Diageo: New Sustainability Strategy and Framework to Help Improve Performance

Accenture developed a framework designed to help Diageo align its corporate social responsibility initiatives with its overall strategy.

The overall intent was to enhance business performance while attempting to maximize potential benefits for all Diageo’s stakeholders in the wider community, thus linking sustainability with the achievement of high performance.

Diageo is the world's leading premium drinks business with an outstanding collection of international brands across spirits, wine and beer. These brands include Smirnoff, Johnnie Walker, Captain Morgan, Baileys, J&B, José Cuervo, Tanqueray and Guinness. Diageo employs more than 20,000 people globally. In 2010, the company reported profits of £2.75 billion ($4.5 billion) on sales of £12.958 billion ($21 billion).

Diageo operates in an industry characterized by growing pressure from a wide community of stakeholders, including regulatory authorities, to demonstrate social commitment. Consequently, the company wanted to refresh and refine its corporate social responsibility strategy and raise the strategy's profile within the company.

At the same time, however, Diageo wanted to align its corporate social responsibility activities with its broader strategy in order to generate maximum benefit for its own shareholders as well as the broader community.

Accenture conducted a thorough analysis of trends in the industry, prioritizing each in terms of potential impact on Diageo’s sustainability strategy going forward. We used a methodology that measured the sustainability impact (society, environment, economy) and the likely business impact (cost, risk, revenue, intangibles) to score the trends in terms of total impact.

Twelve key executives were interviewed, and then a corporate social responsibility framework was created. The framework included several pillars: leadership, people, capabilities and people; performance management; business planning; and delivery for Diageo to implement and communicate with stakeholders.

We put forward recommendations under each of these key pillars within the framework designed to deliver value in the following four areas: driving revenue; reducing cost; mitigating potential risk; and building intangibles such as brand, goodwill and reputation. The overall outcome of our recommendations was to help improve business performance, shareholder and stakeholder value, and help position Diageo as a pioneer in corporate social responsibility.

We also included key partnerships with customers, consumers and competitors in the framework, which was structured to make it easy for Diageo to implement the strategy and communicate with stakeholders. Accenture also provided a detailed road map to guide the implementation, including an action plan register that drilled down into each area to indicate necessary steps, the expected outcome and the estimated timeline for implantation and delivery.

The new corporate social responsibility framework is helping Diageo clarify its strategy to top management and identify business priority areas. The framework also provides a clear guide for consistent implementation of corporate social responsibility initiatives within an overall strategic framework.

The use of key performance indicators also helps make the corporate social responsibility program quantifiable, allowing Diageo to identify potential benefits and make a stronger case for investment. The strategy has key buy-in from members of the executive board and is a top priority of Diageo’s corporate strategy.