associated with these actions 3A Reputation i) Molson Coors is a high profile company and a large user of water and energy which poses a reputation risk in certain markets. Within the UK market where there is highest customer and consumer focus on environmental issues this risk is highest. A negative brand story could impact sales through reduced consumer demand or detrimental shelf space allocation in retailers. A 1% drop in UK sales would equate to $13million ii) We have teams of expert resources dedicated to reducing energy and water consumption in our business operations. We have resources within each brewery, at business unit level and within the corporate organisation. iii) In 2011 our directly attributable resource costs were of the order of $200k and we spent over $3 million on project activity to reduce our energy and water consumption.