sustainability report january - june THIS IS WHO WE ARE, THIS IS HOW WE ARE DOING

Transcription

1 sustainability report january - june 2016 THIS IS WHO WE ARE, THIS IS HOW WE ARE DOING

2 CONTENTS THIS IS WHO WE ARE, THIS IS HOW WE ARE DOING Message from the CEO 1 ABOUT THIS REPORT 2 SUSTAINABILITY AT FEMSA 3 ABOUT FEMSA 6 Our Ethics and Values 8 OUR PEOPLE Action areas and Indicators Highlights OUR PLANET Action areas and Indicators Highlights OUR COMMUNITY Action areas and Indicators Highlights FEMSA FOUNDATION Projects 20 21

3 Message from the CEO THIS IS WHO WE ARE Dear friends, FEMSA believes that the sustainability of our business is responsibility of the company s more than 270,000 employees; people who, day after day, accomplish our mission of creating economic and social value. I am glad to share with you FEMSA s Mid-Year Sustainability Report 2016 entitled This is who we are; This is how we are doing. This report shows the progress we have made in the programs included in our Sustainability Strategic Framework. I hope this publication helps you gain more knowledge about us and our way of doing things. Our sustainability framework is based on our ethics and values, and consists of actions that focus on our people, our community, and our planet. FEMSA Foundation creates social value in the same manner, acting as an instrument for social investment that focuses on water and nutrition projects. Fulfilling our mission demands us to make our best effort, day in and day out; working to improve the way we create value. I would like to invite you, through this report, to learn more about how we focus our actions to achieve this mission, and I encourage you to become part of FEMSA s Actions creating Value. The following are some of the most relevant examples of the progress we have made during the first semester of 2016: THIS IS HOW WE ARE DOING Our Ethics and Values The Business Code of Ethics is the foundation for our daily behavior; therefore, we updated the following issues: Political Contributions, Relationship with Suppliers, Relationship with Communities, and the Whistleblowing System. Our People We strengthened talent management to ensure every one of us takes responsibility for boosting our own, and equally important, our team s professional growth. Our Planet The efforts made by FEMSA Logística represent one of the most significant advances made in this pillar; the coordination of its services with the different Business Units has allowed for a reduction of our operations environmental impact. Our Community We started deploying MARRCO (Model for Addressing Risks and Relations with the Community) at the work centers. This methodology will let us know in depth the interests and needs of our teams, improve communication, and above all strengthen the work we carry out together with the communities where we are present. FEMSA Foundation We channel social investment, focusing on the conservation and sustainable use of water and on improving health among the communities residents using applied technology, science, and education. Carlos Salazar Lomelín Chief Executive Officer of FEMSA 1

4 About this Report THIS IS WHO WE ARE FEMSA s Mid-Year Sustainability Report THIS IS WHO WE ARE, THIS IS HOW WE ARE DOING FEMSA s Mid-Year Sustainability Report This is who we are; This is how we are doing covers the progress made between January 1st and June 30th, This document helps us report to our stakeholders the monitoring of the progress made in each of the Sustainability Strategic Framework Pillars and FEMSA Foundation s main initiatives. We selected the main indicators for this document, as well as a sample of initiatives for each pillar, to show the ways FEMSA and its Business Units seek to create social value for Our People, Our Planet, and Our Community. Visit If you wish to read FEMSA s Sustainability Report This Mid-Year Report does not make any reference to the International Global Reporting Initiative s GRI G4 guide, which we use to write our Annual Sustainability Reports. 2

5 Sustainability at FEMSA THIS IS WHO WE ARE For more than 125 years, FEMSA has had the purpose of creating economic and social value through business enterprises and institutions; today, this is our mission. The concept of sustainability is a vital element to carry it out; and so it is that we use the Strategic Framework to help us make decisions and perform actions that create social value. What Sustainability means FOR FEMSA? For us, Sustainability is the ability to create the social, environmental, and economic capability necessary to operate today and grow through time in harmony with the environment; with actions based on the company s ethics and values, focusing on our people, our planet, and our community. How are identified the Sustainability related issues that bear relevance for FEMSA? In 2012, we performed an analysis to define the most relevant issues relating to sustainability; not only concerning the company s operation, but also concerning our stakeholders (actors with whom we relate and communicate every day because of our operations). What is the Sustainability Strategic Framework? As a result of analyzing the issues relevant for the company, we defined FEMSA s Sustainability Strategic Framework. This scheme allows us to focus our actions, programs, and initiatives on issues where we can maximize the creation of value. vision Action Areas Pillars Core Foundation 3

6 THIS IS WHO WE ARE serve as the foundation of the strategic framework, which branches into three pillars: We promote the professional and personal development of FEMSA s employees. We aim to reduce our operations environmental impact as much as possible. We contribute to the development of communities, helping them become sustainable. 4

7 THIS IS WHO WE ARE Each of the pillars consists of three action areas, which in turn include the 19 focus issues governing our behavior: Pillar Action area Focus topics Culture and values Culture and values Safety and health in the workplace Training and development Compensation Training and development Comprehensive development Comprehensive development Water Water management Energy usage Energy Transportation and logistics environmental impact Packaging and recycling Waste and recycling Waste Healthy lifestyles Nutrition and physical activity Marketing and responsible communication Sustainable products/service offering Community development Local environmental impact Environment safety Social well-being in communities Supplier development Sustainable sourcing Suppliers environmental impact Suppliers labor rights and working conditions Sustainability at FEMSA Creating economic, social, and environmental conditions necessary to OPERATE AND GROW THROUGH TIME IN HARMONY WITH THE ENVIRONMENT, with actions based on the company s ethics and values and focusing on our people, our planet, and our community. (+) Relevance for key Stakeholders Materiality ( ) Relevance for FEMSA s (+) businesses success Strategic Framework Goals and Metrics + Business Units Initiatives and Projects + FEMSA s Programs DEFINITION FOCUS STRUCTURE EXECUTION FEMSA has become increasingly aware of the fact that all of us create sustainability; therefore, we work on strengthening its integration to our business strategy and processes. We endeavor to continue consolidating sustainability as part of our culture, to let it define us as a company, and to let it help us create value in what we do day after day. 5

8 About FEMSA THIS IS WHO WE ARE What we are: Ever since our foundation, 125 years ago, we have worked under a philosophy that currently boils down to our mission of creating economic and social value through our companies and institutions. To fulfill our mission, we have carried out business actions, programs, and initiatives that we perform within our Sustainability Strategic Framework, where we have made successful progress during this year. FEMSA is a leading company that participates in the beverage industry through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world by volume; and in the beer industry, through its ownership of the second largest equity stake in Heineken, one of the world s leading brewers with operations in over 70 countries. In the retail industry it participates through FEMSA Comercio, comprising a Retail Division operating various small-format store chains including OXXO, a Fuel Division, operating the OXXO GAS chain of retail service stations, and a Health Division, which includes all drugstores and related operations. Additionally, through its Strategic Businesses unit, it provides logistics, point-of-sale refrigeration solutions and plastics solutions to FEMSA s business units and third-party clients. Operational Overview: Mexico Central America Colombia Venezuela Philippines FEMSA Comercio Coca-Cola FEMSA FEMSA Comercio y Coca-Cola FEMSA FEMSA Logística Imbera PTM Peru Chile Argentina Brazil Partner 28.1% The Coca-Cola Company Public Coca-Cola FEMSA FEMSA Comercio 6 FEMSA Strategic Businesses Heineken 24.0% 47.9% 100% 100% 20%

9 Economic Value THIS IS HOW WE ARE DOING Total Revenue $ billion Mexican Pesos Income from operations: Capital Expenditure: Payments to suppliers: Consolidated net income: $ $7.814 $ $ billion Mexican Pesos billion Mexican Pesos billion Mexican Pesos billion Mexican Pesos Every indicator covers the period from January 1 to June 30, / Exchange Rate: USD $1 = MX $ at June 30, We invite you to learn more about FEMSA and its Business Units at: Social Value $31.5 Average of Training hours per employee Number of Liters of Water consumed per Liters of Beverage produced at Coca-Cola FEMSA Million Mexican pesos collected by OXXO s PRO Round Up Program 21,246 6, ,347 FEMSA s Volunteers Number of Tons recycled by the Waste Management Plan (OXXO) Number of people participating in healthy lifestyles programs (Coca-Cola FEMSA) We invite you to learn more about the ways we create social value at the following pages. 7

10 Our Ethics and Values THIS IS WHO WE ARE FEMSA aims to make all its activities follow ethical standards and best corporate practices; therefore, Our Ethics and Values serve as the basis for the Sustainability Strategic Framework. The values that set us apart were defined and have been practiced since our foundation, and they were strengthened and promoted by the 17 principles of Don Eugenio Garza Sada s Cuauhtémoc Ideology. Today, our individual and organizational behavior is also guided by our Business Code of Ethics. Learn about FEMSA s Values: mission-vision-and-values Learn about Cuauhtémoc Ideology: cuauhtemoc-ideology To learn about our Business Code of Ethics, please click here: During this semester: Continuing with the practice of keeping our Business Code of Ethics current, we updated the following issues: Political Contributions Relationship with the Community Relationship with Suppliers Whistleblower System For more information about the Whistleblower System, please visit: 8 THIS IS HOW WE ARE DOING We continued strengthening the use of the Whistleblower System which is available for all our employees and stakeholders looking to notify any behavior or action deviating from what is established in our Code of Ethics. This system is operated by a third-party, which gives the process both credibility and safety. During this period: 871 Complaints were received of complaints 58% were served 42% and are now closed of complaints were served and are still in process

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12 THIS IS WHO WE ARE FEMSA s constant growth is made possible by Our People. Thus, we endeavor to create an atmosphere where more than 270,000 of our employees have the opportunity to develop both in a personal and professional level. To boost our employees growth, we focus on three action areas: Culture and Values: Training and Development: Comprehensive Development: We promote a culture of leadership where respect and example are its main tools. It reflects our desire to become the best place to work at, focusing on developing our employees capabilities for responding to current and future challenges, aiming for them to reach their top potential as professionals and individuals. We foster our employees and their families wellbeing and quality of life, as well as their transcendence in the community. Indicators THIS IS HOW WE ARE DOING Most of our employees understand our philosophy (mission, vision, and values) and believe the organization follows it.* *This derives from the results shown by the Organizational Climate survey in its Business Philosophy section Average of Training Hours per employee 1.19 Accident rate* * Incapacitating accidents per 100 employees General illness rate* *Cases of general illness per 100 employees. 21,246 Volunteers 61,301 Volunteered hours 420 Number of initiatives 10

13 Highlights THIS IS WHO WE ARE Talent Management An ever-changing environment and our accelerated growth strategy drive us to strengthen FEMSA s Talent Management even more. There has been a shift in what motivates the newer generations, in our current employees needs, in the ways we use to attract better talent, and in the work models. Thus, we are making an effort on becoming one of the best places to work. Furthermore, we keep encouraging people to become responsible for their own development and for growing together with the business, acknowledging that they are our company s main differentiator. What we do We develop capabilities through processes, technology, and infrastructure so we can boost our people s talent to its highest potential and walk hand in hand with the business strategy. We implement strategies to enable employees as owners and promoters of their own and their team s development. THIS IS HOW WE ARE DOING Through change management methodologies, we kicked-off strategies to continue promoting Talent Management and self-development culture among our people. During this first half year term We carried out assessments and diagnosis to evolve the role of Human Resources within our company, which will allow us to improve the Talent Management processes, creating the conditions for our people to develop and grow at a personal and a professional level. We continued deploying training and development programs to help employees become promoters of their own growth. 11

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15 THIS IS WHO WE ARE Operating and growing in harmony with the environment means that we need to promote actions in favor of a culture of conservation and an adequate management of natural resources, as well as investing in technologies that allow us to decrease the impact on the environment. The pillar we call Our Planet focuses on these action areas: Water Energy Waste and Recycling We optimize water usage in order to decrease our water footprint. We endeavor to reduce CO 2 emissions in our operations. We optimize waste management and decrease the impacts coming from our products and services. Indicators THIS IS HOW WE ARE DOING 1.75 Liters of water used per liter of beverage manufactured at Coca-Cola FEMSA 6, Tons recycled by the Waste Management Plan (OXXO) 70% of Imbera s production of coolers uses CO 2 coolant and propane, which decreases environmental impact. Direct consumption of energy (stationary). Energy used 1,324, GJ 3,976, GJ 2,470, GJ Indirect consumption of energy. Direct energy consumption in Mexico (mobile). We stop issuing 93.5 tons of CO 2 thanks to FEMSA Logística s specialized vehicles, this amounts to the CO 2 issued during 93.5 round trips between Madrid and New York. Every indicator covers the period from January 1 to June 30,

16 Highlights THIS IS WHO WE ARE Sustainable Logistics Management FEMSA serves over 350 million people in 12 countries. The products and services we deliver every day require an efficient and effective logistic system that minimizes environmental impact. This is made possible by having FEMSA Logística as an expert, which designs, operates, and brings results through comprehensive logistic services and incorporates best practices and procedures. In addition, it gives our operations a competitive advantage and a sustainable focus. What we do: We understand the challenges of each of our businesses logistic processes and, together with FEMSA Logística, we develop solutions that optimize fuel consumption and mitigate the emission of pollutants, integrating elements such as: Using specialized vehicles according to route type, equipped with state-of-the-art technology. 24/7 Control centers monitoring operations. Drivers certified in safe and eco-efficient driving techniques. Technicians certified in the proper management of waste. THIS IS HOW WE ARE DOING During this first half year term, throughout our operations: We keep on participating actively in Transporte Limpio (Clean Transportation), a voluntary program developed by Mexico s Ministry of the Environment and Natural Resources (SEMARNAT, for its acronym in Spanish) in which we have been founding members since With this program, we prove our commitment to the environment, adopting strategies, technologies, and best practices that make our transportation operations safer, more efficient, and more sustainable. 14

17 For six consecutive years, FEMSA Logística has undergone assessments carried out by SEMARNAT, reporting the environmental performance results of the Primary Distribution fleet we manage for Coca-Cola FEMSA which has been recognized for its outstanding environmental performance, while Coca-Cola FEMSA s and OXXO s Secondary Distribution fleets have been recognized for their good performance. During this first half year term, throughout our operations: We continue operating under the Sustainable Mobility program, which we use to assess the technical, operational, financial, and environmental feasibility of integrating new technologies and alternate fuels to our operations. During this first half year term, we continued testing using LP and natural gas in utility vehicles as well as natural compressed gas in delivery vehicles; we also carried out liquid natural gas testing for trucks. What s next? During the second half of 2016, we will kick-off operating specialized vehicles in mountain routes, which will let us optimize logistic services by mitigating Carbon Dioxide (CO 2 ) emissions into the atmosphere. This is in addition to the specialized vehicles for flat routes already in operation. The work carried out by FEMSA Logística, redesigning traditional units and providing specialized training for its drivers, is reflected in a continuous improvement and evolution; making it one of Coca-Cola FEMSA s strategic and trusted suppliers. Manuel Márquez Hernández Coca-Cola FEMSA s Main Transportation Manager 15

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19 THIS IS WHO WE ARE We work to strengthen the relationship with the communities where we operate, improving our dialogues and collaboration. In this pillar, we focus or activities in three action areas: Healthy Lifestyles Community Development Sustainable Sourcing We promote physical activity and balanced nutrition habits to foster the general well-being of our communities. We contribute to the economic, social and environmental well-being of the communities neighboring our operations. We work towards improving the performance of our suppliers around issues of labor, social responsibility, and the environment. 288,347 participants of healthy lifestyles program of Coca-Cola FEMSA. 40% of the PTM s suppliers actively participate in the sustainable sourcing program. 13,663 attendants to FEMSA Collection activities and exhibits. INDICATORS $31.5 million Mexican pesos collected by OXXO s PRO Round Up Program. $21.8 million Mexican pesos distributed through FEMSA Comercio Food Program..156 Vehicle Accident Rate (FEMSA Logística Primary Distribution). Measuring unit: Major accidents per million kilometers. 17 FEMSA Logística obtained the ISO 39001:2012 certification in Road Traffic Safety for its Secondary Distribution, additional to the one obtained in 2015 for its Primary Distribution. FEMSA LOGÍSTICA FIRST SEMESTER 2016 TRANSFORCE, USA 2014 NPTC, USA THIS IS HOW WE ARE DOING

20 Highlights THIS IS WHO WE ARE MODEL FOR ADDRESSING RISKS AND RELATIONS WITH THE COMMUNITY Developing and maintaining relationships that generate mutual value in the communities where we operate is fundamental for the sustainability of our company and for fulfilling its mission. We began implementing MARRCO (Model for Addressing Risks and Relations with the Community) in This model allows us to continue developing capabilities among the teams that manage our work centers, looking to: Strengthen the way we relate to local communities, based on dialogue, commitment, trust, and collaboration. Improve the effectiveness of our relationship with communities, identifying and managing opportunities and risks in a timely manner. THIS IS HOW WE ARE DOING During this semester We launched the implementation at two of our Business Units, FEMSA Negocios Estratégicos (Mexico) and Coca-Cola FEMSA (Mexico, Panama, and Colombia). 18

21 Continue enabling our teams at work centers, aiming to make progress in the deployment of the model in each of FEMSA s Business Units (22 work centers in all the Divisions). What s next? Ensure MARRCO s integration to the processes and systems of every business by evolving the methodology into a management model consisting of frameworks for governance, normativity, operation processes, and continuous improvement. This will allow us to build trust among our communities, strengthen collaboration with our business strategy and increase the positive impact of our actions. We have confirmed that our businesses face global challenges that we need to identify, know, and manage by understanding the businesses and the particularities of each surrounding, so we can offer solutions that adapt to local needs. Genaro Borrego Estrada Vice-President of Corporate Affairs, FEMSA management model Learn and improve Strengthening capacities and developing skills by identifying areas of opportunity, best practices, and exchange of learning. Evaluate and measure Levels of impact and progress of initiatives and actions on community management. 5 4 Commitment Collaboration 1 Dialogue Trust 3 2 Identify and understand Needs, resources, and commitments of the business with the community. The characteristics, needs, and priorities of the community. Analyze and plan The risks and opportunities to design strategies, programs, and actions concerning community engagement. Agree and act Listen and build in collaboration with the community in order to establish commitments and execute programs and actions that are mutually beneficial. 19

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23 THIS IS WHO WE ARE FEMSA Foundation is our social investment vehicle to create longterm positive impacts. We focus on water, nutrition education, and early childhood development projects so we can empower people and communities to take responsibility for their own development. We are currently focusing our efforts on two action areas: WATER NUTRITION AND EARLY DEVELOPMENT CHILDHOOD Water is a limited, irreplaceable, and necessary resource for all natural and human processes. We work on projects to provide communities with access to water, sanitation and hygiene and to protect water sources and foster their sustainable usage. Nutrition plays a decisive role in people s health and development. We foster healthy habits to boost childhood development through nutrition education, thus promoting the communities social and financial progress. projects THIS IS HOW WE ARE DOING Water Funds and the 3rd Water Funds Biennial #OurWaterOurFuture An international event aiming to exchange experiences and create capacities on water safety. We finalized the first stage of the Latin American Alliance of Water Funds Water Funds operating in 7 countries. public and private organizations participated in the event. We launched the second phase of the Alliance with the participation of Carlos Salazar, CEO of FEMSA; Mark Tercek, CEO of The Nature Conservancy; and Luis Alberto Moreno, President of the Inter-American Development Bank. We also welcomed two honor guests: Juan Manuel Santos Calderón, President of Colombia, and Carlos Vives. 21 +USD $120 million were leveraged.

24 GOALS Water Funds in operation. million hectares of USD $500 4 watersheds intervened. million leveraged. Partners Inter-American Development Bank, Global Environment Facility, and The Nature Conservancy. Water Links Completion of the First Phase Mobile Water Treatment Plant We brought safe water, sanitation, and hygiene education to communities of Colombia, Guatemala, Honduras, Mexico, and Nicaragua. Results : We supported 196 communities. 110,292 people now have access to safe water. We responded to Ecuador s emergency situation after the earthquake of April 16th, 2016, bringing potable water to Jama, in the Manabi Province. Results We delivered 402,150 liters of drinking water. Healthy and Active Healthy Edison Polygon We offered educational and recreational workshops in seven schools located in the Edison Polygon in Monterrey, Mexico, seeking to promote healthy lifestyles. Results 1,304 6,676 children participated in this program. We fostered healthy nutrition and physical activity habits through game-based activities in 36 schools located in the states of Chiapas, Quintana Roo, and Yucatan; Mexico, where children, parents, and teachers participate. Results children participated in this program. 22

25 Colors Campaign Ludonutrición We offered workshops in educational centers, in order to promote healthy nutritional habits. Colors Campaign is a regional project that brings nutritional education to children, parents, and teachers in schools of Costa Rica, Guatemala, Nicaragua, and Panama. Our Goals 53 20,286 children participating in the program. schools offering nutrition education workshops. We used game-based activities to promote healthy lifestyles among Colombian children. Results 4,008 children participated in this program. Reduction of Chronic Malnutrition in Guatemala We trained mothers in topics of nutrition and early childhood development. In turn, they became leaders, replicating their knowledge in their community. Partners American Nicaraguan Foundation and Glasswing International. Results 5,853 mothers were trained. Nutriescuela We worked in five schools located in Guanajuato, Mexico; training students, parents, and teachers on how to adopt healthy habits trough educational campaigns. Results 3,283 students participated in this program. Eating as a Family We offered cooking workshops for mothers in 15 Food Banks, looking to promote healthy lifestyles in their homes. Results 10,000 mothers participated in the workshops. 23

26 sustainability report January - june 2016 THIS IS WHO WE ARE, THIS IS HOW WE ARE DOING Fomento Económico Mexicano, S.A.B. de C.V. General Anaya 601 Pte. Col. Bella Vista C.P Monterrey, Nuevo León, Mexico