Frucor Suntory Oceania 2023 Sustainability Report

Sustainability Report

CEO Message

In 2023, we have made strides towards our 2030 sustainability goals by leveraging innovative technology, forging strategic partnerships, and rallying our teams into action. We are continuing to explore innovative ways to increase efficiencies in water and waste, reduce our carbon emissions and increase the recyclability of our products.

Through our work, we continue to serve our people and the communities where we live and work. We are committed to building an environment where everyone thrives and can show up to work as their authentic selves. Part of this work involves fostering a culture where our people are enabled to give back through donations and volunteering. Together, we are proud of the partnerships we have built with New Zealand Food Network to address food waste, and with Keep New Zealand Beautiful on our Mizuiku Education Programme which helps educate New Zealand children about the significance of the water cycle.

As we work towards our bright future as Suntory Oceania, we have made tremendous progress in the construction of our new carbon neutral facility located in Queensland, Australia

— an investment that will set a new standard for sustainability in the FMCG industry. To realise these ambitious goals, we are harnessing Queensland’s abundant sunshine and installing over 7,000 on-site solar panels. This source of clean energy will be supported by a Biomass Boiler, Organic Rankine Cycle (OCR) Boiler and renewable energy supplied by CleanCo to minimise our carbon footprint as we expand our operations.

As we become Suntory Oceania and transform into a multi-beverage business, this will be our last Sustainability Report as Frucor Suntory. A final thank you to our team for their dedication to our sustainability goals and to partner with our customers and suppliers as they strive to achieve their own goals.

We look forward to sharing our new sustainability strategy and ambitions for our multi-beverage partnership with you later in 2024.

Sincerely,

Darren Fullerton CEO, Frucor Suntory – Oceania

About Us

Frucor Suntory is a leading beverage company in Australia and New Zealand, known for its diverse portfolio of products and brands including V Energy, Suntory BOSS Coffee, H2GO, Just Juice, Maximus, and Fresh Up. We’re also the bottling partner for Pepsico’s beverages in New Zealand.

Last year, we unveiled plans with Beam Suntory (now known as Suntory Global Spirits) to create Suntory Oceania, a new AU$3B multi-beverage partnership across Australia and New Zealand. With a combined portfolio of over 40 leading brands, supported by two local manufacturing sites, five distribution centres, and a team of more than 1,500 dedicated employees, we’re excited to bring this vision to life.

We’re proud to be part of Japanese beverage and food business, Suntory, since 2009, a family-owned business with its inspiring 120-year vision in which we share a purpose to inspire the brilliance of life, by creating rich experiences for people, in harmony with nature.

Growing for Good Our Approach to Sustainability

In 2023, our sustainability approach has focused on achieving these four targets by 2030:

1 2 4 3

Zero waste to landfill at production facilities

100% recyclable packaging

In addition to these targets, we've implemented various programmes dedicated to:

Championing a diverse and inclusive workplace

Innovating our portfolio to provide consumers with a wider range of choices

Prioritising the health, safety, and wellbeing of our employees Supporting local communities through various initiatives

Our commitment to environmental and social responsibility extends to our partners through our procurement programme for all Frucor Suntory suppliers with support from the SEDEX program. We’re also ISO 14001 certified.

This sustainability report aligns with the calendar year and all references to the year are for 1 January - 31 December 2023.

2030 Sustainability Targets

Progress tracking

• Water metres installed at Wiri.

• Water measurement dashboard created for easy monitoring of water usage across the business.

• V Green reformulation requires less water.

• Re-labelling of office bins improved waste segregation.

• Waste education programmes rolled out across Auckland offices.

• Waste to Wow competition raised recycling awareness.

• Food and Beverage Carton Recycling Scheme launched in New Zealand.

• Lightweighting V glass bottles.

• Completed a roadmap for 50% reduction of Scope 1 and 2 emissions for the Wiri distribution centre.

• Fitted LED lights across the Wiri distribution centre.

• New partner ANL to only use biofuel for marine shipping.

• V Green reformulation requires less natural gas consumption.

• Solar panels installed at NSW, QLD and VIC distribution centres.

• Co-shipping initiatives across New Zealand and to Australia.

• Replacing outdated chillers with energy-efficient models.

* The emissions data presented in this report has been sourced from 1 January - 31 December 2023. The final emissions figure for 2023 will be audited in May 2024.

WaterWater is an essential resource for both our business operations and our communities. Using water responsibly is crucial and we are taking proactive steps to conserve it. Guided by Suntory’s commitment to “Live Like Water” (Mizu to Ikiru), we are focused on safeguarding this invaluable resource for future generations.

In line with this commitment, we set an ambitious target of reducing our water consumption by 33 per cent from our 2015 baseline. This goal was established after exceeding our initial water savings target of 20 per cent, nine years ahead of schedule in 2021. As we pursue this goal and look for new ways to use less water across our operations, in 2023 we experienced a marginal increase in our water usage by 2 per cent . This rise can be attributed to the installation of a new water treatment plant, which is vital for maintaining the quality of our products during manufacturing. The installation of this equipment requires frequent cleaning and as a result increased our water usage.

We have also implemented proactive strategies to not only recover but surpass our water reduction targets for the future. For instance, we installed water metres and live dashboards across our Wiri facility in New Zealand, enabling real-time monitoring and analysis of water usage within each department. These new tools are empowering our teams to see and identify any inefficiencies to ensure we can promptly optimise practices and adhere to industry best practices.

We have also embraced innovative approaches to how we produce our beverages. For example, during the re-formulation of our iconic V Green energy drink, we eliminated the need for pasteurisation. Pasteurisers consume energy and water during the heating and cooling process. By removing this from the manufacturing process of V Green, we have saved approximately 800,000 litres of water that would have otherwise been used.

Waste

We recognise our responsibility to protect our environment and are working towards an ambitious goal of achieving zero waste to landfill across our manufacturing and distribution facilities by 2030. We will achieve this by closely monitoring waste production, sorting and management on site to foster a culture of waste reduction in our workplace whilst also providing ample opportunities for our customers to recycle our products.

In 2023, we conducted a comprehensive waste audit to identify high-priority areas for reducing the volume of waste sent from our Wiri operations to landfill. To address this, we launched a communications campaign across our New Zealand operations, empowering our employees to actively minimise waste sent to landfill. We repurposed several rubbish bins across two offices into receptacles for soft plastics, recycling, organic waste and flat cardboard - each clearly labelled for proper waste segregation. While these adjustments may seem small, they have a significant impact on the cumulative volume of waste sent to landfill over the course of a year.

To ensure alignment with our new waste management strategies, we held engagement sessions to educate our staff on proper waste disposal practices. To enhance morale and creativity around waste management, we also initiated a Waste to Wow competition, encouraging staff to create art from waste and recyclable materials.

These initiatives have led to a noticeable decrease in the amount of soft plastics and compostable items sent to landfill. By introducing new signs and educational sessions, we’ve also encouraged a positive mindset among our team, setting a solid foundation for our ongoing effort to eliminate waste entirely.

There is also opportunity by collaborating with our community to support our ongoing efforts to reduce our waste going to landfill . We actively partner with the New Zealand Food Network and Food Bank in Australia to direct excess product to local food banks, preventing these products from ending up in landfills and ensuring they reach those in need.

Packaging

We’re dedicated to fostering a thriving circular economy, ensuring our products have the best chance to remain out of landfills.

We’ve achieved 94 per cent recyclability of our packaging recyclability target, a significant milestone on our journey towards our goal of 100 per cent by 2030. With just a small portion of our portfolio left to address, we continue to seek innovative ways to improve the recyclability across our portfolio

For example, we use recycled polyethylene terephthalate (rPET) and clear PET across 32 per cent of the portfolio. In the past year, we have also successfully reduced the bottle weight of our V Energy glass bottles by 10g per bottle. Not only does lightweighting help conserve resources but it also results in lower transportation emissions as our products are lighter and smaller, requiring less fuel to transport.

Empowering consumers to responsibly dispose of our packaging is integral to our sustainability efforts. As a founding partner of the Food and Beverage Carton Recycling Scheme (FBCRS) in New Zealand, we’re pioneering a national recycling initiative aimed at diverting food and beverage cartons from landfills and repurposing them into new, low-carbon building products. In addition to ensuring clear labelling regarding end-of-use disposal for consumers, we’ve added the Australasian Recycling Label (ARL) onto our V Energy cans and paperboard packaging. This label, set to debut in the market in the second half of 2024, will provide clear recycling instructions, simplifying the recycling process for consumers and furthering our commitment to a circular economy.

Emissions

We recognise the urgent need to reduce greenhouse gas emissions across our operations to help tackle the global challenge of climate change. This commitment is central to our belief that we can grow our business while minimising our carbon footprint and building a more sustainable future for generations to come.

We have committed to reducing scope 1 and 2 emissions by 50 per cent and scope 3 emissions by 30 per cent from our 2019 baseline. Our emissions are calculated annually and independently audited and certified by Toitū Envirocare.

Scope 1 and 2 emissions:

In 2023, our efforts resulted in a 27 per cent reduction in scope 1 and 2 emissions below our baseline. We’ve made changes across our business operations to achieve this reduction, including:

• The installation of solar panels at our distribution centres in New South Wales, Queensland, and Victoria resulted in a reduction of 9,900 tonnes of CO2 emissions, aligning with our commitment to reduce reliance on traditional energy sources.

• At our Wiri distribution centre in Auckland, we have cut emissions from our electricity usage by swapping out halogen light bulbs to energy-efficient LED bulbs. The switch to LEDs has lead to an annual saving of 560,000 kWh, demonstrating how small changes can lead to significant benefits.

• Our innovative approach to beverage production has also played a role in reducing carbon emissions. By reformulating our V Green energy drink and eliminating the need for pasteurisation, we’ve reduced our carbon emissions during the manufacturing process, highlighting the potential for sustainable product development.

• As part of our ongoing partnership with Mercury New Zealand, we’re using Energy Attribution Certificates (EACs) from the New Zealand Energy Certificate Scheme (NZECS) to offset our electricity consumption. These certificates support Mercury’s Waipipi Wind Farm in South Taranaki, helping us align our energy use with green energy production. Over two years, this initiative has already us save 2,900 tonnes of CO2 emissions.

• We’re also actively upgrading our vehicle fleet, moving towards hybrid models to enhance efficiency and cut emissions. In 2023, we introduced 40 new hybrid vehicles, with 76 more slated for 2024 and plans for an additional 118 as we transition to Suntory Oceania.

I couldn’t believe the efficiency of the hybrid car compared to my petrol vehicle, especially considering the number of kilometres I cover each week. I was surprised how much less fuel it was using, and it’s a massive game-changer for my role.

- NSW Field Manager

Scope 3 emissions:

In 2023, our scope 3 emissions remained unchanged from the previous years, standing at 5 percent above our baseline. As our business continues to grow, we’re actively addressing this challenge through collaborative supplier partnerships and investment in decarbonisation technologies across our supply chain, including:

• Co-packing shipping containers crossing the Tasman and travelling along the coast of New Zealand with light-weight goods to maximise efficiency and reduce carbon emissions from transportation.

• Strategic shift from truck to rail for transporting products from our Wiri distribution centre to Ports of Auckland.

• Utilisation of biofuels for our trans Tasman shipping with marine transport company ANL.

• Continued focus on replacing outdated chillers with modern, eco-friendly alternatives. We’ve now decommissioned 2,200 old chillers and installed 4,600 energy-efficient models across Australia and New Zealand, achieving substantial reductions in carbon emissions while improving operational efficiency.

GOAL

* The emissions data presented in this report has been sourced from 1 January - 31 December 2023. The final emissions figure for 2023 will be audited in May 2024.

Our People

Our commitment to sustainability extends to fostering positive social impact within our organisation. We prioritise diversity, equity, and inclusion-leading initiatives and policy improvements to create an environment where every individual feels valued, respected, and empowered to contribute their best.

Our dedication to fostering an inclusive environment is evident through the success of our Employee Impact Groups (EIGs). These groups serve as platforms for employees to come together, share experiences, and drive positive change across key areas including cultural diversity, all genders, rainbow, accessibility, and life stages.

In 2023, the Employee Impact Groups supported:

• The introduction of new wellbeing spaces: The zen and focus rooms located in our Auckland and Sydney offices provide areas for relaxation, prayer and concentration to enhance our supportive work environment.

• Conducted LGBTQ+ inclusion assessment: Partnering with Pride Pledge in New Zealand, we assessed and improved our practices, earning recognition as ‘Advancing’ in LGBTQ+ inclusion.

• Created Women@FrucorSuntory network: Hosting impactful events, the network empowered and supported women in our organisation, advancing gender diversity.

• Continued our Inclusive Leadership Training programme: Introduced our Conscious Inclusion workshop to further upskill our leaders in fostering a culture of belonging and respect for all employees.

• Awareness and celebration of key dates and milestones: Key awareness raising campaigns for Te Reo Māori Language Week, International Women’s Day, Pride, Gumboot Friday and Movember.

Our Community

As a responsible corporate organisation, Frucor Suntory is dedicated to giving back to the communities where we live and work. Our commitment to environmental protection and community support is deeply ingrained in our values, and we engage with these communities through various avenues including donations, fundraising and volunteering.

Donations

We believe in leveraging our resources to benefit those in need. In 2023, we donated over 40 pallets of beverages to support various initiatives. These included flood relief to food banks operated by the New Zealand Food Network and The Fono during the 2023 New Zealand Floods and Cyclone Gabrielle. Additionally, we supported the efforts of the Rural Fire Service in Queensland for their work battling bushfires, and ongoing donations to Foodbank across Australia to support communities in need.

Metcash’s ‘Buy One Get One Tree’

Teaming up with our Australian customer Metcash, we participated in the ‘Buy One Get One Tree’ initiative at IGA. For every purchase of a V Energy 4x500mL, we donated a native tree. Working alongside other partners, our contribution supported Greening Australia, a national environmental not-for-profit, in planting 20,000 trees to help restore Australia’s unique landscape.

Volunteering

Our employees are empowered to make a difference in their communities through our volunteering policy, which allocates eight hours of volunteer time to each employee annually. In 2023, we introduced Philanthropy Guidelines to ensure a consistent approach to our efforts and to provide Volunteering Toolkits to make it easier for our people to volunteer their time.

This year, over 65 volunteers took part in our annual clean up days in Sydney and Auckland, actively ollecting waste to prevent litter from entering local waterways. Through gift wrapping activities in the lead-up to Christmas, we helped to raise money for the Wesley Mission, supporting their work to help Australians facing homelessness, addiction and mental health issues. Our people also volunteered for the New Zealand Food Network during the festive season, helping to pack and sort over 13.5 tonnes of food, providing nearly 30,000 meals to families in need.

Mizuiku Upstream Battle

Mizuiku launched in New Zealand through Keep New Zealand Beautiful. As a key natural resource in our products, we are committed to ensuring water is looked after now, and into the future. Through Suntory’s Mizuiku programme we partnered with Keep New Zealand Beautiful to expand its school education programme, Upstream Battle. Mizuiku Upstream Battle is a hands-on citizen science programme that helps people better understand the root causes of water pollution and what can be done to mitigate it.

Aligned with Suntory Mizuiku’s mission to educate future generations about water conservation, Upstream Battle engaged over 5,500 students from 128 primary schools in 2023. We look forward to expanding the programme further in 2024, reaching more schools and training more programme facilitators.

New Zealand Food Network Partnership

We actively partner with the New Zealand Food Network to enhance food security and reduce food waste. In 2023, our contributions amounted to approximately 5,200 kilograms of gifted product and 252,500 kilograms of surplus product, resulting in over 1.1 million food servings to families in need. Additionally, our dedicated staff volunteered to distribute essential food items, packing and sorting over 13.5 tonnes of food during the festive season, ensuring that nearly 30,000 meals reached those in need. We remain committed to continuing our partnership, expanding our impact, and driving positive change in the fight against food insecurity and waste.