Section 172 Statement

a) The likely consequences of any decisions in the long-term

The Management Team of the Group consider carefully the long-term consequences of decisions made at a Board level. EverGreen provides the framework in which the company’s annual plan and longer-term strategic plan is deliberated and agreed with the Heineken Group, combining global vision with local UK context. We realise our longer-term ambition of superior and balanced growth through our value creation model – the Green Diamond – which we use to guide the balance between short-term delivery and long-term sustainability and between top-line growth and overall stakeholder value creation.

b) The interests of the Company’s employees

One of our priorities is to unlock the full potential of our people. In a highly competitive, and increasingly global market, we need to attract and retain the most talented and skilled people to remain the leading UK pub, cider and beer company. Our colleagues are what makes the Group great and the interests of colleagues are paramount to the long-term success of the business.

Wellbeing & Inclusion

The health and wellbeing of our colleagues continues to be a priority. We support colleagues through a suite of activity and resources, including proactive and reactive ways to improve overall health and wellbeing. Our support targets physical health, mental health and how we can improve our wellbeing through engaging our local communities. We train more Mental Health Champions every year across all functions and geographies who can support colleagues and signpost them to resources where relevant. We have trained a community of Menopause Mentors to ensure colleagues impacted by the menopause can obtain the support they require.

Our DE&I strategy guides us towards creating a deep sense of belonging for colleagues. We have five Colleague Networks focussing on underrepresented groups such as LGBTQIA+, gender, disability, age and race & ethnicity. These are run for colleagues by colleagues. Their role is to raise awareness of the barriers faced by underrepresented groups and at the same time support improving our diversity. We continue to run an anonymous diversity census on an annual basis so we can track our progress.

Communications

To ensure colleagues are kept up to date on the latest business performance and activity across the business, a strong communications infrastructure is in place. This includes monthly leadership calls led by the Management Team, weekly drumbeat communications that recap on the key highlights each week, brand engagement activities including competitions and product sampling activities, regular senior leader video updates, virtual townhalls, company newsletters, and functional cascades.

Workplace by Facebook is our internal social media channel, which provides a platform for more informal interaction across all levels of the business.

Our annual Climate Survey provides an opportunity for all colleagues to provide honest confidential feedback about working for the Group. The results are shared across the business, after which teams, from the Management Team down, produce a Climate Survey action plan to address key points raised. In addition, we carry out pulse surveys on an ad hoc basis to get in the moment feedback from colleagues.

Learning & development

The organisation provided significant Learning and Development support to all levels throughout 2023. We continued to drive online and virtual learning where relevant and applicable. We also in-housed learning administration services, vendor management and migrated our digital learning platform from one provided externally to the Global Learning Platform, UBrew. This allowed us to save money and re-invest the savings into 2024 Development priorities.

On top of these significant changes, we also delivered our Upskill Reskill programme in Supply Chain, through change readiness workshops, difficult conversations training and inductions for new starters and People Managers. As well as organisational programmes, we have also delivered functional training required by departments to be compliant to Health and Safety and we continue to upskill our colleagues in best practices for their roles.

Policies and Social Dialogue

The Group adheres to the Global Code of Conduct and Equal Opportunities Policy which is in place to ensure equal treatment throughout the recruitment process and duration of employment. We conduct mandatory training on our Code of Business Conduct and awareness campaigns on Equal Opportunities at work to ensure that colleagues are not subjected to discrimination and are treated fairly and equally at all times. In 2023, we also ran Equal Opportunities scenario-based team discussions to highlight this important topic. Colleagues are regularly made aware of the numerous mechanisms to raise concerns, including our Grievance Policy and Global Speak Up platform. For our employees with disabilities, every effort is made to accommodate any reasonable adjustments necessary to allow the employee to participate in employment and to overcome any disadvantage suffered as a result of the disability.

The Group has an Employee Council made up of elected members, representing all colleagues. The Council has 12 elected representatives, four trade union shop stewards (UNITE the Union) and eight employee representatives. The Company undertakes regular social dialogue (information and consultation) with the Council in line with best practice and in accordance with its terms of reference. Members of the Management Team regularly attend the meetings to engage with the Council on a variety of strategic topics, provide updates on their respective functions and answer questions. In addition, we have a local Partnership Group in each of our production sites, comprising of locally elected UNITE the Union shop stewards and local management representatives. They engage in regular dialogue (information, consultation, negotiation) in line with best practice and as per our local Collective Agreements.  

Remuneration and Reward

All colleagues participate in a short-term incentive, or some other variable pay arrangement, which contains a strong link to performance at the Group, Company, channel, function or team level, as well as taking account of individual performance. Additionally, a performance-based share plan (Long-term incentive plan, LTIP) is in place for senior management of the Group. The scheme is operated by The Heineken Group. The vesting of the share rights is subject to internal financial measures of performance and continued service over a three-year period. The 2021-2023 LTIP vested in April 2024. For additional details on LTIP performance in 2023, please refer to note 26 of the Heineken UK Limited consolidated financial statements.

Details of our latest gender pay gap analysis was published in April 2024. Our median hourly pay gap, the difference between the hourly pay of the middle female and the hourly pay of the middle male, moved from 6.2% in favour of female colleagues to 2.6%, in favour of male colleagues. Factors driving these results include the segmented pay approach we adopted to help mitigate ongoing challenges in securing critical technical skills and capabilities in a number of targeted roles, by improving the competitiveness of our reward in these hard to recruit and retain areas.

With a predominantly male population, particularly within our sales and production environments, we have campaigns focused on Women in Supply Chain and Women in Sales. We are also evolving our recruitment practices and policies to proactively encourage female candidates into our wider business. In support of this, our new Employee Value Proposition has a specific focus on attracting female talent into the business.

Our median bonus gap has seen a significant improvement in the year, down to 7.7% from 23.3% in favour of males last year. Separately, Heineken Group conducts an Equal Pay Assessment to measure any average gender pay differences by grade, with a focus on identifying any trends and targets to improve our gender representation over time. Although our pay quartiles have broadly remained in line with last year, there has been a slight increase in the proportion of women in the lower and lower-middle quartiles. Rebalancing the demographic of our workforce continues to be a challenge, hence an area of focus and commitment for the Group.

c) The need to foster the Group’s business relationships with suppliers, customers and others

Engaging with stakeholders to deliver long term success is a key priority for the Management Team. The Group’s strategy is built around EverGreen and all decisions take into account the impact on stakeholders. We design our strategy to enable us to win in the marketplace, focus on the long-term sustainability of our business and create value for stakeholders. We aim to consider our effect on the wider society, communities and the environment.

Our stakeholders and partners are crucial to the long-term success of the Group. Their opinions help inform our plans and guide our prioritisation. We engage with them and measure the progress of our relationships through reputation research, opinion-former insights via our associations and partners and ongoing stakeholder dialogue.

Suppliers

We continue to work together with our suppliers to ensure we have high ethical standards, respect for human rights and the environment. Supplier payment terms are agreed with each supplier at the time of onboarding and with contracted suppliers during negotiations. In addition, suppliers may take advantage of our supplier finance programme with our preferred banking provider.

Customers and consumers

The Management Team and senior leaders regularly review how the Group maintains positive relationships with customers and consumers. As digital innovation reshapes the beer industry’s route to market, the customer and consumer relationship is vital. We offer an innovative range of cutting edge draught dispense solutions that can be tailored to the needs of any bar. As a Heineken SmartDispense® customer, our customer also receives access to a complete package of benefits that will help to grow their business. Further information can be found at https://smartdispense.heineken.co.uk/. We have also invested significantly in systems and processes to help improve the experiences for both customers and colleagues.          

Our direct customer On-trade customer base now transacts with us online, with over 95% of viable orders placed online. The Management Team are committed to improving relationships with customers and consumers with continued investment in digital and data.

d) The impact of the Company’s operations on the community and the environment

Please refer to the ‘Environmental matters and community issues’ section of the non-financial and sustainability information statement for further details of relevant policies and initiatives of the business, promoted and championed by the Management Team.

e) The desirability of the Company maintaining a reputation for high standards of business conduct

The Group through its directors is committed to the highest standards of business conduct, ethical behaviour and integrity throughout its business. The company has a clear code of conduct outlining basic principles for colleagues when acting for or on behalf of our company. The principles follow those of the UN Global Compact and the OECD Guidelines for Multinational Enterprises. We actively encourage everyone to Speak Up, our confidential method of raising misconduct without retaliation, when they have concerns about the way we’re operating as a business or want to raise cases of potential misconduct such as fraud, discrimination, harassment, or corruption. This is for everyone and allows us the opportunity to address concerns more promptly, and to continuously improve as a Group.

As part of its Risk Management and controls, the Group stipulates to its employees a series of mandatory training exercises to be completed annually that comprises the core principles of the code of business conduct and ethics, including:

• Health & Safety at Work
• Code of Business Conduct
• Anti-Bribery & Corruption
• Competition Law
• IT Security Awareness Training
• Data Privacy
• Inclusive Leadership (People Managers)
• Responsible Consumption
• Anti-Tax Evasion
• Fraud Awareness
• Brand Promoters
• Responsible Marketing Code

To complement this programme, regular communications are issued to inform, educate and make aware of important components of business conduct, such as Speak Up and cyber security.

f) The need to act fairly as between members of the Company

The Company’s sole member is Scottish & Newcastle Limited (SC016288). Scottish & Newcastle Limited and its subsidiary undertakings are members of a global organisation led by Heineken Holding N.V. (‘the Heineken Group’).