Budweiser Brewing Company APAC Limited (1876) Earnings Call Transcript & Summary

Welcome to Budweiser Brewing Company APAC Limited ESG Webcast. Hosting today's webcast today from Budweiser APAC are Mr. Jan Craps, Executive Director, Co-Chair of the Board and Chief Executive Officer; Mr. Craig Katerberg, Chief Legal and Corporate Affairs Officer; Ms. Linda Qian, Chief People Officer; Mr. Jan Clysner, VP, Procurement and Sustainability; Mr. Terry Yao, Procurement Director, Sustainability and Smart Barley; and Ms. Emily Rose, ESG Manager. Materials of this webcast can be found on Budweiser APAC's website at www.budweiserapac.com under the Investors tab on the Results & Presentations page. [Operator Instructions] Before proceeding, we would like to remind you that some of the information provided during this webcast, including our answers to your questions, may contain statements of future expectations and other forward-looking statements. These expectations are based on management's current views and assumptions and involve known and unknown risks, uncertainties and other factors beyond our control. Please refer to the slide of the presentation for the full disclaimer. It's now my pleasure to turn the conference over to Mr. Jan Craps. Sir, you may begin.

Thank you, Desmond. Good morning, good afternoon, everyone. I apologize for the technical issues. Thank you for joining our ESG webcast, which also happens to coincide with Earth Day. I hope you're all safe and well. We are delighted to share with you how ESG has been embedded in our daily operations, our commitments towards these topics and our progress thus far. I'll first give a brief overview of our company; and then turn it over to Emily to talk about what we've done in the environmental side; followed by Linda to talk about community engagement and Dream-People-Culture; and lastly, to Craig to talk about our corporate governance. We will then be joined with Jan, VP of Procurement and Sustainability; and Terry, Procurement Director, Sustainability, for some Q&A after. Let's begin with a brief introduction to Budweiser APAC. We are a pan-Asian brewer operating in over 35 countries and territories with over 50 brands. Our regional footprint is comprised of 52 breweries and 53 distribution centers across our key markets such as China, South Korea, India and Vietnam. As of the end of 2020, we had approximately 26,000 colleagues representing over 20 nationalities. About 39% of our colleagues are females assuming important roles across our different functions and markets. As many of you are aware, on September 30, '19, we were listed on Hong Kong Stock Exchange with a stock code 1876, the year in which Budweiser was first brewed. As a regional champion, we aim to build even stronger relationships with our local stakeholders, have a more localized and agile decision-making process, champion consolidation in the Asia Pacific beer industry and attract exceptional talent in the region by leveraging our pan-Asian platform. We are the most profitable brewer across Asia Pacific, with growth potential and opportunities for further margin expansion. In 2020, a year of turbulence and uncertainties, I'm extremely proud of our colleagues who have been embracing challenges with resilience and agility. Our commercial performance has been impacted by COVID-19-related restrictions on the sales channel. In 2020, we generated USD 5.6 billion of revenue, $1.6 billion EBITDA. We also maintained a strong balance sheet with additional efficiencies identified in our working capital and capital expenditures. Our net cash position increased by USD 387 million as compared to the end of '19 to approximately $1.3 billion at the end of 2020. As such, our recommended dividend per share increased from USD 0.0263 in 2019 to USD 0.0283 in 2020. Our purpose at Budweiser APAC is to bring people together for a better world. We do so safely and responsibly. We are committed to brewing the best beers in the best way for the environment and our communities because in the brewery business, we all know that a healthy environment and thriving communities are key ingredients to sustainable business. Our purpose is supported by our 10 principles based on Dream-People-Culture, each built on ownership, informality, candor, transparency and meritocracy. Let me go through some of our principles. We start with the first most important principle, dreaming big. Our dream is to build a profitable growing company. As Asia's leading and most profitable beer company, we are passionate about growth. Our greatest strength is our people, which is our second principle. Our people are curious, bold and resilient. We actively recruit, develop and retain people who can be better than ourselves, which is our first principle. We want all colleagues to feel respected and empowered to bring their authentic selves to work every day. This leads me to our fourth principle. We are a company of owners. We are united by our strong culture, which is a key element of our success. Number five, owners take results personally and lead by example. Numbers seven, we constantly strive to deliver greater value to our stakeholders, such as our consumers, customers and business partners, while maintaining sustainable top line growth in a healthy way. And our final principle, number ten, we never take shortcut, as we believe this is what true authentic owners should do. We are deeply connected to our communities across the region and want to be a part of the solution where it matters where we all thrive. Our reputation is the outcome of doing the right things consistently. That's how we build the company to last for the next 100-plus years. We support the United Nations SDGs and the UN 2030 Agenda for Sustainable Development and strive to contribute directly to their goals to our 2025 sustainability goal, smart drinking goals, the road safety initiatives, our volunteering programs and our disaster relief effort. We ensure wherever possible to use our scale and partnerships to make a positive impact, and this diagram shows how our value chain aligns with the UN SDG while building thriving community. Even before being publicly listed, we have been embedding ESG-related topics into our daily operations. As part of the ABI network, we share the same 2025 sustainability goals in smart agriculture, water stewardship, circular packaging and climate action. I'll pass this over to Emily, who will take you through our journey of these goals and initiatives; followed by Linda to talk about the social pillar; and Craig for government. Emily, please share with us what amazing things Budweiser APAC has done on the environmental side.

Thank you, Jan. Good morning, good afternoon, everyone. I'm Emily, leading ESG for Budweiser APAC. And today, I'd like to showcase our strategy, key goals and progress on sustainability on the environmental side. Here at Budweiser APAC, we believe sustainability isn't just part of our business. It is our business, and we are working together with our teams across our company to embed sustainability in everything we do to ensure we strive to make the world a better place. Here are 4 key sustainability drivers that we focus on. Supply security, which is sourcing the highest quality ingredients, being efficient, resourceful and effective with our resources. Next is our people, who are seeking that sense of purpose, pride to work with us. It's not only vital that we want to attract the best talent, but also to keep them engaged. Our greatest strength is our people, and we will support every individual [indiscernible]. Consumers awareness of our environmental and social impact has been increasing and have been asking questions. This is an opportunity for us to keep stepping up, innovate and drive meaningful value. This leads to my next point, innovation; an important driver in building a sustainable future for us and our stakeholders. Therefore, we will continue to stay curious and find solutions to problems. As mentioned before, sustainability has been embedded into our daily operations from first, sourcing the highest-quality ingredients, bring the best beer in the best way, which leads to driving efficiencies and value creation. Of course, none of these would be possible in sustainability without innovation. Therefore, we continue to embrace new technologies. Finally, we must ensure that our stakeholders hear our story on how we deliver value to them. We will ensure that we keep pushing boundaries, so we continue to do more as we are never really satisfied. So do we have a sustainability goal? Yes, we do. We have our 2025 sustainability goals, and it's the most ambitious yet. Not only does it address what part we can play, but also how we can ensure our environment and communities where we serve first and stay resilient. Agricultural product is important to beer. Brewers and farmers have highly common relationship with the global footprint. We depend heavily on farms because without a consistent supply of high-quality grains and hops, we cannot ensure the production of quality beer. The primary ingredients of beer includes water, and that is why we always state here, no water, no beer. These hops and [indiscernible] grains such as barley and rice. We have chosen these 4 goals, smart agriculture, water stewardship, circular packaging and climate action, as we strongly believe that these are the areas that are close to our core business and where we can bring the most changing trade value. So what are some of our key achievements we achieved in 2020 under each of the 2025 sustainability goals for pillar? Under smart agriculture, 92% of our farmers in India met our criteria for skilled, meaning the farmers have access to good barley varieties and technical training. 100% of our farmers are connected, meaning with whom who are regularly in touch with to share best practices from how to grow their crops, the latest market price or even how to ensure the health and safety on their farms. 83% of our farmers are financially empowered, means we help them to grow their businesses for the long term and ensure that they have access to financial tools they need, ensuring they can improve their resiliency and long-term sustainability. Water is a key ingredient in all our products. It is also a critical resource for our communities. It is our role as a world-leading brewer to work towards ensuring our communities have improved water quality and availability. We have set ambitious water efficiency targets across our businesses, with even more ambitious goals from our brewery located in community facing high-water stress. We have been implementing new technologies and process improvements across our footprint to reduce water usage in our brewers. We were able to reduce water intensity to 2.47 water used per hectoliter of beer produced in 2020. That's a 17% reduction compared to our 2017 baseline. In India, 5 high-risk sites have been identified, and we strive to improve water availability and quality for our communities around these breweries. A collaborative approach was taken by working with our local partners, government, NGO and our community to create an integrated and sustainable solution. We replenished more than 10 million hectoliter of groundwater in these identified locations. By working alongside civil society and NGOs, we believe that we can play a positive role in building a sustained resilient communities. Across APAC, we donated approximately 1.37 million cans of emergency drinking water in 2020. Circular packaging. These are the key numbers we focus on to track progress on the results of our multiple initiatives. 53.3% of our volume was in returnable packaging, and 46.3% of our packaging was made from recycled content. The increasing of recycled content not only helps in this goal but also in carbon emissions. And finally, climate action. We are committed to reducing carbon emission by 25%. Today, we have reduced 10.2% kilograms of carbon dioxide equivalent for hectoliter compared to our 2017 baseline across our value chain. We deployed 216 alternative energy vehicles in China, including 5 hydrogen fuel cell vehicle trucks, which are empowered by cutting-edge technology to reduce carbon emission. We are proud of this achievement as it is the first mover with an AB InBev Group's global network and in China's beer industry. At our Ziyang brewery in China, we were able to switch to 100% renewable electricity, being the first in the Chinese beer market industry to accomplish and setting the benchmark for future facilities. As mentioned, our carbon reduction ambition is across the whole supply chain. We have been partnering with Huaxing, one of our key glass suppliers. Based on our best practice sharing, they had decided to install solar panels in 7 big furnaces, further reducing their footprint. We thank them for their partnership. In APAC, we have 2 pilots through our 100+ Accelerator program, Erthos and Shianco, which I'll discuss more next. It is only through collaboration and sustainability that we can solve problems. Through our 100+ Accelerator program, we look for partners who can deliver breakthrough advancements. Below is an example of a success story in APAC. Previously known as EcoPackers, Erthos has been working together with us to eliminate plastic keg caps used in India by developing eco-resin for agricultural byproducts, which are 100% compostable replacements to traditional materials used for manufacturing keg caps. Some key highlights from these were that we did a pilot test in India with 4 eco-resin samples to [ serve ] the best eco-resin to be used to replace our keg caps. In addition to our global accelerator, we also launched our very own Budweiser APAC Procurement & Sustainability Innovation Hub to empower entrepreneurs who are solving challenges in and for our communities in APAC. Below are 3 examples. Logistic resource linked with market solution of spare resource sharing by Cardinal Operations in China; converted spent malt into beer cups, coasters and ice buckets in India; and in South Korea, Re-nergy bars, granola bars made from saved grain, one of our beer byproduct, through an online crowdfunding platform. Another key highlight story I can share from our 100+ Accelerator is Yushuo, the provider for the storage -- power storage solution by reusing retired batteries from EV trucks. This completes the missing piece of the puzzle for our whole renewable energy solution. In Foshan brewery, we installed solar since 2019. This year, we launched 30 electrical heavy trucks in China and 4 in Suqian. The power storage system can store the renewable electricity from solar systems that cannot be consumed by our brewery, which then charges our EV trucks after. When the EV trucks retire, the battery from them can then be the materials for our next power source system, extending the life of the battery for another 5 years. Due to COVID-19, we faced unprecedented challenges, but it is -- if there's anything we have learned and that is our 2025 sustainability goals are the right ones, and that now, more than ever, we must focus on building long-term resilience by working together. Now I hand over to Linda, our Chief People Officer for Budweiser APAC, who will share more on our social aspect.

Thank you, Emily, for sharing what we have done in sustainability. Now I'm going to talk about our work in our community and our Dream-People-Culture. We believe that drinking beer should be a positive experience. We engaged with multiple stakeholders in achieving our smart drinking goals. Since 2016, we have been cooperating with public health efforts to help reduce the harmful use of alcohol around the world. Our aim to social norms, to influence both social norms and individual behaviors to reduce the harmful use of alcohol across our markets in dedicated social marketing campaigns and related programs by the end of 2025. We have done several marketing campaigns: Smart Drinking, No Drink Driving in China; Smart Pledge Campaign in Korea; #DrinkWiser in India; and so on. We have invested more than USD 15 million in 2020 to build smart drinking awareness and strict consumer behavior. More than [ 7,500 million ] media impressions have been generated across APAC last year. Our no-alcohol beer and then low-alcohol beer aims to ensure no-alcohol and low-alcohol beer products represent at least 20% of our total beer volume by the end of 2025. Our portfolio for this has more than 80 offerings for different consumer occasions. [indiscernible] 0.0%, [indiscernible] 0.0%, have 0.0%, or for you to choose your type of beer. We aim to place guidance labels on 70% of eligible beer volume in APAC by the end of 2020 and increase alcohol health literacy by the end of 2025. At the end of 2020, our use of guidance labels in APAC reached 70%, which exceeds our expectations. We are encouraged by our results. But here at Budweiser APAC, we are never satisfied, and that there's more work to be done to raise awareness and create value for our consumers. As a leading beer company with significant operations of road transportation fleets, one of our top priorities here is including road safely. We launched the first Chinese-translated edition of Management Practices for Safer Roads toolkit, which was codeveloped by AV InBev Group and the United Nations Institute for Training and Research in November 2020. The toolkit is empowered by digital innovation that helps detect hazardous and critical locations where extreme number of a series crash and framework corrective measures. Throughout this year, we have been recognized for our contributions. Our Harbin virtual idol, Hajiang, as a virtual road safety ambassador, helped us win this award of Road Safety Innovation by the China Ministry of Public Security. In India, we participated in Safer Roads for Gurugram initiative, where we won the prestigious Gold SABRE APAC award. At Budweiser APAC, we believe that we can play a positive impact in helping our communities prepare and respond for disasters by working with a different organizations. For example, we donated RMB 11 billion during the COVID-19 outbreak, which is including supply of protective masks and sanitizers to Wuhan Charity Federation in China; over 250,000 cans of water to isolation centers in Vietnam; KRW 1 billion worth of masks and aid to Daegu in South Korea. [indiscernible] approximately 58,000 bottles of water to Hope Bridge Korea Disaster Relief Association for the victim affected in typhoon area in Korea. And our colleagues in Vietnam donated VND 150 million to help people in the flood disaster area. We have been contributing to the community building whatever our business goals. For example, we have committed to donate to the establishment of Hope Schools in each Chinese city where we do have a brewery. To date, we have 29 Hope Schools donated in China, with 2 more under construction. So far, we have 8,600 students and then more than 900 teachers benefit from this. Volunteering and helping our communities are one of the best ways to bring people together for a better word. We have implemented several initiatives such as poverty alleviation program to help farmers in their cultivation technology and sales channels in China. Our project support more than 38,000 farmers. At Budweiser APAC, we are contributing to more than 64,000 hours in volunteering in 2020. Next, I'm going to move on to discuss the Dream-People-Culture, where in Budweiser APAC, dreaming bigger is our DNA. Our people are our biggest asset. And we strive to acquire and retain the best talent through engagement, development and respect for all. Our talent attraction philosophy is to hire highly potential talent for entry and mid-management levels and developed them for leadership position. We aim to source and promote our leadership positions from within. It's worth noting that our employee branding has been able to attract more than 50 females for our leading graduate programs, an increasing of 15 percentage points for [ accelerating ] high female talent. Our employee feedback is also important to help us to continue to improve. We conduct annual engagement surveys, along with periodic pulse surveys, which helps -- and help achieve outstanding results. Our engagement surveys has improved to 90%, which is 20% above industry norm and improved compared with 2019 of 3%, which helps us to continuously improve our engagement [indiscernible]. And also, we received a high level of trust, that 91% of our employees felt optimistic about our future, which is a 4% increase compared with last year. Our learning and development platform offers our employees and the company a resources for sustainable development and continuous learning. Our ABI University is an internal career acceleration center that partners with global leading business schools and technical schools to develop program to better prepare them for current and future challenges. More than 3,000 colleagues have attended the classroom training programs, and more than 15,000 colleagues attended online learning. The health and well-being of our colleagues are important to our company and for our success. Therefore, in China, we launched our new well-being program, We've got you covered! Centered around 4 pillars of well-being: physical, behavioral, financial and social, this program gives our colleagues the tools and resources to be healthy, resilient and be successful both at work and home. We strive to foster an inclusive workplace and increased employment of the women and in the groups across our different markets. In Budweiser APAC, we have an inclusive and diverse workforce, where we have more than 20 nationalities and 39% of female colleagues. We build a diverse and inclusive working environment by continuos working towards achieving our diversity and inclusion ambition. Throughout the year, bi-monthly best practices sharing sessions among different business units to promote equally in advancement opportunities and foster inclusive workforce were held by the People team. We aim to close the gender pay gap. Therefore, we commissioned Mercer, a world-class compensation specialist, to conduct a survey. It was found that our gender pay gap is currently at minus 3%. We have ambitions or target to close the gender pay gap by less than 1%. To achieve this, there are 2 means: corrective actions, remediation plan across 2- to the 3-year window setup to close the gap by targeting and improving our actual salary review mechanism; sustainable plan, measures have been taken to ensure that all our compensation cycles are bias-free and all have an equal chance to increase their compensation based on our principles of meritocracy. We believe the actions we have taken today will help to progress in the results that we aim to achieve going forward. Having a great representation of diverse perspectives across our workforce and our promotional program enable us to better meet the needs of our diverse consumers and grow for the next 100-plus years. We will continue to increase D&I within our company across our value chain. I will now pass over to Craig, our Chief Legal Corporate Officer for Budweiser APAC, who will discuss what we have been doing on the governance side. Craig, over to you.

Thank you, Linda. Good morning and good afternoon, everyone. I will now discuss the last portion of the presentation, which is corporate governance. We are a company of owners, and we operate with high levels of accountability and take a long-term view of how we manage our business. To achieve our purpose of bringing people together for a better world, we have defined clear responsibilities supported by strong oversight systems to integrate sustainability throughout our business. Our senior management members are responsible for ensuring that our business can achieve sustainability in the long term. During the year, we assessed and reshaped the integration of ESG factors into our corporate culture, business strategy and executive compensation plan. To ensure sustainability is embedded in all of our operations, a materiality assessment was carried out to identify key topics that are the most relevant to the business. Here, you can see the material topics that are aligned with our company's values and current priority area. We're honored to have a reputable and experienced Board of Directors. Our Board consists of 7 directors, 1 executive director, 3 nonexecutive directors and 3 independent non-executive directors. We are committed to achieving the highest Board efficiency and maximizing shareholders' value. Apart from providing high-level oversight of the management and operations, the Board also advises on business planning and strategic direction. Our BrewRIGHT system is an award-winning, state-of-the-art analytics platform for detecting and addressing compliance risks. We spent several years developing machine learning technology that can identify risky business partners and potentially inappropriate payment, such as third-party due diligence, which reviews the vendor master list; diligence accuracy, which helps to track vendors after the approval processes; travel and entertainment, which compares expense spending; and data pollution, which assesses data quality across our enterprise-resource-planning systems. To ensure that we uphold our commitments to our stakeholders and work towards common goals together, we've developed and implemented a hosted ESG policies. As ESG issues are always evolving, we keep monitoring the latest trends and issues and ensure that we act accordingly to meet the highest local and international standards. Our purpose is to bring people together for a better world. I'm proud of Budweiser APAC for continually achieving regional and international accolades. These are just some of the awards that we have recently received. I'm excited to be part of a growing team that dreams big and continues to challenge the status quo, as we continue to grow for the next 100-plus years. I hope that we've given you a better understanding of what we've done on the ESG front. So with that, next will be to answer any questions that you may have. Thank you.

[Operator Instructions]

Thank you, Desmond. I will be coordinating for the Q&A session. And so the first question here that we receive is, how do you engage your workforce in ESG sustainability? So thank you for the question. And -- but ESG-related topics have been, I mean, well integrated in our daily operations. The sustainability KPIs, for example, they are cascaded from -- all the way from senior leaders down to the brewery operators, field sales colleagues, procurement teams, as part of the normal target-setting and cascading posters that we have within Budweiser APAC. So for example, when you look at, for example, total energy usage and water usage, These KPIs are shared with our colleagues in the brewery -- in the different breweries that we have for -- when you think about [ road ] optimization and fuel efficiency, this target will be shared with the logistics and the procurement colleague; or for example, targets on compliance, whether it's benchmarking to local standards and global standards and regulations. These will be shared with the legal and compliance team members. So next to that, if you think about sort of target-setting is kind of the first part of the answer. But I would say that next to that, we, of course, take advantage of the fact that we are a real Asian company. So we share best practices between the different countries. To give you one example of that, for example, when we look at returnable bottles, our colleagues in China will share best practices with our colleagues in India to improve the return rate, and there's lot of best practice to share on that. And that, of course, increases and improves the environment, but also helps us to keep our cost low. So we focused on embedding ESG into our business. Actually, our teams are quite excited and passionate about the topic, and we support that both with the target-setting and the best practice sharing routines that we have in the company. So let me take the next question. So the next question is, what carbon-related KPIs do you have in Budweiser APAC? Could you share some examples of your milestones? So for this one, I'll hand it over to Terry.

Yes. So currently, we're already having 10.2% carbon reduction compared to our baseline year, which is 2017. And 3 breweries achieved [ IU 100 ]. They are 3 breweries in 2020. [ Wuhan ] is coming in 2021. And we have 3 dimensions to achieve the carbon-neutral. The first one, improved energy efficiencies and not only inside of our breweries, but also inside of the whole industry. For instance, we are working with the key cooler brands to speed up the efficiency upgrades in China; second, to reach [ IU 100 ], we are driving more on-site renewable energy system in our breweries. And now we had 10 breweries powered by solar, 7 in China, 1 in India, 2 in Vietnam. And we will keep yielding [indiscernible] in more breweries to achieve [ IU 100 ]. Even further, we are working on pushing with our key suppliers to set up their [ SPPI ] goals and driving [ IU 100 ]. The third one is we have an alternative solution to other end, just more sustainable energy solutions, for instance, biomass, biogas, [ green ] hydro. Besides that, the [indiscernible]. Thank you.

Thank you, Terry. So let us go to the next question. The next question is, how is your senior management's compensation linked to ESG? What KPIs do you have? So for this one, I'll maybe go to Craig. Craig, do you want to take this question?

Yes, sure. Thanks, Jan. So yes, the answer is senior management competition is linked to ESG. Every year, we actually assess and reshape the integration of ESG into our executive compensation plans. So our cross-functional team has KPIs. This includes sustainability and procurement, increased legal and corporate affairs teams and then the different functional areas and another event as well. The business forms are actually managed and continuously improves sustainability performance. And it is the teams' compensation that is driven by these goals that we have.

Thank you, Craig. So the next question is, could you elaborate on the diversity of your organization? Do you have any diversity targets? How do you train your leadership and employees? Maybe this one is for Linda.

So let me talk about the diversities first. I will say first one is the diversity will provide a bias-free training to all our managers to improve it and the equity in the decision-making of the career growth of our employees. The second one is we also organized bi-monthly best practice sharing sessions of D&I initiatives between different BUs. More than 50 sessions of trainings and workshops and happy hours focused on the D&. I And also, we have a female leadership development, and then career advancement were organized across APAC. So we have 3 sessions of Unconscious Bias Training, were delivered to our People team to promote equal opportunity -- equal employment for people of different gender, race, backgrounds and experiences.

Okay. Thank you, Linda. So the next question is, could you share some of your goals related to the water, such as water efficiency? So this one, I will give to Jan.

Thank you, Jan. Regarding water, I mean, it's our #1 resource. It is not only essential for us but also for the communities where we live in. And it's probably our most complex goal because it's not one-size-fits-all. There's not one single solution that we can come up with. We are a global company, of course, and we need to understand the local challenges and our communities, and that's why we need to deliver specific and impactful plans. Now we believe that with our 2025 water goal, we clearly have an industry-leading commitment to really drive improvement in the watersheds where we operate in. First of all, we have improved efficiencies internally within our own walls, where we reduced the water consumption of 2.99 hectoliter of water per hectoliter of beer to 2.47. So it's a reduction of 17%, 1-7 percent, more or less compared to 2017, which is the base year. But of course, we're not stopping there. We keep on testing innovations to further reduce that consumption in our own manner. On the other side, we also have the outside of our breweries, and there, we drive multi-stakeholder collaboration, where we need to look at the water scale and the water access, which is much bigger. So there, we're working with CSR projects and other companies. There, we go beyond the individual companies sponsoring those projects and the communities. They -- the key to scale and to accelerate those external projects is through real partnerships. A few examples of those partnerships are endorsed, [ paused ] and [ equally set ]. And we closely monitor those watersheds together with those partners. And we close them depending on additional recharge, relevant water table or the watershed of the [indiscernible]. The -- or the way we man it depends a bit on the location because local legislation or external stakeholder requirements are different location-by-location.

Thank you, Jan. Next question is, it was impressive to learn about your 2025 sustainability goals. How do you attract and monitor these goals? So for this one, I will take it myself. We have set goals that are material to our business and where we know that we have kind of the most impact. So what we do is that we use the same process for all our targets, which we develop clear KPIs. We cascade them throughout the business and then becomes part of our annual target-setting and cascading process. If you want to track the results, our results and the progress on our goals are disclosed every year in our ESG report, which is on an annual basis, right? We just released our second report recently. And then, of course, our ownership mindset and our culture, which is very results-oriented, basically brings the same rigor to our ESG commitments as what we do to any other part of the business initiatives because they are treated really in the same way. So the next question is about ABI. Having majority of Bud APAC shares, how do you protect the interest of the minority shareholders? So for this one, I will pass it to Craig.

Great. Thanks, Jan. So yes, this is one that we spend a lot of time, especially at the time of the IPO, thinking about. The clear answer is that there's a really clear delineation between the business of the ABI and Budweiser APAC that's along geographical and market focuses. And we actually have a noncompete agreement between the 2 entities. So Budweiser APAC and ABI's primary exposure to the APAC territories, so our interests are aligned there. We also have 3 independent directors, who very much ensure good corporate governance and objectively monitor and give independent views if and when a conflict of interest arises. We've also just did a further protection for minority shareholders. We, at Budweiser APAC, have adopted the shareholders' communication policy, and we're committed to providing timely actors to our strategy, performance and other material information so that all of our shareholders can exercise the right in an informed manner. Thank you. Back to you.

Thank you, Craig. So the next question is, Budweiser APAC has a large organization operating in many regions across Asia. How do you ensure the human rights across your organization? So for this one, maybe Linda?

Okay. Thank you for the questions. I think first one, disrespecting the human rights is nonnegotiable commitment to our business. Budweiser APAC has 3 core policies that continue our approach to respecting human rights and labor rights across our operations and our value chain, including our employees, vendors, [ fulfillers ] and as well as our consumers. So the first point is talking with the Human Rights Policy. [indiscernible] set expectations for staffing and promoting human right, leading our own company and not contribute to the violation of the human rights in our supply chain. The second one is the Responsible Sourcing Policy. It's based on our human rights policy and enable us to [ take ] our principles throughout our value chain. The third one is Whistleblower Policy, under which we set a whistleblower hotline run by an independent party, which is allowing us -- for those within and outside of the company to report suspected breaches of the policies, with an options to do so anonymously. And on top of this, we believe the technology and digital innovation offers significant opportunity to enable companies to strengthen our approach to respect human rights, in particular, to help increase in transparency with potential asset stakeholders. We continue to participate in industry and energy initiative that seek to improve business approach to respecting human rights. In 2015 to 2019 and [ until ] today, there was no noncompliance cases with significant impact related to [indiscernible] and the [ force label ] in Budweiser APAC.

Thank you, Linda. So the next question is, what are your water high-stressed areas? How do you control them? So this one maybe I'll give to Terry.

Thank you. Budweiser APAC regularly update its water risk assessment, our breweries and other manufacturing facilities based on short-term and long-term risks. First, we applied the water [indiscernible], and then we're using ABI's custom-made water respirator [indiscernible] through detailed questions on water availability, quality regulatory pressures and the reputation risks. We undertake an in-depth assessment of each facility with a year or with quarterly review with our key internal stakeholders if there's any change in risk profile. We believe with this focus, we will achieve results. And while we classify our risks to know where we should prioritize our [ specs ]. But of course, our water effects are not limited to our high-risk sites. We classify our sites from very high risk to low risk. So far, we do not have any very high risk affecting our operations across APAC. We have identified 5 high-risk sites and striving to improve the water availability and quality for the communities around those breweries. Thank you.

Thank you, Terry. So let's look what the next question is, if there's the next question. So the next question is, how did you support the communities and the partners, especially during COVID-19 period? So this one maybe for Linda.

Okay. Thank you for the question. We've been very passionate about empowering our communities, both large and small. We encourage those efforts through regional and local volunteering because we do our business in our local community and are committed to giving back to our local community. We have committed that in each city where we plan to build a free [indiscernible] for establishment of Hope Schools in China. We have committed the donation to build 29 Hope Schools in China, and another 2 are currently under construction. Throughout the year, these -- the activities will carry on in those schools, such as basket for trialing campaign and [indiscernible], development and protection activities. More than 8,000 students and teachers from those Hope Schools have benefited. We believe we can play a very positive role in helping communities to prepare and respond to disasters by working with governments, society and other entities. In 2020, we have donated more than [ USD 2.4 ] worth cash in fight against COVID-19 pandemic in APAC. And we have committed more than 1.3 million cans of emergency drinking water across APAC. We also encouraged inquiring communities to [indiscernible] volunteering activity. To [indiscernible], we have implemented several initiatives such as poverty alleviation programs to help underprivileged farmers in their cultivation technology and sales channels in China. Cass Forest of Hope program in Mongolia for 10 years, innovative solutions to tackle age-old problems like poverty, lack of the jobs and gender equality in India. We also have a key initiative, our smart drinking [indiscernible]. We take our responsible seriously -- responsibilities seriously to help reduce and prevent the harmful use of alcohol across all markets.

Thank you, Linda.

Thank you. We have the last questions coming up.

Okay. So Let's see what the last question is. The last question is, what is Bud APAC doing to reduce its fatality rate? So maybe this one also to Linda?

Okay. I'll take that question. So here at Budweiser APAC, safety is, at least, at the heart of our culture. It ranks before results and targets. Before anything else, nothing should compromise the safety of our employees, consumers and stakeholders. And as efforts to ensure the safety of our employees, we have operational procedures and safety standards for our production processes, including fire safety, warehouse safety, work-related injuries, electricity safety and an emergency and evacuation procedures. We provide our employees with occupational safety education and training to enhance their awareness of safety issues. We have a technical committee to upgrade technical safety measures to meet industry-leading practices, such as machine guarding and also use of the dusting explosion prevention devices. The recorded injury decreased by 23% compared to 2019. The decrease was made possible by our further rollout of development and safety pillars of our global management system named VPO, and Distribution Process Optimization called DPO across APAC as well as investments in improving safety conditions in the facilities and the implementation of the [indiscernible] safety programs. Last but not least, to help further reduce serious incidents and fatalities [indiscernible]. We continue to develop our internal strategy and toolkits. For example, in China, we have a joint sponsored, the United Nations' Road Safety and Digital Innovation Learning Conference, to extensively explore digital innovations aiming to promote safer roads and reduce [indiscernible] caused by car accidents. Our Harbin virtual idol, Hajiang, as a virtual road safety ambassador, also helped us win the award of the Road Safety Innovation by China Ministry of Public Security. In India, we participate in the Safer Roads for Gurugram initiative, where we won the Pacific's Gold SABRE APAC award.

Thank you, Linda. Desmond, over to you.

This concludes our Q&A session today. I would like to turn the conference back over to Mr. Jan Craps for the closing remarks.

Thank you, Desmond. Here at Budweiser APAC, we are committed to growing a sustainable business together with our stakeholders, and we ensure that ESG is embedded into our daily operations. We've been in the Asia Pacific for more than 100 years, and we aim to thrive for the next 100 years and beyond. Thank you very much for your time. Stay safe and well. Cheers.

This concludes today's webcast. Please disconnect now. Thank you.