CEO Jane Karuku encourages CFOs to prioritise ESG

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Business leadership today goes beyond the bottom line and demands a commitment to ESG principles. This was the message Jane Karuku, the trailblazing CEO of East Africa Breweries Limited, delivered at the recent CFO East Africa ESG Summit.

Jane Karuku is the group managing director and CEO of East Africa Breweries Limited (EABL), since 1 January 2021. Previously she was the managing director of Kenya Breweries Limited (KBL) for six years. Prior to her appointment to KBL, she was the president of the Alliance for a Green Revolution in Africa (AGRA).

On 23 May 2024, Jane addressed the CFO East Africa ESG Summit and below is an abridged version of her speech:

As I was preparing for this event, I saw this quote that I would like to share with you: the greatest threat to our planet is the belief that somebody else is going to do it.

Let me start with the ‘word on the street’ from what I have heard some CFOs and other executives say about ESG: ‘What’s in it for me?’, ‘ESG is for the West’, ‘Will ESG help bottom line?’, ‘ESG is a regulatory thing’, ‘I don’t know how ESG involves me’, ‘I don’t understand this thing’,’ESG is a long term thing’,’ESG is expensive’, ‘ESG is the CEO’s pet project’,’ESG is not a business objective’ and ‘ESG is about planting trees!’.

I was having a look at your [CFO East Africa ESG] survey to see how many of you would admit that you do not understand ESG. Some have set 2030 as their target for achieving carbon neutral [goals]… that is only seven years away!

Another common question is ‘what is in it for me if ESG is not tied to my bonus and is not impacting my bottomline?’. As a CEO passionate about ESG, some see it as just my pet project. Even when I’m talking to shareholders at AGMs, I’ve always found ways of telling them how important it is because we need to care. Otherwise all the money goes to dividends which will just run out while doing interesting things.

ESG is indeed expensive and I will show you how much we have spent in the last 24 to 36 months. At EABL, we talk about strategy and ESG being embedded in this business strategy. And about five ago, we developed a 2030 strategy to embed ESG in the business, which we are calling grain to glass. Within our processes, we are ensuring that we are taking care of the environment and in Kenya we are going to be carbon neutral very soon. We are also preserving water by measuring how much of it we use per litre of alcohol. Kenya is now the best in Africa as far as this is concerned.

Another concept in our strategy is ‘sustainable by design’. For everything we do, be it designing a label or crafting an advertisement, we think about our ESG commitments. On the social aspect, we encourage positive drinking by training people to drink responsibly. It is a no-brainer because we need you to be healthy enough to wake up tomorrow, go earn a living and buy more of our beverages. We also teach a lot, including educating high school students not to abuse alcohol.

Governance has been ahead of the E and the S in ESG and that is something that we have always been intentional and deliberate about throughout our existence. For executives like myself, meeting ESG targets is a requirement for our incentives.

EABL recently celebrated 100 years in existence and as employees, we are very lucky to have been gifted this company by the ones that came before us. It is upon us to gift it to the next generation for the next 100 years. That is something we have to think about everyday when considering being sustainable by design.

Everybody at EABL from the CEO to the lowest level of production has a KPI to drive sustainability. We have certain must-dos; if you’re in brand, you must think about positive drinking. If you’re in sales and you’re having an event, you must think about positive drinking. On that score, our Ugandan entity is performing best in terms of their safety campaigns and partnerships they have with local police.

Route to consumer is probably the toughest and in this regard we have strategies around scope one, scope two and scope three. Scope 1 emissions relate to direct emissions by our internal operations and in this regard we have invested over Ksh. 5 billion in biomass plants. Scope 2 are those emissions on our premises caused by operational stakeholders which we are addressing by transitioning to electrical loaders at our plants. Scope 3 (emissions by our third party stakeholders) is the most difficult to effect. We are partnering with our distributors and outlets on the use of renewable energy mainly solar.

As regards measurement, we have an ESG dashboard that we keep track of. This includes how many kids we’ve reached in terms of education and how many adults we’ve talked to about responsible drinking. Even for this event my team will record that I have talked to the CFOs of East Africa about ESG and positive drinking!

We are establishing partnerships in our quest which include working with the National Transport and Safety Authority (NTSA). You will see a lot of join messages about avoiding drunken driving especially during festive seasons. We also partner with Little Cab and other cab hailing apps to promote use of their services to get you home safely.

Inclusion and diversity is part of our sustainability campaign. We have this programme where we are looking for women-owned businesses for supplies. Our strategy is to source inputs and contents locally. Consequently, we did not suffer significant disruptions during the Covid pandemic because most of our suppliers were local. We work with over 60,000 farmers across East Africa and whereas it is mostly women doing the work, sadly they do not get most of the money. It is part of my pet project to change that.

Our industry has historically been male dominated and as a company we are working to change that. In Tanzania, we have a [production] line that is run exclusively by women and we plan to do that in Kenya and Uganda as well to show women that we can do it. If you ever visit us, go and look at those women, you will find that they have the best productivity, best operational excellence and best quality.

Coming back to water, we are giving back to the communities in which we operate because we acknowledge that we use a lot of it. We use boreholes and plant a lot of trees in the water stressed areas. And then we also work a lot on research to get crops that are not taking a lot of water from the environment.

On renewable energy, we are using these gigantic biomasses in Kisumu, Ruaraka and Uganda. And that’s a very big investment using macadamia husks and sugarcane. We are saving money this way, which is proof that ESG does not have to be expensive.

I leave you with this thought: Investing in ESG is not just about doing well, it is also about enhancing shareholder value.

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