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Research: Consumer
Britvic’s Healthier People, Healthier Planet strategy proactively addresses the key environmental, social and governance (ESG) issues it faces, including consumers’ health, packaging and waste, water usage, and supply chain management. Its sustainability targets for 2025 are the continuation of ongoing actions to meet stakeholders’ expectations and contribute to a more sustainable future. At the same time, management looks far beyond the targets and takes a broad ESG approach towards both business procedures and its staff.
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Britvic |
Actively addressing sustainability challenges
Consumer |
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ESG
15 July 2021 |
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Britvic’s Healthier People, Healthier Planet strategy proactively addresses the key environmental, social and governance (ESG) issues it faces, including consumers’ health, packaging and waste, water usage, and supply chain management. Its sustainability targets for 2025 are the continuation of ongoing actions to meet stakeholders’ expectations and contribute to a more sustainable future. At the same time, management looks far beyond the targets and takes a broad ESG approach towards both business procedures and its staff.
Targeting 100% recycled PET in Great Britain by 2022
While Britvic achieved most of its aims across the Healthier Planet agenda in 2020, it missed the target for recycled polyethylene terephthalate (rPET) plastic in 2020 (ie increase rPET in its Great Britain and Ireland portfolio at 15%, with 100% recycled content for at least two brands), which it highlights was due to challenges posed by the COVID-19 pandemic. However, it moved Fruit Shoot Hydro and 500ml Ballygowan drinks into 100% rPET in 2020 and Ballygowan Mineral Water in Ireland in 2021. Additionally, in October 2020 Britvic announced its intention to ensure that all bottles in Great Britain are 100% rPET by 2022, which surpasses its previous target of 50% rPET in this country by 2025. Management hopes its focus on sustainable packaging will contribute to industry-wide environmental initiatives, including the Deposit Return Scheme, a legislation framework that will go live in 2022 in Scotland, and is in preparation in the UK and Ireland.
Fewer calories to meet expectations and challenges
Britvic’s focus on healthier drinks is in line with changing customer choices, with people looking for functional benefits in drinks (eg low calorie, added vitamin) and policies, aimed at solving health issues its consumers face (eg on high fat/sugar/salt food and drink). Britvic reduced the number of calories in its drinks to 25.5 per 250ml on average in 2020, down 27% since 2013, and it aims to maintain it at less than 30 by 2025. While this guidance looks relatively cautious, management highlights that this reflects its growth ambitions in Brazil, where calories per serving are declining, but remain above the group average. It adds that it is not only the number of calories that matters, but also the quality of ingredients in drinks and their nutritional value. The company invests in innovation in its low or no sugar products and has recently acquired Plenish, a plant-based drinks business. Britvic’s commitment to broad ESG management is reflected in its 2025 targets and the performance it has delivered so far (see next page).
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Consensus estimates
Source: Refinitiv, company data |
Britvic is a client of Edison Investment Research Limited
Britvic’s sustainability at a glance
Below, we present Britvic’s 2025 targets and selected historical KPIs. For management comments on Britvic’s approach to sustainability and a full list of its KPIs, please refer to the company’s annual report. We describe Britvic’s financials and recent developments in our equity research notes.
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Britvic’s 2025 sustainability targets |
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Britvic’s selected sustainability KPIs |
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Healthier consumer choices
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Renewable energy
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Carbon and water**
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Sustainable supply chains***
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Source: Britvic, Edison Investment Research. Note: Historical metrics shown in charts have been independently assured by Ernst & Young. *Employee engagement and wellbeing as measured in Britvic’s Heartbeat survey. **The Greenhouse Gas Protocol defines Scope 1 emissions as direct emissions from owned or controlled sources, Scope 2 as indirect emissions from the generation of purchased energy and Scope 3 as all indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions; tCO2e stands for tonnes of CO2 equivalent. ***Sedex is an ethical supply chain data platform; SMETA, Sedex Members Ethical Trade Audit. |
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Research: TMT
The US Space Development Agency (SDA) is investing in a new network of reconnaissance satellites. This will potentially have hundreds of relatively inexpensive LEO satellites, each deploying optical communications links. Mynaric has already won a contract to supply optical communications links for the first phase of this project. Its focus on design for manufacture in volume and investment in capacity, as demonstrated by the recent opening of a new production hall near Munich, places it in a good position to win follow-on business as the project ramps up.