Chair's Statement

We are now nearly five years on from the launch of 'Spirit of Progress’, our action plan on Environmental, Social and Governance (ESG) issues. We have reflected on our progress to date, what we have learned so far and refreshed our focus for the critical years ahead.

We have simplified and prioritised the goals that form our 'Spirit of Progress' plan. This has allowed us to prioritise the areas that are most material to our business including reducing the harmful use of alcohol, combating water stress and the impact of climate change. We are also accelerating our work advocating for responsible alcohol consumption and water replenishment activities in the communities in which we operate.

I am encouraged by the progress we have made this year on our positive drinking agenda. We have long championed awareness on the risks of drink driving, including collaborating with law enforcement and local authorities. In 2021, we launched the Wrong Side of the Road (WSOTR) digital learning resource with the United Nations.

Institute for Training and Research, aimed at raising awareness about the consequences of drink driving on individuals and communities. WSOTR is available in digital and classroom formats and is now live in 24 countries, and in fiscal 24, we reached more than one million people through WSOTR and other drink driving programmes. We have now reached more than 2 million people since fiscal 20. To embed the message of moderation in culture in APAC we have partnered with K-Pop star SUHO to produce a new song and music video, 'Savour every moment'. This is the first time that responsible drinking messaging is conveyed through K-Pop.

We are steadfast in our focus on water by improving water efficiency at our own sites, investing in water replenishment and collective action. For example, we are committed to replenishing more water than we use in our tequila operations in Mexico by 2026, and mobilising collective action to improve water security. We are partnering with the State of Jalisco and local municipality in Ocotlán, and in fiscal 24 we enabled large scale water reuse for local farmers, replenishing over 470,000 cubic metres of water.

We continue to take significant action to create a sustainable low carbon future, and limit the damaging effects of climate change. We are partnering with governments and institutions in key geographies on our decarbonisation pathway. In the US, we were proud that the Department of Energy selected Diageo as part of the Industrial Demonstrations Program fund to support the installation of heat batteries at our Shelbyville and Plainfield sites, with the goal of building a model that can be replicated.

Our people and inclusive culture are critical to Diageo’s success. This year, Karen Blackett took over accountability as the designated Non-Executive Director for workforce engagement. All Non-Executive Directors participated in the programme engaging with colleagues from all regions, functions, and organisational levels. The Board values the openness of conversations and insights on positive aspects of Diageo’s culture, as well as areas for improvement. Diageo’s culture continues to be a source of pride and competitive advantage, with high quality accessible leadership. This was reflected in the engagement results seen in our global employee survey, Your Voice, which remain in the top quartile and above external benchmarks with 81% engagement levels and 89% expressing pride in working for Diageo.

We have announced further changes to the Board this year, and I am pleased that we have continued to attract high calibre of talent with deep experience across beverage, consumer and regulated industries.

As we announced in March 2024, I plan to retire in February 2025 from the Diageo Board in my ninth year. My colleague and current Non-Executive Director Sir John Manzoni has been appointed as my successor. John joined the Diageo Board in October 2020, having been Chief Executive of the UK Civil Service. He is currently Chair of FTSE-listed multinational energy business SSE plc and a non-executive director of engineering and technology company KBR, Inc. He was previously a non-executive director of the multinational drinks business SAB Miller plc for 11 years. John brings a wealth of experience both from within the beverage alcohol world and from his extensive private and public sector experience. I look forward to working with him, fellow Board members and my Diageo colleagues to ensure a smooth transition. 

Nik Jhangiani, currently Chief Financial Officer (CFO) at Coca-Cola Europacific Partners plc, the world’s largest Coca-Cola bottler, will succeed Lavanya Chandrashekar as Diageo’s CFO on 1 September 2024 and we look forward to welcoming him to the Board. Nik has more than 30 years of finance experience gained in roles in the UK, Europe, India, Africa and the US, including 20 years in various CFO roles, and has spent most of his career in the consumer and beverage industries. I am confident that his record of success as a CFO in multiple relevant markets will further strengthen our long-term track record of delivering sustainable returns for our shareholders.

After three years as CFO, the Board wishes to thank Lavanya warmly for her strong contributions to Diageo over the past six years. She has been instrumental in framing our long-term ambitions, driving a culture of operational excellence throughout her tenure and embedding a culture of everyday efficiency which has already delivered highly significant productivity savings across our business. We wish Lavanya well for the future as she returns to the US.

Julie Brown, CFO and Executive Director of GSK plc since May 2023, will be appointed as a Non-Executive Director, effective 5 August 2024, and on appointment will succeed Alan Stewart as Chair of the Audit Committee. Julie brings many years of experience in financial, commercial and strategic roles in international companies operating in highly regulated industries. She is strongly committed to enabling diversity in business and to creating sustainable, long-term value for stakeholders. Julie previously served as Chief Operating and Financial Officer and Executive Director, Burberry Group plc. Julie has also served as Group CFO of Smith & Nephew plc and previously worked for 25 years at AstraZeneca plc in various finance, commercial and strategic roles including as regional and country president and latterly as Interim Group CFO.

On behalf of the Board, I would like to thank Alan who has been a Director since 2014 and Chair of the Audit Committee since 2017. He has served Diageo with great distinction, and we have benefitted greatly from his expertise and strategic input. We wish him the very best for the future.

At Diageo, we speak of 'standing on the shoulders of giants' and honouring the founders on whose legacies this fantastic company is built. Some years have undoubtedly been challenging, but I am proud to have been part of the company’s journey and to have worked alongside such talented, dedicated, and entrepreneurial colleagues and leaders: the giants of today. They will carry this business forward, live our purpose of celebrating life, every day, everywhere, and create value for our stakeholders. I am particularly proud of the great strides we have made on the inclusion and diversity agenda, and the diverse leadership now in place on the Board and our Executive Committee. I would like to express my deepest thanks to colleagues past and present. As I pass the baton to John, I remain as excited about the future growth potential of Diageo as I was when I joined the Diageo Board in July 2016. I look forward to watching the company and its people thrive under John’s stewardship.

Javier Ferrán

Chairman