AmBev Citizenship Report 07
Transcription
AmBev Citizenship Report 07
Sumário 4 / Message from Management 6 / Profile Mission, Vision and Culture Strategy and structure of social responsibility Stakeholders mapping Outside recognition 12 / About the report 14 / Corporate governance 16 / People Employment Pay and benefits Health and safety Training and education Company relations 26 / Environmental management Materials Energy Atmospheric emissions Water Effluents and wastes Biodiversity Conformity 36 / Society Consumers Clients Community Suppliers Government and society 44 / GRI summary Message from Management Our company´s main drivers are a big dream, compromised People and a strong culture. Our dream is to be the best beer company in a better world. For us at AmBev, corporate social responsibility means generating return for the shareholders and, at the same time, acting in a sustainable manner, creating real and measurable values for the various interest groups related to us. We are sure that acting in this manner our company will continue to be strong in the market for many years, following the standards that characterize our century-long history. This report presents our evolution in relation to this commitment. We used as reference the guidelines of the Global Reporting Initiative (GRI) as applied to our business. We broadened the scope of both qualitative and quantitative information in relation to our previous report. In 2007, our sales volume reached 142.9 million hectoliters, with net income of R$ 19.6 billion, an increase of 10.4% over the previous year. Our cash flow, expressed by the EBITDA, reached R$ 8.7 billion, 16 % above 2006. Net profit was R$ 2.8 billion, in line with the previous year. In the socio-environmental field, we adopted the methodology used to reach the good economic results, with clear plans and objectives supported by a business culture constructed by AmBev People. The Environmental Management System (EMS) results evolved in a consistent manner. Besides reducing relative consumption of energy, our calorific energy matrix is made up of 34% of renewable energy sources. As a result, we reduced our emissions of greenhouse gases and received in Brazil a pioneer certification in the beverages sector for the sale of carbon credits. In the last five years, we have reduced by 22% the relative consumption of water in the manufacture of our products. We reused 98.2% of our sub-products. Besides producing additional income of $ 66.8 million for the company, this work allows the generation of income and employment in other productive networks. We increased outside recycling activities. In all, we supported 36 groups collecting recyclables in Brazil and took steps to raise environmental awareness in communities where we are present. 4 AmBev People remains our big distinguishing factor and absolute priority. About 32% of our employees were promoted during the year and 18,000, including partners, participated in training sponsored by University AmBev (UA). We reinforced our activity in regard to responsible consumption of our products in the in the areas of awareness-raising about the risks of drinking and driving and om regard to encouraging obedience of laws that prohibit the sale of alcoholic beverages to minors. Since the start of the AmBev Responsible Consumption Program, we have already donated more than 50,000 breathalyzers to various governmental entities. We also work to reinforce the advertising self-regulation codes in the countries where we operate and the observance of our responsible communication code. In 2007, we received outside recognition for our work, such as the Social Value award and classifications in the awards for Exame magazine’s Best and Largest and the Best Companies to Work For, and Epoca magazine’s Great Place to Work award. Based on the results that we present in this report and the challenges that we still face, we already have established priorities and goals for the future in the three dimensions of sustainability: economic, environmental and social. Our People, who are the most important to us, will continue to perform all our activities with a focus on sustainable growth. Luiz Fernando Edmond General Director for Latin America Sustainability Report 2007 5 Perfil A publicly traded company, AmBev – Companhia de Bebidas das Américas is the largest brewery in Latin America and, in Brazil, the largest private consumer goods company. Our operations include the production, marketing and distribution of beers, soft drinks and other non-alcoholic and malt beverages to meet different consumer profiles. We reached this position starting with the merger in 1999 of the century of experience of the Brahma and Antarctica breweries in a strategy to expand our operations in a sustainable way and to create value for all our stakeholders. We operate in 14 countries where we have 69 plants, 59 Direct Distribution Centers and 35,000 employees, coordinating the operations from administrative headquarters in São Paulo (Brazil), in Buenos Aires (Argentina) and in Toronto (Canada). Our structure is comprised of three business units: • Brazil, with beers, soft drinks and non-alcoholic and non-carbonated and malt beverages, totaling 32 plants; • Hispanic Latin America (HILA), subdivided in operations Quinsa (Argentina, Uruguay, Chile, Paraguay and Bolivia) and HILA-ex (Venezuela, Peru, Ecuador, Dominican Republic, Guatemala, El Salvador and Nicaragua), totaling, respectively, 20 and 10 plants; • North America with 7 plants in Canada, including beer sales in Canada and exports to the United States. In 2007, we acquired two breweries — Cintra, in Brazil, and Lakeport, in Canada — and in the beginning of 2008, we increased our stake in Quinsa to around 99%. We have the largest portfolio of beverages in Brazil, with 24 separate brands of beer, such as Skol, Brahma, Antarctica and Bohemia; soft drinks, among which stand out Guaraná Antarctica, Pepsi-Cola and H2OH!, in addition to isotonic Gatorade, Lipton teas and Fratelli Vita water. In the Quinsa region, our main brands are Quilmes, Cristal, Paceña and Patrícia beers; in the HILA-ex, Brahma and Brahva beers; and in Canada, Labatt Blue, Kokanee and Alexander Keith’s beers. As a result of management based on income growth, financial discipline, a strong culture and qualified personnel, we reached a total sales volume of 142.9 million hectoliters and net revenues of R$19.6 billion in 2007, an organic growth of 5.8% and 10.4%, respectively, over the previous fiscal year. EBITDA (earnings before interest, taxes, depreciation and amortization) totaled R$8.7 billion (16.0% more), with EBITDA margin of 44.1%. Net income was R$2.8 billion (0.4% above the previous year). The Company’s market capitalization reached R$ 79.0 billion on December 31, 2007. Mission, Vision and Culture Our Mission “To create strong and enduring bonds with consumers and clients, giving them the best brands, products and services.” This mission is our reason for being, our commitment. It does not depend on time. We build the leadership of our brands with impeccable execution and a portfolio that meets the necessities of the consumer and adequately serves all the relevant consumption occasions. Our Vision “To be the world’s best beer company in a better world.” This Vision derives from the opportunities and realities growing out of the association between AmBev and Interbrew, which created InBev, the largest beer production and distribution platform in the world. We believe that our opportunities are as great as our dreams. And our dream — our Vision — is to be the world’s best beer company in a better world. For us, being the best means reaching the highest profitability in the beverage industry. It means, also, having the best brands and those that grow the fastest; the best products for the consumers; the recognition by the clients that we are their best partner; the best personnel and most committed people. It means building a strong, singular culture and having the courage to go in front and to lead the changes necessary to realize the dream. For AmBev, it isn’t enough to be the best. We still want to make the world better in our time. At the same time in which we build a company with solid and increasing economic results, we want to guarantee the generation of social and environmental values for all of society. We are committed in deepening the relationship with interest groups, especially with our People, our great competitive advantage. We support responsible consumption initiatives and the preservation of the environment. Our culture unites our People and represents the energy, the commitment and the alignment necessary to realize our dream. Sustainability Report 2007 7 Dream • We want to be the world’s best and most profitable beer company in a better world To dream big takes the same effort as to dream small. We need a grand and challenging dream that stirs us to build a truly excellent Company. It motivates us to be the best that we can be, with dedication, passion and a defined objective. It is a dream that can only be reached if we engender value to our People, to our consumers and shareholders and to society. We are propelled by results, and the profits are the expression of our success. But we continue to grow only if we achieve better economic performance at the same time as we fulfill our social and environmental commitments. People • Excellent people, free to grow at a speed compatible with their talent and adequately rewarded, are the Company’s most valuable assets. Our people are behind everything we do and are our sustainable competitive advantage. We know that excellent people like meritocracy, informality and sincerity, and that attracts more excellent people. • Our leaders select people with the potential to be better than they are. Thus, we rate our leaders by the qualities of their teams. People with potential help build an excellent Company, help reach our goals and help prepare our heritage. Our leaders do not delegate the responsibility of attracting, developing and motivating personnel. We facilitate the growth of our People, giving them career opportunities that allow each one to quickly develop his or her talent. Culture Our culture is the way the AmBev People make things happen. It sets us apart and shows who we are. It is the combination of our beliefs, practices and management principles. It guides our actions and our ethical behavior with the highest standards of integrity and the commitment to the safety of our People and the quality of our products. • We are never completely satisfied with our results. Zero tolerance helps guarantee enduring competitive advantage. • Our focus on results leads us to dedicate the time and energy that are essential for our business. Results are the fuel of our Company. • We are a Company of owners who take results personally. • We believe that good sense and simplicity are better guides than sophistication and complexity. • We manage our costs rigorously in order to free up more resources to support our market growth. • Leadership by personal example is the best guide for our Culture. We make our Culture. We do what we say. • We don’t take “shortcuts.” Integrity, hard work and consistency are the keys to build our Company. 8 Our Strengths Strategy and structure of social responsibility 1. We think big and set challenges Our strategy of social responsibility is anchored in the co-responsible creation of values for all stakeholders. At the same time in which we want to guarantee increasing economic development for our shareholders, 2. We lead by personal example we know that it is fundamental to accept the responsibility for the impact of our operations along the productive network. Our commitment is reflected in the Dream of our Company as described in item 1.1. 3. We achieve our goals in the AmBev Way: simple, focused and disciplined We operate in three dimensions of sustainability: economic, environmental and social. We want to show consistent economic results over time, to produce beverages using natural resources in an eco-efficient 4. We think and act like owners manner, to develop our People, our main asset. We also want to improve management practices in our production chain and guarantee the fulfillment of our role as a responsible company in society through 5. We develop the best individuals and teams social programs directly tied to our business. To coordinate the social responsibility activities of the Company there has been since 2001 a specific corporate area that answers directly to our Corporate Affairs Department. In addition, as part of our culture and our Code of Business Conduct, all employees and partners are encouraged to incorporate responsible actions in their activities. From the time they arrive at the company, during their orientation, the employees get information about our socio-environmental responsibility. We want to make this awareness part of our daily routine. Sustainability Report 2007 9 Mapping of the stakeholders Our stakeholders were mapped internally, based on an analysis of long-term relationships that we maintain with the publics that make up our productive chain. To assure a growing relationship with these publics, we adopted various tools, processes and channels of communication that allow greater transparency in our relationship. Employees – Our People are our great competitive advantage. We maintain an open-door policy in an Shareholders – Our relationship with shareholders informal environment that allows dialogue and exchange of experiences. We offer a series of benefits and is opportunities for professional growth as a way of recognizing and compensating the achievement of communication, which includes detailed analyses, good results. Among other things, we have a specific area of internal communication that is directed at with reports and quarterly conferences; alignment guaranteeing an even more transparent relationship and permanent dialogue with this public. of objectives, assured by variable remuneration of based on three concepts: transparent all employees tied to the achievement of goals, Clients – Our sales teams are continually trained to maintain a relationship with clients and resellers that and the participation of principal executives goes beyond the commercial. Through sales people, supervisors and managers, we establish an exchange in a stock-acquisition program; and shareholder of information and of best practices, making it possible for them to increase their knowledge of our harmony. market and consequently better develop their businesses. For this public, we have created a specific Customer Service Channel (SAV). Press – We guarantee the projection of an image consistent with our values through a relationship Consumers – Our consumers are the reason we are in business and must receive all our attention. We guided by transparency and by respect for the offer a wide portfolio of quality products, seeking always to innovate, and to disseminate the concept organs of the press. We maintain an area of of responsible consumption of alcoholic beverages through action on two fronts: creating awareness of External Communication that sees that the needs the risks of drinking and driving, and encouraging obedience of the law that prohibits the sale of alcoholic of the press are met. beverages to minors and other laws relating to the consumption of our products. Our consumers can register complaints and suggestions and request information through a specific service channel, the SAC Government – We observe the legislation of the (Consumer Service Center). countries where we operate. We have an area specialized in following government initiatives that Suppliers – We seek the continuous upgrading of our suppliers. Our Code of Business Conduct says we affect our business, and we accept invitations to must offer equal opportunities for all, independently of their status or geographical location, and we participate in public hearings to contribute to the encourage them to adopt management practices that respect human dignity, ethics and preservation of creation of public policies. the environment. We undertake training activities and meetings and annual conferences to increase the dialogue, in addition to an annual convention specifically for transporters. We place at the disposal of our suppliers a tool that allows them to inquire about payments. Society – We seek to contribute to a just and democratic society by paying our taxes on time. Besides providing jobs, we contribute significantly to the strengthening of the economy in countries where we are present. We maintain and support Non-Governmental Organizations (NGOs), professional associations and various community development projects. We concern ourselves with questions of social responsibility that go beyond the boundaries of our units, such as responsible consumption and recycling of our packaging. All citizens can obtain information about AmBev and its operations on our web site. 10 Outside recognition In 2007, our good performance in the three dimensions of business – economic, social and environmental – resulted in winning a series of awards and recognitions, among them: Social Value – Awarded by the newspaper Valor Econômico, it honors companies that honor their commitment to society and sustainable development criteria of excellence and management. We were cited in the Respect for the Environment category. Most Admired Companies – In the ranking by the magazine Carta Capital, we stood out in the alcoholic beverage and non-alcoholic beverage categories because of work in the areas of social responsibility, ethics and commitment to human resources. The award is based on a survey of principal executives in the sector. Best and Biggest – Organized by the magazine Exame, the list names the 500 biggest companies in the country, along with the biggest and best in each of the most representative sectors of the national economy. Great Place to Work – This undertaking of the magazine Época honors the most distinguished companies in personnel management. Best Companies to Work For – The classification, initiated by the magazines Você S.A. and Exame, rates the workplace climate and human resources management. Sesi Quality at Work Award – This highlights the companies that contribute to social development and improving the quality of life of their employees, in addition to wise use of natural resources in their units. Participating in the 2007 Prize were about 2,500 companies from throughout the country. DCI Prize – This recognizes the companies most admired by Brazilian businessmen. Environmental Benchmark Prize – It highlights the best cases of socio-environmental management. Environmental Certificate of Merit – Awarded during the symposium on Experiences in Drainage Basin Management of Water Resources, held in December by the Inter-municipal Committee of the Piracicaba, Capivari and Jundiaí River Basins. FIEC Environmental Prize – Granted by the Federation of Industries of the State of Ceará, in the category cleanest production and reuse of water. State of Goiás Environmental Management Prize – Second place for the plant in Goiânia (GO) in the Industrial Activity category and third place for the plant in Anápolis (GO) in the Food Products category. Ecological and Environmental Prize – Granted by the Curitiba (PR) Municipal Chamber. Sustainability Report 2007 11 About the Report This Sustainability Report shows the actions taken and the results of our work in 2007, with some references to previous years and to 2008, in line with our objective to grow in a sustainable manner and to create value for all our stakeholders. This annual publication, aimed at all the publics related to AmBev, looks partially at the directives of the Global Reporting Initiative (GRI) in its last version, G3, according to the GRI Summary, and seeks to give continuity to the information in the previous report, published in July 2007. Our objective was to reach level B of the GRI. The FBDS evaluated the 2006 Sustainability Report and the preliminary versions of the 2007 Sustainability Report, based on the GRI G3 Directives. Additionally, FBDS conducted a sector analysis and of the benchmarks of sustainability reports. Some recommendations were incorporated and the others will be part of the thinking and of the progress of the Company in the sustainability agenda for future reports. Based on the FBDS work, we prioritized, in an internal process that involved various areas, the selection of the central themes and indicators that reflect the significant economic, environmental and social impacts of the Company or that could influence in a substantial way the evaluations and decisions of the stakeholders. We emphasize, besides our economic achievement that is amply presented in our Annual Report, the relationship with the internal public, eco-efficient environmental management and the health and safety of employees and consumers. The financial information is based on Brazilian accounting standards (BRGAAP), cover all the operations and have as a base data audited by an independent auditor. There was no external validation of the other indicators. All the social and environmental information is managerial, was verified internally and refers exclusively to the Brazil and HILA-ex operations. Throughout this report there is a specific notation when the social and environmental information differs from these criteria. There was no change in the scope, the limits or the measurement methods nor any reformulation of information published in 2006. Several Company professionals participated in its elaboration and we thank them for their work. We also are grateful to the institutions that joined us and directed us in maintaining focus in sustainable actions, among them: 12 • The Brazilian Association of Soft Drink and • The Information Center on Health and Alcohol Non-Alcoholic Beverages Manufacturers (Abir) (Cisa) – Brazil • The Association for the Defense of the • National Environment (Adan) – Venezuela Regulations (Conar) – Brazil • The Dominican Republic Association of Beer • Brazilian Producers (Adoface) Development (FBDS) • The Peruvian Association of Soft Drink • GTZ – Brazil Council for Advertising Foundation for Self- Sustainable Producers (Asbega) • The Institute for Ethical Competition (ETCO) • Chamber of Industry of Guatemala • Recicloteca – Brazil • Chamber of Industries of Guayaquil – Equador • The National Union of the Beer Industry • Peru-Brazil Bi-national Chamber of Commerce (Sindicerv) – Brazil and Integration (Capebras) • Peruvian National Industry Society (SNI) • The Venezuelan Chamber of Beer Producers (Caveface) To obtain more information about AmBev and this Report, visit the site (www.ambev.com.br) or send • Venezuela-Brazil Chamber of Commerce and an e-mail to ([email protected]). Industry (Cavenbra) • The Brazilian Business Council for Sustainable Development (CEBDS) – Brazil Luiz Eduardo Osorio Head of Corporate Social Responsibility and • The Brazilian Business Commitment for Governmental Affairs Recycling (Cempre) – Brazil Fabiana Rafaela Pizzolatti • Cerveceros Latioamericanos Corporate Social Responsibility Sustainability Report 2007 13 Corporate Governance Our conduct is the main element that highlights our superior standards of corporate governance. It is the Finance Committee responsibility of our Board of Directors to guarantee that the principles, the ethics and the culture of AmBev are practiced and disseminated to all of our People. Another essential factor is the alignment of Its function is to assist the Board of Directors in objectives among shareholders and company executives — guaranteed, among other ways, by the system relation to the following matters: Company’s of variable compensation tied to achieving challenging goals that seek to balance the long and short annual investment plan; outside growth terms. The experience of these professionals ensures remaining competitive and reaching of long-term goals. opportunities; the Company’s capital structure and cash flow; and the Company’s financial risk The controlling bloc is formed from two entities that together held in December 2007 approximately management, as well as the budget and 90% of the voting capital and 70.1% of the total capital of the Company: InBev, with 73.7% of the treasury policy. During the year, the Finance voting capital and 61.1% of the total capital, and the Antonio and Helena Zerrenner Foundation (FAHZ), Committee holds at least four meetings at with 16.3% of the voting capital and 9.1% of the total capital. which are discussed, among other things, the budget, financial risk analysis, treasury policy, The governance structure is composed of the Board of Directors, the Executive Committee and the and opportunities for mergers and acquisitions. Fiscal Council. Supporting the Board of Directors are the Finance and Operations, People and Management committees. Fiscal Council Operations, People and Management Committee A permanent organ, it has the task of providing oversight to the Board, with analyses and expert opinions Among its responsibilities are the analysis, relative to carrying out Brazilian statutory functions. None of its members is a member of the Board or suggestion and monitoring of annual economic, an executive officer. The Fiscal Council also executes the functions related to the Sarbanes-Oxley Act. social and environmental performance goals and their budgets; and keeping track of all the Conselho de Administração Company activities through results analysis, marketing developments and internal and external benchmarking. During the year this Committee It is composed of nine members and two surrogates, all AmBev shareholders, who define the general strategic direction of the Company. The General Shareholders Meeting elects them for a term of three years, with re-election permitted. The Board´s internal regiment defines a minumem qualification for the selection of its counselors. The AmBev shareholders agreement regulates the choice of the directors from among the controlling shareholders and establishes standards to avoid conflicts of interests. The cochairmen of the Board do not exercise any executive function. This agreement, valid until 2019, confers on FAHZ the right of veto on questions related to dividends, investments, acquisitions and assumption of new debt, among other things. There are no outside directors. 14 meets at last six times. Executive Officers It is the main link between the policies and decisions adopted by the Board of Directors and the Company The Code of Conduct clearly establishes that all administrators. The Board of Directors elects the executive officers to three-year terms, with re-election the AmBev People must stay informed on laws permitted. Their responsibilities are: to present long- and short-term planning proposals; analyze, propose and regulations. It also vetoes the practice of and monitor the Company’s annual performance objectives, as well as the budgets necessary to meet offering or authorizing any type of contribution, these objectives; analyze and monitor the position of the Company through analyses of results, market donation, favor or gift to government entities or development and permanent internal and external benchmarking; analyze, monitor and propose public officials in order to act or use their influence standardization of good practices; analyze and monitor the performance of Company brands and to help the Company win a contract or obtain innovation strategies; and provide input on issues involving recruitment programs and dissemination of improper advantage. Company culture. Our Code also strictly prohibits any contribution, To learn more about the corporate governance procedures and the profile and remuneration of members direct or indirect, to a political party, campaign of the Amev Board of Directors and the Executive Officers, access Report 20-F and the site for investor committee or candidate for public office unless relations (www.ambev-ir.com.br). prior formal approval has been obtained from the Board of Directors. Code of Conduct TEverybody in the Company is subject to the AmBev Code of Business Conduct, to which we commit ourselves by a signed agreement. Any violation of the document can be reported to the Ethics Committee, composed of the director-general for Latin America, the directors of Finance, People and Management, Legal and Corporate Relations and the manager of Internal Communication. The Committee may be contacted by e-mail and by the aGente AmBev self-service terminal, available at all units, and starting in 2007 by telephone via free 0800 connections. All employees, clients, dealers and suppliers, can access these channels and submitted complaints must be checked out within a minimum of eight weeks. Besides the Code of Conduct, which shows our commitment to responsible, ethical, transparent behavior and mutual respect among our professionals and external publics, we have channels for communicating complaints at all our units, as well as the Ombudsman’s office, which ensures compliance with the Company’s Culture. The Company values actions to define human rights such as freedom of association. It prohibits any and all forms of discrimination based on race, sex, religion or disabilities. It does not tolerate child labor or any form of compulsory labor in its units. Sustainability Report 2007 15 People The talent of our people and the strength of our culture are the two main competitive advantages that drive our businesses and transform our dreams into achievements. The main point that distinguishes us in the market and makes AmBev an excellent place in which to work is our culture of informality, transparency, accessibility of employees to the different hierarchical levels and the spirit of ownership instilled in all of us. We closed 2007 with a team of about 35,000 persons, of which nearly 25,000 are our own employees in Brazil and HILA-ex who work through a management model based upon meritocracy and is designed to surmount tough challenges. This orientation means our employees act like owners and are recognized as such. As a global company, we offer international career opportunities in different fields and countries. In 2007, 30% of our professionals were promoted. We offer a variable compensation system, share option programs, programs for recognition of time of service, health and quality of life, and we provide a series of benefits, many of which are extended to family members. We also invest in the training and qualifying of our People, offering courses through the AmBev University (UA) and scholarships for undergraduate, postgraduate and short-duration courses overseas, along with training in the function each employee exercises. Employment We have a young team at AmBev - the average age is 32. At the same time, more than 3,000 of our professionals have been with us for over ten years. Overall, 92% have completed high school and 19% have graduated from college. We have approximately 4,500 salespersons who work in a market comprised of some 2 million points of sale throughout Latin America. Our sales structure in Brazil includes a fleet of more than 2,000 trucks and 3,500 motorcycles, along with boats and barges, ensuring full geographical coverage of the entire country. Number of professionals Own Brazil HILA-ex Total 16 Outsourced Temporary 2005 2006 2007 2005 2006 2007 2005 2006 2007 20,836 20,083 21,085 6,207 6,127 5,113 38 28 21 5,048 4,587 4,209 1,074 1,163 1,549 - - - 25,884 24,670 25,394 9,286 7,290 6,662 38 28 21 Diversity – 2007 Our employment policy emphasizes the hiring of professionals from communities near our units, especially for operating positions. For all other jobs, we seek to fill the positions through internal promotions — a Age bracket Up to 25 years old 24.3% practice adopted in nearly 90% of the cases. 25 to 35 51.49% 35 to 45 18.5% Recruitment and selection of second tier managers (who report to a superior) are conducted through our 45 to 55 4.99% in-house Succession Program, for which all Company employees may apply. Our Management Training Over 55 0.74% Program (PCG) is applied to future first-tier managers (who report to a director), to develop professionals Gender selected during the People Meeting (see page 22) and approved by the directors. Male 89.6% Female 10.4% Color (*) We run three other programs to attract outside talent and further train internal teams. One is the Trainee Program, which already has graduated 500 professionals since it was created in 1990. About 130 former White 62.6% participants of this program today occupy managerial slots in the Organization. Moreover, 16 current Black (black and mixed race) 36.4% AmBev directors entered the Company through this initiative. Without a fixed number of vacancies, the Indigenous 0.2% program lasts for 10 months and, for 2008’s selection process, it received a record number of applications Yellow 0.8% — 48,025 from candidates around Latin America. Out of the candidates, 35 (32 from Brazil and three Time in the company from HILA-ex) were ultimately selected to initiate the training process in 2008. 15.7% From 1 to 5 years 50.7% From 5 to 10 years 20.1% From 10 to 20 years 11.2% More than 20 years 2.3% Number of persons enrolled in the Trainee Program 48,025 Up to 1 year Executive board 0.2% Managers and Supervisors 16% Administrative and technical positions 30.8 Sale and Operations 53% 25,997 Job distribution Grade school complete/incomplete 2.6% High school complete/incomplete 59.4% College complete/incomplete 36.0% Masters, postgraduate 17,452 Degree of education (*) 2.0% 18 2008 2007 2006 (*) Data from Brazil Another similar initiative is the Talents Program, which sends candidates with a high potential for development and a solid educational background to work in specific Company areas. They are indicated for positions adjusted to their individual profiles in Sales, Industrial/Supply, People and Logistical Management, among others. The number of vacancies is defined annually by the Department of People and Management and validated by the corporate departments. In 2007, 66 persons were selected to participate in the program, all from Brazil. There is also the Intern Program that was structured in 2003, whose selections are made twice a year, in February/March and July/August, by the business units. Candidates who are within a year and a half of graduation can apply through the Company’s web site. In the 2007 selection process 316 professionals were chosen to participate in the program, of which 297 were from Brazil and 19 from HILA-ex. Trainees, Talents and Interns Region Brazil HILA-ex Trainees Talents Interns 2005 2006 2007 2005 2006 2007 2005 2006 2007 21 13 31 1 32 3 54 0 59 0 66 0 144 25 185 30 297 19 Pay and benefits Our concern about appropriately managing the attraction of talents also extends to the retention of our Besides the variable compensation initiatives professionals. For this purpose we offer equal wages for men and women occupying the same positions, (annual bonus), we pay a 14th monthly wage to all along with a compensation and benefits policy that is in line with our culture of meritocracy and employees and maintain a Share and Stock Option surpassing challenges. Program for top managers, who can invest the bonus they receive in a given year in company It involves paying a fair fixed salary ensured through an annual market survey, plus variable compensation, shares and also receive stock options. With regard applied at two levels. Operational employees participate in the Profit Sharing Program (PLR) while other to 2007’s earnings, 181 executives exercised their employees, as of the position of supervisor, are involved in a variable compensation program in which the right to purchase shares/stock options. amount of the bonus is linked to the achieving of each operation’s individual and collective targets. In 2007, this program was changed and began to offer bonuses to 70% of the best professionals from the middle tier to coordinators — the largest group within the Company. Until 2006, 60% of the best talents received bonuses. For corporate management and directors, 100% receive bonuses as long as they meet a minimum percentage of the targeted results. Sustainability Report 2007 19 Recognition undergraduate and postgraduate university CIPAs operate in each one of our units, comprised courses. In order to obtain the latter benefit, of employees who are elected by the work teams The Recognition Program, which annually offers which was awarded to 1,377 persons in 2007, themselves. The managers of the units and the professionals who complete 25 years of service employees must already be enrolled in an areas where accidents have been reported during with the Company an extra month’s fixed wage, is undergraduate or postgraduate course that is in the period are required to participate in the also part of our policy. In 2007, 460 employees line with the job function they exercise in the monthly meetings of the committees. The received this extra compensation. Company. information about accidents, whether or not with At our industrial facilities, we run the Plant Our supplemental pension plan, with the option Institute (INSS) using the Workplace Accident Excellence Program (PEF), which evaluates all of for a lump sum or defined benefit payout, is Communication Form (CAT). The workplace safety the units in their different aspects. The award is another distinctive feature of our benefits policy. department and physician in the unit where the the determinant for the variable compensation of As of age 28, participants decide what percentage accident occurred are responsible for filling out the the employee and can be as much as five monthly of their salary they want to contribute on a document. All incidents also are investigated and wages. Every plant is listed and variable monthly basis (between 2% and 8%) and the followed up internally. The units send information compensation is based on its placement in the Company makes a matching payment. For about all accidents that lead to employee lost time ranking. The same goes for the Direct Distribution participants over 38, AmBev’s matching payments to a corporate team of specialists in the subject, Centers, where there is a Sales Excellence Program are double that of the employees’ contributions. which analyzes the facts, proposes corrective (PEV) in place. Each year, participants can change the percentage action and discloses the findings all persons amount of their contribution — and, also, the responsible for safety throughout the Company to Furthermore, there is a way to recognize the best plan’s prevent similar accidents in the future. work cells in the industrial units. Even if a unit has moderate or aggressive. The plan is administered not placed well in the PEF, the work groups are in-company and, in general, profitability is higher The industrial units and Direct Distribution Centers audited through the excellence program. This than most of the economic indices and (CDDs) follow Safety and Occupational Health assessment, known as the World Championship, is investments available through the market. In Guidelines that, among other items, deal with conducted quarterly. 2007, it posted returns ranging between 11.86% permission for conducting risky work, routine and 19.67%. inspections, minimum safety requirements for lost time, is sent to the National Social Security management profile: conservative, service providers, power cutoff, the registration There are also regional and corporate campaigns that can be created within the Company’s Annual Action Plan, or to support a new launch. Health and safety and analysis of workplace accidents and medical appointments and examinations. We watch out for the health and safety of our Regarding Sales and Distribution, where our sales People. Through the Vida Legal (Cool Life) people and supervisors use motorcycles and program sponsored by the FAHZ, all of our automobiles as a work tool, we also promote the NOur benefits policy encompasses all employees employees have access to disease prevention Traffic Peace program that seeks to ensure the independent the programs — such as flu vaccination campaigns physical integrity of our professionals, managing organizational chart. In the latest satisfaction and awareness raising about problems such as safety indices and reducing traffic accidents. The survey held in 2007, the plan received a 91% stress, hypertension, diabetes and women’s health initiative approval rating. – and assistance for the acquisition of school infrastructure, the attitude of the driver, leadership Benefits of their placement on has four basic underpinnings: materials, Christmas hampers and toys. The attitude and management. Since it was introduced It includes customized medical and dental plans company makes annual investments of about R$ in Brazil in August 2003, the Program has been of that also are extended to dependents, and do not 1.6 million through the Vida Legal project. fundamental importance, leading to a nearly 70% require that participants make reduction in the number of accidents with lost regular time in the Company. contributions; rather, they only pay a percentage Regarding safety, a Safety Master Plan is in place based on their salary bracket in the month they to ensure that the Internal Accident Prevention actually use the services. Committees (CIPAs), the Specialized Safety and We also operate the Safety First program and Workplace Medicine Service and managers and implement a Safety Master Plan (PDS) in all of our We also offer an option for employees to buy life supervisors constantly are kept up to date on the Latin American manufacturing units. Safety First insurance and an annual refund of the cost of subject. The Plan covers the monthly monitoring was created to foster the dissemination and school materials for them and their children and and follow-up of the tools in place that seek to management of pre-defined safety topics InBev we reimburse 70% of the monthly cost of reduce work accidents to a minimum. sends to us on a bimonthly basis. 20 Moreover, once a year all of the units organize an Internal Workplace Accident Prevention Week (SIPAT). Beginning in 2007 in the CDDs, the SIPAT began to include the environment and responsible consumption as issues to be discussed. Training – The Safety Guidelines and other programs involve safety and health training courses. From the moment an employee — whether our own or an outsourced worker — enters the Company for the first time, safety education is inherent to his or her orientation activities. Subsequently, employees participate in safety training sessions as part of their overall preparation. And at the industrial units, weekly training events known as “5 Minutes of Safety” or “Daily Safety Dialogues” (DDS) are conducted by the area manager, always dealing with important accident prevention topics. Safety training for managers and defensive driving classes are taught for operators of cars and motorcycles who work in sales. In 2007, AmBev’s Engineering Center developed and implemented the Zero ACA Project, conducting diagnoses in the industrial units around Latin America and training managers in safety administration practices and the importance of leadership in this field. Some 2,200 managers in our industrial units Definitions: received training during the year, replicating their knowledge within their teams and, thus, ensuring Seriousness rate – An index used around the world 100% alignment of our practices throughout the Company. that measures the combination of days lost (lost time), days debited (days debited by law due As a result of these actions, in 2007 we registered 234 accidents with lost time, 18% lower than to permanent injury or death) and hours worked the previous year. The Seriousness Rate (SR) was 168 in 2007 (314 the previous year), representing in the unit. a 44% decline over the number of days lost and 100% of the number of days debited due to work- TG = (days lost + days debited) x 1.000.000 related accidents. Man/hours worked Accident with Lost Time (ACA) – Accidents occurring during the workday that implies time lost greater than one day, resulting in temporary, Workplace accidents permanent or death of the victim. Seriousness Rate Brazil HILA-ex Total 2005 2006 2007 2005 2006 2007 occurring during the workday that do not cause lost 540 362 193 22,266 16,140 9,242 time. In this case, the employee returns to work the 98 143 67 1,049 1,759 785 449 314 168 23,315 17,899 10,027 Total Plant ACA Brazil Total Plant ASA Total Plant ACA Total Plant ASA Total Plant Deaths Outsourced Outsourced Death Outsourced 2006 2007 2005 2006 2007 2005 2006 2007 2005 2006 2007 2005 2006 2007 2005 2006 2007 13 54 1163 852 915 0 0 0 67 51 52 491 392 365 0 1 0 9 241 156 105 0 0 0 10 9 15 118 60 81 0 0 0 63 1,404 1,008 1,020 0 0 0 77 60 67 609 452 446 0 1 0 24 61 93 74 Total Sales ACA Total Total Plant 69 Total HILA-ex same or following day. 2005 HILA-ex Brazil Accident without Lost Time (ASA) – Accidents Lost Workdays Rate Total Sales ASA Total Sales Total Sales ACA Total Sales ASA Total Sales Deaths Outsourced* Outsourced* Death Outsourced** 2005 2006 2007 2005 2006 2007 2005 2006 2007 2005 2006 2007 2005 2006 2007 2005 2006 2007 198 168 138 209 175 191 2 0 0 x x 382 x x 52 x x 2 64 44 33 51 40 27 0 0 0 x x x x x x x x x 262 212 171 260 215 218 2 0 0 x x 382 x x x x x 2 * The work accidents involving outsourced workers in the sales area began to be monitored in a systematic manner in 2007. Sustainability Report 2007 21 Training and education We have adopted the Annual People cycle to attract, train and retain talents, monitor their performance and identify and fill gaps according to our culture and our objectives. It includes defining and expanding Corporate MBA objectives, the competency management of 100% of our employees and an annual alignment meeting The Corporate MBA, recognized and certified by the (The People Meeting) at which all leaders meet to evaluate the performance and define the career paths MEC, is designed to offer upper tier executives of members of their teams. a general overview of AmBev's business and provide access to the management tools, knowledge These stages guide the development and training plan sent to the AmBev University (UA) for the of the best market practices and leadership skills. preparation of modules designed to orient people entering the Company, prepare those who will be In partnership with the Business School São Paulo promoted, support the Company’s processes and ensure the sustainability of the business. (BSP), the MBA course already has trained 250 employees. About 35% of the content is taught by In 2007, R$ 13.4 million were invested in the UA. It conducts activities in all of the Company’s units and AmBev's own professionals and one of the course organizational levels through external and in-company training courses, applying tools such as e-learning module's contains international content. and TV AmBev. Within this structure are 51 official programs and 225 courses, each annually updated and divided into five main areas that are applied equally across the entire spectrum of the Company’s hierarchy. Leadership Practice 22 Operational Excellence Management System AmBev Culture Market Orientation Leadership Practice – Fosters the alignment and defines the profile of an AmBev leader, who must AmBev Culture – Expands achieve differentiated results regarding the ethical conduct of his teams. Examples of programs that are reference regarding how to act within the inserted into this area of focus are the Corporate MBA, Leading @ InBev; Managing @ InBev and Company, establishing guidelines for retaining and Competency Training. In 2007, the six programs involved 217 professionals and a total of 773 hours. developing the best people, meritocracy and an the points of ownership spirit, pragmatism and focus on results, Operational Excellence – Assures the dynamic quality of the training events for the development of the strong selling capacity, constant concern about necessary technical knowledge in all job functions. Its guidelines include the survey of critical product quality and cost efficiencies. It provides competencies, the improvement in training for each function and the establishment of benchmarks for the technical-operational qualifications. Among the programs are Sales and Reselling, E-Learning, technical Performance and Change Program (LPC), Reseller courses in partnership with Senai, the Successors Program, the Languages Policy, Best Practices, Master Successors, Seals, Trainees and Talents programs. Brewers, Overseas Scholarships in partnership with the Estudar Foundation and Undergraduate and In 2007, the six programs organized under this Postgraduate Scholarships, along with participation in fairs and seminars. In 2007, a total of 18,357 area provided 2,490 hours of training time. underpinnings for the Leadership, persons participated in 68,773 hours of training activities through 37 available programs. Market Orientation – Promotes the relationships Management System – Disseminates and perpetuates the management practices and tools at all and alignment practices with distributors, resellers, Company levels that comprise the chain of business and systematic approach that is a feature of AmBev’s communities and end customers. Currently, its disciplined and pragmatic way of acting. This area is responsible for the Green Belts and Black Belts (Seis programs are undergoing development. Sigma) programs, which involved 59 persons and totaled 554 training hours in 2007. To learn more about these overall programs that contribute to the employability of our professionals, please go to the AmBev University Annual Publication available through the Company’s web site. Sustainability Report 2007 23 Company Relationships Besides all of these training programs, which Our workplace environment is quite informal, which facilitates relationship between our employees. involved more than 18,000 persons in 2007 and Thus, it is common for information to be exchanged between employees and managers, including with 75,000 course-hours, the AmBev University is higher hierarchical levels. We maintain a calendar of formal meetings to consolidate the informal responsible and conversations, meetings and assessments. Each year we organize an Annual Convention with the dissemination of the best practices adopted in all participation of all managers and meetings of the Management Performance system (SDG) on an area- of the Company’s units. by-area basis, by department and by unit, which represent regular and continuous opportunities for for the management managers and top management to dedicate their time to direct communication with the employees. For this, it organizes an annual event during which the best projects are presented. In 2007, the Best For information that is of interest to the entire Company, we also make use of a number of Practices program attracted 318 entries from communication channels, including magazines, corporate TV, bulletin boards, information guides, e-mail, around Brazil and Latin America (HILA-ex), with six newsletters, and text to the sales staff’s palm tops and top management’s cell phones. We transmit the initiatives chosen as winners in the following messages through the most appropriate channel for the recipient of the information. categories: Socio-environmental (Winner: Maltaria Navegantes), Logistics (Goiânia bottling plant), The architecture of our workplace environment is planned to foster integration. Directors, managers and Market (Direct Distribution Center, Salvador), all other employees share the same space: there are no private offices (except for meeting rooms), nor Financial (Direct Distribution Center, Diadema), dividing walls. Thus, any time an employee wants to speak with a superior he or she has the liberty to People (Direct Distribution Center, Fortaleza) and do so directly. Industrial (Jacareí Engineering Center). We also have developed some free participation mechanisms that offer channels designed to make For its part, TV AmBev, which is received in all our employees more comfortable in expressing what they really want to say outside of the routine. We have business units, supplements training policy by suggestion boxes placed in all units where employees can leave their suggestions, complaints and quickly and effectively transmitting information observations. The Ombudsman’s office is another formal channel through which in employees can send about the Company and its brands while, at the in their suggestions, complaints or other information they deem necessary. The information is checked same time, strengthening our core values and through sampling and audits so that the appropriate measures can be taken. culture. Its programming schedule includes weekly training sessions for sales teams and news We organize regular meetings when each manager and a representative of the People & Management programs aimed at all in-company publics. Department listen individually to identify and resolve problems. All of our employees in Brazil are represented by a number of different labor unions. Although the Company guarantees full freedom of association with unions, only 7% of our employees are affiliated with one. Salary negotiations with the unions take place on an annual basis. Collective bargaining agreements are negotiated separately on a unit-by-unit basis and have two-year periods of validity. Socio-environmental Responsibility during the Best Practices Event For the third year, the Event received a number of entries in representing the field of social responsibility. Three practices were selected as finalists. The Maltaria Navegantes placed first (page 31). The Solidarity Recycling Program (page 41) and the Project Ecolegio from the Huachipa branch in Peru (page 40) came in second and third, respectively. Sustainability Report 2007 25 Environmental Management AmBev’s Environmental Policy, instituted in 1997, is the basis of our actions to reduce the environmental Development held in Rio de Janeiro in 1992 impact of our operations and to achieve greater eco-efficiency in all activities, products and services. It (Eco92), and is considered the standard for applies to all production units and encompasses compliance with existing environmental legislation; the sustainable development. (4.11) utilization of technologies, processes and inputs that minimize the environmental impacts; the maintenance and support of environmental education and awareness programs for clients, suppliers and We operate an Environmental Management communities; and continuous monitoring of environmental performance in each phase of the production system (SGA) with standardized and documented process. procedures, personnel training and operating controls that makes it possible for us to act This process is oriented by the Precaution Principle, according to which the absence of absolute scientific preventively regarding potential environmental certainty was not be used as a reason to have postpone effective and economically to feasible measures risks. One of the tools is the Survey of Aspects and to prevent the threats of serious or irreversible damages, environmental degradation or damage to human Assessment of Associated Risks (LAIA), applied to health. This principle was consecrated wide the United Nations Conference on the Environment and map out the potential risks and to define in the mitigation measures for expansion and new plant construction. For the year, we invested over R$ 65 Recognized practices million in the SGA. During Environmental Week in 2007, two units were recognized through an internal competition designed to encourage new practices in step with the Company’s Environmental Management System. Internal Environmental Committees (CIMAs) are in operation in all of our industrial units. These are Fleet management multidisciplinary committees designed to train The São Luis (MA) Distribution Center planted 300 trees in partnership with the city government, organized employees and monitor the main eco-efficiency lectures about the environment and monitored the emission of gases of the 35 diesel vehicles in the partner’s indicators, such as use war consumption, the use fleet. The control of the level of atmospheric gas emissions resulted corrective maintenance of the trucks that were of renewable energy sources and the reutilization outside of mandatory specifications. of by-products. Moreover, upon being transferred to a different area each employee undergoes Agenda 21 The Juatuba (MG) plant was the highlight of Environmental Week, which included environmental education activities involving nearly 1,200 persons including students from municipal schools, public servants, NGOs, AmBev partner companies and bottling plant employees. The students visited AmBev, learning about the facility’s environmental management system. They participated in trail walks in an Ecological Reserve and the revitalized riparian zone along the banks of the Ribeirão Serra Azul River, visited waste collection points, viewed fish reintroduction into the river and areas of Ipê seedling planting in the city’s central square. Another activity was an Environmental Fair where topics related to recycling and environmental preservation and awareness were presented. The program ended with the presentation of awards for entries in a drawing contest about the environment. The children were given gifts and one school won selective waste collection receptacles. As a consequence of this work, and together with government and organized civil society, in September AmBev initiated the process to prepare the Juatuba Agenda 21 project. The agenda encompasses actions for current and future generations to achieve the sustainable development of the city. 26 environmental training. In 2007, we began to extend our Environmental Materials Loss of extract operations and defining environmental standards. maintaining competitiveness, is expressed also in Selective waste collection was introduced into four our search for and use of raw materials (such as Direct Distribution Centers in São Paulo, and all of malt, corn, wheat, rice and hops). Besides the professionals working in these areas, whether maintaining registries our own or outsourced workers, were trained in consumption during how to adopt it. The recyclable materials are generation of residues, we monitor the loss of the treated specifically have already become a source extract — composed of fermentable sugars, of the income for the Company. In 2007, more derivatives of maltable and non-maltable cereals than 300 tons of recycled materials were collected. and carbohydrates, and sugar used in beer materials, and the 2003 production. The smaller the loss of extract, the lower is the loss of raw materials in the production 2007 the production of 2006 of reduction 2005 the 5.24 to 2004 commitment 4.64 environmental impacts and, at the same time, 5.09 Our reducing the environmental impacts of their 5.48 non-conformities, identifying opportunities for 6.41 Policy to the sales and distribution units, surveying process. In 2007, this reduction was 4.64%, stemming from efficient management of Packaging makeup (Beer) operations by the units. Furthermore, we seek to adopt the best processes, technologies and materials, and we employ specialized professionals trained to develop 26% Can packaging that satisfies consumer expectations while, at the same time, minimizing impacts on Selective Collection at the São Cristóvão CDD the environment. As a result of this work, we were In parallel with the development of the corporate than 12%, the consumption of some types of project for the introduction of environmental policy plastics by 11.37% and the consumption of in AmBev’s sales and distribution units, the São cellulosic packaging by 5.88% able to reduce the consumption of glass by more 3% Disposable glass Packaging makeup (Soft Drinks) Cristóvão CDD in Rio de Janeiro has begun to make waste collection. It installed receptacles in all of its Consumption of materials that make up packaging (2005/2007) areas and has begun to sell the waste produced by Type Reduction (%) the unit as a by-product. Besides benefiting the Glass 12,35 environment, the initiative made it possible to Plastic 11,37 reduce the amount the Center pays for its regular Paper 5,88 garbage collection. In five months 12.5 tons of Total 27,34 its employees aware of the importance of selective 71% Returnable 1% bag in box 4% Glass 80% PET 15% Can paper was collected. Sustainability Report 2007 27 Energy Consumption of energy per hectoliter produced 107.79 104.68 2007 109.12 2005 2006 108.69 2004 Megajoules per hectoliter (MJ/hl) 113.80 previous year, when it was 107.79. 2003 In 2007, we used 104.68 megajoules of energy per hectoliter produced, which was 2.86% last than the This result, among other factors, was due to the application of a number of projects focused on energy efficiency, including the installation of natural gas “economizers,” high performance boilers and power “savers” for liquefying carbonic gas. Two new biomass units also went on stream in 2007: one in Juatuba (MG), which is fueled by a charcoal known as “moinha,” and the other in Anápolis (GO), which burns wood chips. We also adopted renewable pine plantation lumber and babaçu coconut and rice husks as biomass, used to fuel steam boilers to generate power. The alternative fuels already have been adopted in seven of the Company’s industrial facilities in Brazil and were responsible for fuel oil savings of some 48,171 tons in 2007. With the beginning of the operation of the two new biomass units, our calorific energy matrix for the year was made up of 54% natural gas, 12% fuel oil and 34% biomass. Furthermore, we adopted a process for boiling starch1 in HILA-ex pilot units. Known as Multiple Step Boiling (MSB), it is globally used by InBev and interferes in the water evaporation rate, which is directly related to the consumption of calorific energy. Thanks to the system, the evaporation rate in the starch boiling operations in the pilot Calorific Energy Matrix units was reduced from 7% to 4%. Consequently, there was a 43% decline in the consumption of calorifc energy employed in this activity. Savings also were derived from process redesigns, refurbishing and modernizing of equipment and 34% Biomass changes in the behavior of employees as a result of organizational and technological innovations. The Company’s Electric Power and Steam Consumption Commandments orient all our units, with monitored compliance of its rules. These initiatives contribute to the supply of products developed with low power consumption requirements. 12% Fuel Oil 54% Natural Gas Energy consumption (megajoules) Primary Source 2003 2004 2005 2006 2007 Calorific energy (MJ)* 6,095,551,608 6,052,029,381 6,341,333,474 7,273,609,118 7,352,167,324 Electric energy (MJ) 2,428,847,942 2,435,466,370 2,969,440,326 3,006,571,226 3,178,576,971 Total (MJ) 8,524,399,550 8,487,495,751 9,310,773,800 10,280,180,344 10,530,744,295 (*) Includes biomass, fuel oil natural gas (1) To learn more about the beer production process,visit our web site: www.ambev.com.br. 28 Climate change Climate change could have a large impact on our businesses, especially regarding water ended energy consumption. Thus, we have adopted a number of initiatives to make as increasingly more efficient users of these resources. Risks – The scarcity of water and energy sources has a negative effect on production costs and the volume and the quality of essential raw materials. In addition, climate instability affects our chain of production and the consumer habits. Opportunities – As our industrial processes become more efficient, with lower water and energy consumption per hectoliter produced and as Atmospheric emission we identify new energy sources, we become more effective and competitive. The emission of greenhouse gases is inherent to our activity. In 2007, the total of greenhouse gases emitted per hectoliter produced was 6.38 kilos, a reduction of 29.3% over 2002. This reduction is equivalent to the planting of 1.5 million trees. The reference used to measure these emissions is from the Intergovernmental Panel on Climate Change (IPCC). In order to minimize emissions, we have developed projects to use alternative fuels and to reduce the consumption of energy, including using biogas resulting from the anaerobic treatment of effluents, and, whenever possible, the substitution of fossil fuels with biomass. Our biogas projects already have been implemented in five plants and, in 2007, 1.9 million cubic meters of gas were substituted by biogas generated in the Company’s own facilities. As part of InBev’s Environmental Data Gathering inventory, we conduct an annual survey in our plants to measure the emissions levels. We are the first company in the Brazilian beverage sector to be officially registered with the United Nations for the Clean Development Mechanism (CDM), for a project being conducted by our Viamão (RS) plant that is in alignment with the Kyoto Protocol. We received the approval of the federal government for this project in June 2007, and on November 5, 2007 the UN (UNFCCC) registered it. As of the date of the UN registration, we initiated the monitoring of emissions and, after one year, the first audit will be conducted to validate the volume of carbon credits that can be sold. We already could sell the credits, but the issuance of the Carbon Emission Reduction (CER) certificate only occurs after one year of monitoring our role. The approved project calls for the reduction of 188,000 tons of carbonic gas emissions into the atmosphere over the next seven years, due to the substitution of fuel oil with biomass to heat boilers. At the end of the year, two other projects for substituting fossil fuels with renewable sources of energy at our plants in Agudos (SP) and Teresina (PI) were approved by the Brazilian government. Greenhouse gas emissions (GGE)* 2002 Total emissions 2003 2004 667,287,029 607,690,417 609,123,040 Total hectoliters Total emission per hectoliter (Kg) 2005 2006 569,298,941 635,200,513 2007 644,902,474 67,464,472 64,195,416 67,799,152 83,292,729 95,926,277 101,112,600 9.03 8.22 7.89 6.83 6.62 6.38 * The numbers until 2005 refer only to Brazil to, whereas 2006 and 2007 also include HILA-ex Sustainability Report 2007 29 Water Sources of water Our efforts to use water sustainably, with a focus on the continuous reduction of consumption, recycling and reutilization of the resource, is based on procedures published in the Company’s Water Commandments document. It approaches the issue from two fronts: training and awareness raising of employees and the monitoring of the consumption indicators in all units. 35% Artesian wells 10% Public network We also seek to preserve water quality by treating effluents and monitoring water reception bodies. We comply with all legal regulations, maintaining discharge systems and monitoring water input. We also participate in Water Basin committees that have been constituted in the regions where we operate to 55% Springs contribute to the planning of the responsible use of water resources. For being in step with all of these initiatives, we are renowned globally for the production of beverages with relatively low rates water consumption. Some of our plants are benchmark units. Our facilities in Brasília (DF) and Curitiba (PR) achieved, respectively, rates of 3.26 and 3.33 liters of water per liter of beer produced. In 2007, we used an average of 4.19 liters of water per liter of beverage, encompassing the units in Brazil and HILA-ex. Regarding soft drinks, our bottling plants in Jundiaí (SP) and Sapucaia (RS) Water consumption (liter / liter of beer) 30 4.21 4.30 4.19 2005 2006 2007 2004 2003 4.37 4.88 reported in 2007 averages of 1.63 and 1.83, respectively. Effluents and wastes Reutilization of industrial wastes We treat 100% of our industrial wastes. Industrial Effluent Treatment Stations (ETSs) are installed in 95% of our units and have the capacity to receive an organic charge of 500,000 kilos a day of Chemical 98.2% 98.1% 96.8% 96.5% 95.0% Oxygen Demand (COD). The exceptions – the units in Curitiba (PR) and Camaçari (BA) – send the material for treatment in external stations. Effluent quality is monitored to guarantee that final discharge into reception bodies is in compliance with environmental legislation, and thus does not harm local habitat and biodiversity. A list of the bodies of water into which our treated effluents are discharged is attached to this Report. Regarding the management of solid wastes, besides continuously seeking to reduce the quantity produced, we promote its recovery, reuse, recycling and composting. In 2007, we reutilized 98.2% of our industrial wastes, which are sold as a way to boost the Company’s revenues to the, reduce their environmental impact and offer a source of income in another chain of production. The other wastes were disposed of in sanitary landfills and, when classified as being dangerous, were incinerated. Paper and pulp residues from labels are used to produce paper and cardboard; malt bagasse and humid ferment are used for animal feeds to dry ferment is a source of prote to to the for human or nutrition; 2007 2006 2005 2004 2003 and mud from effluent treatment is used as organic fertilizer. The reutilization of these by-products depends upon their quality. Thus, in the case of bagasse, for example, we monitor the levels of humidity and proteins during storage and conduct microbiological analyses of the material. We select licensed partners to receive the by-products, establish contracts containing environmental responsibility clauses, and we monitor and audit their activities to be certain they are in compliance with both our own requirements and the legislation. In the event of materials spills or leakages that cause an impact in a region, we seek to adopt measures to quickly resolve the problem. In 2007, no significant spills or leakages occurred. 66.8 59.3 50.9 41.0 30.5 By-product revenues (R$ million) New applications We systematically conduct research into new uses for by-products as a way of guaranteeing responsible final disposal and increasing the added value of our raw materials. One example was the development of more applications for barley residues obtained during the industrial process of a malt plant. The Maltaria Navegantes in Porto Alegre (RS) identified the opportunity to use barley in place of wheat flour for the production of glue for doors. The amount added to the value of the barley rose by 73%. For this initiative, the unit was recognized by in AmBev Best Practices Program, in the Socio-Environmental Category. Moreover, the Agudos (SP) unit began to use mud generated from the treatment of industrial effluents as biomass for producing power. And, at the Guarulhos (SP) brewery, beer that is to be discarded but is still within the expiration date no longer is discharged into the industrial effluent treatment station; it now is donated for use 2007 2006 2005 2004 2003 as cattle feed. Sustainability Report 2007 31 32 Biodiversity Our concern with the environment is also related to the protection and preservation of the areas that are rich in biodiversity and are part of our business units. We engage in activities to stress the importance of these areas and to protect the typical flora and fauna of each region. In some of the business units, environmental protection areas (APAs), permanent preservation areas (APPs), areas of relevant ecological interest (ARIEs), ecological reserves (REPs) and riparian forested riverbanks are used as resources for environmental education. In the city of Maués (AM), in the midst of the Amazon forest, we maintain the 1,070-hectare Fazenda Santa Helena, the largest guaraná genetic bank (a fruit native to the region and the principal ingredient in the Guaraná Antarctica soft drink) in the world. The entire crop under cultivation – which occupies approximately half of the area – is integrated with the ecosystem through the planting of small clearings in the forest, called “guaranazeiros,” to ensure the preservation of local flora and fauna. In Guarulhos (SP), our bottling plant is surrounded by an 850-hectare APA that is registered as a Release Area by the Brazilian Institute of the Environment and Renewable Natural Resources (IBAMA). In this area, in partnership with the Guarulhos Department of the Environment, we conducted the first wild animal survey in 2007. The study yielded surprising results: 274 species were cataloged, including 52 reptiles, 54 mammals and 168 bird species. The unit engaged in the construction of habitats, together with the Guarulhos zoological agency, a place where wild animals are taken for readjustment to their Atlantic Forest habitat. Among these animals are some endemic species that are especially vulnerable to extinction, and that are on the Red List of the International Union for the Conservation of Nature (IUCN): the Channel-billed Toucan and the Red-breasted Toucan (Ramphastos dicolorus and Ramphastos vitellinus), the Swallow-tailed Blue Manakin (Chiroxiphia caudata), the Red-ruffed Fruitcrow (Pyroderus scutatus), the Puma (Puma concolor), the Ocelot (Leopardus pardalis), the Brown howling monkey Environmental Education in Guarulhos We introduced the Guarulhos Environmental Project jointly with the government of the state of São Paulo. The unit opens its doors for state public schools as a way of promoting the principles of awareness and conservation among young people. Approximately 650 grade school students from five schools were selected for the first phase of the project and attended classes on water, flora and fauna, among other subjects, taught in the forest maintained by the company. (Alouatta guariba), the Black-fronted Titi (Callicebus nigrifrons) and the Neotropical River Otter (Lontra longicaudis). In Agudos (SP), our plants are surrounded by 920 hectares of an Area of Relevant Ecological Interest (ARIE) and a Permanent Preservation Area (APP). In the Cerrado region of the state of São Paulo, there are approximately 185 species of trees, 29 species of mammals, 165 species of birds, 29 species of reptiles and 13 species of amphibians. Among these species, five are threatened with extinction: the Maned Wolf (Chrysocyon brachyurus); the Pequizeiro (Caryocar brasiliense Camb), a tree native to the region; the Ocelot or Painted Leopard (Leopardus pardalis mitis); the Puma (Puma concolor capricornensis); and the largest species of Anteater (Myrmecophaga tridactyla) are listed on the IUCN’s Red List. There are 124 hectares of reforestation of eucalyptus trees, while ecological and environmental hikes are offered to raise the environmental awareness of our employees and the community. Similarly, the plant at Jaguariúna is surrounded by 20 hectares of APA and the plant at Cuiabá (MT) by 30 hectares of APP, while the plant at Jacareí is in the midst of 2.1 APA hectares. In 2007, the Cebrasa branch in Anápolis (GO), created a project to recover the riparian vegetation along the banks of the Ribeirão das Antas River. The goal is to replant the banks that are incorporated into our facility, in partnership with the Faculdade Anhanguera Educacional S.A., along with a nursery for producing seedlings from the trees of our forest for constant replacement and replanting. Sustainability Report 2007 33 Conformity AmBev has a clear and rigorous policy of respect for the environment. Nevertheless, in 2007 four isolated incidents occurred with limited environmental impact that led to administrative complaints brought by the competent environmental agencies. In three of these cases, a Term of Adjustment of Conduct agreement (TAC) was signed with the Public Prosecutor’s Office. Each of the incidents is noted below: Viamão (RS) – Because of complaints from residents, the public prosecutor held a public hearing that resulted in a TAC. In compliance with his request, we implemented actions for the recovery of the vegetation and water resources affected by leaks, donated R$ 150,000 to be distributed after deliberation by the Viamonense Environmental Committee, and invested in a program to promote recycling of solid waste. Juatuba (MG) – A falling tree branch caused a temporary blockage in drainage out of the effluent treatment station. This led to a one-time discharge of treated effluents that was outside the specifications of the river located behind the plant. As soon as the incident occurred it was spontaneously reported to the state environmental agency, which then prepared a report of an infraction against the company. The company presented a defense, in which it demonstrated no harm had been done to the environment, which is now being analyzed by the environmental agency. The public prosecutor held a hearing to investigate the incident, which was tabled immediately upon the signing of a TAC, in which we promised to prepare socio-environmental activities together with the local community. Green plant Lages (SC) 1 – Because of failures in the composting operation procedures in the manufacturing facility operated by an outsourced service provider, there was an emission of untreated drippings into a lagoon The commitment to protect biodiversity from the located on the plant’s grounds. Lages Environmental Police initiated a criminal inquiry to determine the impact of our activities, products and services can facts and responsibilities. The investigation was closed after a TAC agreement was signed, with the be seen through the detailed environmental acceptance of the state environmental agency, the Public Prosecutor’s Office and the Environmental impact studies that are undertaken before Police. We implemented a reforestation project encompassing 20 hectares, earmarked R$ 37,000 for an construction begins on new facilities. One agreement with Public Prosecutor’s Office-Environmental Police and R$ 8,000 to the Canoas River Basin’s example is the glass factory we built in 2007 in Rio Water Resources Committee. de Janeiro (RJ). This eco-efficient facility is equipped with an electrostatic precipitator, which Lages (SC) 2 – During the startup process to increase the production capacity of the plant, some malt acts as a filter for the purification of 99.5% of the beer was spilled into the effluent treatment system, temporarily causing the organic load of the treatment gases emitted by the glass fusion process. The by- center to rise above the capacity for treatment. The functioning of the anaerobic reactor had to be product of this process is a powder that is rich in stopped and re-charged with activated mud to reestablish appropriate operating conditions. Because of calcium sulfate, which is recycled as a raw material this stoppage, there was a one-time release of liquid effluents outside the parameters established by the for the production of glass. In addition, all of the environmental legislation for the Carahá River. The company, of its own accord, reported the event to the water used in the treatment of the ETEI is recycled state environmental agency, which then issued the infraction. An administrative defense was presented through the refrigeration systems and used for to show that there was no environmental damage. We are awaiting the judgment of this defense. washing the floors. We also reutilize all glass shards resulting from breakage: 55% of the material is recycled and used in the manufacture of bottles. 34 Society We believe that in order to grow in a sustainable manner profits are necessary to pay dividends to shareholders and, at the same time, create value for society as a whole. This belief characterizes our relations with clients, consumers, suppliers, resellers, communities, the government and society. We try to include three different dimensions – economic, social and environmental – throughout our business chain, from an increase in production of inputs supplied by farmers through to postconsumption, as represented by programs promoting responsible consumption of alcoholic beverages and recycling. We contribute to social welfare both by paying taxes as well as by confronting complex issues, such as those involving responsible consumption. Consumers We have exercised our role as a good corporate citizen since 2001, supporting programs to raise the awareness of the general population about the risks associated with the improper use of alcohol. They are part of the AmBev Responsible Consumption Program in Brazil, guided by the premises offered by the World Health Organization (WHO), based on two pillars: awareness of the risk of drinking and driving, and encouraging compliance with the law that prohibits the sale of alcoholic beverages to minors. In support of these objectives, various initiatives were held in 2007. One such initiative is the second edition of the People Who Care Program, where all of our facilities throughout Brazil open their doors to employees and invited guests to discuss the responsible consumption of alcohol and to watch an educational video call “Drink or Drive: Make the Right Choice,” prepared by the Center of Information of Health and Alcohol (CISA). This initiative mobilized some 45,000 persons in the factories and distribution centers who then “blitzed” local universities, distributing educational brochures and “Boomerang” stickers – the symbol of the program – with the message: “It’s more fun to go and then return.” In addition, our own vehicle fleet displayed this message. 36 People Who Care AmBev believes that good behavior begins at home. Therefore, in August 2006, it introduced the first People Who Care program. The event is designed to engage employees and the local communities on social responsibility issues. During the year, 19,200 breath analyzers were donated to traffic authorities and federal, state and municipal government agencies, including the Federal Highway Police (Ministry of Justice) and Denatran (Ministry of the Cities). In total, since the start of the program, we have donated more than 50,000 breath analyzers. We celebrated Carnival in São Paulo (SP), Rio de Janeiro (RJ), Salvador (BA) and Olinda and Recife (PE) by passing out messages about responsible consumption. In our own events such as Skol Beats, Skol Spirit, Brahma Box and Boteco Bohemia, we promoted activities to raise public awareness. Our points of sale are another channel used to spread the message about drinking responsibly. For this channel we developed the “Ask for the ID” program to encourage following the law prohibiting the sale of alcohol to minors. The owners receive orientation material about the need for following the law and their co-responsibility in this task. From its inception, this Program has reached around 800,000 establishments throughout Brazil. We also introduced the Responsible Bar, for the distribution of posters and educational material with advice for the owners of drinking establishments, spreading the message “alcoholic beverages are only for those who are old enough and for those who are not going to drive.” This program was aimed at bars in São Paulo (SP), Brasília (DF) and Porto Alegre (RS). The AmBev Responsible Consumption Program has also been developed in Venezuela, with messages about responsible consumption contained in advertisements and on products labels. The information stresses that alcoholic beverages do not go well with driving and only individuals 18 years or older may consume alcoholic beverages. One highlight for the year involved the raising of awareness in bars and restaurants about responsible selling of alcoholic beverages. Brochures and stickers to be placed on cash registers in these establishments stress the idea that the sale of beer should only be for 18-year-olds or older. Access to information AmBev operates a customer service center (SAC) to meet the demands of consumers. This led to the first ISO 9000 certificate to be issued to the beverages sector, and in 2005 and 2006, to the Modern Consumer Award for the Best Customer Relationship Center in the beverages segment. The service provides five 0800, toll-free, numbers (Brahma, Skol, Antarctica, Gatorade and Pepsi), and e-mail addresses that function together, but permit servicing of a specific brand to facilitate consumer access to information. The SAC receives 1,500 telephone calls and 300 e-mails every day. Of these contacts, 70% are questions about the composition of the products and their distribution, information about company events, and sales and corporate data. Another 16% are complaints, 10% looking for sponsorship and/or donations and 4% involve opinions. All of the information received is organized according to the area concerned (Industrial, Sales and Marketing) and serves as a basis for improving the products and processes that increase consumer satisfaction. In addition, the SAC conducts regular surveys into the degree of consumer about our products. We maintain the practice of exchanging all products that present a problem and analyzing all of those that are returned. Occasional errors, including those that take place during distribution and at the points of sale, are reported to the Quality Control Department for corrective action. 38 In the consumer’s life We believe that the consumer is the reason we are in business. We need to understand them, and to create a close relationship over the long term. Our marketing policy gives priority to meeting consumer needs and expectations. In order to do this, monthly surveys are conducted about the lifestyle, values, priorities, events and consuming habits of 2,500 people throughout Brazil. The results help to improve the products, packaging and introduction of our brands. We follow assumptions to guarantee the quality of our products to assure that they are free of any kind of contamination or risk for the health and safety of our consumers. In the conception of products and the choice of suppliers and ingredients, we take into consideration the standards of the Company and our partners. In general, our guidelines are stricter than those established in the regulations and technical standards of the appropriate government agencies and when there are no regulatory standards in the countries in which we are active, we follow international benchmarks, such as those of the U.S. Food and Drug Administration (FDA). Along with the safety of our employees, quality is the essential element in our manufacturing operations. We monitor the quality of inputs and all of the pertinent production processes, identifying the critical points, performing visual and laboratory end product quality analyses. We store our products in a way so as to maintain the quality achieved during the production process and we provide guidance to our clients in the same way. We have also adopted a transportation manual containing shipping guidelines and specifications for each category of product. We regularly assess the satisfaction of our consumers with regard to our products through the SAC, while also monitoring the preference of consumers for our brands. Furthermore, we use specific programs to measure the quality of our products in the market. Our concern extends to post-consumption, structuring initiatives for the recycling of packaging (more information on page 41) and the responsible consumption of alcoholic beverages (more information on page 36). To reinforce this policy, we have implemented a Responsible Marketing Code and signed an advertising self-regulation agreement in a number of the countries where we operate, including the Common Principles of Self-Regulation in Advertising for Latin American Brewers, the Brazilian Self-Regulation MARCOS FREIRE – Homenagem a João Gilberto Marketing Code prepared by the National Council for Self-Regulation of Advertising (Conar), the Self Regulation Code for Commercial Communications in the Brewing Industry (Venezuela), the Code of SelfRegulation in Advertising and Promotions for the Brewing Industry of Nicaragua, and the Marketing Self- Original Art Regulation Code (Dominican Republic). In partnership with Recicloteca, we promoted the exhibition of creations by artists in two shows We maintain the same level of concern regarding the packaging of our products. In 2007, we introduced entitled “Original Art.” Made with materials distinctive packaging to meet the needs of different consuming profiles, such as the 18-can Skol beer recycled from our Original beer (tops, labels, pack, Bohemia Dark in a long neck bottle and can; and a Skol heat-sensitive can; initially limited to the cardboard boxes and glass bottles), the works of market in Rio de Janeiro, it is the first to be sold in Brazil that informs the consumer when the beer is the art were presented at the Image and Sound right temperature for consumption. All of our labels contain the information required by legislation. Museum (MIS) in São Paulo, and in the Original Bar, in Rio de Janeiro. The works of art were prepared At our events, in addition to promotional activities and messages regarding responsible consumption, we especially for the events, representing a challenge encourage the selective collection and recycling of cans and bottles. In some cases we establish that resulted in a new way of looking at every-day partnerships with groups that sort recyclable materials as a way of providing yet another source of income objects, such as chairs and lamps, and in the and social inclusion for the workers who collect such materials. In 2007, more than 10 tons of materials creation of unusual works in different styles. were collected and recycled. Sustainability Report 2007 39 Clients We know that our responsibility to the client does not end with a sale. We are constantly working to improve our relationship with the points of sale as well through programs and channels that help to Planting Trees and Recycling identify their needs and answer their questions, establishing a partnership based on trust, commitment Recycling and eco-efficiency are the focus of the and the pursuit of a common goal. Ecology Project, initiated by the Huachipa plant in Peru to disseminate its environmental policy in the In Brazil, the Relationship Program, created in response to the needs of our clients, helps us to help them community. Directed by students from the Beata in developing their businesses through the dissemination of information published in a bimonthly Imelda school, with the participation of teachers magazine and carried monthly on a TV channel. and employees, the organization also has the help of the local congregation of religious organizations We are constantly revising the routine of our sales teams, so that we can be certain that we are being and volunteers from AmBev. Selected as one of the efficient and helping our clients to better display our products, identifying opportunities and best practices of the Company, the project improvements to be made. This effort includes support for the management of inventory and hints about encouraged schools to participate in the United training, education and practice to increase sales and win customers. Nations’ program for planting one million trees and began the practice of recycling wastes and studying Community the environmental problems of the community As a result, more than 100 trees were planted in the Our external investment is based on the ability to add value to the communities with which we have area owned by the school and five environmental relationships. In 2007, we improved our internal processes and programs for excellence to stress the studies were conducted: reduction of water socio-environmental responsibility of our People in the manufacturing units and our Direct Distribution consumption and energy, production of biodiesel Centers and resale, working together day by day closely with the people who live around us. fuel, paper recycling and the responsible disposal of batteries. The paper and the packaging collected The performance of this aspect of our activities is recognized with a Star Prize, awarded annually to the were sold and were used to start creative projects unit that does the most for the benefit of its community. And the award counts for points in the Excellence for the decoration of the classrooms at the school. in Manufacturing Award (PEF) and Excellence in Sales (PEX) awards, which also include our network of resellers. In 2007, approximately 80% of the plants and CDDs and 42% of our resellers were working with us in socio-environmentally responsible activities, in environmental education initiatives, selective waste collection and support for community projects, assuring greater social responsibility with regard to its employees and the community. The results obtained during the year demonstrate the potential of this kind of work: • More than 5,000 books as well as other scholastic materials have been collected and donated to schools and municipal libraries; • Some 4,000 seedlings have been planted; • In addition to our employees, approximately 10,500 people have participated directly in activities to encourage recycling and promote environmental education, including students, teachers, and representatives of the local community; • More than 6.6 tons of recyclable materials have been collected in recycling initiatives in the communities; • Our sales team distributed Ministry of Health’s information about the campaign against dengue fever to our points of sale around Brazil. Since 2003, we have been participating in the Green Duty-Free Zone, of the state government of Amazonas, with investments of R$ 61 million in the development of the region scheduled through 2013. 40 This funding has already permitted the financing of more than 1,300 low income housing units in rural areas; the creation and maintenance of 12 agricultural complexes; the inauguration of a seamstress Recycling and Citizenship workshop where school uniforms for the municipality are produced; the development of projects for the The Cebrasa branch in Anápolis (GO) received cultivation of fowl, swine, beekeeping (the distribution and administration of hives) and the cultivation recognition in 2007 as winner of the Star Prize for of cassava; and incentives for the production of sugarcane. Manufacturing Excellence, for its Community Project – Recycling with Citizenship. It involved four Dialogue schools, getting them to more vigorously pursue the project’s initiative from the previous year to To manage and minimize the impact of our operations in the communities, we make dialogue a priority. distribute information about recycling practices and One example is the consultation we did before starting the construction of a plant in Huachipa, Peru, in environmental education. Waste sorting kits were 2005. The project was discussed with more than 170 people in the local community, demonstrating the placed in the schools, talks were given on how to Company’s concern for the protection of the environment and the sustainable development of the region. recycle and why it is important. Some 3,605 people, In addition, regular visits were made to the community to assure a good working relationship and a including students, teachers and members of the dialogue that was ethical, transparent and permanent. community were involved. In total, 4,692 kg of paper, plastics and metal were collected. The Recycling Solidarity income from the sale of the recyclable materials was returned as benefits for the schools. AmBev We continued and improved the Solidarity Recycling Program, which recently celebrated five years of recognized the school that excelled at the initiative. existence. Developed in partnership with the Recicloteca NGO which is maintained by AmBev, and also The initiative also received recognition for taking since 2007 with the Business Commitment to Recycling (Cempre), the initiative combines the three pillars third place in the Goiás state’s Environmental of sustainability: Management Award contest. 1. For the environment, contribute to the preservation by supporting groups that collect recyclable materials; 2. Regarding the economy, to increase productivity, income and the organization of members of the cooperatives and improvements in the organization of the groups; and 3. Regarding the social objectives, to promote the inclusion and approval of the quality-of-life of the communities where the entities are installed. Amount Collected Material Volume (t)* Paper 487 Plastic 355 Metal 83 Glass 61 Others 8.5 Total 994.5 * The amounts were collected between the months of September This is done by means of providing equipment, such as presses and scales, the transmission of knowledge and December 2007 by 16 different groups. (AM, CE, PE, PR And RJ) and exchange of best practices. During the year we reinforced our actions with activities to support the for forms and spreadsheets for control of income and costs, adoption of best practices for the workplace Average number of cooperative members and environmental protection. State management of the cooperatives, including information about health and safety, accounting, models Cooperatives AM 20 The project makes it possible for the cooperatives to have a representative from Recicloteca assisting CE 15 them in their operations. The model not only prepares the service providers but expands the relationship PE 15 with the members of the cooperative, for working over the long term. In this way we are able to help PR 33 Recicloteca in the development of activities that make it possible for each of the cooperatives to continue RJ 322 to put the guidelines into practice. Total 405 In Rio de Janeiro – the birthplace of Solidarity Recycling – there are already more than 300 workers involved in the initiative. In five years, the participating entities have significantly increased the quality of the materials collected. In addition to greater volume, there has been an improvement in the added value of the collected materials. At the end of 2007, the activity provided direct benefits to approximately 400 people in Rio de Janeiro Paraná, Amazonas, Rio Grande do Sul, Mato Grosso, the Federal District, Ceará, Espírito Santo and Pernambuco, in addition to another 600 who participated in the program in earlier stages. In 2007, 12 new cooperatives were integrated into the program, which raises to 36 the current number of organizations receiving benefits. Sustainability Report 2007 41 Donations Our policy of encouraging community development includes the donation of funds for to outside social In addition to producing part of the malt that we projects. In 2007, using the provisions of the tax incentive laws, we supported various non-governmental use, in the Southern Region of Brazil we support organizations that are active in training youths, among them the Gol de Letra Foundation that works with Rural Days, where our employees, producers, farm children, teenagers and young people in São Paulo and Rio de Janeiro through programs and projects for cooperatives and agricultural technicians from the implementation of a new teaching method that offers knowledge, culture and citizenship; the Growth Embrapa meet to improve their knowledge about Institute for TV, Cinema and New Media, which contributes to inserting young people from low income cultivation and new technologies. communities from the municipality of São Paulo into the job market through a program of technical and socio-cultural training; and the Citizens Sport Club program developed by the Porto Alegre Young Men’s Transportation partners Christian Association (ACM) and by the Dunga Institute for Citizenship Development to promote citizenship through the practice of team sports. An example of the programs that we have adopted to assure the excellence of our own In accord with our Code of Conduct, we also make periodic donations to Community Action. These operations, since 2001 we have been developing come from internal auctions, prizes and gifts sent to employees at Central Administration. the Guide to Excellence in Shipping (GETrans) to provide guidance for the logistics operators that Suppliers are our partners to ensure the sustainability of the business. GETrans determines the criteria that permit the monitoring and measurement of We acquired various materials, goods and services from about 11,500 suppliers to guarantee the performance of these suppliers with respect to the production and delivery of our products to consumers. Our supplier relationship policy gives priority to management of persons and the fleet, indices of local and diversified suppliers, and calls for the preparation of commercial and technical studies before productivity, and others. We monitor the correct granting them approval in order to guarantee the quality of the products that are part of our chain of remuneration of their employees and ensure that production, in addition to monitoring deliveries to guarantee supply. they meet their tax and fiscal obligations. Our behavior, expressed in the Business Code of Conduct, is based on the offer of equal opportunities Further, we encourage investment in socio- to all of our partners, independent of their size or geographic location. We also recommend to our environmental responsibility. Part of the fleet is employees that they encourage suppliers to use management practices that respect human dignity, ethics increasing its use of biodiesel as a fuel and and environmental protection. beginning in the second half of 2007, 5% of the fleet has replaced traditional methods of washing Guaraná and barley vehicles, using a “dry-cleaning” method that represents a savings of more than two millon liters We pay special attention to the producers of guaraná and barley (hordeum vulgare) that provide the of water. essential raw materials for the quality of our products. With this in mind, we support the development of guaraná production in the state of Amazonas and provide incentives for planting barley in the south Every year we evaluate the scores obtained using of Brazil, a partnership with 4,000 farmers. the Guide for all of the transporters. Based on these evaluations, the best partners are recognized In the Amazon Region, we support in the Maués Project in partnership with the state government to at the GETrans Convention. The results may promote the restoration and expansion of the guaraná plantations by supplying seedlings to the farmers culminate, above all, in the increase in the share of and supporting the development of alternative sources of income. Every year we promote Guaraná Day best operators in the AmBev system. Training and, since 2006, together with GTZ (the German Technical Cooperation Agency) we have held training activities also take place at the Convention. In this cycles. During Guaraná Day we hold technical seminars and the farmers visit Fazenda Santa Helena, way we contribute so that the people who owned by AmBev, where they learn about the techniques and equipment used in the cultivation of the fruit. transport our products adopt the best practices for the management of their businesses. Every year, about 280 rural producers, along with representatives from Embrapa, and municipal and state governments, from GTZ and their local associates, participate in Guaraná Day. The event recognizes the producers and agricultural technicians who have provided outstanding results in the production and improvement of guaraná. In 2007, about 150 producers participated in training cycles offered jointly with GTZ. The training took place in loco and provided the producers with knowledge about each of these stages of production, from the preparation of the earth through to the improvements in guaraná and production integrated with other typical crops in the region, such as cassava and açaí. 42 Government and society We believe that we are contributing to society when we create both direct and indirect employment and when we pay our taxes on time. We are among the three largest taxpayers in Brazil. In 2007, operations in Brazil resulted in the transfer of about R$ 10 billion to the coffers of federal, state and municipal governments in Brazil. We are members of the Brazilian Business Council for Sustainable Development (CEBDS), the Business Recycling Commitment (Cempre) and the Brazilian Institute for Competitive Ethics (ETCO), among others already mentioned in chapter 2. Through our participation in these organizations we contribute to the formulation of public policy related to our sector of activity, and we occupy the role that befits us, as an industry, to seek a reduction in the improper consumption of alcohol. With this objective, we participate in the public discussions in the National Congress. We also participate as observers in the meetings promoted by the World Health Organization (WHO). The industry is recognized by the WHO in two resolutions approved by the Assembly, as a stakeholder in confronting the harmful consumption of alcoholic beverages. Our actions related to Responsible Consumption made it easier for other agents involved in this issue to participate. One example is the donation of the breath analyzers - to municipal, state and Federal agencies that will be used to monitor and apprehend those who drink and drive. We frequently make donations to alleviate the suffering of victims from catastrophes. To assist the homeless and displaced persons after the earthquake in Peru in 2007, we sent 62,000 liters of water and 5,000 liters of water replacement beverages. In Sapucaia do Sul (RS), we collected 2.5 tons of food and more than 500 pieces of clothing and shoes for the benefit of communities hit by the heavy rains that fell in the region at the end of September. In addition, one of our controlling shareholders, FAHZ, supports the Walter Belian Technical School and the Santa Helena Hospital, both in São Paulo. GRI Summary Page Strategy and Analysis 1.1 Statement from the most senior decision-maker 1.2 Key impacts, risks, and opportunities Page Governance, Commitments, and Engagement 4 and 5 4.1 Governance structure 14 4, 5 and 12 4.2 Indicate whether the Chair of the highest governance body 14 is also an executive officer Organizational Profile 4.3 Independent and/or non-executive members 14 4.4 Mechanisms to provide recommendations to the highest 15 2.1 Name of the organization 6 2.2 Primary brands, products, and/or services 6 2.3 Operational structure (main divisions, operating companies, 6 subsidiaries, and joint ventures) 6 4.6 Processes to ensure conflicts of interest are avoided 14 2.4 Location of organization’s headquarters 6 4.7 Process for determining the qualifications of the members 14 2.5 Number of countries where the organization operates 6 2.6 Nature of ownership and legal form 6 4.8 Mission or values, codes of conduct, and principles relevant 2.7 Markets served 6 4.9 Procedures of the highest governance body for overseeing 2.8 Scale of the organization 6 Significant changes during the reporting period regarding size, 6 2.9 structure, or ownership including 2.10 Awards received in the reporting period governance body 4.5 of the highest governance body 7 to 9, 15 14 the organization’s identification and management of economic, environmental, and social performance 4.10 11 Report Profile Linkage between compensation and the organization’s performance 19 Processes for evaluating the highest governance body’s 14 own performance Commitments to External Initiatives 3.1 Reporting period 12 4.11 3.2 Date of most recent previous report 12 4.12 Precautionary approach or principle is addressed by the organization 26 Externally charters, principles, or other initiatives 3.3 Reporting cycle 12 4.13 Memberships in associations 3.4 Contact point for questions regarding the report or its contents 13 39 13, 43 Stakeholder Engagement Report Scope and Boundary 4.14 List of stakeholder groups engaged by the organization 3.5 Process for defining report content 12 4.15 Basis for identification and selection 10 3.6 Boundary of the report 12 4.16 Approaches to stakeholder engagement 10 4.17 Key topics and concerns 12 3.7 State any specific limitations on the scope or boundary 12 3.8 Basis for reporting on joint ventures, subsidiaries 12 3.9 Data measurement techniques 12 3.10 Re-statements of information provided in earlier reports 12 3.11 Changes in the scope, boundary, or measurement methods 12 applied in the report 3.12 GRI content index 44 3.13 External assurance for the report 12 10 Performance Indicators Page ECONOMIC PERFORMANCE Emissions, effluents, and waste Economic performance EC1 Page Direct economic value generated and distributed EN16 Total direct and indirect greenhouse gas emissions - EN17 Other relevant indirect greenhouse gas emissions 29 - EC2 Risks and opportunities due to climate change 29 EN18 Initiatives to reduce greenhouse gas emissions EC3 Coverage of the organization’s defined benefit plan obligations 20 EN19 Emissions of ozone-depleting substances - EC4 Significant financial assistance received from government - EN20 NOx, SOx, and other significant air emissions - Market presence EC5 Range of ratios of standard entry level wage compared to local - minimum wage EC6 Policy, practices, and proportion of spending on locally-based suppliers EC7 Procedures for local hiring - EN21 Total water discharge EN22 Total weight of waste by type and disposal method 29 31 and appendix - EN23 Significant spills EN24 Transported waste 31 - EN25 Identity and protected status of water bodies - 18 Products and services Indirect economic impacts EC8 Development and impact of infrastructure investments EN26 EN27 and services provided primarily for public benefit EC9 Significant indirect economic impacts Initiatives to mitigate environmental impacts of products 27 and services 40 to 42 Products and packaging materials that are reclaimed - 31, 43 Compliance ENVIRONMENTAL PERFORMANCE EN28 Monetary value of significant fines 34 Materials EN1 Materials used EN2 Materials used that are recycled input materials 27 - Energy EN3 Direct energy consumption 28 EN4 Indirect energy consumption 28 EN5 Energy saved 28 Initiatives to provide products and services with 28 EN6 low power consumption EN7 Initiatives to reduce indirect energy consumption 28 Water EN8 Total water by source 30 EN9 Water sources significantly affected 30 EN10 Percentage and total volume of water recycled and reused - Biodiversity EN11 Location and size of land owned EN12 Impacts on biodiversity EN13 Habitats protected or restored EN14 Managing impacts on biodiversity EN15 Number of species affected by operations, by level of extinction risk 33 33 33 Transport EN29 Impacts of transporting products and other goods and materials - EN30 Total environmental protection expenditures and investments - Performance Indicators Page Page SOCIAL PERFORMANCE Security practices LABOR PRACTICES AND DECENT WORK PERFORMANCE HR9 Security personnel trained in aspects of human rights - Employment LA1 Total workforce by employment type and contract, and region LA2 Rate of employee turnover LA3 Benefits provided to employees 16 19 to 20 Labor/management relations LA4 Collective bargaining agreements LA5 Minimum notice period(s) regarding operational changes SOCIETY PERFORMANCE Community SO1 Manage the impacts of operations on communities 36 a 39, 41 Corruption 25 SO2 Analyzed for risks related to corruption - SO3 Trained in organization’s anti-corruption policies and procedures - SO4 Actions taken in response to incidents of corruption - Occupational health and safety LA6 Represented in formal joint management–worker health and safety committees Public policy - SO5 Participation in public policy development and lobbying 21 SO6 Contributions to political parties LA7 Rates of injury, occupational diseases, lost days, and absenteeism LA8 Education and training LA9 Health and safety topics covered in formal agreements with trade unions - 20 e 21 Anti-competitive behavior SO7 Average hours of training LA11 Programs for skills management and lifelong learning LA12 Performance and career development reviews Legal actions for anti-competitive behavior, anti-trust, - and monopoly practices Training and education LA10 15 25 22 Compliance SO8 Monetary value and non-monetary sanctions for noncompliance - with laws and regulations Diversity and equal opportunity LA13 Composition of governance bodies LA14 Ratio of basic salary of men to women 19 PRODUCT RESPONSIBILITY PERFORMANCE Customer health and safety PR1 PR2 Investimentos e processos de compra HR1 Investment agreements that include human rights clauses - HR2 Suppliers and contractors that have undergone screening - on human rights and actions taken Training on human rights Incidents of discrimination and actions taken Operations in which the right to exercise freedom of association - PR3 Type of product and service information required by procedures PR4 Non-compliance concerning product and service information 39 - and labeling - PR5 Practices related to customer satisfaction 39 Marketing communications - PR6 and collective bargaining may be at significant risk Adherence to laws, standards, and voluntary codes related 39 to marketing communications PR7 Non-compliance with regulations and voluntary codes - concerning marketing communications Child labor HR6 - Product and service labeling Freedom of association and collective bargaining HR5 Incidents of non-compliance with regulations and voluntary codes concerning health and safety Non-discrimination HR4 36 a 39 of products and services are assessed for improvemen HUMAN RIGHTS HR3 Life cycle stages in which health and safety impacts Operations identified as having significant risk for incidents of child labor 15 Customer privacy Forced and compulsory labor HR7 Operations identified as having significant risk for incidents PR8 Complaints regarding breaches of customer privacy and losses - of customer data 15 of forced or compulsory labor Compliance Security practices HR8 Security personnel trained in aspects of human rights PR9 - Non-compliance with laws and regulations concerning the provision and use of products and services - APPENDIX DISCHARGE OF EFFLUENTS Plant Country Destination of Discharge 1 Viamão (RS) Brazil Lagoa dos Patos 2 Agudos (SP) Brazil Lençóis River 3 Camaçari (BA) Brazil Concessionária Cetrel 4 Anápolis (GO) Brazil Córrego das Antas 5 Contagem (MG) Brazil Córrego São João 6 Cuiabá (MT) Brazil AndCuiabá River 7 Almirante Tamandaré (PR) Brazil Iguaçu River 8 Goiânia (GO) Brazil Meia Ponte River 9 Guarulhos (SP) Brazil Guaracau River 10 Jacareí (SP) Brazil JaguarI River 11 Jaguariúna (SP) Brazil JaguarI River 12 João Pessoa (PB) Brazil Riacho Mussuré 13 Jundiaí (SP) Brazil Concessionária DAE 14 Juatuba (MG) Brazil Ribeirão Serra Azul 15 Cabo (PE) Brazil Pirapama River 16 Sapucaia do Sul (RS) Brazil Arroio José Joaquim 17 Lages (SC) Brazil Cahará River 18 Huachipa Peru Huaycoloro River 19 Teculután Guatemala Quebrada Barranca Seca 20 Guayaquil Ecuador Daule River 21 Sullana Peru Dren Troncal Cieneguillo 22 Aquiraz (CE) Brazil Pacoti River 23 Teresina (PI) Brazil Parnaíba River 24 Curitiba (PR) Brazil Concessionária Sanepar 25 Barquisimeto Venezuela Rede Cloacal Industrial 26 Estância (SE) Brazil Fundo River 27 San Martin Dominican Republic Haina River 28 Manaus (AM)* Brazil Córrego dos Franceses e Igarapé do 40 29 Mogi Mirim (SP) Brazil Mogi Mirim River 30 São Gonçalo do Amarante (RN) Brazil Concessionária Sitel 31 Piraí (RJ) Brazil Piraí River 32 Rio Janeiro (RJ) Brazil Guandu River 33 Brasília (DF) Brazil Concessionária CAESB 34 São Luis (MA) Brazil Ribeirão Pedrinhas 36 Porto Alegre (RS)** Brazil Lake Guaíba 37 Puan** Argentina Laguna de Brizola 38 Paysandú** Uruguay Uruguay River 39 Nueva Palmira** Uruguay Uruguay River * There are three production units located in Manaus.. Two of these – the beverage factory and a metal Factory – use the same river for the discharge of effluents (Córrego dos Franceses). ** These facilities are malt factories. Credits Text Editora Contadino Graphic design fmcom Photos AmBev