working better together

This is our second Corporate and Social Responsibility (CSR) Report,incorporating for the first time a full Environment, Health and Safety Report.

IT COVERS THE PERIOD FROM JANUARY 2002 TO DECEMBER 2003

workingbetter

togetherour corporate and social

responsibility report 2004

Take a look at our four bigchallenges; find out why CSR mattersto us, what we've achieved and how

we’re going about putting it intopractice throughout our business.

In the following pages we map out our continuing journey

in the world of

welcome

Corporateand Social

Responsibility

This report is for all our stakeholders. Shareowners, employees, special interest groups,investment analysts, consumers, customers, suppliers, business partners, governments,members of the communities in which we live and work – we invite you all to take a look at where we are and how we’re doing on our CSR journey. To help each of you find theinformation you want, we have provided two ways to follow the journey. If you like, you cantake the quick route through the main illustrated pages to get the big picture of CadburySchweppes and CSR. Along the way, or straightaway, you can get more detailed informationon specific issues, policies, key performance indicators and case studies from the bookletsinserted in the report.

Peter ToddManufacturing Area ManagerCadbury ANZ

other challengesConsistent global data collection 6

Biodiversity 11.14

policies and principles4.1 Our Business Principles

11.1 Environment, health and safety policy

9.1 Human rights and ethical trading policy

7.2 Equal employment opportunities and diversity policy

8.4 Quality policy

progress we are making9 Working with suppliers

10.1 Growing community value around the world

11.12 Packaging innovation

6 Embedding CSR within the organisation

6 Working better together

new topics in this reportGenerating and sharing wealth 1.16 Sustainability key performance indicators 6.1Stakeholder dialogue 5.1Listening to consumers 8.1

contentby chapter

1. our commitmentthe little book of big challenges

2. who we are3. our value chain4. what csr means to us

our business principles

5. how we make decisionsencouraging stakeholder dialogue

6. making it happenkey performance indicators

7. our peopleour people

8. our consumersour responsibility to consumers

9. working with suppliershow we are working with suppliers

10. growing community value around the worldinvesting in communities

11. environment, health and safetyan integrated approach to theenvironment, health and safety;and responsible use of resources

12. the journey continuesand index

Big Challenges

Managing company change 1.1

Addressing obesity 1.6

Trading with care 1.11

Economic responsibility 1.16

New horizons. Over the past two to three years Cadbury Schweppes has made great strides in embedding CSR under the leadership of mypredecessor, John Sunderland, and Baroness Judith Wilcox, the Chair of our first CSR Committee. I look forward to continuing their great work.

We are wholeheartedly committed to Corporate and Social Responsibility (CSR). From our key strategic goals to the individual actions of our peoplearound the world everyday, it is central to who we are, what we do and the way we do it.

For all of us at Cadbury Schweppes, 2003 was a year of transition. JohnSunderland became Chairman and I became Chief Executive, we undertookthe largest restructuring in our history and we made and successfully beganintegrating our largest acquisition, Adams. Big changes accomplished in anatmosphere of challenging global economic, social and political conditions.

We have adopted five key strategic goals, one of which is to reinforce ourgood reputation with employees and society by building on our high standardsof CSR worldwide. I believe passionately that our global team has thecommitment and enthusiasm to deliver greatly on this and all our key goals.

The restructuring of our business and the integration of Adams require factory consolidation and a reduction in the number of employees worldwide.This challenge will be met with care and sensitivity and guided by our businessvalues of integrity, honesty and responsibility.

These values are not just about maintaining a healthy workplace, where peoplelove to work. They underpin our commitment to working better together to understand and find solutions to other challenges: the ethical sourcing of raw materials; the economics of sustainable business in a competitive and fast-changing world; and changing consumer attitudes to diet and activelifestyle.

We now have frameworks to help us understand and manage these issues, as discussed by my colleague Baroness Judith Wilcox (right). Looking forward,the focus of the next two years is to embed these further throughout thebusiness. We will train and develop our colleagues, build capability within oursupply chain, strengthen our key performance indicators and data collectionsystems, and determine the role of auditing and external verification in ourCSR reporting.

1. our commitment

Todd Stitzerchief executive officer

Sanjiv SarinCommercial Director

Cadbury Egypt

gett

ing

read

yfo

rth

ejo

ur

ney

Journey logbook. Throughout my career in business and public life, I havealways believed that good business is conducted competitively but fairly,honestly and with benefits for all those involved. I have found those beliefs to be rooted in Cadbury Schweppes' traditions too. I am delighted to play an active role as we build on them, in every part of our business and in diversecultural settings around the world.

We are halfway through a planned five-yearprogramme to review, update and embed our CSR commitment, while incorporating therich and varied CSR traditions that we haveinherited from the companies and brands that now make up Cadbury Schweppes. Weare building around five CSR pillars: humanrights and employment standards; ethicalsourcing and procurement; marketing, foodand consumer issues; environment, health and safety; and community investment. Wealso publicly committed in 2003 to theprinciples of the United Nations GlobalCompact.

In the period covered by this report we havedeveloped frameworks to enable us to deliverhigher performance in key areas. Forexample, our Human Rights and EthicalTrading (HRET) committee has concentratedon putting the detail of our HRET policy intopractice. We learned much from pilot studyvisits to five key countries: China, Ghana,Indonesia, Mexico and Turkey.

This learning has been reflected in our EthicalSourcing Standards, which are underpinnedwith a system for supplier evaluation, trainingfor our people and engagement with oursuppliers.

Another highlight is Growing community value around the world, a global strategy to demonstrate the part we can all play to assist local communities. We aim to investone per cent of our pre-tax profits, and have established guidelines to measure andmanage our community investment activities.

We are pleased that we continue to receiveencouraging external feedback on ourperformance, including positive ratings in the FTSE4Good, Dow Jones Sustainabilityand Business in the Community indices. But the most important feedback is fromconsumers, employees, shareowners and other stakeholders, who continue to trust us to create brands that people love withhonesty, integrity and responsibility.

Baroness Judith Wilcoxnon-executive director and chair of the

Corporate and Social responsibility committee

the little book of

challenges

p1.1 managing company changep1.6 addressing obesityp1.11 trading with care

p1.16 economic responsibility, wealth generation and distribution

managing company changeWe have embarked on a programme ofwide ranging changes that will shapeCadbury Schweppes for the future. Thesechanges are driven by our desire to“deliver greatly” – in every sense, fromgreat shareowner returns to greatcontributions to the communities we liveand work in. We have set our sightsdeliberately high. To continue to succeed

in a world of more demanding customers, changing consumertastes, increasingly global competition, mounting publicscrutiny of the food and drink industry and rising expectationsof the role of business in society – we must deliver greatly.

To this end, we have carried out a fundamentalreorganisation of the business and are focusing our heads andhearts on achieving five stretching and mutually reinforcinggoals (see chapter 4). In the way we go about achieving ourgoals, as in everything, we will be guided by our values ofintegrity, honesty and responsibility and by our core purposeof working together to create brands people love.

Bob StackChief Human ResourcesOfficer

big challenges

1 .2

As our Chief Executive Officer ToddStitzer said at the outset of ourreorganisation in 2003, “We need tochange the processes that define theway we work, the technology thatsupports our work, the organisation inwhich we work, and the ways inwhich we work. But through thischange we must remain supportive,open and honest with each other.Take on new challenges, work withnew people. Dare to do great thingstogether.”

We carried out the reorganisationrapidly and effectively. In early 2004,Science and Technology was added asa new global function represented atthe top level of the organisation,reflecting the importance of this areafor our future business strategy. Weare now organised around five

regional operating units and six globalfunctions in order to give ourselvesthe strongest possible structuralfoundation for reducing costs,streamlining decision making andworking better together.

This reorganisation builds on a historyof managing change well. In recentyears we have successfully acquiredand integrated a number ofbusinesses. The latest and biggest isAdams. We completed the Adamsacquisition in March 2003 and arebusy integrating it around the world.Two other similarly big and boldintegrations are also well underway:the bringing together of our AmericasBeverages businesses and the furtherintegration of Europe Beverages. Aswe continue on our journey oftransformation, we are committed to

Operating units: Global functions:Americas Beverages Human ResourcesAmericas Confectionery LegalEurope, Middle East and Africa FinanceEurope Beverages Supply ChainAsia Pacific Commercial Strategy

Science and Technology

big challenges

Case studyWorking BetterTogether

Our Sharpening The Culture programme,introduced in 1997, is designed to boostthe skills and capabilities of all our peoplein line with our Managing For Valuediscipline and our Leadership Imperatives,especially the 3As: Accountable, Aggressiveand Adaptable.

Building on the success of Sharpening TheCulture, in 2003 we launched WorkingBetter Together. This core programmeoffers a wide range of tools to help allteams perform to a high level in the morecross-functional and networked businessthat we have today.

Working Better Together reflects andreinforces our core purpose: working

together to create brands people love. Itunderpins our updated LeadershipImperatives, particularly our three newImperatives: collaborative, living our valuesand growing our people.

Working Better Together will beincorporated into all new programmes andalso into other existing key global andregional initiatives, for example Sales andOperations Planning and IntegratedPortfolio Management. It will also bedelivered to all employees as anintroductory leadership training session,followed by more detailedteam/organisational training activities.

As we roll it out and make it an everydaypart of the way we go about our business,Working Better Together will help us todare and do great things together tocreate brands people love.

making it a success and to doing it inthe right way.

We are looking to improve across theboard. We encourage all ouremployees to contribute their ideas onhow we can work better together,how we can develop an organisationthat can stretch itself on an everyday

basis, how we can ratchet up ourcapacity to innovate, how we canreinforce our reputation with society -how we can deliver greatly and in sodoing become one of the very bestcompanies in the world.

1.3

big challenges

1.4

Our first and foremost goal remainsto deliver superior shareownerperformance in line with our Managingfor Value discipline, to which weremain absolutely committed.

To achieve this goal, we areaggressively managing down our costsvia our Fuel for Growth strategy tobecome much more competitive withour FMCG peers. We will reinvest asignificant proportion of these savingsin well designed and well executedgrowth plans as part of our SmartVariety commercial strategy.

We are well advanced in achievingtwo demanding but necessarymedium-term targets: to reduce thenumber of factories in operation by20% and employee numbers by 10%.This is not an easy process but we arecarrying it out responsibly andsensitively in consultation with ourcolleagues around the world and inline with our values of openness,fairness and respect for the individual.

Natural attrition applies to a certainextent, and when we make peopleredundant, good redundancy packages

are being offered. All concerned areprovided with extensive supportprogrammes including job searchactivities, interview and cvpreparation, and career counselling.

We want all our people to understandour strategy, to feel engaged, listenedto, and treated with consideration.We will recognise uncertainty whereit exists and provide a clear sense ofdirection through enhanced employeecommunication programmes. Whereparticular locations are affected, our commitment remains for allCadbury Schweppes businesses to look for a continuing and positivecommunity role.

big challenges

Case studyConsolidating productionsites in Brazil

Cadbury Adams Brazil produces Halls andVita-C drops, as well as chewing gumbrands Trident, Bubbaloo, Clorets andChiclets. We currently have three plants inBrazil: Avenida do Estado, Sao Paulo;Cumbica, Guarulhos; and a modern site inBauru.

To increase production, logistics anddistribution efficiencies and support ourplans for growth and innovation, wedecided to consolidate the Avenidaproduction site into the modern facility atBauru. We began the transition in October2003 and aim to complete it by July 2004.While the closure of Avenida do Estadoinvolves the loss of 300 jobs, 212 new jobswill be created in Bauru.

We have managed the impact of thechanges by being open and transparentabout what has to be done and by workingwith employees to do it in the right way.We informed all employees in advance ofthe closure and hired a firm thatspecialises in supporting large scalerestructuring. The firm devised aprogramme, New Professional Project, tocoordinate the redeployment of employeesin the most supportive way. Theprogramme included researching jobvacancies with local companies andmatching employees' capabilities, wishesand ambitions within the current jobmarket and business environment.

Alexandro Michelmann, who works atAvenida, said: “In my opinion this has beena very instructive moment and has made usponder over several issues related to theclosing down of the factory and our lifefrom now on. Now we have to apply thethings we have learned, do our best, andalways believe in our potential.”

1.5

big challenges

1.6

addressing obesityThe rise in obesity is an area ofconsiderable public health concern. Forsome time now, we have been workingwith our industry, governmental bodiesand other stakeholders to see how we can add to the efforts to address theproblem. It is essential that we all worktogether to tackle obesity based on agreedand authenticated scientific evidence.

We believe we must focus on the real causes in order tocontribute to the achievement of a sustainable solution.

In many countries across the worldover the last two decades the averageweight of people has been graduallyincreasing. This has now reached apoint whereby obesity, universallydefined as a height to weight ratiothat gives a body mass index greaterthan 30, is viewed by the WorldHealth Organisation as one of themost considerable global healthconcerns. Chronic obesity is associatedwith disorders such as diabetes, heartfailure and other forms of

deterioriation in the body’s majororgans.

The causes of obesity are complex. Toincrease understanding, the medicaland scientific communities areengaged in research on the role of,for example, genetics, changed eatinghabits, changed lifestyles, changes in apopulation’s overall diet, theintroduction of new ingredients to thediet, and the impact of theenvironment in which people live.

Trish FieldsConsumer Impact Director

big challenges

What is known is that the nature ofour diet has changed. More“convenience” and pre-prepared foodis being consumed and in many partsof the world there has been a rapidincrease in out-of-home consumption.What is also clear is that there hasbeen a gradual shift to a moresedentary lifestyle. Technologicaldevelopments have enabled us toreduce manual activity in work and inthe home. They have also increasedour ability to entertain ourselves viainteractive technology, such as TV andcomputer games, rather than by sportor physical activity.

We want to play our part inaddressing these important issues ofdiet and lifestyle. However,confectionery and soft drinks are asmall part of the world’s diet, so ouropportunity to have a direct impact islimited. In countries such as the UK,where confectionery consumption isrelatively high compared withelsewhere, it represents just over 1%of the diet, and over the last twentyyears there has not been a significant

rise in consumption. Our products areprimarily viewed by consumers astreats and refreshment. Some of ourextensive chewing gum product rangeprovide dental health benefits, andother products, such as Halls, providecold-symptoms relief.

Consumers trust us and our brandsand this provides us with anopportunity to make a contribution.To this end, we are taking a holisticapproach.

We are taking action (and urgingothers to do so) in the areas ofinformation and education toencourage consumers to consume ourproducts sensibly and in moderation.

We are particularly keen to ensurethat children learn to enjoy ourproducts as treats and refreshment, tobe consumed in moderation and fully

Our chocolate products arepredominantly cocoa, milk, other fatsand sugar; sweets contain sugar; softdrinks, when not in diet form,contain sugar – with the naturalsugar of fruit also present in many.

1.7

big challenges

1.8

guided by parental authority. We havea specific code of marketing practicethat guides the particular attentionand care we insist on when marketinghas any impact on children.

Our range of products can beconsumed and enjoyed by the wholefamily as treats or refreshments or fortheir functional benefits as part of abalanced lifestyle. We firmly believethat parents, guardians and carers arethe most important people to directchildren's consumption, as they arethe key influence in children'sdevelopment.

We believe advertising our productsdirectly to children is appropriate onlywhen it is conducted in anenvironment that supports theparental role and where the child hasreached an age of cognisance andreason which is generally establishedas the age of 8.

Advertising our products directly tochildren is also appropriate when itsupports positive social developmentand nutritional understanding andencourages responsible consumption.

In support of this stance, we took thedecision to withdraw from alladvertising directed specifically atsituations where children aged lessthan 8 years form the majority ofviewers.

In addition, we have developed aglobal marketing code of practice,which we believe reflects bestpractice in the industry. In some caseswe go beyond what is generallyviewed as the most stringentregulatory standards regardingmarketing to children.

Our comprehensive global codeensures all advertising is:

• Supporting parental/carer control

• Recognising children’s susceptibilities

• Supporting the principles ofresponsible consumption andbalanced lifestyle

• Supporting positive socialdevelopment

• Sensitive to cultural differences

big challenges

We are addressing the problem inother ways, too:1. Product choice and innovation

We are investing in science andinnovation to develop newformulations to create greaterchoice.

2. MarketingWe advertise and promote ourproducts responsibly within a globalcode of marketing (visit our websitewww.cadburyschweppes.com).

3. PortioningWe follow best practice in labellingand we have taken the decision towork towards clearly defining on

the pack the distinction betweensingle serve/occasion and productsfor sharing or multiple eatingoccasions, consistent withapplicable labelling regulations.

4. LabellingWe are creating new ways of usingproduct labelling to educate ourconsumers on responsible andbalanced consumption, always inline with local labellingrequirements.

5. Consumer insightWe are helping to improve theunderstanding of the issuessurrounding overweight/obesity byusing our consumer research andinsights.

6. ScienceWe are working with both ourscience teams and other experts tobetter understandoverweight/obesity and the rolewe can play in support of solutions.

1.9

A STRICT CODE OF PRACTICEREGARDING MARKETING ANDCHILDRENWe recognise and share publicconcern about the potential impactof advertising directly to youngchildren. We would include in thisthe purchase of all forms ofadvertising – TV, radio, outdoor,internet, posters and the use of SMStexting – specifically directed atsituations where children aged lessthan 8 years form the majority ofthe audience.

big challenges

1.10

7. Contracted business partners (e.g.licensees, franchisees, bottlersand promotional partners)We are engaged in discussions withour contracted business partners torecommend they follow ourstandards where contractualarrangements permit.

8. EducationWe are engaged in educationprogrammes and other initiativesto support increased physicalactivity.

9. StakeholdersWe are actively working with arange of stakeholders in thedevelopment of guidelinespromoting balanced lifestyle andinformed choice.

10.Community initiativesWe are encouraging our employeesto participate in communityinitiatives to help encourage betterdiet and lifestyle, building on ourhistory of community engagement.

We are proud of our brands. They arefun and give enjoyment as treats orrefreshment to people all around theworld. Our consumers are at theheart of our business and we listen toand act responsibly by them. We listento people when they say they want toenjoy our brands in moderation and aspart of a balanced diet and lifestyle.We offer variety and new innovations,plus information on our products, tohelp people choose the right productfor them and the eating occasion. We will always encourage responsibleconsumption as we believe this iscentral to consumers continuing toenjoy our brands.

big challenges

We share with Fairtrade a desire toimprove the conditions of cocoagrowing communities and admiretheir work with dedicated cocoacooperatives to help provide access tobetter communications, commercialinfrastructure and a minimumcommodity price based on a long-term relationship. More broadly, weapplaud their work in bringing toconsumers’ attention many of theissues concerning the prosperity of

farming communities in developingcountries. We believe they willcontinue to play a valuable role in theindustry.

Our approach is different, though ouraims are equally ambitious. As avolume cocoa user, our supplies aretraded on the world market and theprice is always subject to the normalconditions of supply and demand.Against that background we look to

trading with careCadbury Schweppes has a long andhonourable tradition of trade with WestAfrica, underpinned by care for the wellbeing of cocoa farmers and their families.Along with industry colleagues, we look to encourage the production of cocoabeans in a sustainable manner that givesfarmers a fair return for their crops. Readhow we continue to meet the challenge

of trading with care and about the broader commitment ofour industry to the International Cocoa Initiative.

1.1 1

Ngawang LobsangGlobal Procurement Director

big challenges

1.12

find ways to improve conditions for allthe estimated million and a halfsmallholder farmers across West Africa.

Ethical sourcing in CadburySchweppesMany of the supply chains that deliveressential raw materials to CadburySchweppes’ businesses start with smallagricultural producers. The chains areboth long and complex, with cropsproduced by the myriad small growerssituated in some of the poorestregions of the world. These areasgenerally have little infrastructure andmay be located many thousands ofmiles from our factory gates. Theproduce has frequently been handledby a number of middlemen, andtraded through international markets.

Our aim is to ensure that humanrights and ethical trade standards aremet at every step of our productionprocess including in our owned andoperated businesses, in other franchiseholders and in our whole supply chain.

In the early twentieth century,William Cadbury investigatedallegations of labour abuses in the

supply chain of cocoa from the WestAfrican island of Sao Tome. Today,too, we are actively engaging with oursuppliers globally to ensure that theproducts we buy from them aresourced ethically. This is a challengingtask but one which we are addressingrobustly as it may involve as many as40,000 suppliers.

Our engagement with suppliers startswith supplier colleagues who deliverdirect to our operations around theworld and we are building processesthat work right back along the chain,for example to the original growers ofagricultural produce.

We have conducted ethical tradingpilot studies in China, Ghana,Indonesia, Turkey and Mexico andthese have been helpful in building ourcontinuing engagement processes.

One clear lesson is that each supplychain has particular characteristics andthat no single model of engagementworks for every one.

As we entered this new millennium,we rearticulated our traditional

big challenges

commitment to ethical trading. OurHuman Rights and Ethical Tradingpolicy (page 9.1) reflects the UniversalDeclaration of Human Rights and coreInternational Labour Organisationconventions. This is supported by OurBusiness Principles and Workingwith suppliers, published in fivelanguages to guide our procurementteams worldwide.

As in our own businesses, throughcloser engagement with our supplierswe look to ensure that decent

minimum labour standards; hoursworked; wages paid; workingconditions; dignity at work andrespect for employees are met atevery step of the supply chain for our brands.

Through increased investment in ourprogrammes of ethical sourcing wewill demonstrate that we live ourvalues and act responsibly in the newglobal economy of the twenty firstcentury.

Case StudyEthical sourcing ofcocoa, West Africa

West Africa produces most of the cocoaused by Cadbury Schweppes and some 70%of the world’s supply. It is estimated thattoday there are some 1.5 millionsmallholders in West Africa who worktheir farms with family labour and rely oncocoa production for their living,producing on average less than one tonnea year.

Access to potable water is a basic humanneed. Its availability dramatically reducesthe risk of disease, improves the health ofvillagers (especially children), andminimises time to carry water for afamily’s daily requirements. We haverecently begun a programme to dig wellsto provide permanent supplies of clean,fresh water for cocoa farmers and theirfamilies in important growing areas of thewestern regions of Ghana (see page 10.15).We are also working with ActionAid andthe Commonwealth Education Fund oneducation projects for the children of

1.13

big challenges

1.14

migrant parents in Ghana’s farmingcommunities.

A global industry coalition was createdsome two years ago at the time of mediaallegations of abusive labour practices onsome West African cocoa farms. Thisindustry coalition began working withgovernments, non-governmentalorganisations (NGOs) and other experts toensure that cocoa is grown responsibly.With a number of partners, the coalitionsigned a Protocol under the leadership ofUS Senator Tom Harkin and CongressmanEliot Engel.

The Protocol committed the coalition tospecific steps, including the formation of afoundation (now the International CocoaInitiative) and development of acertification system to ensure cocoa hasbeen produced without abusive labourpractices. Cadbury Schweppes is taking aleading role in the coalition, which bringstogether the six largest global chocolatecompanies, cocoa processors and traders(together with their trade associations)with a range of donors and NGOs, theInternational Labour Organisation and,most importantly, relevant governmentagencies in cocoa producing countries.

One of the coalition’s first tasks was toestablish the facts around the laboursituation on West African cocoa farms anda detailed independent survey wascompleted in 2002. The results have been

published and it is clear that some mediaestimates of the scale of the problem wereexaggerated. However, the findings haveled the industry and a range of otherdonors to focus on a number of priorities:

Create and manage farmers’ groups toenable farmers to market their cocoa moreefficiently. Early results indicate thatfarmers receive better prices for producesold through these groups.

Establish Farmers’ Field Schools. Some4,000 farmers in four countries haveparticipated in these self-help trainingprogrammes to learn better husbandry;improved pest and disease control; and theissues around responsible use of labour oncocoa farms.

Develop a certification process to assureconsumers that products have been madeusing responsible labour practices.

Work with local radio stations. Trailers onchild labour have met with an initiallyencouraging response. An experimentalshipment of wind-up radios is beingdistributed to help reach more farmers.

Work with the International LabourOrganisation to develop greater publicawareness of the law; build localunderstanding of responsible labourpractices; and protect young people at riskof exploitation.

big challenges

International CocoaInitiative: workingtowards responsiblelabour practices

The International Cocoa Initiative’s role isto oversee and sustain efforts to eliminatethe worst forms of child and forced labourin the growing and processing of cocoabeans and derivative products. Funded byindustry, it is based in Geneva and employs

a small staff to act as a catalyst and tofoster cooperation. It is also becoming aclearing house and a source of bestpractice on this issue.

This not-for-profit foundation is managedby a board with an equal number of cocoaand chocolate industry directors (includingone from Cadbury Schweppes) and non-industry directors (from the labourmovement, consumer groups, developmentNGOs and activists) who contribute theirknowledge and experience.

What Ghanaian cocoafarmers have to say

“The training has enabled me tounderstand the cocoa agro-ecosystem. I have been able to remove mistletoes andunwanted chupons from my farm. I alsothinned my farm for adequate spacing andharvested the pods as discussed in theFarmers’ Field School. The harvest hasfetched me money from which I boughttwo packets of roofing sheets, windowand door frames and blocks to put up anew house. The practices conducted in myfarm have prolonged the harvest season.The trees are still flowering and carryingpods. Long live Farmers’ Field School.”DORA OSEI

“The Farmers’ Field School is simple andpracticable and encourages participants to

achieve quick results. I never expected theresults of the management practices put inplace on my farm could yield results sorapidly. I encourage all farmers to practiceall that we discussed for higher yields,more money and a better way of living.”ABINA FOBI

“If the Farmers’ Field School had comeearlier than now, I would have beensomewhere in the moon. The training hasmotivated me to put my farm in a bettershape by managing the shade, removal ofdisease-affected pods and thinning. Theblackpod attack has reduced to a very lowlevel in the farm.

I have bought four female goats to keepfrom the proceeds of my harvest.Harvesting is still in progress. Well done,donors and trainers.”JANET YEBOAH

1.15

big challenges

Just as social and environmentalperformance are important tomeasure in our CSR Report, so is theimpact of our economic performanceon these stakeholder groups. Inaddition to statutory financialreporting, here for the first time, weshow how we add value, and how thiscash value added is distributed to ourstakeholders.

By engaging in business, and payingfor goods, services and fixed assets,

we provide the revenue for suppliersto pay their employees, partners andin turn their suppliers. We reward ourpeople for their human capital andprovide revenue to governmentsthrough taxes. The cash value added isalso used to pay interest on externalborrowings; invest in the communityand pay shareowner dividends. Theremaining element of the value addedis retained within the business forfuture growth.

Economic responsibility,wealth generation anddistribution

As a food and drink manufacturer we add value to raw materials. First classrecipes and technology are combined with marketing skills to create brands that people love. In doing so, we interactwith many stakeholders around the worldwho benefit from the economic impact of our business.Ken Hanna,

Chief Finance Officer

1.16

Cash value addedCash value added provides an easy tounderstand map of the wealth wecreate and how our stakeholdersshare in our economic success. The

statement calculates the wealthcreated in monetary terms bydeducting the cost of raw materials,goods, services and fixed assets webuy in from our sales income.

big challenges

Cash value added statement

Cash generated 2003 2002 2001 2000£m £m £m £m

Turnover (income from sales) 6441 5298 4960 41 18Payment for goods, services and fixed assets 4519 3562 3282 2599Cash value added 1922 1736 1678 1519

Distribution to stakeholdersEmployees (wages, salaries and retirement costs) 1024 800 734 648Government (taxes and social security costs) 320 308 254 228Providers of capital – dividends to shareholders 246 235 201 213

– interest on borrowingsto lenders 156 74 92 29

Community investment* 4 4 0 0Total distributed to stakeholders 1750 1421 1281 1118Cash retained within the business 172 315 397 401Cash value added 1922 1736 1678 1519Note:* The figures represent community investment through cash donations only. The figure for 2003

was £4.4m compared to £4.0m in 2002.

1.17

big challenges

1.18

The statement shows that in 2003,we spent £4,519 million on rawmaterials, goods, services and fixedassets. This means that more thantwo-thirds of the economic activitygenerated by our product sales takesplace in the supply chain rather thanin our own business operations.

The most significant group to benefitfrom the cash value added were the55,000 plus Cadbury Schweppesemployees who received 53% of this value. Providers of capital, ourshareowners and financial institutionsfrom which we borrow moneyreceived £402 million, about 21%. We retained 9% for future use in the business.

We paid £320 million (17%) togovernments around the world intaxes and social security costs for our

employees. That tax revenue pays forvital public services in all thesecountries. Finally, £4.4 million (0.2%) in cash was invested in growingcommunity value around the world.An additional value of communityinvestment worth £1 .6 million wasdonated in staff time and companyproducts and facilities.

The figures vary from year to year, of course, but the pattern is broadlyconsistent.

Our ShareownersOur primary objective as a business isto grow shareowner value over thelong term and we strive to deliverconsistently superior shareownerreturns.

Of the over two billion shares in issue,the majority are in nominee accounts.

big challenges

There are over 80,000 registeredshareowners that include corporateand individual shareowners. Of these,about 400 accounts have more than500,000 shares representing about84% of the total shares.

Among the biggest fifty shareownersare three Socially ResponsibleInvestors (SRI): Morley FundManagement, Insight Investment andISIS Asset Management. Theircombined shares are approximately 43million (2.2%).

We have engaged with these threeSRIs on issues relating to CSR, supplychain and beverage bottle recycling.Our engagement with them helps usto identify the significance of currentissues within our sector and of anyparticular risks associated with ouractivities.

1.19

the little book of

challenges

p1.1 managing company changep1.6 addressing obesityp1.11 trading with care

p1.16 economic responsibility, wealth generation and distribution

A global company, we manufacture,market and distribute a variety of muchloved confectionery and beveragesbrands. Our brands are sold in almostevery country in the world and ourorigins go back over 200 years. Weare joint number one in chocolate,sugar and functional confectionery, a strong number two in gum and theworld's third largest soft drinks company.In 2003 we reorganised into fiveregional operating units (AmericasBeverages; Americas Confectionery;Europe, Middle East and Africa(EMEA) confectionery; EuropeBeverages; and Asia Pacific) and fiveglobal functions (Human Resources;Supply Chain; Commercial Strategy;Finance; and Legal). We added a sixthfunction, Science and Technology, inearly 2004.

Globally2002* 2003*

Turnover (£m) 5,298 6,441

Profit before tax (£m) 830 564

Total employees 42,314 55,799(average)

Dividends per ordinary share (pence) 11.5 12.0* GLOBAL FIGURES INCLUDE ALL FIVE REGIONS AND CENTRAL

OPERATIONS

Americas Beverages2002 2003

Turnover (£m) 1,982 1,814

Underlying operatingprofit (£m) 585 532

Employees 6,970 6,910

we have major operations in:USA, Canada and Mexico

key brandsDr Pepper7 UPSnappleHawaiian PunchMott’s

ClamatoYoo-HooCanada DryA&WSunkist

AmericasConfectionery

2002 2003

Turnover (£m) 233 871



we have major operations in:USA, Canada, Mexico, Brazil,Argentina

key brandsHallsTridentDentyneDentyne IceBubbalooClorets

CadburyChicletsSwedish FishSour Patch KidsBeldentBazookaMantecol

2. who we are

Asia Pacific2002 2003




we have major operations in:Australia, New Zealand, China, India,Malaysia, Thailand, Japan, Indonesia

key brandsTrebor Red TulipSportlifeHallsTridentClorets

SchweppesCottee’sSoloSpring ValleySunkistWaveBournvita

Europe, Middle Eastand Africa (EMEA)

2002 2003

Turnover (£m) 1,787 2,117


Employees 18,745 22,334

we have major operations in:UK, Denmark, France, Nigeria,South Africa, Egypt, Russia,Turkey,Poland, Spain, Morocco, Lebanon

key brandsCadburyTreborBasset’sHollywoodPoulain

WedelTridentHallsStimorolV6Dirol

Europe Beverages2002 2003




we have major operations in:France, Spain and Germany

key brandsSchweppesOranginaOasisLaCasera

PamprylTrinarajusAppolinarisGiniVida

where we operate

making & testing

Suppliers

WE HAVE

INFLUENCE HERE

cadbury schweppesWE HAVE CONTROL HERE

buying

WE BUY

AN EQUIVALENT

OF 170,000 TONNES

OF COCOA BEANS EACH YEAR

packaging marketing

innovating

Healthy cows

chief checker

OVER 1 MILLION CADBURY’S CRUNCHIEBARS ARE PRODUCED IN THE UK EVERY DAYAT A RATE OF 1,200 BARS PER MINUTE

TOTAL BEVERAGES

PRODUCED IN 2003

4,328,752,000 LITRES

CAPITAL INVESTED

PER EMPLOYEE £52,900

distribution

PA

YM

ENT

TOSU

PP

LIER

SFO

RG

OO

DS

AN

DSE

RVIC

ES(£

M) 4

,234

3. our value chain

business partners

consumers & customers

WE HAVE INFLUENCE HERE

customers

super sales person

WE EMPLOY

AROUND 55,000 PEOPLE

IN2003 W

EPRODUCED

483,612 TONNESOF

CHOCOLATECONFECTIONERY

INVESTMENT IN RESEARCH

AND DEVELOPMENT (£M) 53

COST OF SALES

(£M) 3,309

DISTRIBUTION COSTS (£M) INCLUDING MARKETING 1,479

PRE-TAX PROFITS PER

EMPLOYEE £10,100

Eliane RossiniSocial Responsibility ManagerCadbury Adams Brazil

why it matters Demonstrating strong corporate and social responsibility is not only the right thing to do, italso makes good business sense. Shareowners, customersand regulators are more likely to support our plans togrow our business because they trust us to make theright decisions and to manage our risks. Consumers aremore likely to buy our brands because they trust us toprovide safe, high quality products. Employees are morelikely to join and stay with us because they trust us totreat them openly and equally, recognise and rewardtheir contributions and help them realise their potential.

Issues of good corporate governance are at the forefrontof the minds of institutional investors, governments, themedia and the public alike. Companies have to demonstratemore visibly that they live their values and can act responsiblyin this new economy, both at home and abroad.

We will continue to keep CSR at the heart of our companyand our brands. It is a fundamental part of living ourPurpose and Values. It is explicit in our fifth strategicgoal and in the two supporting priorities we have setourselves. The reorganisation of 2003 has given us asharper focus. CSR will help drive our business strategy in the years that lie ahead.

goals

Deliver superiorshareowner performance

Profitably and significantly increase ourglobal confectionery share

Profitably secure and growour regional beveragesshare

Ensure our capabilities are best in class

Reinforce our reputationwith employees andsociety

priorities

• Deliver annual contract• Execute Fuel for Growth

• Integrate Adams and beat the model

• Execute Smart Variety

• Integrate North America Beverages

• Further integrate Europe Beverages

• Ratchet up innovation• Hone people and

systems capabilities

• Motivate, develop and reward people

• Continue high CSRstandards

1994GUIDE TO

ENVIRONMENTAL

MANAGEMENT

ISSUED

1996BAD NEUENAHR

SITE IN GERMANY, OUR FIRST TO

OBTAIN EMAS

CERTIFICATION1993ENVIRONMENTAL

POLICY PUBLISHED

AWARDED A‘STRATOSPHERIC

OZONE PROTECTION AWARD’BY US ENVIRONMENTAL

PROTECTION AGENCY

1998FIRST ENVIRONMENT

REPORT PUBLISHED

ASPERS SITE IN USA,OUR FIRST TO OBTAIN

ISO 14001

4. what csr means to usCSR is and always has been fundamental to us. Our founders were well known for theirfair treatment of employees and for philanthropy in the community. Now a global company,we feel this responsibility as keenly as ever. The nature of our value chain and the globaleconomy in which we operate brings new issues and many challenges. Our CSR programmeprovides the framework to integrate our values into everything we do.

the last ten years of our journey...

Pierrick Kerjean

Sales Representative

Orangina Schweppes

1999NAMED ONE OF

THE WORLD'S 100BEST-MANAGED

COMPANIES FOR

FOURTH SUCCESSIVE

YEAR BY US MAGAZINE,INDUSTRY WEEK

2000FIRST COMBINED

ENVIRONMENT,HEALTH AND SAFETY

REPORT

HUMAN RIGHTS AND

ETHICAL TRADING

POLICY PUBLISHED

2001CORPORATE AND

SOCIAL RESPONSIBILITY

COMMITTEE ESTABLISHED

LAUNCHED HUMAN

RIGHTS AND ETHICAL

TRADING PILOT

STUDY PROGRAMME

INCLUDED IN DOW

JONES SUSTAINABILITY

INDEX

2002PUBLISHED FIRST

CSR REPORT

PUBLISHED OUR

BUSINESS PRINCIPLES

PARTICIPATED IN

INAUGURAL BUSINESS

IN THE COMMUNITY

CORPORATE

RESPONSIBILITY

INDEX (RESULTS

ANNOUNCED IN 2003)

2003INTEGRATION

OF ENVIRONMENT,HEALTH AND SAFETY

MANAGEMENT, POLICY AND SYSTEMS

SUSTAINABILITY KEY

PERFORMANCE

INDICATORS ADOPTED

GROWING COMMUNITY

VALUE AROUND

THE WORLD STRATEGY

LAUNCHED

JOINED THE UN

GLOBAL COMPACT

2004SECOND CSR REPORT

INTEGRATED WITH

ENVIRONMENT, HEALTH

AND SAFETY

EMBEDDING

CSR PROGRAMME

LAUNCHED

Cadbury Schweppes is committed to the UN Global CompactUN Secretary General Kofi Annan first proposed The Global Compact at Davos, Switzerland, in January 1999. He called on business leaders to embrace and enact within their own corporate activities nine coreprinciples derived from universally accepted agreements on human rights,labour and the environment. The nine principles include two on humanrights, four on labour standards and three on environment. In 2004, anew principle against corruption will be adopted.

The four labour principles reflect the International Labour Organisation(ILO)’s core labour standards, which our HRET policy commits us to. The three environment principles reflect the Organisation for EconomicCo-operation and Development’s Guidelines for Multinational Enterprises.We will report annual progress to the Compact. www.unglobalcompact.org


MO

RE

I NS I D E

p4.3 purpose & values p4.4 corporate governancep4.5 ethical business practices p4.8 employees p4.9 consumers

p4.9 customers, suppliers and business partnersp4.9 community activities p4.10 government relations

p4.10 the environment

At Cadbury Schweppes, we take our responsibility and reputation as a goodcorporate citizen seriously. We are proud of our principles and their effect onhow we do business.

This booklet has evolved from our code of conduct and takes into account globalstandards – such as the International Labour Organisation conventions and theUniversal Declaration of Human Rights – as well as cultural and legal bestpractices from our local markets.

It clearly states our business principles. It shows their impact on everyoneinvolved with Cadbury Schweppes, from the board, the businesses andemployees, to consumers, suppliers and business partners.

It highlights our responsibility, as a group and as individuals, to:• promote ethical business practices• respect the environment and communities in which we operate• assure equal employment opportunities• value diversity in the workplace• provide healthy and safe working environments• respect human rights and trade ethically

These principles should sit at the heart of our management processes and inform howwe work, all over the world. Through them we can protect and perpetuate the ethicalstandards that make Cadbury Schweppes a great company – to work for and to workwith.

By working together we can ensure our company maintains its reputation for ethicalstandards and keeps its promises. The final part of the booklet describes your role inmaking this happen.

INTRODUCTION

Todd StitzerChief Executive Officer

John SunderlandChairman

At Cadbury Schweppes we worktogether to create brands peopleloveWe believe that good ethics and good business go together naturally to produce the bestlong-term results for all our stakeholders.

Ethical business sits at the heart of Cadbury Schweppes. It always has. It is part of who weare, our heritage, our processes and the way we behave.

Our business principles reflect and reinforce this. Through them we continue to play apositive part in society, grow shareowner value, attract and develop the best kind of peopleand, importantly, create brands people love.


4.2


4.3

PURPOSE & VALUESWe work together to create brands people love. This is our core purpose.

Our measure of success is the value we create for our shareowners. But we can onlymaximise this value if we respect our commitment to every one of our stakeholders:shareowners, consumers, customers, colleagues, suppliers and the communities in which weoperate.

At Cadbury Schweppes, we are proud of our heritage and its relevance to our currentvalues throughout the world. These inform what we stand for, how we behave, ourapproach to business and to management.

In our actions we believe in showing integrity, openness and responsibility, reflected in theway we have built up the company.

In the way we work, we aim to reflect the principles of clear objectives, quality and simpleorganisation.

Through this we can take advantage of change, attract and retain committed people andmaintain a competitive advantage.

All this is encapsulated in three key behaviours which should guide everyone in CadburySchweppes: accountability, adaptability and aggressiveness.

Details of our “3As” and the behaviours they embody can be found in the LeadershipImperatives (see page 7.6).


Corporate governanceBoard of directorsOur board of directors is responsible for the proper management of the group. The non-executive directors are independent of management.

Board sub-committees deal with the following:

• audit: accounting, financial reporting and internal controls.

• corporate and social responsibility: environment, employment practices, health and safety,equal opportunities and diversity, community and social investment, ethical trading andhuman rights, and other aspects of ethical business practice.

• remuneration: annual salaries, incentive arrangements, option grants, service agreementsand other employment conditions for the executive directors.

• nomination: makes recommendations to the board on appointing any new executive ornon-executive directors.

Legal complianceWe are committed to strict compliance with the laws and regulations which apply to ourbusiness activities around the world.

Company records All books and records must be kept in accordance with applicable laws and according toproper accounting standards, fully reflecting all receipts and expenditures. This is in order to make sure the financial information we use within the business or for externalpublication is accurate and reliable.

Company reportingWe are committed to openness in all forms of reporting. The published reports andinformation we supply to regulatory agencies or other government organisations must be complete and not misleading.

4.4


ethical business practicesWe expect honesty, openness and courtesy from all employees in their business dealings.This means everyone must act in an ethical way and respect the dignity and human rights ofother colleagues and the people we do business with.

CommunicationsWe communicate openly, directly and accurately with the public. We will not give specialtreatment to any individual or institution. Material information about our performance andprospects is communicated to the financial community at the same time.

Matters relating to the group must not be discussed with representatives of the mediaunless specifically authorised as part of your role. Our group corporate communicationsdepartment must co-ordinate any announcements, statements, or responses to questionsfrom the media, which relate to price or commercially sensitive information.

ConfidentialityWe expect employees to keep all company and group information confidential. This mightinclude plans to buy or sell businesses, product formulation, manufacturing processes,advertising, marketing plans, concepts, research and development, suppliers, customers,financial information, personnel and employment matters, and other information which isnot generally known to the public. We will make sure that you are aware of yourobligations and also expect you to take steps to prevent unintentional disclosure. Theseobligations apply to all employees, including those who leave the company.

Inside information Confidential business information must not be shared with others outside CadburySchweppes or used for the personal gain of yourself or others. You, your family and closeacquaintances should not buy or sell company shares if you or they have materialinformation that has not been made public and could affect our share price.

4.5


Conflicts of interestEmployees must not have outside commercial interests that conflict with the best interestsof the group. We expect all employees to act only for the benefit of the group and not beinfluenced by a personal interest that may result from other individual or business interests(for example, shares in business partners, personal or family involvement in trading contractswith us, and so on). In addition, employees may not work simultaneously for a competitor,customer or supplier.

Conflicts of interest may not always be clear-cut, so if you have a question you shouldconsult with your manager, or human resources department or legal department.

Fraud We will not tolerate fraud. Our fraud policy and guidelines alert management to the waysin which fraud can happen and identify the best practices to prevent it.

Gifts and improper payments Gifts of money, goods, services or other favours (other than those set out below) must notbe asked for or accepted.

Small tokens and reasonable hospitality may be accepted provided they do not place youunder any obligation and will not be misconstrued. Any gift or hospitality of more thantoken value must be reported to your manager to determine if it may be accepted. You and your family should not accept anything that could damage our reputation.

Improper payments must not be offered or made. This does not stop you from receiving or giving reasonable business-related products, marketing materials or entertainment.

Appropriate use of company resources We expect employees to use our resources in a responsible and ethical manner. Whileincidental or occasional personal use may be allowed with prior approval from a manager,misuse is an ethical violation. For example, we support and encourage the use of e-mail and Internet services for conducting company business, but have formal standards andpractices in order to protect the company from potential abuse and associated risk.

4.6


Corporate opportunitiesEmployees may not: take for themselves personally opportunities that are discoveredthrough the use of corporate property, information or position; use corporate property,information or position for personal gain; or compete with the company. Employees owe a duty to the company to advance its legitimate interests when the opportunity to do so arises.

Inventions and intellectual propertyEmployees must disclose any inventions conceived, while in our employment. These mayarise from normal duties or from employment by us. Subject to applicable law, we will beentitled free of charge to the sole ownership and exclusive use of them.

Political contributions We and our subsidiaries will not make political contributions unless they have beenapproved by the board of directors and, in certain circumstances, shareowners. Politicalcontributions include cash contributions and benefits in kind, and in some cases may includedonations, gifts and or sponsorships.

If there is any question as to what constitutes a political contribution you should ask theadvice of the group secretary or legal department.

CompetitionWe are committed to free and open competition. We will compete vigorously but honestly,while complying with all competition and anti-trust laws wherever we carry out business.

4.7


employeesCommunications and involvementWe have a long tradition of encouraging direct, two-way involvement of andcommunication with employees. This is in order to obtain the fullest participation ofeveryone's energy and views and we believe is best promoted within the local workplacethrough locally-based information and consultation procedures. We respect the right to join a legally-recognised trade union.

Pay, benefits and working conditionsWe respect the dignity and human rights of our people. We remunerate fairly according to skills and performance and with reference to competitive industry and local conditions.We expect our people to work only reasonable hours.

We will not employ forced labour and will employ children only under circumstances thatprotect them and their rights to education and social development (for example, oneducational work experience or work placements).

Health and safetyWe recognise the importance of health and safety within our business. We seek to provide a healthy, safe and clean working environment in line with local laws, regulationsand industrial practice. We measure, appraise and report performance, as part of ourcommitment to the health and safety of our employees, contractors and everyone whoworks on or visits our sites.

Equal opportunities, diversity and personal development Our policy on equal opportunities and diversity states that we recruit and promoteemployees on the basis of their suitability for the job without discriminating on grounds of race, colour, ethnic or national origin, gender, sexual orientation, age, religion, maritalstatus, or disability unrelated to the task. We will not tolerate sexual, physical or mentalharassment of employees.

We value diversity. Employees from varied backgrounds enrich our company’s culture andsupport our commercial success. We recognise the value that all employees create for the business and will provide opportunities for personal and career development.

4.8


consumersProduct integrity We are committed to providing consumers with high-quality, wholesome products whichare marketed truthfully, labelled clearly, and, as a minimum, meet food safety regulations.

Advertising and promotionsAll advertising, promotions and other public communications will be conducted in line withthe principles of honesty, integrity and openness. This will ensure that we communicate inan accurate and truthful way. We will take special care to avoid any suggestion of exploitingthe inexperience of children or undermining the responsibility or judgement of parents orother carers.

Customers, suppliers & business partnersWe will carry out our business honestly, ethically and with respect for the rights andinterests of the people with whom we do business. We expect relations with joint-venturepartners, licensees, suppliers and trade customers to be mutually beneficial and willencourage our principles and standards to be upheld while the relationship continues.

COMMUNITY ACTIVITIESWe recognise our responsibilities as a member of the communities in which we operateand commit resources to support community and social investment through national orlocally targeted programmes in partnership with others. We will also encourage andsupport your efforts to be involved in and provide leadership in the educational and socialfabric of the communities in which you live.

4.9


Government relationsWe support dialogue between business and government authorities at local, national andinternational levels to promote and implement relevant legislation, regulations andagreements, protecting the rights of all stakeholders while safeguarding a healthy andcompetitive business environment.

the environmentAs a major multinational company we recognise our environmental responsibilities and ourcontribution to sustainable development. Our environment policy and its managementprocesses deal not only with the environmental issues connected to our manufacturingprocesses and facilities, but also with protecting the ecosystems from which we derive ourraw materials, management of our supply chain, and distributing, selling and consumptionof our products.

4.10


M O R E I N

SI D

E

p4.3 purpose & values p4.4 corporate governancep4.5 ethical business practices p4.8 employees p4.9 consumers

p4.9 customers, suppliers and business partnersp4.9 community activities p4.10 government relations

p4.10 the environment

A new, simpler structure was introduced in February 2003to clarify accountability and enable swifter decision-making.We now have five regional operating units supported by six global functions. The new leadership team of 11 keyexecutives reports directly to the CEO.

The corporate and social responsibility committee, formed in 2001, drives the CSR agenda for Cadbury Schweppes. It is chaired by Baroness Wilcox, a non-executive board member, and includes thechairman, the chief executive, human resource and legal officers, andtwo other non-executive board members. The Committee oversees themanagement of all issues relating to our five pillars of CSR: humanrights and employment standards; ethical sourcing; marketing, food andconsumer issues; community investment; and environment, health andsafety management.

The Global Leadership Team is around 100 strong. It includes the functional and regional heads and senior executives who report to them fromregional and business units, in addition to themain board executive directors.

the new organisation has provided immenseopportunities to extend CSR across our business. The structure is providing value in target setting andcommunications; in process development, performancemanagement, and in verification of the progress weare targeting.

within the regions are business units, which includecommercial, administrative or operational sites.They execute the strategies, while incorporating theinsights gained through their interaction with ourstakeholders. The units are supported by an increasingnumber of CSR and community champions, a network of people with specialisms such as environment, healthand safety, and employee development.

5. how we make decisions

John Sunderland Todd Stitzer

Gabriela RiveroCommunication and PR Manager

Cadbury Schweppes Bebidas Mexico

THE MAIN BOARD IS CHAIRED BY JOHN SUNDERLAND AND CONSISTS OF FOUR EXECUTIVE DIRECTORS AND FIVE NON-EXECUTIVE DIRECTORS. THE BOARD IS RESPONSIBLEFOR THE PROPER MANAGEMENT OF THE COMPANY. SPECIFIC MATTERS ARE DELEGATED TO THE FIVE BOARD COMMITTEES AND CHIEF EXECUTIVE’S COMMITTEE.

The five regional operating units supportedby six global functions (see page 4) give focusto our growth and efficiency and provide the strongest possible structural foundation.The leader of each function and region sitson the chief executive’s committee (CEC).The regions are responsible for developingregional strategies to drive the growth ofCadbury Schweppes brands. Our HumanResources, Supply Chain and CommercialStrategy functions are vital in managing our five pillars of CSR.

shareowners

consumers

our stakeholders

governmentbusinesspartners employees

suppliers

Bob Stack David ThompsonDr Wolfgang

Berndt

Mike Clark Ken Hanna

Baroness Wilcox

Roger Carr RickBraddock

workingbetter

together

encouraging stakeholder dialogueM

O

R E I N S I D E

p5.1 how we engage with stakeholdersp5.6 what others say about us

p5.9 what stakeholders say about our CSR reporting

encouraging stakeholder dialogue

How we engage with stakeholdersListening to and working with stakeholders is at the heart of ourapproach to CSR. We have open and regular dialogue withshareowners, employees, consumers, business partners and suppliers,governments and the local communities in which we operate –what they say influences how we think and what we do.

Dialogue with many of our stakeholders is crucial toour business. Like every business, we listen to ourcustomers and consumers all the time to ensurethey are happy with our products and services.Similarly, our buying teams engage daily withsuppliers and, internally, human resource teams

listen to our people, many of whom are the mainlink to our local communities.

On broader matters, we engage with stakeholdersin a more structured way. Since publication of ourprevious CSR report, we have met representativesof non-governmental organisations, the socially

5.1


5.2Case StudyWhat investment analysts sayabout us, worldwide

In 2003 we reviewed and responded to assessments of our CSR prepared by our top SRIs: Morley FundManagement and Insight Investment Management.

In these assessments we were challenged on the lack of information in the public domain about how we manage human and labour rights in the supply chain. We subsequently met with the analysts to give specificdetails on our progress on these issues and have included a section on human rights and ethical trading in this report (see page 9.1).

Another of our top SRIs, ISIS Asset Management, engaged directly with our environmental team andpackaging experts on the use of recycled polyethyleneterephthalate in beverage bottles.

responsible investment (SRI) community, governmentsand multilateral agencies, to understand better theirexpectations of us. Many business units also holdformal stakeholder dialogues on particular topicsthat are relevant to them.

Investors and shareownersWe have ongoing dialogue with investors through a broad ranging investor programme wheremanagement regularly meets with investors andanalysts in the main investment centres around theworld. In 2003 we held two investor seminars inLondon and New York to communicate our strategyand supporting goals and priorities over the nextfour years. Shareowners also have the opportunityto discuss company performance and CSR relatedtopics at our annual general meetings.


We regularly respond to questions raised by analystsand SRIs on CSR issues and we use their feedbackto address the gaps and risks that they identify.

Consumers All our business units deal with consumer enquirieson a daily basis and we have an interest in hearingtheir views on our products and service. For manyyears our market research has tracked changingconsumer interests and lifestyle patterns. Many ofour business units also formally conduct consumersatisfaction surveys. We have such a wide range ofproducts that consumer-facing issues vary from onebusiness unit to another.

However, some themes are increasingly commonand we recognise that on some issues, such asmarketing to children, we need to respond globally.

We have therefore been developing responses andinformation for the range of issues raised byconsumer stakeholders – many of which areincluded in the “Addressing obesity” section of thisreport (see page 1.6).

EmployeesLine managers deliver regular team briefings tocommunicate information about the business andprovide opportunities for our people to reviewdepartmental, local, regional and corporatestrategies. In some business units, two-waycommunication also takes place through locallytailored employment climate surveys. We are in theprocess of developing a global climate survey to becompleted in 2005.

5.3


5.4

Our commitment to respect the rights ofemployees to join legally recognised labour unionsprovides a channel through which managers andemployees can discuss issues relating to the business.Currently, 70% of our people are covered by formalemployee representation bodies including tradeunions, work councils, collective bargain agreementsor a combination of these. Regular meetings,newsletters, the Group website and many localwebsites help employees keep up to date with whatis going on within the business at local, regional andGroup levels.

Business partners and suppliersBuyers work closely with suppliers and respond totheir suggestions, for example on innovations and

efficiency gains. We have engaged with suppliers toexplain our Human Rights and Ethical Trading (HRET)policy and Ethical Sourcing Standards and to learnof their views and progress.

During pilot studies we engaged with suppliers andbusiness partners in five countries: Ghana and Turkeyin 2001, China and Indonesia in 2002 and Mexico in2003. This helped us better understand HRET policyissues in those countries. Our buying team alsoinitiated a dialogue with over 90 high prioritysuppliers, including many from developing countries,to ensure that they understood and complied withour Ethical Sourcing Standards. A full descriptionof this engagement process is detailed on pages 9.4.-9.6.


GovernmentWe talk to government authorities at both local andnational levels, and to international agencies. Weare not only interested in the direction of food andagriculture policy, but also in wider business issuesand in social and education policy, to promote ahealthy and competitive business environment.

At Group level we often respond to governmentconsultations on issues that affect us. In doing sowe aim to show real examples of how policies andregulations impact on consumers, employees,shareowners and the communities in which we liveand work. Recent examples include our dialoguewith the UK government on the benefits ofEnterprise Education, in which our expertise has

been developed through our communityprogramme (see pages 10.5-10.6).

We also participated in the World HealthOrganisation’s industry dialogue on diet, health andnutrition, which aimed to build consensus betweengovernments and industry to tackle rising levels ofobesity and physical inactivity.

In dealing with governments we are guided by Our Business Principles, which emphasise acting with honesty towards government officials andinstitutions and seeking truth and accuracy in our representations and communications. Anyconsultants that we work with are required to signup to the relevant professional codes of conduct.

5.5


5.6

We are included in theFTSE4Good index, which

measures the performance of companies thatmeet globally recognised CSR standards.

Since our firstparticipation in the DowJones Sustainability Index

(DJSI) in 2001, we have been included in the DJSWorld Index every year. In 2003 we were includedin the DJS STOXX Index, which reflects theprogress we are making.

What others say about us

Global food industry average

Cadbury Schweppes score

Best company in food industry

Total score

Social dimension

Enviromental dimension

Economic dimension

69

4366

426667

4768

72

3763

76

0 20 40 60 80 100%

DJSI scores 2003


We participated in both theinaugural 2002 and the 2003Business in the Community (BitC)Corporate Responsibility indices.

Since 2002, our overall score has improved from73% to 87%. We ranked forty-ninth overall andsecond in the food producers and processors sector.

Significant progress was underlined by our improvedscore for CSR Integration, due largely to ourprogramme to embed CSR within business practice,the publication of the 2002 CSR report and ourcommitment to continued reporting.

Performance in BitC’s Corporate Responsibility Index 2002-2003

5.7

Overall score

Corporate strategy

Integration

Management

Performanceand impact

Assurance

2003

0 20 40 60 80 100%

8773

98

88

88

62

81

74

88

69

50

66

2002


5.8

On Performance and Impact the roll out of ourGrowing community value around the worldstrategy, with its measurement guidelines forcommunity investment, improved our score as didimprovements in management practice, with newpolicies on equal employment opportunities anddiversity and human rights standards.

We continue to work on areas in which we candemonstrate further improvement. For example inPolicy Development, where we did not havepolicies in the public domain on marketplace issues,we have now strengthened our response to keyconsumer issues (see Addressing obesity page 1.6).

On Assurance we scored lower than average, as wehave not yet engaged an independent group auditor third-party verification of management systemsand performance in all areas. We are currentlydetermining the most appropriate processes toaudit and verify our CSR activities.


Our 2002 CSR report emphasised our commitmentto live up to the growing and changingresponsibilities that good corporate citizenshipdemands. Audience expectations of CSR reportshave inevitably changed since 2002. In preparationfor the 2004 report, we consulted key audiencesfor feedback on the first report and to seek viewson both future directions for reporting and thewider engagement of CSR within the business.

We conducted email and telephone surveys withemployees from across our five regional operatingunits and with key customers in the UK. We also

held separate focus groups with special interestgroups and NGOs, CSR professionals and SRIs andanalysts. Overall, the groups felt that we had madehelpful progress in reporting on CSR, noting that it“differentiated Cadbury Schweppes in this sector”.

On content, our stakeholders hoped that in futurethey would see a fuller range of factual informationand data on our CSR performance. Key areasincluded diet and nutrition, ethical and fair tradeand human rights. This report addresses these issuesupfront and further information is clearly signpostedthroughout the report. We are clear that future

What stakeholders say about our CSR reporting

5.9


5.10

CSR reports must record social and environmentalperformance and prompt debate to stimulate acycle of continuous improvement.

The design of our last report was well received andwas acknowledged as an attempt to stand out fromthe crowd. However, a minority felt that althoughthe playful nature of the design engagednewcomers to CSR, it did not reflect theseriousness of the topic, and was not a suitableformat for more specialist audiences such asinvestors and special interest groups.

This year’s design retains the Cadbury Schweppeslook and feel while introducing a two-speed readapproach. Pictures and captions on the maindouble-page spreads are backed up with moredetailed information in the little books, to meet the needs of specialist audiences.

To improve the readability of this year’s report we’ve improved the contents index, simplified theillustrations and improved the content navigation.We’ve also made the report size smaller, henceeasier to store and carry. We welcome furtherfeedback via the feedback form.

Investment analysts focus group

Your 2002report was a

major step in theright direction"

Investment analystsfocus groupSEE CHAPTER 9

I want to knowabout how you

are working with your supply

chain

I want to knowabout your emissionsof greenhouse gases,particularly intransportation

Investors interest groupSEE PAGE 11.21

What are you doingabout HIV in Africa?"

Non government organisation focus groupSEE PAGE 10.9

Investment analysts focus groups

SEE CHAPTERS 4 AND 5

We want to knowmore about

governance andkey policies. How

do you makedecisions?

Has CadburySchweppes signed upto any international

conventions?"

Non governmentorganisation focus group

SEE CHAPTER 4

I found thedesign of the2002 reportto be very

busy"

Employeesurvey

what stakeholders said about our reporting and where to find our response

Can thereport be

more relevantto my job?"

Employee survey

I loved the style of the 2002 report, itmade me pick it up"

Special interest focus group

We want easyaccess toperformanceinformation"

Investment analystsfocus groupSEE PAGE 6.1

Employee survey

The 2002 reportwas great, I found

it useful fortraining seasons

with my colleagues

Will your nextreport be

independentlyverified?"

Special interestfocus groupSEE CHAPTER 12

Special interest groupSEE PAGE 10.8

The get active campaignwas of concern for me,

how have you respondedto stakeholder concerns?"

Address the bigchallenges, suchas ethical trading

and obesity

Investment analystsfocus group

SEE PAGE 6.1

We want morefactual data"

Special interest focus groupSEE CHAPTER 1

encouraging stakeholder dialogueM

O

R E I N S I D E

p5.1 how we engage with stakeholdersp5.6 what others say about us

p5.9 what stakeholders say about our CSR reporting

We will now build on these foundations, as we work to embed CSRdeep within the business. The energy and creativity of our managementteams and the development of a common understanding and sharedresponsibility for CSR will be key to the success of this agenda. We will:• build awareness and understanding through communication, training

and development programmes for management teams and specialists• develop skills and capacity to implement CSR initiatives• evaluate regional CSR risks and opportunities and build these

into local business planning• develop high quality stakeholder engagement• ensure efficient data collection, and clarify the role of auditing

and external verification• measure and report on performance, using consistent KPIs

Raising awareness, building capacity, assessing risks

We are engaging in a dialogue to cascade CSR to the regions,operating companies and business units, with the emphasis on raisingCSR awareness, building capacity and assessing risks. This started with the Chief Executive's Committee and during the first half of 2004 involves regional and functional leadership teams in a series of workshops.

Meanwhile other teams, for example within supply chain and humanresources, are introducing learning and development materials forspecific functional groups and for wider employee engagement as partof the Working Better Together agenda. Leadership teams are responsiblefor rolling out the programme to business units globally, while buildingCSR into business and individual performance objectives.

Measuring and reporting against key performance indicators

To benchmark, review and make more effective decisions about CSR,we need continually to measure our performance and compare ourprogress in relation to external best practice, where available. We have adopted a set of sustainability KPIs that draw on both the GlobalReporting Initiative and the UK’s Food and Drink Federation guidelines. The indicators will be used both internally, to manage our risks andimpacts and to communicate progress in social and environmentalperformance, and for external reporting.

We are introducing and/or improving data gathering systems for all theKPIs. We are working towards a simple but effective global measurementsystem which will help us manage our CSR commitment at a local,national and global level. This report contains the earliest results of the system (see the insert on the right). Future reports will reflectglobal data for all the KPIs.

We committed to a five year programme in 2001 tounderstand and embed CSR further in our business. As weapproach the second half of this journey, much has beenachieved. We have a new Board level leadership structure;restated values and principles; sustainability keyperformance indicators (KPIs); and stronger processes todeliver on policies around human rights and ethical trading;environment, health and safety; food, diet and lifestyle; andcommunity investment.

6. making it happen

Jack Mathias

Production Manager

Cadbury Adams Middle East

EMPLOYMENT PRACTICESComposition of female and male• Board of directors ch.7• Senior management p7.3• Total workforce p7.3

Employees categorised by age band p7.4

Maximum number of hours an employee n/ris contracted to work for

Proportion of employees represented by p7.10independent trade union organisations, collective bargaining agreements or bona fide employee representatives

Average number of training days per p7.5employee per year

ENVIRONMENT, HEALTH AND SAFETYProportion of manufacturing by tonnage with p11.2an externally certified EMS (such as ISO 14001 or EMAS)

Total energy use (kWh) in manufacturing per p11.10tonne of product per year

Total CO2 equivalent emissions (kg) per tonne p11.10of product per year

Total packaging placed on the market per tonne p11.12**of product per year

Total water consumption (M3) per tonne of p11.18product per year

Percentage of total ex-factory solid waste p11.25recovered/recycled per year

Total solid waste ex-factory (kg) per tonne p11.25of product per year

COD (kg) discharged per tonne of p11.27product per year

Wastewater discharge (M3) per tonne of p11.27product per year

Other significant air emissions by type n/r*(kg) – NOx, SOx etc per tonne of product per year

Number of notifiable accidents per 100,000 p11.6***employees per year (RAIR)

Lost Time Injury Frequency Rate p11.4, 11.6, 11.7(LTIFR) per 200,000 manhours

key performanceindicators

Our Sustainability 6 . 1

HUMAN RIGHTS AND ETHICAL TRADINGDescription of policies and procedures to p9.1-6evaluate and address human rights performance within the supply chain

Evidence of consideration of human rights in p9.4-6procurement decisions including selection of suppliers

Proportion of Suppliers which follow n/ra recognised ethical trading code of practice

COMMUNITYProportion of pre-tax profits invested in p10.3the community

Description of community investment in terms of p10.4cash, time and kind donations

Description of investments by key themes p10.4

Awards and recognitions received relevant to p10.16-18community investment

ECONOMICPre-tax profits per employee ch.3

Capital invested per employee ch.3

Total production tonnage ch.3• Beverages

• Confectionery

Stock market capitalisation (£ million) n/r

Investment in Research and Development ch.3

Cost of all goods, materials and services purchased p1.17

Total wages, salaries and retirement benefits paid p1.17to employees

Distributions to providers of capital broken down p1.17by interest on debt and borrowings and dividends to shareowners

Sum of taxes paid to governments p1.17

Key: n/r not reportedch chapterp page

* Not reported because none identified as significant** Data for Cadbury Trebor Bassett, UK only

*** For 68% of manufacturing sites only

6.2

We have a strong heritage of valuing and investing in our peoplestretching back to our earliest days over 200 years ago. Our challengethese days is to build on that heritage in line with changing employeeexpectations, workplace dynamics and business requirements. This means continuing to invest in our people, helping them managechange, reflecting and promoting true diversity in our workforce and helping colleagues realise their potential while achieving a good work/life balance.

OUR YOUNGEST EMPLOYEE IS 15 (AUSTRALIA)

AND THE OLDEST 79 (USA).

WE AIM TO RECRUIT AND RETAIN

THE BEST PEOPLE BY OFFERING

REMUNERATION AND REWARDS THAT

ARE COMPETITIVE IN LOCAL MARKETS.

7. our people

CADBURY INDIA’S INCREASINGLY HIGHRANKINGS IN THE ‘BEST EMPLOYER’ AND‘GREAT PLACES TO WOR’ SURVEYS HAVE

STRENGTHENED ITS ABILITY TO ATTRACT ANDRETAIN TALENTED GRADUATES

IN THE 1870S AT THEIR FAMOUS

BOURNVILLE "FACTORY IN A GARDEN",

THE CADBURY BROTHERS PIONEERED

THE PROVISION OF HOMES, LEISURE

FACILITIES, TRAINING AND EDUCATION

FOR THEIR EMPLOYEES.

WE ARE WORKING WITH OUR

EMPLOYEES TO HELP THEM ACHIEVE

A GOOD WORK/LIFE BALANCE.

CURRENTLY WOMEN CONSTITUTE 34%

OF OUR GLOBAL WORKFORCE, 25% OF

OUR MANAGERS AND 11% OF OUR

EXECUTIVE MANAGEMENT TEAM.

Kene Umeasiegbu

HR advisor

cadbury schweppes

‘THE PLACE TO BE’cadbury schweppes

7. our people continued

WE HAVE AROUND 55,000

PEOPLE IN OVER

60 COUNTRIES AROUND THE WORLD.

WE ARE REGULARLY AMONG THE TOP TEN IN THE UK'S ANNUAL

"MANAGEMENT TODAY'S MOST ADMIREDCOMPANIES REPORT. IN 2003, WE

WERE SECOND OVERALL AND FIRST INTHE MOST ADMIRED COMPANY FORCOMMUNITY AND ENVIRONMENTAL

RESPONSIBILITY CATEGORY.

GLOBAL STAFF TURNOVER IS GENERALLY LOW: BETWEEN 2% AND 5% PER ANNUM.

OUR GLOBAL LEADERSHIPTEAM HAS AROUND 100 SENIOR EXECUTIVES

CHICLE ADAMS SA, COLOMBIA

WON ‘BEST COMPANY TO

WORK FOR’ IN 2003

CADBURY WEDEL, POLAND WASRATED THE 2ND ‘MOST ATTRACTIVEEMPLOYER’ IN THE FOODINDUSTRY IN 2003

Karren HarkerCorporate Communications

Cadbury Schweppes

p7.1 helping to make Cadbury Schweppes “the place to be”p7.2 equal employment opportunities and diversity

p7.5 learning and developmentp7.10 communication and consultation

p7.12 rewards and recognitionp7.13 well-being and work/life balance

M O R E I N S I D

E

our people

So how do we bring this place to life across achanging business around the world? Through anintegrated global approach rooted in our values.

Our People Strategy sets out the values and policiesthat underpin all areas of our people management.Together with our Human Resources GlobalMinimum Standards, it provides the foundation formanaging and developing our people in line withour Purpose and Values and Our BusinessPrinciples. All our businesses are expected tooperate within the minimum standards andguidelines while respecting the local legislative,cultural and social differences that inevitably arise.

Helping to make Cadbury Schweppes“the place to be”“The place to be” describes the big picture of working at CadburySchweppes, so that everyone pursuing or considering a career withus can get a clear sense of what it's like, what's expected of themand what they can expect in return. It's a place where you can bepart of our world, make a difference, grow with us, gain from oursuccess, and be yourself. A place full of opportunities, challengesand rewards. A place rich in stories.

our people

7.1

our people

7.2

Equal employment opportunities and diversity Our global Equal Employment Opportunities and Diversity Policyunderlines the value we place on having a diverse workforce,providing equal opportunities and engendering an inclusive workingenvironment. Introduced in 1993, it covers race, colour, ethnic ornational origin, gender, age, religion, sexual orientation, maritalstatus and disability. Our Policy1. What we mean by Equal Employment

Opportunities and Diversity at CadburySchweppes:

Equal Employment Opportunity (EEO) is concernedwith treating employees and potential employeesfairly and equitably, regardless of gender, race,ethnic or national origin, colour, religion, maritalstatus, age, sexual orientation, disability, social classand political association.

Diversity is complementary to EEO and builds uponit. It is concerned with creating an inclusive workenvironment that seeks to understand and respectindividual differences. By valuing, cultivating andenabling diversity, the talents of all employeeswithin our organisation will flourish and beleveraged for individual, team and organisationalsuccess.

2. Purpose of the policyThis policy supports Cadbury Schweppes in:

• attracting and recruiting diverse candidates

• selecting the best people available for thepositions based on performance criteria

• making the most effective use of the talents andexperience of people in the business, providingthem with the opportunity to develop and realisetheir employment potential

• acting in a fair and equitable manner withemployees and potential employees and, as aresult, earning a good reputation internally and inthe communities in which we do business

• ensuring legal compliance, locally and internationally

• operating in line with the company-wide frameworkof internal Minimum Standards, and Human Rightsand Ethical Trading policy, while taking account oflocal societal and cultural variations

• educating employees on the value of diversity.

our people

7.3

The policy outlines the responsibilities of the groupand local business units in implementing andreviewing processes. There are guidelines to help allbusiness units adopt the policy within their owndiverse cultures.

Accountabilities for equal employmentopportunities and diversityThe Board and its CSR Committee receive regularreports on global progress, coordinated by a senior

HR director at group level. Regional diversitycontacts work together with the group team todevelop and implement plans and initiatives acrossthe business. Local units develop their own diversitystrategies, using training, workshops, induction and,in some cases, diversity committees to support ourcommitments.

Workplace statistics

Ethnic diversity – Ethnic statistics are tracked regionally,reflecting local ethnic groupings. We are in the processof collecting data to compare the make-up of our localworkforce with the local population.

Example: America Beverages workforce andnational demographics*

2003 2003Workforce National

Group Demographics** Demographics

Caucasian 75% 73%

Hispanic 13% 11%

Afro-American 9% 11%

Asian 2% 4%Native American/Alaskan 1% 1%

* The company practices with respect to employment opportunities are

consistent with the US regulation for federal contractors.

** Total workforce – 3969 employees

Women in the workplace – Women make up 34% of ourworkforce, 25% of our managers and 11% of executives.

This diagram gives the age profile for our global workforce.We have been able to verify, as part of our global HumanRights and Ethical Trading Policy, that we employ no oneunder the local legal minimum age for employment.

16-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

5

65+

0.8%

5.8%

13.5%

17.0% 17.0%

14.6%12.7%

10.2%

6.4%

1.8%0.2%

Age profile

our people

7.4

Keeping up with the latest developmentsKeeping up to date with new legislation, bestpractices in other industries and companies,together with new trends and developments is animportant part of refreshing our own approach toEEO and diversity. To this end:

• we are members by invitation of the VanguardGroup of leading edge EEO companies.

• we are founding members of the Employers’Forum on Age and we are also members of theEmployers’ Forum on Disability.

• we attend European and global conferencecouncils, facilitating exchange of information withinternational developments and other globalcompanies.

Case studyDiversity in South Africa

Bromor Foods is playing its part in South Africa’semerging democracy. Its Employment Equity Strategy,established in 1999 and revised in 2003, now has fivethemes supporting its HR vision:– affirmative action measures, to achieve equitable

representation of all colleagues– training & development, including a leadership school,

for example– resourcing, to ensure fair practices and support talent

with retention plans, career pathways and succession– culture, promoting our values through workshops– social responsibility, through community initiatives such

as education and HIV/AIDS issues

The strategy was developed in consultation with numerousstakeholders including a registered trade union. Progressand actions are monitored by regional equity forums madeup of management and staff representatives, which inturn report to a national forum chaired by the managingdirector. Achievements to date include settingemployment equity objectives and targets, implementing acareer planning process and providing employment equitytraining for over 1000 employees.

Case studyDiversity in Americas Beverages

The Diversity Steering Committees of the differentbeverages business units in America were formed in 2000.In 2003 a joint Cadbury Schweppes America BeveragesDiversity Steering Committee was developed under theleadership of the regional leadership team. TheCommittee is made up of men and women of multipleethnicities including Asian, Caucasian, African Americanand Hispanic. The members also come from differentlevels and functions within the region.In the past two years, the committee has been able to:

• Offer diversity training for all employees

• Develop a mentoring programme for new employees on diversity

• Organise diversity celebrations and exhibits to increaseawareness and understanding

• Form female focus group events with seniormanagement

• Organise a diversity essay/art contest for employees andtheir families

Quarterly progress reports, including the challenges andopportunities to the diversity agenda, are shared with theregional leadership team.

our people

7.5

In practice, learning and development programmesare developed on a number of levels:

• Individually, as part of personal development plansto meet job and career needs

• Locally, to meet the needs of the business unit orfunction, or to support the implementation ofprojects

• Globally, to address the strategic needs of thegroup as a whole and ensure consistentapplication of the processes which operate acrossthe company

The number of days’ training our colleagues receivevaries depending on the business agenda. Typically itranges from 3-15 days and can be more when, forexample, a major project is being introduced on site.

All units use a performance management processfor managers and over 70% have personaldevelopment plans. 360-degree feedback tools arealso widely used to help people understand theirstrengths and development needs.

Performance management processes areincreasingly used for lower levels of staff – almost

70% of units use this process for some categories ofnon-management staff.

Examples of global training programmesSharpening the Culture (STC) Designed to boostthe skills and capabilities of all our people. It focuseson helping individuals and teams apply the 3As ofour Leadership Imperatives: Accountability,Aggressiveness and Adaptability (see box: LeadershipImperatives).

Global strategic programmes A number of globalprogrammes developed to support the company’sstrategic agenda. These include Building StrategicCapabilities, the Cadbury Schweppes manufacturingsystem, Value Based Management, and Sales andOperations Planning.

International development We also encouragecross-functional and international experience, whichsupports our diversity agenda as well as bringingindividual and business benefits.

Since 1990 we have run international developmentprogrammes to accelerate the career progression

Learning and development Developing the talents of all our people depends on thecommitment of both the company and the individual – the companyoffering support, encouragement and resources, and the individualproviding the motivation, time and personal dedication.

our people

7.6

of managers with three to ten years’ experience.We ensure that participants are balanced in termsof gender, geographic and ethnic representationand actively monitor their progress. In 2003 we had150 managers on international assignments acrossthe group.

Global conferences, functional forums and bestpractice groups Provide opportunities to shareknowledge and learning and develop personalnetworks as well as run skill development modules.

Leadership ImperativesWe have eight Leadership Imperatives which define thecore behaviours all our people need to adopt forindividual and business success. They are part of theperformance management process for leaders andmanagers, globally and locally, and are reflected in the360-degree feedback process. The Leadership Imperatives are:• Accountable – taking responsibility for ensuring

collaborative and effective working with teams todeliver results

• Aggressive – having the drive and resilience to succeed,constantly seeking out new value creating opportunities

• Adaptable – being open-minded and flexible inapproaching different situations, working effectivelywith diverse ideas, business and cultures

• Forward thinking – making sound decisions based on along-term view and a broad understanding of thebusiness

• Motivating – inspiring everyone to take appropriateactions that add value to the business

• Growing people – actively working to build everyone’scapabilities to develop the organisation

• Collaborative – actively sharing knowledge andeffectively working across teams and boundaries, locallyand globally

• Living our values – putting our values into action in thethings we do, to create maximum worth for theorganisation and its stakeholders

CASE STUDYSarah Atherton

1997 from analyst to finance controller (UK)2000 senior business planner, Mott’s Inc, US as part ofthe International Development Programme (IDP)2002 Finance Manager – Impulse Sales, Cadbury TreborBasset, UK2004 promoted to Finance Director, Cadbury KenyaLimited

“My first role under the IDP involved working closelywith the Mott’s marketing team to develop forecasts andconsolidate them to evaluate the total business forecast.This was very different to my previous technical financerole and initially I found the commercial aspects of therole challenging. However, I realised I could add value tothe business due to my knowledge of how theinformation was used at Group level. I was able to focusthe team on the most important aspects, anticipatequestions and thus improve the quality of informationprovided.”

our people

7.7

AIESECWe partner the international student organisationAIESEC, so that they can benefit from workingdirectly with us and our managers can developleadership and cross-cultural experience. We takepart in two global programmes with AIESEC:

Developing Leaders Day – At AIESEC’s annualconference for up to 500 of their members fromover 80 countries, up to 15 Cadbury Schweppescolleagues join a consortium of their peers fromother multinational companies to learn leadershipskills. They then design and deliver a training daycovering these skills for the 500 AIESECers. In thisway, learning and role model behaviour is shared inmulticultural groups, while Cadbury Schweppesbenefits from employee development, and internaland external networking opportunities.

Global Exchange Partnership – Internationaltrainee exchanges are at the heart of AIESEC’sactivities. As a global partner, Cadbury Schweppeshas placed over 20 trainees in a number of businessunits around the world since 2000. Participation inthe scheme not only gives us access to a group oftalented individuals, it also complements ourdiversity initiatives and widens our global outlook.

Cadbury Schweppes Global Resourcing Director, Norma Boultwoodwith AIESEC members currently working at Cadbury Schweppes.

Case studyKene Umeasiegbu

“I studied geology at theUniversity of Nigeria, graduatingtop of my class in 1998. For the four years following mygraduation, I worked full time on the management boards ofAIESEC in Nigeria, Estonia andBrazil and eventually at the

global headquarters in The Netherlands where I wasresponsible for AIESEC's global CSR and SustainableDevelopment Strategy, as well as the Africa GrowthNetwork. It was during this time that I had my firstpersonal contact with Cadbury Schweppes at the 2000Developing Leaders Day.

I chose Cadbury Schweppes because of the company’sflexible approach in linking my personal goals to those ofthe company and willingness to create a role that woulddraw on my past experience. This has enabled me to drawfrom my AIESEC experience and networks, while beingchallenged to build new competencies”.

our people

7.8

Examples of local training programmesGrowing Our People Our last CSR report lookedat how Cadbury and Trebor Basset (CTB) weresuccessfully integrated, thanks to close consultationbetween employees, management and trade unions.CTB wanted to build on this to create a new culturebased on maximising performance. The result isGrowing Our People – a three-day developmentprogramme to help managers coach for excellence.

Many managers feel they have improved theirlistening and coaching skills, and are better able toencourage their teams’ learning and development.Nine months after the programme was introduced,a team of MBA students carried out an evaluationas part of their coursework. The results confirm thatmanagers see the programme as highly relevant andpractical. Many gave examples of how they hadbeen able to apply the programme to deliverbusiness improvement through better peoplemanagement.

The programme is now being rolled out acrossCadbury Schweppes. A train the trainer programmeto enable HR teams to deliver Growing Our Peoplehas been completed for Europe Beverages, EMEAand the group functions. It will be extended to AsiaPacific and the Americas regions during 2004.

Developing skills for the factory staff Aspers inPennsylvania, our largest beverages plant in NorthAmerica, have put in place a cross training

programme for the factory staff. It is designed tobuild skills in multiple areas including equipmentoperation, production processes, machinerychangeovers, plant hygiene, food safety andtroubleshooting.

The programme takes place both on the factoryfloor and in the classroom. The trainers are mostlycolleagues from the factory itself, for exampletechnicians, team leaders and laboratory staff.Typically the factory staff receive training on somepart of the programme every month.

Our colleagues at Aspers are very proud of theirplant, reinforced by its ranking in the top 10 BestPlaces to Work in Pennsylvania in 2002.

Getting everyone involved in step-by-stepimprovements We have a workplace improvementprogramme designed to support the journey to“World Class Manufacturing”. It defines 20 practicaland inter-related methods to make better productsmore efficiently. The principle behind theprogramme is to involve every factory employee in astep-by-step approach to continuous improvement.

The system was adopted in the Sheffieldmanufacturing factory in the UK towards the end of2000. Given their critical role in the success of theprogramme, the entire frontline management teamwas trained, to equip them with the skills needed tocoach and support their staff.

our people

7.9

Around 50% of the Sheffield plant workforce isnow actively involved through small group activitiesand ideas generation and implementation. Benefitsto employees include the ability to improve theirown workplace by simplifying work processes and sodeliver better levels of performance, improvedteamwork through small group activities, and theopportunity to develop their skills.

Since launch, the programme has delivered £1.3m in cost savings for the local business unit, a 45%reduction in consumer complaints, and a deliveryperformance that is one of the best in UKconfectionery. According to the team leader, “theprogramme allows the business to grow strongerthrough the involvement of all its employees whilerecognising the achievement and contribution ofindividuals and teams”.

Developing the managers of tomorrow in NigeriaCadbury Nigeria has a long established graduaterecruitment scheme that aims to develop thecompany’s future managers. Now in its 27th year,the scheme has attracted 172 people – over half ofwhom are still with the company today.

After a rigorous selection process, successfulcandidates join a 12-month programme: 6 monthsclassroom training focused on business andleadership skills and 6 months on the job practicalapplication. After completing the scheme, traineesmove ahead with their respective career paths.

The programme has seen an increase inmanagement trainee retention levels over the years. In the last ten years the retention rate hasdoubled and in 2002 all trainees continued working with the company – an indication of theprogramme’s effectiveness in matching training and business needs.

The Cadbury Nigeria HR Director, Tunde Falase, addressingmanagement trainees.

our people

7.10

Around 70% of our employees worldwide haveformal representation through trade unions, workscouncils or collective bargaining.

Good employee relations rely on having effectivecommunication channels throughout the company,and on having the right processes in place,particularly during periods of change, reorganisationand business integration. During 2003 the group hasgone through a significant amount of change andthese principles have ensured open communicationwith staff during what we know can be times ofanxiety and uncertainty.

In addition to other communication andconsultation channels, our CEO and his leadershipteam give personal presentations to employees tosupport key business messages.

We encourage our people to report any concernsthey may have about any activity which might be inconsistent with Our Business Principles. A confidential hotline will be set up in 2004 as an additional option for colleagues to raise anyconcerns.

Communication and consultation We have a long tradition of open and honest communication withemployees, both formally and informally. Partnerships with tradeunions, European forums and staff councils all form part of the localcommunication network, depending on the historical andoperational context.

our people

7.11

Case studyManaging commercialintegration in Cadbury AdamsEgypt

With duplicate commercial organisations, the integrationof the Cadbury and Adams businesses in Egypt was amajor undertaking. What's more, the decision tooutsource sales and distribution functions called for clearcommunication and consultation with both our ownemployees and those of the distributor.

The communication process ensured that everyone waskept up to date with the progress of the integration andongoing employee feedback was encouraged to makesure all issues were addressed immediately. In addition,sales managers received training and support on changemanagement so that they were well equipped to supporttheir own teams through the changes.

A rigorous and open recruitment process took place.With the appointment of the sales supervisory positions,for example, candidates were interviewed by a series ofpeople and feedback was given to all. Some unsuccessfulcandidates were retrained and are now working in otherareas of the business. Others received career advice andsupport with their job search.

Case studyCreating a culture of opencommunication in China

Recognising the importance of creating an environmentof open and regular communication with all ouremployees, we have put in place an integrated set ofactivities to communicate business updates and provideopportunities to raise questions.

Communication channels include monthly newsletters, aquestions and answers document, and an employeehotline through which employees can ask questions andseek information about the company. As a result,employees have become increasingly comfortable as theyhave openly raised questions and concerns through thesechannels, which in turn has enhanced levels of trust.

The local team has a set of key performance indicatorsfor communication: frequency of meetings by allemployees on site, employees’ satisfaction withnewsletters and grievance response and resolution time.

Employees at an all-staff meeting addressed by the managingdirector.

our people

7.12

Rewards and recognition Regions and local businesses remunerate our people with theobjective of attracting, retaining, motivating and rewarding themappropriately.

Our HR strategy is committed to deliveringremuneration and rewards that both meet theneeds of the business and are competitive in localmarkets. Similar to our approach on diversity, ourglobal reward framework and HR MinimumStandards provide guidelines within which localbusinesses can develop their own variations, asappropriate. Our Human Rights and Ethical Tradingpolicy ensures that working hours and remunerationare reasonable and comparable to those offered bysimilar companies.

At the group level, we design and coordinate allinternational remuneration and benefit plans,policies and guidelines, including incentive and shareplans, and retirement and risk benefit plans. Allbusinesses offer annual incentive plans to managersand awards are based on performance. Many havevariable pay programmes for lower level staff.

We have clear approval processes at the global,regional and local business unit level to managereward and recognition. These include formalintegration of performance management into the

reward process for managers and the ‘grandfather’principle, which requires pay and benefit changes tobe formally authorised by at least two managementlevels above the most senior beneficiary. With theinvolvement of group HR, audit and treasury, localbusiness units identify, assess and minimise the risksassociated with remuneration and benefit liabilities.

Share plansWe actively encourage employees to own shares inCadbury Schweppes, to motivate them to workbetter together to create long term shareownervalue. All employees in Australia, Canada, France,Germany, Ireland, Mexico, Netherlands, Portugal,Spain, UK and USA are offered shares at discountto market value. Share plans are promoted toemployees every year and about 45% of eligibleemployees choose to participate. In the UK almost70% of all employees are enrolled in the scheme.The policy is under constant review to removebarriers to extending employee share plansworldwide.

our people

7.13

Well-being and work/life balanceWe are very supportive of trying to help employees find options andpractical ways to balance their lives inside and outside work. Mostimportantly, this is about finding solutions that work well for boththe business and the individual.

To this end we encourage local business units todevelop their own approaches which reflect theparticular needs of their business activities. Inmanufacturing environments, shift work patternsand part time hours offer a range of flexible optionsfor our employees. Our sales staff often work froma home base. Administrative work can frequently beorganised in a flexible way - taking advantage ofadvances in technology, using job sharingarrangements, flexible and part time hours andsometimes a combination of home and office based working.

It can be difficult to have a defined policy thatadequately addresses the wide range of businessactivities and individual needs and so we very muchencourage individuals to discuss the matter withtheir line manager to identify the most appropriatesolution.

We know from our recent survey that our businessunits are increasingly expanding the ways in whichthey are responding to employees’ needs forflexibility.

our people

Case studyFit for Life (UK)

Cadbury Trebor Bassett's occupational health departmentdeveloped this programme to promote a motivating, funand healthy work environment in the belief that healthand fitness have a direct influence on employeeperformance. This is an increasingly serious issue, asphysical activity both at home and work continues todecline. Currently 70% of UK men and women don’t takeenough exercise for it to be good for their health.Following the pilot, we hope to roll out the programmeto all UK sites, incorporating employee feedback in theevaluation of the pilots. The pilot phase in 2004 focuseson three areas:

Healthy eating – a range of healthy options in staffcanteens.

Regular exercise – walk 2000, an initiative byBirmingham City Council to encourage people to walk2000 metres. Walk leaders mark out a number of 2000metre walks before and after shifts and during lunchbreaks.

Health promotion and education – seminars on keyactivity and lifestyle issues; raising the profile of on sitesports or exercise facilities.

The following flexible working benefits are currentlyavailable:

% of business units Type of benefit offering the benefitMaternity leave 100Paternity leave 70Flexible working hours 67Adoption leave 63Part time work 46Working from home 35Childcare (crèche facilities/parental career breaks) 28Career breaks (excluding child care) 26Job sharing 20Sabbatical leave 15Short term contracts 11

7.14

our peopleM O R E I N S I D

E

p7.1 helping to make Cadbury Schweppes “the place to be”p7.2 equal employment opportunities and diversity

p7.5 learning and developmentp7.10 communication and consultation

p7.12 rewards and recognitionp7.13 well-being and work/life balance

8. consumers

OUR WORLD-CLASS CONSUMER INSIGHTS

PROGRAMME, ALICE, HELPED CADBURY

SCHWEPPES AUSTRALIA AND NEW ZEALAND

ESTABLISH A STRONG MARKET POSITION

FOR THE MOTHER EARTH BRAND.

TO REGULARLY REVIEW AND BUILD ON OURFOOD ISSUES STRATEGY, WE TALK TO A RANGEOF EXTERNAL STAKEHOLDERS. OUR GLOBALPOLICIES THEN INFORM LOCAL PLANNING ANDPROMOTE BEST BUSINESS PRACTICE.

Mumbi Mubari

Brand Assistant

Cadbury Kenya

millions of consumers around the world enjoy our chocolate, sugar, medicated and gum confectionery, our soft drinks and our food beverages. To continue to create brands people love, we listen and respond to customers and consumers, respect consumer choice and are committed to manufacturing, marketing and distributingsafe products of the highest quality.

AS PART OF OUR ONGOING

COMMITMENT TO MAINTAINING

THE HIGHEST POSSIBLE PRODUCT

QUALITY, WE HAVE INTRODUCED

A NEW CADBURY SCHWEPPES

QUALITY POLICY AND SUPPORTING

QUALITY STANDARDS.

our responsibility to

consumers

p8.1 using consumer insights to help create brands people lovep8.2 responding to consumer needs p8.4 the quest for quality

M O R E

I NS

ID

E

our responsibility to consumers

8.1

using consumer insights to help createbrands people loveListening to customers and consumers is fundamental to ourbusiness success – it's something we do every day.

Our customers work with us in selling our productsto the people who consume and enjoy them. Wedeal with our customers every day and this helps usbetter understand consumer trends. We also talkwith our consumers on a daily basis and havesubstantial support functions at the business unitlevel to listen and respond to consumer queries andcomplaints.

Alongside local consumer-focused activity, we alsoface some issues that are the same all around theworld and we address these through our FoodIssues Strategy Group (see next page). Consumerorganisations are another way for us to listen to thepeople who buy our brands. We monitor sector andindustry issues that are raised via these forums.

Case StudyALICE is the key to consumerneeds

Cadbury Schweppes Asia Pacific launched the ALICEInsights programme in 2002 to help colleagues solvebusiness challenges in the marketplace. ALICE is a world-class five-stage process that offers tools and a commonlanguage to align issues to strategy, increase focus on thetarget market, and identify potentially winningopportunities.

ALICE has given Cadbury Schweppes Australia and NewZealand (ANZ) deeper insights to many consumer-basedprojects. For example, ANZ used ALICE to identify andestablish a differentiated and ownable position within thenutritious snacks category for the Mother Earth brand.

This project involved a cross-functional team from sales,marketing, operations, etc., which looked at what theproduct offering meant to customers and consumers. These findings were then shared among the team and used to determine the best opportunities and needs thatthe brand might satisfy.


8.2

Responding to consumer needsFood and diet are now high on the consumer agenda, alongsideproduct quality and safety.

Finding new ways to do things can be a lengthyprocess and we need to respond to consumersquickly and with confidence. To this end, our scienceand technology and external affairs teams talk togovernments, activists, food lobbyists and theacademic community so that we can anticipatefuture consumer trends and respond appropriately.

Research also plays a large role in our innovationagenda – helping us explore opportunities for newproducts, enhancements to existing products andpackaging. In addition we are always checking that ourrecipes and ingredients are right for our consumers.

To enable us to increase our understanding ofemerging food issues and develop the appropriatestrategies to address consumer needs, we have aFood Issues Strategy Group (FISG) led by ourChairman. Our Chief Executive Officer (CEO),selected members of the Chief Executive'sCommittee, science and technology, marketing andhuman resources functions and the ConsumerImpact Director support him. The Consumer ImpactDirector, who reports to the CEO, hasaccountability for ensuring that the whole businesstakes up the agreed commercial steps.

The FISG is responsible for setting our globalstrategy so that we can respond positively tochanges in our markets across the globe, takingaccount of the diversity of legislation, cultures andconsumer impact in all of the countries in which we manufacture and sell.

Case StudySticking to our policy ongenetically modified ingredientsin gum, UK

The genetic modification of plants is a relatively newbranch of biotechnology. While we recognise thepotential of any new technology, some consumers havereservations about anything so new and unfamiliar. Inresponse to local market and consumer preferences, ourconfectionery in markets such as the UK has not containedgenetically modified (GM) ingredients for some time.

2003 saw the acquisition of Adams Confectionery and the formulation of the new EMEA regional structure. In response to the consumer preference across Europe, a programme of work has just been completed to ensurethat all our confectionery products manufactured for sale anywhere in EU are made from non-GM derivedingredients.


To support FISG's activities we have our Food IssuesStrategy Into Action (FISA) group. FISA is responsiblefor taking the strategies deep into the business andbringing them to life – making sure we deliver to allof our commitments.

To regularly review and build on our strategy, we talk to a range of external stakeholders. This also helps us to better understand and respond to their opinions and expectations. Our globalpolicies then inform local planning and promotebest business practice.

In line with their importance, accountability forimplementing the policies is part of our annualinternal business contract process, with seniormanagers having a clear responsibility for turningthem into business practice. We also commissionexternal scientific and nutritional guidance insupport of achieving our goals.

Case studyConfectionery that makes adifference, Australia

It took less than six years for the Natural ConfectioneryCompany to secure a place in the hearts of Australianconsumers and become the most popular jelly sweets inthe country. With an impressive 8% market share, theproducts appeal to both concerned mums and youngwomen who are drawn to the use of all-naturalingredients with no artificial colours or additives. Theproduct is associated with the Institutes of Sport in bothVictoria and New South Wales, to promote an activelifestyle alongside a healthy diet.

Case studySnapple shines in schools, USA

Under a five year deal, all New York City schools nowexclusively sell our range of Snapple fruit juices andwater in their vending machines. New York City recentlydecided to make healthier beverage choices available inits schools and awarded the contract to CadburySchweppes.

The deal means we can encourage children to drink 100%natural juices, with no added sugar, and water at school,while also supporting greater participation in schoolsport and physical exercise. A similar deal has beenagreed in Torrance, California, which will see our naturaljuices and water supplied exclusively across city schools.Negotiations are underway to replicate this successfulpartnership in North American cities.

8.3


8.4

The quest for qualityWe want to make sure that our products are of the highest quality possible – that’s why manufacturing standards are critical.Our operations continue to seek ways to integrate manufacturingbest practice standards that maintain and improve the integrity of our brands.

It’s up to everyone within Cadbury Schweppes tomaintain our quality standards every day. To help uswith this there’s a new Cadbury Schweppes QualityPolicy and supporting Quality Standards.

The new policy covers the whole supply chain andnot just our own manufacturing processes, whilethe supporting standards integrate new ideas andlearning from colleagues across the company.

Many of our factories have adopted theinternational Hazard Analysis and Critical ControlPoints (HACCP) programme. Since our last report in 2002 we’ve facilitated a further 40 internationalactivities including training courses, implementationworkshops and factory system audits. Progress isbeing monitored at each site.

Quality PolicyAt Cadbury Schweppes Quality has always been anintegral part of how we operate and who we are.

Our core purpose of working together to createbrands people love is founded on a commitment toquality in everything we do.

Active management of quality is vital to ensure theintegrity of our brands, the creation of value for ourshareowners, the strengthening of the bond weshare with our consumers and the partnership wehave with our customers.

This Policy reaffirms our commitment to qualitythrough the application of rigorous quality standardswithin our business and the wider environment inwhich we operate.


8.5

Case StudyAssuring product quality, India

When India celebrates the beginning of the festiveseason in October, consumer spending peaks as doCadbury India’s chocolate sales. In October 2003, as anew advertising campaign began to make an impact andseasonal sales looked promising, there were reports that,of a million bars sold in a day, one or two were infested.

Although the incident was the result of unhygienicconditions at a retail outlet, we faced the challenge ofreassuring consumers that our chocolate was safe to eat.

Consumers were encouraged to call a toll-free line withtheir queries and advertisements were placed in themajor daily newspapers to highlight the steps we weretaking. Hundreds of mothers on our “Bournvita” databasewere also mailed.

Working with distributors and buyers, we looked for along-term solution to stop this happening again. Theresult was Project Vishwas, a retail educationprogramme, and the creation of new product packaging,which was launched in November 2003 with a “purityseal” to reassure consumers. The combination ofinformation and action helped build bridges withconcerned consumers and subsequent market researchshowed that confidence was beginning to be restored.

We will:1. Market high quality products that consistently

meet our specifications and comply with localregulatory requirements

2. Actively listen and regularly respond to thequality expectations of our consumers at thepoints of purchase and consumption

3. Ensure that representations of our Companyimage, including our trademarks, meet approvedstandards and reinforce our commitment toquality.

4. Encourage a “right first time” culture in whichemployees are appropriately trained andaccountable for quality

5. Operate audited quality management systemsthat deliver the policy

6. Assign clear management accountability forsetting and meeting measurable quality targets

7. Work with our supply chain and businesspartners to drive compliance to our quality policyand systems

8. Review and update this policy regularly

our responsibility to

consumers

p8.1 using consumer insights to help create brands people lovep8.2 responding to consumer needs p8.4 the quest for quality

MO

RE

I N S I D E

We turn many different raw materials intoa variety of finished products. To this end we buy goods and services from agricultural produce to chocolate wrappers and paper clips, involving some 40,000 suppliers. Our current focus in working with suppliers is to address human rights and labour issues in the supply chain, a big issue for our stakeholders.

WE HAVE MORE THAN 40,000 SUPPLIERS GLOBALLY

IN 2003 WE INTRODUCED

ETHICAL SOURCING STANDARDS

IN 2000 THE BOARDADOPTED A HUMANRIGHTS AND ETHICALTRADING POLICY.

9. working with suppliers

Duncan MwendwaCorporate Social Responsibility Manager

Cadbury Schweppes

RISK ASSESSMENTS HAVE BEEN UNDERTAKEN IN FIVE PILOT

COUNTRIES: GHANA, TURKEY, CHINA, INDONESIA AND MEXICO

OF 40,000 SUPPLIERS, 96 ARE CATEGORISED BY US AS LEVEL 1 PRIORITY,

ABOUT 3,000 ARE LEVEL 2 AND THE REST ARE LEVEL 3.WE HAVE SO FAR COMMUNICATED OUR ETHICAL SOURCING

STANDARDS TO ALL LEVEL 1 AND 2 SUPPLIERS.

OUR NEXT STEPS ARE TO ESTABLISH

AN ONGOING ASSESSMENT OF OUR HUMAN

RIGHTS AND ETHICAL TRADING POLICY,INCLUDING THE NUMBER OF SUPPLIERS

THAT MEET OUR STANDARDS.

withsuppliersworking

how we are

p9.1 human rights and ethical tradingp9.4 putting policy into practice

MORE INSIDE

As a responsible corporate citizen, CadburySchweppes plc aims to act in a sociallyresponsible manner at all times by: respectingthe economic, social, cultural, political and civilrights of those involved in our operations;complying with all local human rights legislation;implementing programmes across our globaloperations and with our supply chain partners.

Core labour rights and dignity at work • preclude the use of forced labour • respect the rights of employees to join legally

recognised labour unions • ensure that children are employed only under

circumstances that protect them from physicalrisks and do not disrupt their education

• not tolerate any form of harassment in theworkplace

Health and safety in the workplace • create a healthy and safe work environment

for each employee

Fair remuneration • ensure that working hours and remuneration

are reasonable and comparable to thoseoffered by similar companies

Diversity and respect for differences • manage diversity to promote and capitalise on

cultural and individual differences to createcompetitive advantage through newperspectives and local market sensitivity

Opportunity for development • recognise the value that employees create and

reward them with opportunities for personaland career development

• provide employees with equal opportunitiesregardless of their gender, age, marital status,sexual orientation, disability, race, religion ornational origin.

Our Human Rights and Ethical Trading (HRET) policy is monitored by the HRET working group,which has representatives from legal, business risk management, procurement, external affairs,human resources and an external advisor, The Corporate Citizenship Company. The workinggroup reports to senior management and the Board’s Corporate and Social ResponsibilityCommittee, which has overall responsibility for HRET and is chaired by a non-executive director.

HUMAN RIGHTS AND ETHICAL TRADING POLICY

Human rights and ethical tradingIn December 2000 we adopted a Human Rights and Ethical Tradingpolicy, which was supported by a series of pilot programmes to help us understand how the policy can be applied in different local settings.

how w

e are working w

ith suppliersIn 2001 we carried out an initial risk assessment as akey part of developing our HRET programme. Thisreview of global procurement activity included ownedand operated businesses in various countries aroundthe world and as a result five countries were selectedfor in depth HRET pilot studies: China, Ghana,Indonesia, Mexico and Turkey. The selection was basedon the potential human rights issues associated withthe countries and the importance to our brands of thecommodities sourced. Between 2001 and 2003 wemade five pilot study visits and what we learned has

helped us develop our broad HRET SupplierCommunication Programme.

The visits were also useful in evaluating any risks and envisaging how our HRET Policy would apply in different countries by experiencing the diversecultural contexts in which our local divisions operate.Additionally, discussions were held with a majorinternational commodity supplier to review itsapproach to ethical sourcing issues and themanagement systems in place to deal with them.

9.2

Country pilot study profileCountry Date Local business Ingredients & goods

units contactedChina September 2002 Cadbury Food Company Strawberries

Trebor Wuxi ConfectioneryGhana May 2001 Cadbury Ghana CocoaIndonesia September 2002 Cadbury Indonesia Quinine

CocoaMexico July 2003 CS Bebidas Mexico Sugar

Motts FlavouringsCadbury Adams Packaging

Turkey November 2001 None (trip was prior Hazel nutsto acquisition of our Vine fruitTurkish business)

HRET working group members made the pilot visits, working in collaboration with local staff to visit 15 key globalsuppliers and engage in dialogue with 82 organisations locally. These ranged from local branches of internationalorganisations and local government agencies to local non-governmental organisations (NGOs) and academics.

how w

e are working w

ith suppliers

Case StudyMexico Pilot Study

This was the last of a series of five country studies toreview local application of our HRET policy. It focused onbeverages rather than confectionery, which was the focusin previous studies. Prior to the visit in July 2003, deskresearch looked at the issues addressed in the HRET policyand broader issues likely to impact on Cadbury Schweppes'Mexico operations.

Local business units were consulted and CadburySchweppes Bebidas Mexico (CSBM) facilitated the visit bysetting up and participating in the meetings. We visitedCSBM’s local suppliers, bottling plant and distributioncentre in Guadalajara; a franchise bottler in Puebla; localand global suppliers in Mexico City and Cuernavaca; andthe Mott’s plant in Tecate on the US-Mexican border.

In addition to reviewing Cadbury Schweppes' ownoperations and those of key business partners the views ofother stakeholders, such as trade associations, national andinternational NGOs and the Mexican government, weresought at a breakfast meeting hosted by The BritishEmbassy. Participants were invited to share their views onour approach to CSR and on opportunities and challengesto implementing the HRET policy in Mexico. Individualconsultations were also held with managers at CadburyAdams, the National Commissioner of Human Rights,International Labour Organisation, UNICEF and FordFoundation.

The dialogues suggested that there are potential labour-related concerns, particularly over workers’ rights, workingconditions and migrant and child labour in agriculture andin other parts of the economy. These issues will beaddressed as the business units take forward the HRETsupplier communications programme. No concerns,

however, were identified at Cadbury Schweppesbusinesses, or the local and global suppliers and theindependent bottling company visited. We learned that:• suppliers thought integrating HRET questions into a

normal commercial audit was the right way to proceedfor processing units

• dialogue with stakeholders who understand the dynamicsof issues such as child labour in agriculture is particularlyvaluable both for local perspectives on the issue andsharing of Cadbury Schweppes' own policies

• the Mexican Human Rights Commission was able to comment on issues in sugar farming and tradeunionisation in manufacturing (in Ghana, the head of the agricultural workers union also gave clear adviceand guidance on child trafficking and labour in the cocoa regions)

• the pilot studies were needed for the insight andexperience that helps develop a supplier communicationprogramme and procurement training materials.

Stakeholder dialogue: President, Mexican Human RightsCommission, Dr Jose Luis Sobranes Fedz (right) with CadburySchweppes External Affairs Director, Neil Makin and GabrielaRivero of CSBM.

9.3

how w

e are working w

ith suppliers

9.4

putting policy into practiceA relevant and effective supplier communication programme ishelping us to turn our Human Rights and Ethical Trading policy intopractice. We started with high priority suppliers and are now rollingout our policy and standards to all suppliers.

From the findings of the five pilot studies, wedeveloped Ethical Sourcing Standards for suppliers,consistant with our HRET policy and our businessprinciples. The standards are based on globalstandards such as the Universal Declaration ofHuman Rights and the International LabourOrganisation conventions on labour rights. We are using the existing supplier relationships toimplement the standards, and our buyers providethe important link in these relationships.

In 2003 we trained our 111 regional buying teammembers. The training covered broad CSR themes,our HRET policy in detail, and practical ways in whichwe can use standards to buy goods and services.

The first training session was for regional purchasingmanagers, who are responsible for communicatingthe standards in their regions. We also invited amajor supplier, to help us understand how the rollout would work. We then worked our way throughthe regions to train all the people who buy particular

MD Niel Hyde, and Director Altan Bodur of Bond Commodities sharetheir views on CS’ Ethical Sourcing Standards at a regionalpurchasing managers training session in May 2003.

Category buyers discussing how to apply the toolkit for supplierdialogue at the continental Europe regional training.

how w

e are working w

ith suppliers products and services. So far we have coveredcontinental Europe, Great Britain and Ireland, AsiaPacific, Americas and part of Africa and Middle East(AME). The rest of AME is due to be covered in 2004.

We have categorised suppliers into first, second orthird levels according to perceived risk as well assize. The communication programme explains howwe manage the implementation of the sourcingstandards for each level. A supplier toolkit to help the buyers introduce and evaluate suppliers’compliance with the standards includes a practicalevaluation checklist of the issues outlined in thestandards. It is available to all buyers through ourprocurement intranet.

The Ethical Sourcing Standards (ESS) have nowbeen communicated to all our first level suppliers.We have started dialogue with 88% of thesesuppliers and we will engage the remainder as theHRET training of AME regional buyers is completed.This will equip buyers in the supplier engagementexercise with the tools necessary for suppliersupport. As part of the continuing monitoring and

review process the buyers are in contact withsuppliers to evaluate their practices and proceduresagainst the standards and identify gaps that need to be closed.

For the second level (which includes ingredient and packaging suppliers), the ESS have beencommunicated through a dedicated interactiveextranet established for ongoing engagement.Elsewhere, terms and conditions outlined on allpurchase orders will draw attention to the HRETpolicy. By signing up to these terms, all suppliers,including those in the third level, will confirm that

Suppliers’ risk profileLevel Category of supplier Total Suppliers communicated toFirst High Priority 96 96Second Ingredients and packaging 3000 3000Third Rest of suppliers 36,000 In 2004

Category buyers at the continental Europe regional training in Paris, France.

9.5

how w

e are working w

ith suppliers

they are fully aware of Cadbury Schweppes’expectations in human rights and ethical trading.

Following their initial dialogue with suppliers,category buyers will review checklists and completean assessment grid using Red, Amber or Greenrankings:

Red Performance is not to standard, either inrespect of actual practice or poor managementmonitoring. Immediate action is required.

• action to be taken by the supplier within onemonth.

Amber Overall performance is acceptable at presentbut there are issues of performance or monitoringthat need to be addressed over time, but thesupplier has the capacity and willingness to do so.

• action should be taken within three, six or 12months as agreed with the supplier.

Green The supplier has a good record ofperformance on the issues and has goodmanagement and data systems in place.

• no initial action required, but an annual reviewrecommended.

Supporting suppliersSupplier dialogue is designed to assess and evaluatea supplier’s ability to meet the sourcing standards. In the ongoing process we hope to identify anyspecific support that may be needed to help asupplier to comply.

Where we can see that a supplier has the potentialor capacity to improve, we will work with them andsupport their efforts. In future, the pre-qualificationprocess for selecting suppliers will build HRETevaluation into the selection process.

Next StepsFollowing the risk assessment conducted as part of the pilot studies, ongoing detailed assessmentsare being made in a further 40 countries where we source and/or have operations. We will continueto build on quality audits and environmentalassessment of suppliers and we plan to integrateHRET into the supply chain global complianceprocess in 2005.

Our plans include developing a regional group ofcertified assessors to carry our quality, environmentand HRET supplier assessments, and continuing towork with our supply chain to cascade the samestandards to their own suppliers. In our next report,we will describe further progress. We will alsoevaluate the impact of the HRET processes in 2005,five years from the Board's decision in December2000 to implement the programme.

9.6

how w

e are working w

ith suppliers

9.7

Case studyApplying HRET standards in thesupply chain

Jason TangRole: Category Manager,Procurement Business Service, NorthAmerica.

Budget: Estimated annual spendabout US$40m

The trainingAs a category manager for the

Procurement Business Service, I attended the HRETtraining for regional procurement staff in July 2003 in the US. The training equipped me with a step-by-stepprocess to communicate and engage with suppliers: why,when, who, what and how. It was of benefit to categorymanagers as we are at the centre of the Cadbury supplierrelationship and constantly manage it.

The supplierJilin Shulan Pharmaceutical Company in China is a long term contract supplier of caffeine, a flavour concentrateingredient used widely in beverages including our own Dr Pepper beverage.

Shulan began to produce and export caffeine in 1987 after Pfizer withdrew from the market. Being in the Jilin Province in northeast China and supported by themunicipality, Shulan enjoyed lower operating cost and was able to expand and grow sales. Dr Pepper began to purchase caffeine from this factory in 2001 after the plant passed a facility audit in November 2000. The auditcovered quality management, standard operatingprocedure and environmental standards etc.

In 1998, Shulan restructured from a state-owned enterpriseto a shareholder company with the majority of the sharesowned by the plant’s management. In 2003, it was amongthe top three caffeine producers in China.

The engagementInitially, the buying agent in Shanghai was introduced tothe HRET policy, Ethical Sourcing Standards, the processguidelines and supplier communication toolkit. He was also referred to the corporate website for further companyinformation including Our Business Principles. We reviewedthe HRET training material and the implementation processof the standards in November 2003. With a thoroughunderstanding of Cadbury’s needs and expectations, theagent translated the information and communicated withthe factory on a number of occasions. Positive feedbackwas received from Shulan’s top management.

EvaluationThe suppliers that we work with in China are industryleaders, with healthy growth and profits in the last decade.In addition to being protected by insurances, laws andregulations, the workforce is remunerated with aboveaverage pay and bonuses.

Given China’s growing free market economy and thecompetition it faces in the global market, the threesuppliers with whom we have engaged so far embraceCadbury’s HRET policy and find the dialogue helpful. Giventhe international community’s perception of China’s humanrights record, our suppliers view this as an opportunity tobe proactive to avoid potential losses from mishandlingHRET and environmental issues.

The General Manager of Shulan, Dai Qian Li said, “We are glad to be working with Cadbury to meet the high global standards of HRET and be more competitive in the global market”.

how w

e are working w

ith suppliers

9.8

ChallengeAs the Chinese economy continues to grow the challengefor suppliers will be the rising cost of raw materials, labourand energy and the need to meet more rigorous regulationsin pollution control, as well as social standards.

Future plansWe will continue to engage with Shulan to review theirsocial and environmental performance. The factory iscurrently working with the state Environmental ProtectionAgency and the local pollution control department toupgrade the factory’s pollution control process andfacilities. The factory is investing more than 5mRMB (about£350,000) of capital expenditure to obtain ISO 10000certification including meeting the environmentalstandards, by the end of 2004.

The General Manager JSPC, Mr Dai Qian Li, talking to the Shulan staff about HRET and its application to their business and own suppliers.

p9.1 human rights and ethical tradingp9.4 putting policy into practice

withsuppliersworking

moreabout

MORE INSIDE

Community investment helps to build prosperous, educated,economically sustainable and socially inclusive communities,benefiting the societies in which we live and work. It alsobrings benefits to our people, our brands and our businesses.Our community investment is made up of the time, expertiseand money that we contribute to local communities.

OUR PEOPLE DONATED

TWICE AS MUCH TIME

TO COMMUNITY PROJECTS

IN 2003 AS IN 2002,VALUED AT £722,350

IN 2003 WE CONTRIBUTED

£2.2M TO UK COMMUNITIES,

REPRESENTING APPROXIMATELY

3% OF UK PRE-TAX PROFITS.

10. growing community value around the world

CADBURY ADAMS BRAZIL IS

RECOGNISED AS A ‘CHILD-FRIENDLY

COMPANY’, FOR INVESTING IN

CHILDREN’S WELFARE BUT

NOT EMPLOYING THEIR LABOUR.

WE WON THE UK FOOD INDUSTRY AWARD

FOR SOCIAL COMMITMENT AT THE 2003 FOOD

INDUSTRY AWARDS IN RECOGNITION OF

‘WINTERWATCH’, A PARTNERSHIP TO RE-HOUSE

AND REHABILITATE 11 HOMELESS PEOPLE

WITH FOCUS HOUSING IN BIRMINGHAM.

WINNER OF THE 2003CHAIRMAN’S AWARD FOR

EMPLOYEE INVESTMENT IN THE

COMMUNITY, KATHLEEN SYTHES

HAS PERSONALLY RAISED

SOME £0.3M FOR CHARITY.

Wannapa SoonjakbhapHR Manager

Cadburys Adams Thailand

investing in

communities

MO

R EI N S I D E

p10.1 why we invest in the community p10.2 how we invest in the community

p10.5 education and enterprise p10.7 health and welfare p10.14 environment

p10.16 rewards and recognition

more about the com

munity

Growing community value around the world is our global strategy for how we interact with localcommunities. The strategy builds on our corepurpose and values and explains the part we can allplay to support communities. One of the strategy’s

aims is a global investment of 1% of pre-tax profitsand it includes guidelines as well as ideas andsuggestions for action to help our businessesmeasure and manage their community investment.

Why we invest in the communityCommunity programmes allow our people to give something back to society, to gain new experiences and broaden theirhorizons, be challenged and develop skills, build community contacts and have fun.

Case StudyWhat our leadership teamlearned at school, Costa Rica

To demonstrate the senior management team’scommitment to Cadbury Schweppes’ communityinvestment, the Americas Confectionery seniormanagement team meeting devoted the first day of their three-day meeting in Costa Rica in November 2003 to community action.

This inaugural meeting was an opportunity to integrate a new management team and demonstrate the importanceof CSR within the organisation. Their ambition: “a personal and professional journey connecting with ourcolleagues, the community, the business and ourselves”.

The 85-strong team spent a day at the local República dePanamá Elementary School, San José.

The day was planned with the school’s management whoallocated projects with clear goals and deadlines. The teamtackled projects that ranged from laying turf on an entiresoccer pitch, to making classroom desks and paintingmurals in relaxation areas. In addition, the children learntsomething about the supply chain process and the schoolreceived donations of IT equipment.

Being part of the schoolcommunity for the day wasthe highlight of the regionalmeeting for the leadershipteam, who rated it asbeneficial to the community,beneficial to their team skillsand fun. Similar events willnow be included in localbusiness unit leadershipmeetings.

Laying turf at the school’ssoccer pitch.

10.1

more about the com

munity

10.2

Our investment can be a mixture of money, thetime and skills of our people and/or gifts in kind.We have a wide range of resources that can begiven in kind. These include product donations, useof meeting rooms and other facilities, as well asaccess to training and other specialist materials.

As the needs of communities vary from region toregion and country to county, our investment is not prescriptive. However, around the world, ourbusinesses have developed three principal areas inwhich we concentrate our community involvement:

• education and enterprise

• health and welfare

• environment.

Local business units may expand on these areas ofinvestment, depending on the particular needs ofthe community around them. They also decide howmuch money, time and skills or gifts in kind they willinvest, using the Growing community value aroundthe world guidelines to measure and manage theircommunity investments.

Benchmarking community investmentWe work with a number of UK groups, such as

Business in the Community’s (BitC)PerCent Club and the LondonBenchmarking Group (LBG) to

measure and manage our community investment.We are members of BitC’s PerCent club whichincludes companies that invest more than 1% of UK pre-tax profits in the community.

We also benchmark our community investmentusing the LBG internationally recognised model for measuring community investment. Using theLBG model, we ask business units around the worldto calculate their contributions to the community.We ask them to report on cash, as well as gifts inkind of resources and products, and time spent withcommunity organisations, including managementtime spent directing community programmes. This enables us to understand fully our globalcommunity contribution.

The value of our community investmentIn 2002 our UK community investment was 3% ofUK pre tax profits. This ranked us second in the UKfood and drink sector, with a total contribution of£2.6m in cash, gifts and time. We also reported our2002 global community investment in the FTSE 100

how we invest in the communityOur community investment ranges from global initiatives to localbusiness unit involvement. Decisions on how to spend time andmoney are made by local businesses.

more about the com

munity

Cadbury Schweppes Foundation

In the UK, cash donations are channelled mainly through our registeredcharity, the Cadbury Schweppes Foundation, which dates back to 1935.In 2004, the foundation's available funds totalled £700,000. Thefoundation's strategy is to:• focus the majority of activities within education and enterprise, while

supporting some health and welfare and environmental projects• support employee community involvement• offer regional engagement in key UK operating areas such as

Birmingham, Sheffield and London.

Trustees include our chairman and other UK directors. The foundationsubscribes to Business in the Community's Principles of CorporateCommunity Investment. In considering projects for support, we look for value for money in terms of maximum possible community benefit.Although purely charitable in nature, we also seek to assess the value of community activities to the business.

The foundation is primarily focused on UK programmes, but occasionallysupports international programmes. Recently the foundation hasdeveloped the Africa Aid initiative, which will represent around 15% of the foundation's funds from 2004. Africa Aid’s core areas ofinvestment will be consistent with the three principal areas of globalcommunity investment: education and enterprise, health and welfare,and environment.

Cadbury Schweppes Foundation Grants 2003 by theme

Cadbury Schweppes Foundation Grants 2003 by region

Education andEnterprise 64%

Environment 5%Employee community involvement 6%

Health andWelfare 25%

Birmingham 14%

Bristol 2%

Sheffield 5%

London 11%

National 54%

Overseas 14%

Giving List 2003 for the first time, and were rankedamong FTSE’s top 40 givers, with a contribution of£5.6m or 0.65% of global pre-tax profit.

In 2003, our global contribution to charities orequivalent organisations amounted to £6.03m or1.09% of global pre-tax profit, an increase of almost10% over the past year. If 2003 profit had been equalto 2002, our investment would have risen to 0.7%from 0.65% in 2002, though the impact of a year of

re-organisation and Adams integration makes strictcomparison difficult.

The launch of the Growing community valuearound the world strategy meant business unitswere able to better prioritise, measure and managetheir community contributions and we saw amarked rise in the value of community investmentin 2003 (see table).

10.3

more about the com

munity

10.4

Breakdown of community investment by theme 2003 2002£ £

Education and enterprise 3,328,020 3,594,427Health and welfare 1,849,000 97 1 ,1 7 1Environment 349,000 282,345Other (outside the three themes) 505,000 657,37 1TOTAL 6,03 1,020 5,505,314We encourage our people to participate in business-led community initiatives, in addition to personalinitiatives they may undertake outside the business. This has produced a significant rise in employee timedonated between 2002 and 2003 (125%).

Breakdown of community investment by type 2003 2002£ £

Donations in cash 4,443,180 3,995,982Donations in kind, equivalent £ 865,490 1 ,187,80 1Donations in staff time, equivalent £ 722,350 32 1,53 1TOTAL 6,031,020 5,505,314Our Growing community value around the world strategy is in its first year of roll out and many regions are only beginning to build community investment into their business strategies. A series of workshops is planned to assist this process.

Breakdown of community investment by region* 2003 2002£ £

Group Functions 1 ,190,600 1,650,000Americas Beverages 1,55 1,470 1 ,789,548Americas Confectionery 273,6 10 122,626Europe Beverages 230,590 270,777Europe, Middle East and Africa 2,158,510 1,526,869Asia Pacific 626,240 145,494TOTAL 6,031,020 5,505,314

* The regions are not economically or geographically equal in size and so this is not a relative comparison

Education and enterpriseOur priority theme is to encourage enterprise in education, asdeveloping the skills and potential of people is the key to aprosperous society.

Education is the key to everyone’s future success. By supporting education projects we help raisestandards and develop skills. By building links withindividual students, teachers and schools, we cantransform aspirations, support learning and helpprepare young people for the world of work.

Enterprising communities generate employment and skills. We invest in education and enterprise to unlock potential and create new opportunities.Value that continues to grow long after ourinvolvement ends.

Case studyJunior Achievement Kenya

Junior Achievement Kenya (JAK), like Young Enterprise inthe UK, is part of the Junior Achievement Internationalmovement. With a mission “to educate and inspire youngpeople to value free enterprise, business and economics toimprove the quality of their lives,” JAK forms partnershipsbetween the education and private sectors.

Cadbury Kenya is a primary partner in the educationprogramme and was instrumental in launching JAK in April 1999. Today, Cadbury Kenya and the CadburySchweppes Foundation support the programme financially.Locally, Cadbury Kenya provides leadership at the JAKsecretariat as well as classroom volunteers. Our peoplegive at least one hour a week for about three months todeliver school programmes, serving as role models for theyoung people. During the 2002/03 school year, more than4,000 students were taught JAK programmes.

10.5

more about the com

munity

10.6

more about the com

munity

Case studyEnterprise in schools, UK

We support a number of initiatives to promote enterprisein schools, notably our work in partnership with thePrince's Trust and Young Enterprise in which we areinvesting £1m over six years.

We support the Young Enterprise Primary Programme, aninnovative way for employee volunteers and teachers towork together to equip students with a better and broaderunderstanding of society and their place within it.

The programme supplements core elements of theNational Curriculum, particularly literacy, citizenship, andpersonal, social and health education. Six modules reflectthe different class ages: Ourselves, Our Families, OurCommunity, Our City, Our Nation and Our World. Themodules include exercises to discuss and explain citizenshipconcepts such as voting and taxation and are anintroduction to economic life.

A key element is the role of business volunteers, whodeliver the programme. All volunteers are trained prior toworking with teachers to plan lessons. In 2003, 30employees helped to deliver the programme in schoolsaround the country. The Primary Programme is now one ofsix core Young Enterprise programmes, which in 2002/3reached 61,979 students against a target of 48,000 –nearly 30% over target.

We also support the Prince’s Trust xl clubs, a network that encourages students at risk of under-achievement orexclusion to realise their potential. There are 9,000 suchyoung people in 800 clubs across 513 schools in the UK. By

2005, 12,000 young people are expected to participate in 1,000 clubs.

The xl clubs build partnerships between schools, localcompanies and the community via activities that developpersonal and teambuilding skills, such as forming their own companies or fundraising committees. In addition to our community investment, our people volunteer inclubs to share with students the experience of working for a major company.

The Prince's Trust commercial director Carol Homden said: “The Cadbury Schweppes Foundation has been aninvaluable partner throughout the programme’sdevelopment. The foundation has helped us to improve the content of the programme and increase its scale,increasing the support we can offer to thousands of youngpeople at school in the UK.”

HRH, The Prince of Wales meets a Prince’s Trust xl Club.

more about the com

munity

Health and welfareWe support health and medical charities as well as organisationsconcerned with social welfare and inclusion. We particularlyencourage initiatives that promote healthy lifestyle.

In some of the communities in which we operate, illhealth and disadvantage in society direct ourapproach to community investment. In Africa, forexample, poverty and diseases such as Aids havedevastated many people’s lives. Many of our Africanbusinesses support local organisations that providefor the education, health and welfare needs of thecommunities around them. Recently we have alsoestablished the Africa Aid initiative within the

Cadbury Schweppes Foundation, which centrallysupports international NGOs in their Africanprogrammes (see page 10.3).

Prevention is always better than cure, and increasinglywe seek to encourage active and healthy lifestyles as part of our health and welfare theme. Webelieve we can add to the debate on how to tacklerising levels of obesity, by promoting more balancedlifestyles through our community projects.

Case studyPromoting active lifestyles,worldwide

As an industry leader with a strong heritage of socialresponsibility we are in a unique position to promotephysical activity, the decline in which is a major cause ofrising obesity levels. We’re able to harness one of ourpopular brands to encourage debate to find new, moreeffective ways to address one of the biggest health issuesto emerge in recent years.

Cadbury South Africa sponsors the Chappies Little League,a national schools-based soccer development programmefor under-12s. It has become the world’s largest footballtournament, which in 2003 had an incredible 6,023

participating teams and 138,529 players. Each of thoseteams played a minimum of four games during the 2003tournament, so at least 24,092 games were playedbetween April and September.

The record entry will be registered in the 2005 edition of Guinness World Records. Chris Marais, researcher andadjudicator for Guinness WorldRecords, commented that, “GuinnessWorld Records are delighted to beassociated with such a staggeringachievement and are proud to award a new world record.”

Two teams in the Chappieslittle league showcase their

talent at the National Finals.

10.7

more about the com

munity

10.8

Case studyPromoting active lifestyles,worldwide continued

In the UK in 2003, Cadbury Trebor Bassett launched GetActive in partnership with the Youth Sport Trust (YST). It isour largest health and lifestyle initiative to date, designedto get more children more active. In its first year, GetActive funded the training of over 5,000 teachers by theYST to improve the quality of activity in schools.

More than 6,000 schools registered to receive free sportskit, for use by school children through a token collectionscheme. In August 2003 nearly 14,000 people attended aGet Active Day, which introduced children and theirparents to new forms of activity ranging from street danceto table tennis. Our people also gave their time topromote physical activity in schools.

There was some controversy around the token collectionscheme in the Get Active programme. Following stakeholderfeedback, we have decided to discontinue the tokencollection scheme but to honour our commitment to thewider programme and its objective to get more childrenmore active.

In 2004, we continue to work with the YST to promoteactivity through our UK community programme. Theprogramme will have three key elements that fit with ourwider community agenda: a free unbranded resource packto all 6,200 schools that signed up last year; an employeetraining programme which will use the pack to enable ourpeople to run activity days at schools and community

groups, and an activity fund to enable communityorganisations to access funding for activity-based projects.

In the United States, Snapple donates a portion of theproceeds of the Snap2O brand line to KaBoom!, a not-for-profit organisation that builds skateparks and playgroundsfor children in deprived areas. Over 200 Snapple andMott’s employees volunteered to build KaBoom!’s firstskatepark in New York’s Bronx area. Skateparks in otherareas continue to be built with Snapple’s financial support,as part of the company strategy to introduce more youngpeople to the benefits of physical activity.

Snapple and Mott’s employees constructing skate boards for apark in New York City.

10.9

more about the com

munity

Case studyHIV/AIDS, South Africa

Latest estimates put the number of infected people inSouth Africa at between 4.5 and 5 million, with one in fivemen and women being HIV positive.

The South African businesses established a strategy tomeet the needs of employees and their communities withregards to HIV/AIDS. It includes:• communication and education programmes for all

employees• financial support for community programmes in areas

from which we draw our employees• access to professional, confidential healthcare providers• disease management systems and processes• managing employee benefit schemes and maintaining

business continuity.

Financial support from our South African businesses hasbeen matched by the Cadbury Schweppes Foundation andgoes to help the following community-based organisationsin areas from which we draw our employees.

St Francis care centre, GautengWe are assisting with the provision of accommodationfacilities for both children and adults affected by AIDS.

Hope Worldwide, Port Elizabeth We funded the purchase of a vehicle for Hope Worldwideto assist homecare support centres to offer counselling inthe townships in and around Port Elizabeth.

The Dream Centre, Pinetown, NatalWe are supporting renovations for the 42-bed palliativemedical care centre that caters for adults and offers

holistic medical care for the terminally ill, respite care,counselling and support for those with AIDS and theirfamilies, as well as training for care-givers and heath workers.

Thembacare Centre, Cape TownWe support Thembacare, a hospice set up to providemedical care to children up to the age of 12 years who areterminally ill with AIDS.

ZimbabweOur Zimbabwean business partner, Crystal Candy,recognises the magnitude of the problem of HIV/AIDS inthe workplace and has approached it by providingeducation and information about prevention of infection aswell as on diet and how to follow a healthy lifestyle.

Zinc and Selenium supplements, which improve theimmune system, are provided for employees at heavilysubsidised prices. The business has also introduced acomprehensive treatment program aimed at HIV positiveemployees and their spouses, which includes the provisionof anti-retroviral drugs.

In addition, employees may use the in-house clinic andmedical aid scheme. The business also supports a suburbanclinic in the local community, funding equipment for theclinic and salary costs as well as providing working capitalto finance the purchase of medicines, which enables theclinic to charge prices affordable to local people.

10.10

more about the com

munityLocal business unit community projects

Community Cadbury Schweppes Activity Community Cadburypartner business benefit Schweppes benefitHispanic Dental Cadbury Adams, Trident oral care 1000 children of Brand reputationAssociation USA sponsors preventive low-income through theand the dental medicine families in association ofAmerican clinics in three Philadelphia sugar free gum,Dental cities; plus 20 received free Trident, withHygienist Assoc US$1500 (over £800) dental care; dental care

scholarships US$100,000 (approx. £60,000) donation

A number of Cadbury Trebor Ready for Work, A vital step Of 22 clientshomelessness Bassett provides short work back into on workcharities placements for employment placements,

previously homeless for the client five joinedpeople the company

Save the Children Mott’s Corporate As Corporate Over 200Partnership funding Partner, Motts employees are has enhanced an donated actively engagedout-of-school US$600,000 with the charitynutrition programme, (over £300,000)Energy for Living in cash and

products

As well as promoting active and healthy lifestyles, local business units support many projects that address the healthand welfare needs of the communities around them. A number of these are summarised in the following table.

10.11

more about the com

munity Local business unit projects continued

Community Cadbury Schweppes Activity Community Cadburypartner business benefit Schweppes benefitSpecial Olympics, Dr Pepper, 30 companies DPSU raised A win-win, as sports charity Seven Up participated in third largest builds teamworkfor children with 2003 Corporate amount of and involvesmental disability Challenge to US$4,570 employees,

raise funds (approx. £3,000) families and friendsBeijing Municipal Cadbury Schweppes, SARS outbreak Donation and Extensive mediaGovernment and China meant nursing encouragement exposure; adoptionChina Charity staff had no letters to medical of “ChooseFederation time to eat and workers happiness, choose

suffered from Cadbury” sloganlow energy levels; distributed products to 7 SARS hospitals

Cairo University Cadbury Egypt Refurbishment of Students able Support forthe laboratory to complete potential employeesfacility for food experimentstechnology students and projects at the university for their studies

10.12

more about the com

munity

Case studyClown Doctors, Australia

Cadbury Australia embarked on a long term relationshipwith Clown Doctors, an innovative and uplifting causethat uses the healing properties of laughter to benefitsick children in hospitals.

Across the business, 120 of our people volunteered theirtime and talent to lead their site’s fundraising. They’vecontributed about 1,000 hours of company time and evenmore of their own time to plan and run workshops andevents, which showcased their talents, developed newskills and made a difference in their workplace and the community.

Our total contribution to Clown Doctors in 2003 wasA$280,000 (£114,000). This will fund eight ClownDoctors programmes for one day a week each year,bringing another 40,000 smiles to sick children’s faces.We also participate in the Clown Doctors’ corporatefundraising scheme, which gives us the opportunity towork with other businesses. Plans for 2004 includesupporting Clown Doctors’ expansion to New Zealand,where our people will also get involved.

Case studyOn the ball in Brazil

Neighbourhood children of our Cadbury Adams plant atGuarulhos had for a long time jumped over theperimeter wall to play football in an open field, which served as an extensionto their backyards. In adeprived neighbourhood where the open spaces are not safe for children, parentsfelt comfortable that theirchildren were playing in a“company’s backyard”.

Rather than reinforce the wall and prevent the children from entering the field, the local communitywas consulted on how access to the space could be made safer. In July 2003, we launched a programme of social inclusion to provide real community space andfacilities. Activities offered include computer science and citizenship classes and, for the children keen to playfootball, sports classes take place two hours a day, threedays a week. An arts project has transformed the plantwalls into murals.

Over 100 children and teenagers have been helped andthe scheme has now applied to the city’s Child andTeenager Council to obtain government support. Itmeets the requirements of an independent body,Fundacao Abrinq, and as a result Cadbury Adams Brazil has been awarded the “Child-Friendly Company”seal. The project was also awarded the team prize in the 2003/2004 Chairman’s Award for employee community involvement.

Local children taking partin the football programmewith Cadbury Adams.

Clown Doctors visiting a children’s hospital in Australia.

Case studyLa Casera, Spain

More than 2.5 million people in Spain have diabetes, halfof them unaware that they have it. Between 2000 and2003, Cadbury Schweppes Bebidas España contributed over€90,000 (£60,000) in money, products and employee timeto support the Fundación para la Diabetes. The foundationaims to prevent the spread of the illness with informationand education and finances holidays for diabetic childrenfrom low-income families.

One of the difficulties diabetics face is the limited choiceof sugar free foods. Our local product La Casera is one of the few soft drinks that do not contain sugar. Ourpartnership with the Fundación therefore enables us to build awareness of diabetes through our brand as well as providing support for sufferers and their friendsand families.

10.13

more about the com

munity

more about the com

munity

environmentOur community environmental interests extend from our directimpact on local environments to the protection of the ecosystemsthat provide us with raw materials.

The Growing community value around the worldstrategy encourages local business units to invest in community environmental programmes, as aconstructive way to engage with communities.Recent projects include:

• providing clean water in Ghana and India

• public education programmes to promoteenvironmental awareness

• local environment “clean-up” activities.

We are also seeking opportunities to partnerenvironmental organisations in areas linked with the environmental impacts of our operations. These are extensively covered in the environmentsection (see pages 11.1-11. 28)

Case studySupporting ecosystems with ourbrands, Australia

During the course of research into the trend for healthiereating, we found that a 30 year old New Zealand brandcalled Mother Earth was regarded as a healthy brand andsatisfied consumers’ desire for product integrity. Weacquired the brand in 2001 and with it the opportunity to support consumers who want to make a difference.

Mother Earth’s brand promise, “Cares for you, cares forthe earth” is really being delivered. Through a partnershipwith Worldwide Fund for Nature (WWF), Mother Earthmakes a donation for every product sold. The WWF logoand website address appear on every Mother Earthproduct, together with tips on how to reduceenvironmental impact.

10.14

Mother Earth productpackaging with theWWF logo.

10.15

more about the com

munity

Case studyWater wells, Ghana

It is estimated that some Ghanaian children spend onequarter of their waking hours fetching water for theirfamilies. Besides the effect of lack of water on hygiene andfarming practices, this lost time could otherwise be spent on education. In partnership with Kuapa Kokoo, a farmers’cooperative, and now with the charity, WaterAid, we areworking to help cocoa farming communities by buildingwater wells.

The first well was built in 2000 at Sefwi-Kojina, inGhana’s western region. Although it has littleinfrastructure, the region produces more than 50% ofGhana’s annual cocoa crop. A further 12 wells were dug inthe first half of 2001. Increased Foundation funding andCadbury International Ltd funding in 2002 saw 50 morewells dug in the western region.

Over 150 wells have now been constructed, giving over40,000 farmers and their families safe potable water. Most of the wells have been funded at Group level to date but now our UK business unit Cadbury Trebor Bassetthas developed a fundraising scheme that will enable ourpeople to sponsor wells through fundraising events andindividual contributions.

“The provision of this well has brought a lot ofimprovement… the water tastes better… we do not haveto form long queues… children and adults do not sufferfrom water-borne diseases.”Nana Kofi OkyereVillage Chief, Akim Koforidua

“It [the well] has improved the quality of the lives of thepeople, especially the schoolchildren.”"Miss Afoa JoanaHeadmistress Akim Koforidua Primary School

Village residents fetching water from a well dug through CadburySchweppes donations.

10.16

more about the com

munity

The Chairman’s Award, established in 1999,recognises outstanding examples of employeecommunity involvement. It rewards employees who have been involved in any community-based

activity whether support for a school, charity or other voluntary organisation, fundraising orassistance with an environmental, sports, arts or other recreational activity.

Rewards and recognitionWe want to celebrate success and we use award schemes to recogniseoutstanding contributions that our people make to the community.

Case StudyKathleen Sythes, Chairman’sAward winner 2003

Kathleen Sythes, a Cadbury Ireland canteen employee, hasvolunteered and fundraised for a variety of causes for morethan 30 years. She has personally raised some £0.3m, anincredible track record.

After six weeks in India at the orphanage for which shefundraises, Kathleen visited Calcutta to volunteer with StTeresa’s Missionaries of Charity. She is also a volunteer skiinstructor for blind and visually impaired people and hastaken them on ski holidays for 25 years. She trains the IrishSpecial Olympics Alpine Ski Team and has brought teamsto the last two Winter Olympics. Toronto in 1997 sawKathleen’s team of eight skiers win 12 medals and atAlaska in 2001, six skiers took home 10 medals. Kathleen is currently training a team for the 2005 games in Japan.

Kathleen has also climbed to base camp on Mount Everestin aid of the National Council for the Blind, assisting threeblind people to climb with her and raising funds along theway. She is incredibly giving of her time and energytowards a large number of causes, but always remarks onthe generosity of her Cadbury colleagues.

“Cadbury employees have to be the most generous andgiving group of people I have had the good fortune toknow. Without this support the best fundraising ideaswould come to nothing,” says Kathleen. Presenting herwith the award, Chairman John Sunderland commentedthat he was especially, “impressed by the time and thedegree of involvement Kathleen showed to each and everycause she supports.”

Kathleen Sythes (top right) with medal winners at the SpecialWinter Olympics, Alaska.

10.17

more about the com

munity

Employees are asked to nominate colleagues whohave shown outstanding commitment to their localcommunities. The Awards, held every two years, arean important opportunity to celebrate the amazingwork done by so many around the business. Werecognise the ideas, energy and enthusiasm ourpeople bring to the Community organisations theywork with and the skills they develop which in turnbenefit our business. In 2003 we had 66 entriesthat highlighted an impressive diversity of activity.Among our people are volunteer fire officers,fundraising champions and those who dedicate

much or all of their free time to helping those less fortunate than themselves.

The overall winner receives a cash donation of$5,000 (£2750) for their cause, as well as theChairman’s award trophy. The other winners eachreceive US$1000 (£555) and a certificate. All entriesare acknowledged by the judging panel and used in company communications to share best practiceand encourage others to get involved.

Cadbury Trebor Bassett’sannual Big Heart Awards are another great way torecognise the effort that

our people at CTB put in as volunteers. There areseven categories of award for which all UK sites can submit nominations. Prize winners receivecertificates and a cash donation to charity.

External recognitionIndividual business units have been rewarded and recognised for their contribution to thecommunity by external bodies, but we do notcurrently collect this data at Group level. Our UK business has received the following awards for community involvement:

Food Industry Awards 2003 Nestlé award forsocial commitment at the 2003 food industryawards. This was in recognition of the“Winterwatch” programme, in partnership with

WINNERS OF THE 2003 CHAIRMAN’S AWARDMarjorie Jacobs, Cadbury South Africa: runs a soupkitchen for over 120 local children in need.Lina Abboud, Cadbury Adams Egypt: founded the Sideby Side charity for the socially excluded in Alexandria.Surendra Lagu, Cadbury India: has spent three and ahalf decades fundraising for various educational andhealth causes.Shirley Olifant, Cadbury South Africa: runs a schoolfeeding scheme for malnourished children.Julián Rodriguez Peña, Cadbury Schweppes Bebidasde España: works with a charity supporting peoplewith alcohol related problems.Sanjiv Sarin, Cadbury Adams Egypt: volunteer teacher.Sherilyn Brodersen, Americas Beverages: founded acharity which helps Peruvian street children.Ari Psillos, Crystal Candy, Zimbabwe: establishedcompany programme to address effects of HIV/AIDSin the workforce.Peter Todd, Cadbury Australia and New Zealand:Captain of rural fire brigade, leads 120 volunteers.

10.18

more about the com

munity

Focus Housing in Birmingham to rehouse andrehabilitate 11 homeless people.

Food and Drink Federation Award 2003 CadburyTrebor Bassett won the Gold Award for its“Community – you can make a difference”programme at the FDF Community PartnershipAwards, 2003.

Management Today We came second inManagement Today's 2003 poll of Britain's leadingbusinesses in a vote for the “most admired companyfor community and environmental responsibility”.

BITC “PerCent Club” We reported communityinvestment of 3% of UK pre-tax profits in theBusiness in the Community “PerCent Club” Index of corporate giving for year 2002. We rankedsecond in the food and drink sector in the UK with a total contribution of £2.6m.

Solidarity Committed Company AwardIn 2002 Cadbury Schweppes Bebidas Españareceived a “Solidarity Committed Company” awardfrom Ayunda en Accion for their support to schoolbuilding in Ecuador.

2003 Heroes of Hope Honourable MentionDPSU’s “Make your Caring Count” Campaign was named Honorable Mention by United WayMetropolitan Dallas in its 2003 Heroes of HopeCompetition. The campaign, which raised funds for health and social services in Texas, resulted in

a 60% increase over prior year in dollars raised bypayroll deduction and an 1 1% increase in overallemployee participation.

The Northside Partnership Corporate SocialResponsibility Awards Cadbury Ireland received theOverall Northside Partnership Award for CorporateSocial Responsibility. This was in recognition of thecompany’s contribution to the Northside partnershipsEducation Trust which offers financial support forthe education of students applying to join collegesoutside of Dublin.

Child-Friendly Company Seal Cadbury Adams in Brazil has been awarded the Child-FriendlyCompany Seal by the ABRINQ Foundation for beinga company that actively improves the situation ofchildren and adolescents in their local communitybut does not employ them.

Westchester Community Awards, US SnappleBeverage Group received the “You Make TheDifference Certificate” in 2003 for making adifference within Westchester Community’s childrenand homeless adults. We also received The FoundersAward in 2003 for housing provided for our teensthroughout Westchester County.

Great Strides Award, US In 2003 the CysticFibrosis Foundation (US) awarded Snapple BeverageGroup the Great Strides Award for their fundraisingefforts, support and dedication to Cystic Fibrosis.

more about the

communityM O R E

I N

S I DE

p10.1 why we invest in the community p10.2 how we invest in the community

p10.5 education and enterprise p10.7 health and welfare p10.14 environment

p10.16 rewards and recognition

EVEN THE BUBBLES

IN OUR BEVERAGES ARE

INCLUDED IN CALCULATING

OUR CARBON DIOXIDE

EMISSIONS.

WE USED 167.8KG

OF PACKAGING PER TONNE

OF PRODUCT IN THE

UK IN 2003.

TO HELP REDUCE CARBON EMISSIONS

WE USE CLEANER FUELS WHERE WE CAN,

SUCH AS NATURAL GAS OR BIO-FUELS.

11. environmentWe have continued to improve environmental, health and safety performance, by integrating health and safety with our established environmentalmanagement systems and with the introduction of a wider range of key performance indicators. We report on this progress and on how we will facesome of the bigger challenges of climate change,packaging and the emerging issue of biodiversity.

FROM 1998 TO 2003 WE REDUCED CARBON DIOXIDE

EQUIVALENT EMISSIONS PER TONNE

OF PRODUCT BY

21%.

AN INTEGRATED

ENVIRONMENTAL AND HEALTH

AND SAFETY POLICY WILL BE ROLLED

OUT ACROSS THE GROUP

IN 2004.

ALL MANUFACTURING SITES

HAVE AN ENVIRONMENTAL

MANAGEMENT

SYSTEM

32% OF OUR MANUFACTURING BY

TONNAGE IS CERTIFIED TO

INTERNATIONAL

STANDARDS

IN 2003 68% OF MANUFACTURING

SITES STARTED TO REPORT AGAINST

NEW HEALTH AND SAFETY INDICATORS

AND RECORDED 819.5 NOTIFIABLE

ACCIDENTS PER 100,000 EMPLOYEES.

A BUSINESS

IN THE ENVIRONMENT

SURVEY RANKED US THIRD IN

OUR SECTOR IN 2003. OUR RATING

HAS IMPROVED SINCE THE SURVEY

BEGAN FROM 50% IN 1997

TO 88% IN 2003.

OUR

BIODIVERSITY JOURNEY

IS JUST BEGINNING AS WE TALK

TO KEY STAKEHOLDERS TO DETERMINE

WHAT ACTION WILL MAKE A REAL

DIFFERENCE AND TO

HELP DEFINE OUR

PRIORITIES

Narender Katoch

GM, Corporate Affairs

Cadbury India

an integrated

approach to

MO R E I N S I D E

p1 1.1 environment, health and safety policy p1 1.2 environment, health and safety management

p11.6 health and safety p11.9 climate changep11.12 packaging and materials conservation

p11.14 biodiversity

the environment, health and safety

1 Conduct our business in compliance withenvironmental, health and safety laws and withour global standards, and regularly assess thecompliance of our operations against theserequirements.

2 Maintain and continually improve systems tomanage our EHS responsibilities, establishing andensuring employee accountability for our EHSperformance at all levels of the organisation.

3 Set clear targets for continual improvementin our EHS performance and monitor thesetargets to ensure that they are met.

4 Strive to prevent pollution and to minimisethe environmental costs and impacts of ourglobal operations.

5 Provide a safe and healthy environment forour employees, contractors and other visitors toour sites.

6 Assess and eliminate or control the EHS risksof new and existing operations, and continuallyassess the environmental performance of ourproducts, seeking ways to contribute positivelyto their performance.

7 Train and motivate our employees tounderstand their EHS responsibilities and toparticipate actively in our EHS programmes.

8 Work with our supply chain and businesspartners to improve our collective EHSperformance, to protect the ecosystems thatprovide our raw materials and to minimise theimpacts from transportation.

9 Communicate with our shareowners,employees, customers and other interestedparties by regularly reporting on our EHSperformance and maintaining an open dialogue.

10 Review and update this policy regularly.

At Cadbury Schweppes, we see sound and responsible environmental, health and safety (EHS)management as an integral part of achieving our goal to grow the value of our confectionery and beverages businesses for our shareowners. We aim to ensure that in the course of ourbusiness activities we minimise our impact on the environment around the world; look after the health and safety interests of our employees; and seek opportunities to improve the localenvironment in the communities in which we operate. We believe that such an approach will generate and sustain significant environmental, social and financial benefits, contributing to our objective of long-term sustainability. We will...

ENVIRONMENTAL, HEALTH AND SAFETY POLICY

In October 2003 environmental and health andsafety management were integrated at both Groupand regional levels and an integrated Environmental,Health and Safety (EHS) policy will be rolled out in2004. We will then implement an EHSManagement System, compliant with both ISO14001 and ISO 18001.

All sites have for some time been required to havean Environmental Management System (EMS) inplace – the elements of which comply with theinternationally recognised ISO 14001 standard:

• structure and accountability

• identification of environmental aspects

• legal requirements

• procedures

• training, and

• setting and monitoring continual improvement targets.

All sites are internally audited by Group personneland some have gone further and been externallyaudited and certified to one of two internationallyrecognised standards: ISO 14001 or the Eco-Management and Audit Scheme (EMAS).

Percentage of manufacturing by tonnage covered by an externally certified EMS.

1999 2000 2001 2002 2003

Environment, health and safety managementWe have had an environmental policy in place for a number of yearsthat commits Cadbury Schweppes to working with suppliers toimprove our collective environmental performance and protect theecosystems that provide our raw materials.

17%

25%

30% 30%32%

an integrated approach to the environment, health and safety

11.2


11.3

In 2003 we introduced a set of sustainability KeyPerformance Indicators (KPIs) that draw on workundertaken by the UK trade association, the Foodand Drink Federation. A number of the indicatorsare based on information that we have collected forsome years, others are reported on for the firsttime in this report.

Indicators and performance have beensignificantly influenced by the acquisition of theAdams confectionery business in 2003. Adams isCadbury Schweppes’ largest acquisition to dateand significantly alters the product mix. Thisaffects our reported environmental performanceas the manufacture of confectionery generallyrequires significantly more water and energy pertonne of product than for beverages. To makefuture comparisons of performance moremeaningful, we have included Adams data for allof 2003, although the acquisition was completedonly in March 2003.

Business in the Environmentsurvey 2003 ranked CadburySchweppes third in our sectorwith an improved score of 88% in 2003, up from 50% in 1997.

CASE STUDY Environmental initiatives supportGovernment aims, China

With increasing government investment in environmentalprojects, environmental awareness is gaining a muchhigher profile in China. The Government issued a total of100,103 non-compliance sanctions in 2002, which hasspurred companies in China towards meeting localregulatory requirements.

The Guangzhou plant has already gone further andachieved ISO 14001 accreditation in November 2002,with external certification by internationally recognisedaccreditation company, TUV. The plant had the best auditresult of all the companies assessed by TUV in China in2002. Other initiatives at the site include an aggressivereduction in office paper use. Since ISO 14001certification, many processes have been transferred to theintranet resulting in:• a 58.5% reduction in office paper use • 1,860 kg paper saved• 1,239 kg wastepaper recycled.

The success of these initiatives has encouraged ourcolleagues in Guangzhou to seek new ways to protect ournatural resources and the environment.

The Guangzhou factory in China.

CASE STUDYHealth and Safety focus reapsrewards, Italy

The plant at Silvi Marina, in Italy, has focused onenvironmental, quality and safety compliance for someyears, achieving ISO 14001 in 1999, ISO 9001 in 2002 andOHSAS 18001 in 2003. Our Italian colleagues summarisehow this has made the site more efficient and competitive:

“The important part is to have the right internal team toguide the plant and to follow the toughest industrystandards. This will prepare your location for the journeyahead. We used a Swiss consultancy with one of thehighest reputations in the compliance field, who we knewwould challenge us. After our first certification to ISO14001, we had the experience to move forward.”

“We have learnt from each certification experience. Afterachieving ISO 9001 in 2002, we decided to apply ourlearning to the safety aspect of the business. We adoptedthe same methods used for ISO, taking extra measures toachieve OHSAS 18001. We have now reduced lost timeaccidents to two in 2003 (18 lost working days) from 13 in1998 (452 days), although obviously our goal is zero. Inapplying OHSAS, we investigate each accident thoroughlyand discuss next steps with our engineering and productiongroups. We share our learning with colleagues, by postingan accident report on the intranet.”

“One of the benefits of compliance with the ISO/OHSASsystems is that they have forced us to be more organisedand continually improve. As a result, Silvi Marina is safer,better for the environment, more efficient and better ableto produce top quality products. Our objective now is tomaintain this momentum and build on our worldclassstatus.”


11.4

1998 1999 2000 2001 2002 2003

6.81

8.92 9.02

2.79 2.99

1.82

Lost Time Injury Frequency Rate at Silvi Marina 1998-2003.

The Silvi Marina plant, Italy.

CASE STUDY Below average risk means aboveaverage performance,worldwide

The investment community increasingly recognises thatresponsible environmental management is a goodindication of a well-managed company, which is likely toyield higher financial returns. North American researchcompany Innovest gave Cadbury Schweppes an AAAEcoValue rating, ranking us first of 25 global foodproduct companies. Innovest’s Rating Implication Report2003 projects that Cadbury Schweppes will “out-perform the sector going forward” with “below averagerisk, above average environmental management capacityand above average engagement in environmentallyfavourable business.”

The Ethical Investment Research Service survey 2002noted Cadbury Schweppes’ commitment, environmentalpolicy and management systems had significantly reducedour environmental impact, particularly in the areas ofwater use and waste.

CASE STUDY Seminars help share best practice, worldwide

To share best practice, we hold two day environmentaltraining conferences in three or four locations every year.In 2003 conferences were held in Australia, Germany andThailand with colleagues from Australia, New Zealand,Germany, Russia, Poland, Turkey, France, USA, China,Japan, Thailand, India, Malaysia and Indonesia.

According to senior environmental manager Paul Flint,“The conferences have been running for 10 years and are invaluable in bringing together people with similarresponsibilities from different sites, to help them find the best solutions to common issues. They includepresentations on all of the main environmental subjectssuch as environmental management systems, CSR,sustainability, achieving ISO 14001, legal trends, duediligence, energy management and environmental best practice.”


11.5

A group training conference in Bangkok, Thailand.


11.6

Health and safetyThe roll out in 2004 of a new set of EHS standards will ensure thatwe not only continue to improve our health and safety performancelocally but operate to consistently high standards globally.

As an important step on our CSR journey, the datagathering system for all global health and safetyindicators is being improved to enable us to reportGroup-wide statistics. Local regulations on thedefinition and type of accident reporting, forexample, vary considerably. This means sites haveimplemented accident reporting systems that arelocally compliant.

To enable us to publish a consolidated set of Grouphealth and safety data, we have now defined a setof health and safety Key Performance Indicators(KPIs), which all sites must report against. In manycountries, this will exceed local legislativerequirements. In 2003, 68% of manufacturing sites had started to report against the new KPIs and recorded 819.5 notifiable accidents per 100,000 employees (Reportable Accident Incident Rate – RAIR).

CASE STUDYNew system brings improvedsafety performance, USAIn 2003 we developed and implemented a safetymanagement system (SMS) in all 10 Mott’s manufacturingsites in the Americas and will soon include the Dr PepperSeven Up (DPSU) concentrates plant in St Louis. The SMSincludes:• documentation of procedures compliant to OHSAS 18001• identification and compilation of all health and safety

regulations applicable to each site • external compliance audit of all applicable health and

safety regulations at each site by local safety consultants

• implementation of corrective action based on thecompliance audit results.

At an Americas Beverages safety conference in September,EHS managers were trained in the Group EHS riskassessment process. We immediately applied this process in Mott’s, which involved training about 110 employees andforming teams of trained people on each site. We aim tohave a complete assessment of each site by June 2004.Our efforts have been rewarded with improved KPIs:

Lost time injury frequency rate 1.37(number of accidents resulting in someone being away from work per 200,000 person hours)Notifiable accidents per 100,000 employees (RAIR) 710.4

CASE STUDY Employee communication hasdramatic effect, Africa

Cadbury Swaziland dramatically reduced its Lost Time Injury Frequency Rate in 2003 through a number ofactions and a programme to actively manage accidentsand incidents:• employees were constantly reminded of the need to

work safely at all times• one-on-one interviews were conducted with all

employees in 2003, and each received a set of “10commandments” for safety

• during 2003, most machinery was fitted with improvedsafety devices such as guards and safety switches

• training in the 2001 Occupational Health and SafetyAct helped first-line managers to understand theirsafety obligations

• following this training, a proactive accident and

incident management programme was implemented,with incident investigators trained to determine theroot causes of incidents

• there is follow-up and coaching of employees where anincident has been caused by a failure to follow safetyrules and procedures

• tracking lost time accident trends from 2000 to 2003showed that some employees were booked off atalmost the same time. These trends made the companysuspect that there were some fake injuries, which oninvestigation proved to be the case.

• an employee booked off for more than one shift is nowvisited at home within 24 hours of the injury. This isprincipally for the welfare of the individual, but alsodeters employees from faking injuries.

2001 2002 2003

4.99

3.47

2.08

Lost Time Injury Frequency Rate at Cadbury Swaziland 2001-2003.


11.7

Example of new improvedmachine guards on wrappingmachine at Swaziland that havereplaced the original guards.

CASE STUDYQuick fix that can save lives, USA

At some sites an enhanced level of medical trainingenables employees to provide a high level of immediatemedical assistance, during the period it takes the publicemergency services to arrive. One such site is the CadburyAdams Rockford site in Illinois, which employs some 700people engaged in the manufacture of chewing gumbrands such as Bubblicious, Dentyne, Trident, Burst andBlack Jack. An Emergency Response Team (ERT) wascreated, designed to respond to medical emergencieswhile waiting for an ambulance to arrive.

Twenty four employees have been trained and are nowcertified First Responders. They are able to triage medicalproblems, administer oxygen and use an automatedexternal defibrillator. Team members are spread over allshifts, to provide round-the-clock emergency medicalsupport. The site has benefited in a number of ways, mostnotably in 2003 when two colleagues suffered life-threatening emergencies. The First Responders were ableto give vital help until the ambulance arrived. The ERT'sprompt action and the support of health service staffmeans both colleagues have recovered and been able toreturn to work.


11.8

Colleagues discuss the use of the automatedexternal defibrillator.

Climate changeClimate change is one of the greatest environmental challengesfacing humankind. Cadbury Schweppes wants to play its part in supporting governments and international bodies to tackle the problem.

We support global initiatives such as the KyotoProtocol and national agreements such as thatnegotiated between UK companies and the UKDepartment of the Environment, Food and RuralAffairs (DEFRA).

In 2002 and 2003 Cadbury Schweppes participatedin the Carbon Disclosure Project. This survey of theworld’s 500 largest companies aims to understandthe potential risks and opportunities of climatechange. The Carbon Disclosure Project has selectedCadbury Schweppes as one of the 50 globalcompanies to be part of their Climate LeadershipIndex. A summary assessment of CadburySchweppes’ position and a copy of our response to this survey can be found on the project websiteat: www.cdproject.net

To manage our emissions we have adopted DEFRA’smethodology for “Company Reporting onGreenhouse Gas Emissions” for all ourmanufacturing sites globally. We have gone beyondits recommendations and included the carbondioxide (CO2) used to carbonate our beverageproducts – on the assumption that the gas will bereleased at some point in the future, when theproduct is consumed. Our published CO2 emissions(below) include the following elements:

• onsite emissions from fuel combustion inboilerhouses and ovens

• offsite emissions (by power stations) that resultfrom our use of electricity

• CO2 equivalent of halocarbon refrigerantemissions

• CO2 used to carbonate beverages.


11.9


11.10

Energy use is the key driver of CO2 emissions, soour target is for all manufacturing sites to reducethe amount of energy they use per tonne offinished product by at least 1% each year for thenext 10 years.

Although Group energy use per tonne rose by 12.5%in 2003 (because of a higher ratio of more energyintensive confectionery production following theacquisition of Adams), greenhouse gas emissionsexpressed as CO2 equivalents per tonne ofproduction increased by only 8.7%. This is thanks to aprogramme to switch from carbon intensive fuelssuch as coal and oil to cleaner fuels such as naturalgas, or to use bio-fuels where appropriate.

While we have investigated transport’s contributionto our overall greenhouse gas emissions, emissionsfrom manufacturing sites are much more significantand so are the initial focus of our programmes.

CO2 equivalent emissions kg/tonne of product per year.

1997 1998 1999 2000 2001 2002 2003

Energy use kWh/tonne of product per year.

700 679656

597558

487548

1997 1998 1999 2000 2001 2002 2003

249238 232

212192

172187

CASE STUDYEnergy use down 16%, USA

The Opelousas factory in Louisiana makes Yoo-Hoochocolate drink. Installing a heat recovery unit on theboiler has reduced its energy consumption by 16%.Opelousas has also reduced solid waste generation by64%, after making improvements to filling and cappingoperations on the glass line. This drastically reduced glassbreakage, the site’s main source of solid waste.

CASE STUDYAll sorts of ways to reduceenergy use, UK

Home of world-famous Liquorice Allsorts, our Sheffieldsite has implemented a programme to continuallyimprove energy efficiency. Poster campaigns andbriefings have been introduced as part of the CadburySchweppes manufacturing system (see page 7.8) to raisesite personnel’s awareness of energy conservation.Systems are in place to monitor energy use across thesite so we can plan how to make the biggest energysavings. Natural gas is the primary fuel to produce steamfor site processes. All parts of the steam-raising plant,from generation to distribution, have been thoroughlyinvestigated.

Compressed air is one of the site’s major users ofelectricity. A number of improvements to compressed airgeneration and distribution have been made as part of anair compressor maintenance programme and siteengineers now design process machinery to usecompressed air equipment that operates at lowerpressure to further reduce compressed air consumption.

Electric motors account for about 30% of site electricityusage, so high-efficiency motors are now bought asstandard.

Energy use kWh/tonne of product at Sheffield.

2000 2001 2002

2382

1947 1859

CASE STUDYGas emissions down 30%, UK

The historic Bournville site has a boilerhouse originallyconstructed in the 1920s with four coal-fired boilerswhich are being replaced with new gas-fired boilers. The switch to less carbon-intensive fuel will reduce localgreenhouse gas emissions by 30% and eliminate the needto transport coal and ash.


11.11

Packaging and materials conservationFor consumers our most visible environmental impact is packaging,which they come across every time they consume Cadbury Schweppesproducts. However, it is vital to protect and preserve food andbeverage products throughout their production, storage, distribution,retail sale and use. Food and beverage packaging must meet necessaryregulatory, safety, hygiene and consumer acceptance criteria.

Confectionery packaging typically includes plastics,aluminium foil, paper and board and for beverages,metal, glass and plastic containers. Some productsare further packed into multipacks for point of sale,and all products have secondary packaging such ascases, shippers, or shrinkwrap to transport them ingood condition.

Our aim is to balance the environmental impact ofpackaging with the amount of packaging requiredto maintain product integrity and function and tocontinue to optimise packaging use. Examplesinclude:

• developing lightweight packaging and reducing theamount of packaging material, while retaining therequired structural properties. The weight of many

soft drink cans, PET plastic and glass bottles hasbeen significantly reduced over the past decadethanks to better designs, technology and materials

• using multipacks and lightweight secondary displaypacks and cartons

• using returnable bottles in markets where thereuse of bottles is well established (although wehave to consider the transport of the emptybottle, and water and energy used in bottlewashing)

• constantly seeking to innovate, through the use ofnew materials.

In the UK we used 167.8 kg of packaging pertonne of product during 2003.


11.12

CASE STUDY:Message in a bottle says recycleand reuse, Germany

Germany is Europe’s largest soft drinks market, and in2002 our soft drinks subsidiary Apollinaris & Schweppesled the way and introduced a returnable plastic bottle –ahead of legislation in 2003 that made this mandatory.

Our innovation didn't stop there. We designed not onlythe returnable bottle but also a revolutionary new crate -which meant that we had to create our own bottle andcrate pool. By careful design of the new crate'sdimensions we made it more convenient to carry andstore, thus making it easier for customers to recycle orreuse their empties.

Additionally, more crates of the new design fit on to thestandard German pallet enabling 600 as opposed to theusual 480 bottles to be carried, which reduces transportrequirements by 25%.

The new bottles are colour coded to distinguish betweenmineral water and soft drinks and there is so muchdemand for the new-design crates that we are producingat full capacity even off-season and have opened an extraproduction line.

CASE STUDYResearch yields packaging innovation, Australia

Plantic™ is a new eco-friendly plastic made from abiodegradable, non-toxic material derived from cornstarch. It decomposes rapidly and dissolves instantly oncontact with water. It’s already being used instead of theconventional plastic tray in Milk Tray packaging by ourAustralian subsidiary. The main benefits for theenvironment are:• the packaging is produced from a sustainable resource

(maize or corn – which is GM-free) rather than derivedfrom petroleum

• even if littered, Plantic™ decomposes quickly withoutpolluting local groundwater systems.

Plantic™ materials are the result of seven years’ researchat the Cooperative Research Centre for InternationalFood Manufacture and Packaging Science, with whomwe have worked closely for many years. CadburySchweppes is the first company in the world to offer thisimportant innovation to customers.

For further information, please visit www.plantic.com.auor www.cadbury.com.au


11.13

The new Apollinaris (Blue Box) crate.


BiodiversityAs a result of human activity our planet is losing biodiversity at an ever-increasing rate. The rate of loss is now a cause of seriousconcern and concerted international action is needed. While we in Cadbury Schweppes have a number of ad hoc projects underway,we are at the start of this particular journey.

Biodiversity refers to the whole variety of life onEarth. It includes all species of plants and animals,their genetic variations and the complex systems ofwhich they are part. Biodiversity is not restricted torare or threatened species. Cadbury Schweppesdepends on a diverse and healthy environment tosource raw materials such as cocoa, milk, sugar,water and the fruits that go into our products. Butthis need for raw materials has to be balanced withthe need for biodiversity to sustain life.

We recognise we have a role to play and areconsulting with non-governmental organisationssuch as Earthwatch to establish the priorities. Overthe next two years we will work with keystakeholders in this area to determine what actionswill make a difference. Our aim is to understandand be clear about our role, develop and documentappropriate actions and solutions and begin toreport on these in future CSR reports.

A COMMENT FROM EARTHWATCH

Companies such as Cadbury Schweppes, with aninternational presence dependent on good qualityagricultural products, can contribute a great deal tobiodiversity conservation efforts.

We would like to see the company recognise this inspecific commitments and develop a strategicapproach to implementing these across the company.This would include identifying major areas of impact orreliance on biodiversity, such as areas of the supplychain, as well as ways in which the company can bestmake a positive contribution by supporting andworking in partnership with others.

Dave HillyardDirector of Programme DevelopmentEarthwatch Institute (Europe)

11.14

case studySeeking sustainable sources ofpalm oil

Palm oil is a naturally occurring oil derived from the oilpalm, a perennial tree cultivated in parts of South EastAsia, South America and Africa. It is commonly used in awide range of food and other products, including biscuits,crisps and chocolate confectionery. While our requirementsremain very small in global terms, our use of palm oil hasincreased in recent years. This is because, with keenerawareness of possible health concerns, we have phased outalternative transfats that had been used for taste andflavour in a small number of our confectionery centrerecipes.

Concerns have been raised that recent increases in thedevelopment of large-scale oil palm plantations incountries such as Indonesia have been at the expense ofthe environment, with the destruction of areas ofrainforest, together with its natural wildlife, and theremoval of local communities from the land. We sharethese concerns and have committed to seeking all our palmoil from sustainable sources. To this end, we have begun aprocess of assessment and consultation with our suppliersof palm based products. We will work in partnership withthem to make sure they understand the sustainability issuesand how they can meet our requirements. We support thework of the Roundtable on Sustainable Palm Oil to raisestandards of sustainable production. This recentlyestablished multi-stakeholder group includes the WorldWildlife Fund and other supply chain partners.

Our UK suppliers are already committed to delivering palmoil from sustainable sources. Elsewhere, our regionalprocurement processes have identified a proportion of ourrequirements from similar sources and we are activelyencouraging others to adopt these standards.

In December 2003 a socially responsible investmentresearch study from ISIS Management recognised ourprogress in the palm oil issue: “Cadbury Schweppes…hasbeen able to source from suppliers that are known toproduce in line with sustainable development objectives.”We will continue to work with our supply chain partnersto monitor and achieve everywhere the sustainablesolutions our Ethical Sourcing Standards require.


11.15


11.16

CASE STUDYSite of special scientific interestbreeds respect, UK

Cadbury Trebor Bassett’sMarlbrook factory atLeominster produces 97,000tonnes of milk chocolatecrumb annually. It suppliesmainly Bournville andSomerdale, where the crumbis blended with cocoa butter,refined and turned into milkchocolate. Marlbrookprocesses 180 million litres

of fresh milk, 56,000 tonnes of sugar and 13,000 tonnesof cocoa liquor each year to produce the crumb, and doesso in an area designated a Site of Special ScientificInterest (SSSI) where biodiversity abounds.

Operating a factory in this environment is a greatresponsibility and we are fully aware of the potential topollute the local environment. Biodiversity is evident atthe site. The factory wastewater is fully treated and thenenters the settlement lagoons that have provided ahabitat for many species of wild fowl for almost 50 years.Canada geese proliferate, but swans and a variety ofducks also breed in the margins of the lagoons and riverLugg (a tributary of the Wye). Many other bird species areregular visitors to our bird tables.

These settlement lagoons were recently modified toimprove flow and retention times and we took theopportunity to install a stepped “Chinese waterfall”. This not only cools the water but also aerates it – thusimproving the quality of the water for the many species of wild fowl in the lagoons. We are privileged to have this natural abundance on our doorstep, and recognise our responsibility to maintain this ecologically importantand beautiful area.

CASE STUDYSupport network for cocoagrowers, worldwide

Cadbury Schweppes supports a number of internationalinitiatives. We are members of the Biscuit CakeChocolate and Confectionery Alliance, whose cocoaresearch programme aims to achieve, “sustainable yieldsof good quality cocoa without over-reliance onagrochemicals”. BCCCA also runs innovative projects onenhanced breeding, integrated pest management,agroforestry and agronomy, and post-harvest technology.

We are also involved in the Sustainable Tree CropsProgramme (STCP), which works in Ghana, Cote d'Ivoire,Nigeria and Cameroon. Its goal is to “improve the well-being of smallholder farmers through the development ofsustainable tree crop systems that increase productivity,generate income, conserve biodiversity, use naturalresources sustainably, and offer stable developmentprospects and long-term economic incentives.”

STCP is a coordinated effort by industry, government andresearch, development and conservation agencies toimprove smallholder agricultural systems based on treecrops. With an agenda combining economic,environmental and social considerations, STCP has fivemain objectives:1 maintain increased productivity of high quality tree

crop products, over the long term, with an emphasis onfarm rehabilitation and reclamation of deforested land

2 improve efficiency in the marketing chain, so that itdelivers fair prices to farmers and quality products toend-users

3 make African tree crop products competitive ininternational markets

4 improve the socio-economic situation of farmers5 conserve the natural resource base and biodiversity.

Swans in the Lagoons atMarlbrook.

an integrated

approach to

the environment, health and safety

MO R E I N S I D E

p1 1.1 environment, health and safety policy p1 1.2 environment, health and safety managementp11.6 health and safety p11.9 climate changep11.12 packaging and materials conservationp11.14 biodiversity

Our group environmental standards help us to manageissues such as water use, emissions and waste. While westrive continually to improve efficiency and reduce levels of waste to land, air and water, our challenge is to continuethe journey towards long-term sustainable use of resources.

WE REDUCED OUR WASTE PER TONNE OFPRODUCT BY 6% FROM 2002 TO 2003AND BY A TOTAL OF 37% SINCE 1998. WE RECYCLED OR REUSED 73% OFOUR WASTE IN 2003

MANY OF OUR FACTORY PROCESSESGENERATE WASTEWATER, WHICH WETREAT BEFORE IT IS RETURNED TO THENATURAL ENVIRONMENT.

11. environment

OUR FACTORIES IN

TASMANIA, AUSTRALIA,

USE CARBON NEUTRAL

HYDROELECTRICITY.

Tomasz Demski

Operator

Cadbury Poland

IN 2003 WE DISCHARGED3.1KG CHEMICAL OXYGEN

DEMAND PER TONNE OFPRODUCT AFTER ONSITE

TREATMENT

OZONE-DEPLETING CFCS

IN LARGE EQUIPMENT SUCH AS PROCESS

CHILLERS, COLD ROOM CHILLERS AND

COOLING TUNNELS HAVE BEEN VIRTUALLY

ELIMINATED FROM OUR OPERATIONS WORLDWIDE

OUR MAIN IMPACT ON LOCAL

AIR QUALITY COMES FROM FLUE GASES

FROM BOILERS, REFRIGERANT GASES, DUSTS, ODOURS AND EXHAUST FUMES FROM

TRANSPORT VEHICLES.

responsible use of

resources

MO

RE

INS

IDE

p1 1.18 water consumption p1 1.20 air quality p1 1.21 transportation

p11.23 soil and groundwater protectionp1 1.24 solid waste management

p1 1.27 wastewater

Water consumption, air quality, transportation,soil quality, waste management and effluentdischarges are all areas we manage withinGroup environmental standards. We continue toinvest in the necessary systems and facilitiesto maintain infrastructure and comply with ourstandards and regulatory requirements.

Water pollution

21.7%

Air/odourcontrol24.6%

Noise control 2.1%Storage/containment 5.0%

Waste management 4.6%

Energy/water 37.6%

Other 4.4%

Percentage of capital spend in recent years

responsible use of resources

Our business is dependent on the supply and qualityof water and we have a direct interest in conservingwater resources and protecting water quality. Wateris the main ingredient of beverage products, so ouruse is directly related to production volumes. Bothour confectionery and beverage businesses also uselarge volumes of water during the productionprocess: to cool and heat, and to wash and rinseequipment and surfaces. The production of safefood and drink demands the highest hygienestandards and water plays an important role in this.

Actions that we take to reduce water consumptioninclude education campaigns to minimise water use,water recycling systems including recycling water incooling towers and re-circulation of water.

The production of confectionery products requiresmore water than beverages and with acquisition ofAdams, our annual water use increased in 2003.

Water consumptionThe impact of climate change is difficult to predict, but manyexperts believe that water shortages will increase and that moreparts of the world could suffer droughts. Water is already aprecious resource and supplies are under pressure both from over-consumption and from industrial and agricultural pollution.

5.605.11 5.20

4.813.99

3.293.51

Total water use M3/tonne of product per year

1997 1998 1999 2000 2001 2002 2003CASE STUDYWater use down 7%, USAAspers produces applesauce and juice. Through theefforts of a water conservation team and cooling tower improvements, Aspers has reduced waterconsumption by 7%.

11.18


CASE STUDY – water consumptionCool air beats water, France

At our confectionery factory in Blois, France, waterconsumption per tonne of finished product has fallen by 46% since 1998. This has been achieved through acomprehensive water management programme thatincludes:• installation of water recycling systems in several areas

of the factory• maximisation of condensate recovery from the steam

distribution system• working with employees to find ways to avoid waste.

The factory also replaced some water cooled with air-cooled systems and removed a number of cooling towers.“Operation of the remaining cooling towers wasscheduled to maximise efficiency,” said the environmentalmanager, Daniel Pellot.

3.3

2.62.1 2.1

1.8 1.9

Blois water consumption M3/tonne of product per year

1998 1999 2000 2001 2002 2003

11.19

CASE STUDY – air qualityReaping the benefits of agro-based fuel, India

The Induri plant manufactures crumb and evaporates milk.These processes demand huge quantities of steam – 130tonnes at peak – that used an average 12,000 litres a dayof non-renewable fossil fuels, such as oil. Conscious of theenvironmental impact of burning fossil fuels, we decidedto shift to a non-fossil fuel from a renewable source.

The factory is located in a sugar-cane growing region,where a number of mills are run by co-operatives. A by-product of the crushing process is bagasse, a substancethat the co-operatives use to generate steam for their ownconsumption. A carbon-neutral bio-fuel with virtually nosulphur content, good “heat value” and around 3% ashcontent, bagasse’s exhaust gases are clean enough to notrequire complicated handling systems.

The installation of a bagasse-fired boiler has reduced theplant’s sulphur dioxide emissions by 250 tonnes a year andhas produced total savings to date of 10,000 tonnes ofCO2. We have now replaced a CFC-based chiller with amore environmentally friendly vapour absorption chiller,that runs on steam produced by the bagasse-fired boiler.We have also commissioned a back-pressure steam turbineon the boiler, which has brought further energy savings.

Stock piles of bagasse used in the bagasse-fired boiler.


Air qualitySince 1991 we have had a proactive programme to control releases and phase out ozone depleting refrigerants.

The release of gases such as refrigerants, Volatile OrganicCompounds, sulphur dioxide, nitrogen oxides, particulates andodours into the atmosphere reduces local air quality and contributes to global warming and ozone depletion.

Our main impact on local air quality is flue gasesfrom boilers, refrigerant gases, dusts, odours andexhaust fumes from vehicles.

Most of our plants have boilers to generate hotwater and steam used for cooking, pasteurisation,cleaning, sterilising and heating. Refrigerants areused to cool during processing, and for storage topreserve product quality - particularly important inhot parts of the world . We are seeking to reduceour impact on air quality by:

• monitoring and reducing the quantity of pollutantswe emit

• replacing old boiler equipment with energyefficient low emission boilers

• measuring and minimising refrigerant usage

• increasing the use of low or non-ozone depleting refrigerants

• converting to cleaner burning fuels

• installing equipment to filter out dust and pollutants.

Chlorofluorocarbon (CFC) refrigerants in largeequipment such as process chillers, cold roomchillers and cooling tunnels have been removed in virtually all locations globally. Small sealed roomair conditioners and refrigerators are being replacedat the end of their useful life. Vending machineswith small sealed charges of CFCs continue to bechanged over during regular maintenance.

11.20

TransportationTransportation, with its combination of fuel consumption and air emissions, is a key area in which we can reduce environmentalimpact.

Although manufacturing operations contributemore significantly to global warming, efficientscheduling and planning of product distribution helpto reduce both energy consumption and roadcongestion. An analysis of carbon dioxide emissionsfrom the Cadbury Trebor Bassett (CTB) UK supplychain has been undertaken to quantify the relativeimpacts of raw material sourcing, manufacturing

and finished product distribution. The majortonnages of raw materials are cocoa, which isbrought to the UK by sea from West Africa, andsugar and milk, which are both brought to our UKsites by road transport.

It is clear that manufacturing is by far the largestcontributor to global warming, which is why wehave focused on it.


MANUFACTURING 88.93%

MILK TRANSPORT 1.36%

SUGAR TRANSPORT 0.88%COCOA SEA TRANSPORT 0.91%COCOA ROAD TRANSPORT 0.12%

FINISHED GOODS TRANSPORT 7.8%

TRANSPORT 11.07%

Annual emissions of carbon dioxide from the Cadbury Trebor Bassett supply chain in the UK.

11.21


11.22

CASE STUDY Cocoa beans take short cut tofactory gate

The majority of cocoa bean and cocoa products are nowimported from West Africa via sea-freight into Liverpool inthe north-west of England rather than Tilbury in thesouth-east, which considerably reduces road freightmileage in the UK.

In 2001 we moved 52,000 tonnes of cocoa beans andproducts by road from ports at Tilbury and Felixstowe toour cocoa-processing factory at Chirk in North Wales. Thisinvolved 2,150 loads travelling over 500,000 miles.

In 2002 we moved 47,000 tonnes of cocoa beans andproducts into Chirk, of which 27,500 tonnes came fromTilbury and 19,500 from Bristol. This involved 1,800 loadstravelling approximately 330,000 miles. (This reflects theimpact of larger loads and some imports now coming intoBristol). There was a 33% reduction in miles travelled tosupply Chirk compared to 2001.

In 2003 we moved 45,000 tonnes of cocoa beans andproducts into Chirk, of which 35,000 tonnes came fromLiverpool and 10,000 from Tilbury. This involved 1,600loads travelling only 135,000 miles (as Liverpool is only 40 miles from Chirk, plus larger loads). There was a 75% reduction in miles travelled to supply Chirk compared to 2001.

This is good news for the UK environment and represents a reduction of about 0.2% in CTB’s annual emissions ofcarbon dioxide from their supply chain.

Cocoa being loaded into barges in West Africa.

Cocoa arriving by ship in Liverpool, UK.


Soil and groundwater protectionWe use water drawn from rivers, lakes, springs and undergroundsources in manufacturing facilities around the world, but realise justhow valuable water is as a resource.

To help protect the integrity of water supplieswherever we operate we implement a range ofmeasures to minimise the potential for groundwatercontamination. For example, we:

• exercise a duty of care programme for all facilities,which includes best practice in water supply andgroundwater protection

• regularly monitor the quality of product water

• replace underground storage tanks that containpotentially hazardous materials such as fuel oil,with above-ground tanks

• install purpose-built hazardous materials storagefacilities and secondary containment aroundindividual tanks

• train staff in spill prevention and clean-uptechniques.

CASE STUDY Solid waste is mostly water, USA

The Mott’s beverage plant at Williamson near Rochester was able to reduce solid waste generation by 66%, after installing a centrifuge for sludgedewatering. The process removes water from liquidsludge and returns it to the system for nutrient value,which significantly decreases the volume of sludgehauled to and spread on neighbouring fields.

11.23

11.24


Solid waste managementWaste minimisation is an important way to improve manufacturingefficiency which both reduces raw material consumption and use of landfill.

Inputs

OutputsExamples of waste generated by the production of our range of products.

cocoa beans, milk, sugars, nuts and raisins,packaging, water, energy

sugar, glucose, starch, gelatine, flavours, gums, packaging, water, energy

sugar, water, food acids, flavourings, bottles, cans, labels, shrink film, energy

oranges, lemons, apples, cranberries, sugar, packaging, water, energy

Wrapped chocolate products:• by product: cocoa shell treated as soil conditioner• effluents and air emissions• solid waste to landfill• packaging for recycling

Sugar confectionery:• by-product: liquid wastes for animal feed• effluents and air emissions• solid waste to landfill• packaging for recycling

Soft drinks in bottles and cans:• effluents and air emissions• solid waste to landfill• packaging for recycling

Fruit juices and fruit concentrates:• by-product: fruit pulps and sludges used as soil conditioner• effluents and air emissions• solid waste to landfill• packaging for recycling

Inputs

Process

Outputs

Process

Process

Waste is generated during the manufacturing process and from the final disposal of packaging, afterconsumers use products. A good waste management programme aims to reduce the amount of wasteproduced, maximise the proportion of waste that is usefully disposed of and, by reuse or recycling, tominimise the proportion that is sent to landfill.


Some of our wastes – for example mineral oils,paints, flammable liquids – are classified as“hazardous” and we take particular care to disposeof them correctly. In 2003, 0.32 kg per tonne ofproduct (0.9% of the total waste produced) wasclassified as hazardous waste – this is the first yearwe have reported this information.

There are fewer opportunities to recycle solid wastegenerated by sugar confectionery manufacturing.With the acquisition of Adams, the overall solidwaste recycling rate dropped in 2003.

Sites measure their waste streams and many haveprogrammes to reduce the amount they generateand send to landfill. Through better monitoring of

waste we have gained a better understanding ofthis environmental impact, in particular landfilloccupation and resource depletion. A number ofinitiatives have enabled us to reduce the amount of waste sent to landfill and increase the possibilitiesfor recycling, reuse and energy recovery. In manycases, food waste is still valuable after processingand can have a second life as animal feed or fertiliser.

We generate a wide range of waste items that, if separated, can be reused or recycled. Typically,products such as pallets, crates, plastic, paper and metals are collected separately at each site for recycling.

75% 78% 82% 80% 79% 81%73%

Group recycling/reuse rates (%)

1997 1998 1999 2000 2001 2002 20031997 1998 1999 2000 2001 2002 2003Solid waste generation kg/tonne of product

62.956.2 53.8

46.8 44.237.7 35.5

11.25


11.26

CASE STUDYNow hardly anything is wasted,France

The Orangina Schweppes factory in Nuits St Georges, nearDijon in France, makes a range of juice-based drinks underthe Pampryl brand. Many of the ingredients are deliveredby tanker, while others come in metal or plastic barrels.Some of the barrels are returnable but others are not.These, together with other materials such as cardboardboxes, damaged wooden pallets, defective bottles and usedplastic film, have to be managed as solid waste.

“A few years ago our record was frankly not very good,”says line leader Alain Sauvry. “Every day a waste containerwas taken away. Now I’m pleased to say that we achieverecycling rates of around 90% for solid waste and theamount of waste going to disposal is minimal. I take apersonal interest in the correct separation of our wastesand constantly work with my colleagues in the factory tomake sure that we maintain our good habits. In fact, aspart of our process of auditing the suppliers I frequentlyaccompany the mixed waste container to the wastetransfer site to make sure we’ve not let anything slipthrough the net.”

CASE STUDYLocal communities get to gripswith recycling, Australia

We have for many years owned 50% of a packagingrecycling scheme that’s raising awareness of recycling andanti-pollution issues throughout South Australia.Statewide Recycling is a highly effective, mainlyautomated operation that recycles aluminium and plasticcontainers – so reducing the amount sent to landfill.

Ensuring that waste packaging from homes throughoutSouth Australia finds its way to the recycling centre is achain that involves the whole community. Residents puttheir recyclable waste into wheelie bins that are collectedby the council and taken to one of 140 depots throughoutthe region. Here council staff and local scout groupsseparate out recyclable containers, compact them, thensend them on to the Statewide centre for recycling. KeepSouth Australia Beautiful has an education centre forschools at the centre. Not content merely to processwaste, Statewide Recycling is actively researching newrecycling and pollution prevention methods.

Alain Sauvry inspecting drums for recycling. Statewide Recycling in Australia.


WastewaterMany of the processes carried out at our factories generatewastewater, which must be treated before being returned to thenatural environment.

The wastewater we generate during the productionprocess contains materials such as sugar, flavourings,acids, cleaning fluids, soaps and fats. We seek toreduce the volume and strength (Chemical OxygenDemand or COD) of wastewater by improvedefficiency, as well as water recycling. Efficiencystarts with minimal use of water.

The wastewater that is generated is usually sent tothe local municipal wastewater treatment plant,with some onsite pre-treatment (such as pHneutralisation). In other cases, wastewater is fullytreated onsite before being released to rivers orlakes. We continue an active programme tominimise wastewater and where necessary installand operate the most appropriate modern effluenttreatment plant.

COD is a standard measure of the amount oforganic loading – for example sugar, fats etc – in wastewater.

In 2003 we discharged 3 .1 kg of COD per tonne ofproduct after onsite treatment (this is the first yearthis information has been reported).

This would typically reduce to about 1.0kg of COD(per tonne of product) actually discharged to theenvironment after treatment by municipalwastewater treatment plants.

11.27

1997 1998 1999 2000 2001 2002 2003Wastewater discharge (M3) per tonne of product per year

2.81

2.532.41 2.4

2.05

1.83

2.11


11.28

CASE STUDYWater treatment plant, Nigeria

Cadbury Nigeria, located in the Agidingbi area of IkejaLocal Government, Lagos, has always had a far-sightedview of environmental responsibility. Constructed in 1979,the company’s effluent treatment plant represented aconsiderable investment at the time. It was installed beforeenvironmental legislation came into force in Nigeria andinternationally was way ahead of its time. All factorywash-down and sewage is treated by the “activatedsludge” process and final effluent discharged into theOdo-Iyalaro, a major stream outlet in Ikeja district.Effluent parameters are measured on a daily basis in thein-house effluent laboratory.

It is no surprise that in 2000 Cadbury Nigeria plc won the LASEPA (Lagos State EPA) Environment FriendlyIndustry Award.

MO

RE

I NS

IDE

p1 1.18 water consumption p1 1.20 air quality p1 1.21 transportation p11.23 soil and groundwater protectionp1 1.24 solid waste management p1 1.27 wastewater

responsible use of

resources

Our five pillars of social responsibility provide thesignposts for the next stage of our journey.

human rights and employment standards• Continue to invest in the skills of our people – working

better together.• Labour standards throughout the supply chain to meet

the highest international minimum standards.• Confidential employee hotline to alert any concerns of

breach of our business principles.• Our first global employee climate survey to be

completed in 2005.

ethical sourcing and procurement• Extend engagement, dialogue and risk assessment both

geographically and deeper within our supplier base.• Integrate ethical sourcing, along with environmental

and quality audits, into our supply chain globalcompliance process.

• Understand better the parameters for sustainablesupply of agricultural raw materials. Take a leadershiprole in raising standards, eg. in cocoa and palm oil.

marketing, food and consumer issues• Hold responsibility at the heart of our brands

and within our consumer dialogue.• More research into the wider area of food and diet,

and build findings into our policies and activities.• Work with stakeholders to seek sustainable solutions

to the issue of obesity and poor lifestyle around theglobe, especially as it relates to more vulnerablegroups in society, and opportunities for prevention.

environment, health and safety• Support our new integrated Environment, Health and

Safety Policy with EHS management systems,compliant with the international standards ISO 14001and ISO 18001.

• Measure impact on the eco-systems from which wederive our raw materials, and work collaboratively todevelop solutions to protect biodiversity.

community• Build community investment into mainstream

business practice.

• Encourage the greater participation of our people;their energy, skills and ideas.

• Create community value around the world, withbusiness units investing at least 1% of pre-tax profitsin targeted programmes.

We look forward to reporting progress in futurereports, and on our website. Improvements are beingbuilt into our data gathering systems for all oursustainability key performance indicators, and whereappropriate we will establish visible improvementtargets, and benchmark with our industry peers. In 2005,five years after the adoption of our Human Rights andEthical Trading Policy and our new Board CSRCommittee structure, we will undertake an overallimpact analysis, and decide the role for ongoingindependent verification.

Corporate responsibility is a journey without an end. It is one of continuous learning andimprovement for all of us at Cadbury Schweppes. Our journey will continue in a fast changingand less certain world – one in which we will need to be aware, adaptable and sensitive tochanging circumstances, new challenges to our business values, and keener stakeholderexpectations. We will engage and listen to all those who can help inform our future directionand priorities.

12. the journey continues

Where to find information on…

Air qualityAwards

BiodiversityClimate change

Community investmentCorporate governance

ConsumersDiversity

Economic impactsEmployeesEnergy use

Environmental managementEqual employment opportunities

Food and diet issuesHealth and safety

Human rights and ethical tradingLost time injury frequency rate

PackagingPalm oil

Purpose & ValuesRecycling

StakeholdersSuppliers

Training and developmentTransportation

Waste managementWater consumption

11, 11.19-11.205.6-5.8, 10.16-10.1811, 11.14-11.1611, 11.9-11.11, 11.21-11.224.9, 10, 10.1-10.8, 124.4, 54.9, 8, 8.1-8.57.2-7.41.1-1.204.8, 7, 7.1-7.1411, 11.10-11.224.10, 11, 11.1-11.5, 127.21.6-1.10, 8.2-8.3, 1211, 11.1, 11.6-11.8, 121.11-1.15, 9.1-9.8, 1211.4, 11.6-11.711, 11.12-11.13, 11.2411.154.311.3, 11.24-11.265, 5.1-5.124.9, 9, 9.1-9.47.5-7.911.2111, 11.24, 11.2811.18-11.19, 11.23

1. Please rate this report on a scale of 1 to 5.

POOR EXCELLENT

Overall 1 2 3 4 5

Clarity 1 2 3 4 5

Credibility 1 2 3 4 5

Case studies 1 2 3 4 5

Design 1 2 3 4 5

Usefulness of information 1 2 3 4 5

2. What information did you find most helpfulin the report?

3. What additional information would you liketo see in our future reports?

4. Please rate what you think is CadburySchweppes’ current performance in thefollowing areas of CSR based on this report.

POOR EXCELLENT

Overall 1 2 3 4 5

Stakeholder engagement 1 2 3 4 5

Employment standards 1 2 3 4 5

Ethical sourcing 1 2 3 4 5

Community involvement 1 2 3 4 5

Responsibility to consumers 1 2 3 4 5

Environmental management1 2 3 4 5

5. Please tick the category that best describes you.

Consumer NGO

Supplier Government

Investor Community member

Employee Academic

Other

6. Please tick if you would like to receive the following:

CSR Report 2002

Annual Financial Report 2003

7. Optional

Name

Position

Organisation

Address

Postcode

Telephone

Email

Cadbury Schweppes Plc

External Affairs Department

25 Berkeley Square

London W1J 6HB

UNITED KINGDOM

We would like to hear what you think of our 2004 corporate and social responsibility report.

please return the form by post or fax it to us on +44 (0) 20 7830 5137.

For more information on Cadbury Schweppes, seewww.cadburyschweppes.com

Annual Review and Summary Financial Statement 2003Report & Accounts and Form 20-F 2003

Cadbury Schweppes Plc External Affairs Department25 Berkeley Square London W1J 6HB

United Kingdom

Consultancy, design and production by Corporate Edge. Photography James BellPrinted by St Ives Westerham Press to ISO 14001 environmental standards

and using vegetable based inks, on 100% recycled paper.

questions information

comments suggestions

details

working better together

Documents

Transcript of working better together