Diageo dilutes target to reach net zero direct emissions by 2030

Drinks giant Diageo has today announced it has diluted a number of its sustainability targets, including a flagship goal to achieve net zero emissions across its direct operations by 2030.

Announced alongside the company's Annual Report, the maker of Johnnie Walker, Guinness, and Smirnoff confirmed a new target to reduce its Scope 1 and 2 emissions by 50 per cent by 2030 against a 2022 baseline, before then reaching net zero for its direct operations by 2040, a full decade later than originally planned.

It also announced it now intends to cut its Scope 3 emissions by 26 per cent by 2030, representing a downgrade on the previous goal to halve value chain emissions by the end of the decade.

However, a long term goal to achieve net zero across Scopes 1, 2 and 3 by 2050, which was set in 2020 as part of Diageo's Spirit of Progress plan, remains unchanged.

Diageo revealed it has continued to make progress in cutting its emissions, reducing its direct greenhouse gas emissions by 4.9 per cent between 1 July 2024 and 30 June 2025 compared to the previous financial year. 

But the company argued plans to deliver on it ambitious suite of original targets for 2030 had been hampered by the failure of regulations, policy frameworks, and clean tech infrastructure to advance "at the scale required".

"In 2020, when we set ambitious environmental sustainability goals as part of our Sprit of Progress action plan, we didn't have all the answers," an update from Diageo stated. "But we knew progress would require innovation, long-term commitment and supportive policy environments. Five years on, we have better data, deeper insights and a clearer view of the practical realities to deliver net zero." 

Speaking exclusively to BusinessGreen, Ewan Andrew, president of global supply chain and procurement, and chief sustainability officer at Diageo, said the new carbon targets would also be based on a 2022 baseline as opposed to the original 2020 date - which due to the covid pandemic represented an "outlier" compared to the company's emissions performance in 2019, 2022, and 2023.

"Covid had just broken and we had a lot of reduced production linked to restrictions and the impact on consumer demand that year," he said. "Our production was really low, so it was a false baseline to base our journey off. If you look at our reports for the next couple of years, our Scope 3 came up quite significantly because it was just the natural return to our normal level of volume."

Diageo also today confirmed its 100 per cent renewables goal will be superseded by new targets, but insisted the firm would remain committed to a wholesale switch to green electricity by 2030 through the RE100 initiative.

In addition, the FTSE100 firm maintained that while it had extended the deadline for a number of its carbon targets the changes have been validated by the Science Based Targets initiative (SBTi) and remain aligned with a 1.5C temperature goal.

"The way I articulated it [target changes] for my board, for myself, and for my organisation, is that we're not slowing down on decarbonisation, we're just not going to accelerate as quickly as we'd hoped," explained Andrew.

Diageo also today revealed it will seek to increase the percentage of recycled content in its packaging to 50 per cent by 2030, downgrading a previous target of 60 per cent, and has retired a goal to reduce its packaging weight by 10 per cent. The changes come after the firm hit a 2025 goal to use 35 per cent recycled content in its PET bottles.

As the firm's most strategic near-term climate risk, Diageo's water goals - including targets to deliver a 40 per cent improvement in water use efficiency in water-stressed areas by 2030 - will remain unchanged.

The company also today confirmed its water efficiency has improved by 20.6 per cent against a 2020 baseline and it remains on track to replenish more water than it uses in water-stressed areas by 2026. And the company revealed it has already surpassed a goal to provide water sanitation and hygiene facilities near its sites and has implemented more than 150 water replenishment projects since 2020.

"Sustainability has never been simple," Diageo's update stated. "Collaboration remains essential and we cannot achieve our goals in isolation. We're clearer than ever on what it takes to achieve our objectives with renewed focus and expert knowledge. By acting on, delivering and reviewing our commitments we are taking steps to make our business more resilient while preserving our license to operate and grow."

Reflecting on the five years since the launch of the company's Spirit of Progress plan, Andrew maintained the firm was "very proud" of the progress it has made, but the broader pace of change across the global economy had made hitting the company's initial targets more challenging.

"I think what we learned about these five years is that it's the innovation gap that has closed quite quickly," he said. "There's a lot of clean technology that's been developed that can allow you to kind of decarbonise your operations. But what we're not seeing is infrastructure move at the same pace of development. We're not seeing policies and regulatory authorities create the environments which allow businesses to come together in a way that we'd like to see."

Moving forwards, Andrew said Diageo was confident in delivering a 50 per cent cut in carbon emissions by 2030, before reaching net zero across its direct operations by 2040, as it draws on the lessons learned over the past five years and continues to deploy clean technologies across its portfolio.

"We now have very specific road maps within our Scope One and Two requirements, we know exactly what our technology choices are, and what our investment decisions will be, and we're going to continue to move through and deliver those," he said.

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