Diageo: Emissions Targets Slashed Amid Global Uncertainty
Diageo has sought to explain why a number of its key sustainability targets have been slashed.
The multinational beverage company – renowned for brands like Guinness and Smirnoff – has outlined substantial revisions to Scope 3 emissions goals and packaging recycled content benchmarks in its Annual Report for 2025.
Ewan Andrew, President of Global Supply and Procurement & Chief Sustainability Officer at Diageo, outlined the organisation's evolving perspective.
“In 2020, when we set ambitious environmental sustainability goals as part of our Spirit of Progress action plan, we didn’t have all the answers," said Ewan. “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.
“Today, alongside our annual report, we’re updating our sustainability goals, with some important adjustments to our carbon and packaging goals to give us a stronger, more credible path forward.”
How have Diageo's targets changed?
While targets relating to water use and replenishment are unchanged, notable adjustments have been made to both direct and indirect emissions, as well as recycled packaging
The changes are as follows:
Water efficiency in water-stressed areas
- 2024 – 40% improvement by 2030
- 2025 – unchanged
Water efficiency across the company
- 2024 – 30% improvement by 2030
- 2025 – unchanged
Water replenishment
- 2024 – 100% target in water-stressed areas by 2026
- 2025 – unchanged
Emissions from direct operations (scope 1 and 2)
- 2024 – net zero carbon by 2030
- 2025 – reduce emissions by 50% by 2030 (net zero by 2040)
Value chain (Scope 3) emissions
- 2024 – Reduce by 50% by 2030
- 2025 – Reduce by 26% by 2030 (net zero by 2050)
Increasing recycled content
- 2024 – by 2030, increase recycled content in products to 60%
- 2025 – by 2030, increase recycled content in products by 50%
Confronting global complexities
Diageo's Annual Report provides detailed reasoning for these changes, attributing them to the intricacies inherent in societal and environmental challenges.
The company explains that the adjustments reflect the "complexity of the challenges faced by society and the environment".
Its strategy highlights the wide-ranging impact of climate change, from environmental pressures to social dependencies, emphasising the deep interconnections between climate, nature, agriculture and people across its global value chain.
Diageo stresses that its targets are subject to regular review as regulations evolve and new insights emerge on addressing systemic challenges such as greenhouse gas emissions. This ongoing evaluation, it says, strengthens business resilience, supports long-term growth and safeguards the company’s licence to operate.
Engagement with the SBTi
Diageo maintains that its commitments to water preservation and emissions reduction remain steadfast.
Performance metrics have been reviewed to align with Science Based Targets Initiative (SBTi) targets.
The firm continues: “This review, conducted as part of our regular update of Science Based Targets initiative (SBTi) targets, resulted in changes to greenhouse gas emission reduction percentages and timeframes to achieve those reductions.
“We also reframed our packaging targets due to both external factors and our growth ambitions, shifting our focus to recycled content of our packaging, with lightweight packaging reporting focused on examples, rather than a formal target.”
Navigating tariff challenges
Like many global organisations, Diageo is working hard to mitigate the impact of tariffs imposed by US President Donald Trump and his administration.
The report projects that tariffs will cost Diageo approximately US$200m annually.
Strategies in this area include meticulous inventory management, supply chain optimisation and investment reallocation to mitigate financial pressures.
Interim Diageo CEO Nik Jhangiani adds: "We continue to believe in the attractive long-term fundamentals of our industry and in our ability to continue to outperform the market as the Total Beverage Alcohol landscape evolves.
“Diageo’s ambition remains clear: to be one of the best performing, most trusted and respected consumer products companies in the world.”
He adds: “With world-class brands and talent, highly effective global consumer insights and an ongoing focus on efficiency and effectiveness, we are confident in our ability to outperform the market, restore Diageo to a top quartile TSR consumer company and provide stronger returns to shareholders.”
