Bacardi Limited announced that it has pioneered a new auditing method that accurately measures performance and progress against key environmental sustainability objectives. Called BEST – Bacardi Environmental Sustainability Tracking – the new system represents an innovative best practice in assessing a variety of metrics typically included in sustainability initiatives.
Bacardi Limited, the world’s largest privately held spirits company, created this innovative system using general accounting principles. The Company then built upon standard metrics to include non-financial performance measurements in water use, energy use and greenhouse gas emissions from all of its manufacturing operations. The results provide an accurate assessment of not simply the cost of goods, but also the degree of efficiency in the Company’s use of resources.
Using the BEST method, Bacardi Limited is able to gain a precise comparison of its performance against sustainability initiatives over time. The Company calculates very specific data from a set baseline to understand just how much water and energy it would have used in prior years if those years had had the current-year mix of goods and services. All reporting compares today’s results to specific base years and provides data on a monthly basis. Other companies, using standard methodology, apply average cost of resource use that shows only the difference between the current and base year mix of goods and services; this method does not fully capture efficiencies in the use of resources.
BEST provides Bacardi Limited with a more accurate picture of performance, which, in turn, enables more accurate budget forecasting. The Company’s unique and innovative system was featured in Strategic Finance magazine and has been widely praised by industry leaders.
“The methodology advances Bacardi’s sustainability efforts through an application of the principles of activity based flexible budgeting to produce indices of improvements (efficiency metrics) for sustainability KPIs based in physical quantities rather than monetary amounts,” write Poole College of Management at North Carolina State University professors Jon Bartley, Ph.D.; Frank Buckless, Ph.D.; Y.S. Al Chen, Ph.D.; D. Scott Showalter, CPA; and Gilroy Zuckerman, Ph.D. in Strategic Finance magazine.
“These new metrics have transformed the way Bacardi measures progress in meeting its key sustainability objectives, and they represent an innovative best practice for management control and for external reporting.”
To learn more about Bacardi Limited environmental efforts and the “Good Spirited: Building a Sustainable Future” initiative, visit here.