Living Sustainability: Victor Treviño, FEMSA
Continuing our exploration of how food and beverage multinationals are addressing sustainability today, Amrop talks with Victor Treviño, Director of Energy and Sustainability at FEMSA.
Sustainability has always been a part of FEMSA’s DNA. How is this globalizing organization building on its legacy? It begins with ‘rooted sustainability’, says Mr. Treviño: everybody must incorporate it into their day-to-day operations and long-range planning.
In a Nutshell | C-suite Messages
Founded in 1890 as a local brewery in Monterrey, Mexico, FEMSA operates in 18 countries across the globe through its Business Units: Proximity & Health, Coca-Cola FEMSA and Digital@FEMSA. With more than 350,000 employees in 18 countries, FEMSA has a long history of concern for society and the environment. Today it puts sustainability first. It creates economic and social value through companies and institutions and strives to be the best employer and neighbor to its communities.
Amrop asked Victor Treviño to imagine a round table of experts and C-suite leaders from different organizations. What would be his advice to CSOs?
- Move from shareholder to stakeholder primacy. Sustainability begins and ends with a mindset: the role of business is to serve not only shareholders, but a wide spectrum of stakeholder groups, from customers, employees and suppliers to entire communities. A company’s impact can and will move the sustainability needle.
- Create universal value through sustainability. Sustainability is not a zero-sum game pitching shareholders against stakeholders. It is a win-win dynamic. Quite simply, being sustainable is good for the company. It builds value from the economic, social and environmental perspectives.
- Acknowledge the urgency. Companies that ignore the call for sustainability will quickly be jeopardized. In essence, sustainability means existing in the future. To continue to exist tomorrow, the organization must recognize that it must act today.
- Set priorities where it counts — and communicate. When it comes to sustainability, many organizations still embark upon multiple experiments that lack focus and alignment. Progress means identifying areas of highest impact, prioritizing, then taking the message to the organization in an engaging way.
- Drill down and set targets. It is vital to link priorities to targets that signal the organization’s sustainability ambition and incorporate all measures into the day-to-day. Critical success factors should be connected to sustainability activities, assigning responsibilities and accountability. Clarity and transparency create momentum.
Victor Treviño has served as FEMSA’s Director of Energy and Sustainability since 2010. Today, his role is all-encompassing: “FEMSA is a large organization with a number of different business units. The corporate office has responsibility for sustainability in all of them. We’re in charge of establishing the strategy, making sure we have the proper governance principles, setting targets and so on.”
ESG is increasingly taken as a shortcut for sustainability. What definitions does FEMSA use? “ESG means Environmental Social and Governance, whereas sustainability is about ensuring we can operate today and continue to grow and operate in the future.”
It’s a form of conscious capitalism: “We believe that a company’s purpose should be to create wealth not only for shareholders, but for all stakeholders.”
The sustainability domain seems boundless. Choices must be made. But how? A materiality analysis involves identifying and prioritizing the ESG issues that matter. It is even a requirement for many sustainability reporting standards and frameworks. FEMSA conducted one in each of its business units, merging the output with the major global priorities. This included aligning the organization with the UN Global Compact and Sustainable Development Goals.
It is a question of gaining a comprehensive understanding across interest groups, says Mr. Treviño. “We are very aware of the priority topics. For example, our investors rely on many of the ESG ratings and evaluations throughout the world, like the Dow Jones Sustainability Index, the Morgan Stanley Index, the FTSE4Good Index in London.”
“So, we understand what is important for industries, for the stakeholders of each of our different business units.” The analysis also embraces the perspectives of FEMSA’s consumers, community, suppliers, and employees. “We put all of that together and define our priority topics, in which we can make a bigger difference.”
Leading change from the top
To move from boardroom PowerPoint to frontline action, an organization’s sustainability efforts depend upon culture. As the stewards of a 350,000-strong workforce, how has FEMSA’s leadership made the link? For Mr. Treviño, top management must ensure the organization understands sustainability as an integral part of business. “To convey that it starts top down, with our Board, C-suite and CEO.”
“It’s part of our FEMSA Forward strategy — defining what we expect of the business. How do we get there? We’ve defined three ‘how’s’; one is rooted in sustainability. So, sustainability is not only the responsibility of the sustainability department, but it is rooted and incorporated into all the areas of the company. Strategic planning, purchasing, operations, maintenance and the commercial side must all look at their activities and responsibilities through a sustainability lens.”
Root and branch sustainability
The output of FEMSA’s strategy work was a sustainability framework with three main axes, each linked to priority topics. “We depict this in the shape of a tree. The roots are our ethics and values and governance principles, and then from the large trunk come the three main branches of people, community and planet.”
But positive intentions must be pinned to objectives. “For each priority topic we’ve established long term goals which will clearly indicate the direction we want to move in, what our ambitions are. And we can be very transparent on reporting our progress.”
FEMSA has committed to recycling 100% of its post-industrial waste in each of its bottling plants by 2025. By end 2021, 98% had already hit their objective and 31% of recycled material was incorporated into its PET packaging with associated energy efficiencies. Over the six previous years, the group achieved a 17% improvement in water use. US$4.5 million were invested in 2021. (for more results, visit FEMSA).
Meanwhile, Coca-Cola FEMSA has committed to Coca-Cola’s ‘World without Waste’. The goal is to recover 100% of the packaging it puts on the market by 2030 to recycle and foster the circular economy. In June 2023 Coca-Cola FEMSA joined the Mexican Coca-Cola industry for ‘Cleanup Day in Acapulco’, assembling more than 880 volunteers and recovering 3.89 tons of waste.
Making the CSO role relevant
As an executive search and leadership advisory firm, Amrop takes a keen interest in CSO success factors. Mr. Treviño’s mandate is to design, drive and implement FEMSA’s sustainability strategy, including cultural change. What are the pre-conditions? It is a matter of business relevance and motivation, he explains.
Most business leaders today theoretically understand the interplay between sustainability and value creation. FEMSA also understands the practice. “Being sustainable is better than not being sustainable. In the business, operational, human sense. If you look at it from any side. Let’s say we’re talking about diversity and inclusion. Any department or area will be much more successful if it incorporates diversity and inclusion. It promotes collaborative efforts, analyzing things from different perspectives. At the end of the day, you’ll take better decisions.”
The group has publicly committed to increasing its representation of female talent in leadership (managers and directors) to 40% by 2030. But of course, diversity and inclusion are only one zone of value creation. FEMSA operates a vast network of supply chains, and here the opportunities are considerable. “Being sustainable from the standpoint of trying to reduce CO2 emissions, for example, falls into the category of being more energy efficient. And being more energy-efficient saves you money. It saves resources.”
With the areas of operational effectiveness pinpointed, sustainability outcomes rest upon good communication, he says. Technicity must be translated into humanity, “conveying the message to all the areas of the organization… to transform some things that are maybe complex and technical into something much more understandable and relatable.”
But beyond the task of a small band of project-pushers, sustainability must be a systemic, mass movement, a collaborative effort: “Many years ago the topic of sustainability was really only taken care of by the sustainability area. And it was a small area. And now, even though that area still has a small headcount, it has many ambassadors and allies. And they are all over the organization. So, I think that mindset is very important, and that’s ‘rooted sustainability’. Everybody must make sure they incorporate sustainability into their day-to-day operations, as well as long-range planning.”
A revolutionary story
During the twenty-three years of his tenure, what shift in mindset has Mr. Treviño seen at FEMSA? He considers himself fortunate to work in a company for which sustainability is not just an aspiration, but a historical fact. Its pioneering philanthropy even influenced Mexico’s social policy.
Not so much a shift, as a starting point, then. “Since its foundation in 1890 the company’s leadership has always recognized the importance of not only creating economic value, but also social value. For example, it started taking care of employee wellbeing even before there was a government social security institute. And I understand that what is now the social security institute in Mexico was created to model what the company had done.
See the full article for the history of sustainability at FEMSA going back to 1911, and how the organization is continuing its social engagement through its forward-looking programs.
During the Mexican Revolution in 1914, the company’s early owners faced the dilemma to shut up shop or continue to serve their community. Since then, matters have become even more complex. Today, FEMSA operates in 18 countries with very different cultures, regulatory frameworks, challenges and opportunities.
Continuing to drive FEMSA’s sustainability goals within such diverse locations demands ongoing analysis and perspective, says Mr. Treviño: “It’s very different working on, for example, renewable energy here, and in Argentina or Brazil, Switzerland or Germany… that’s why our corporate goals are not limited to a certain geography.”
He returns to a primary concern — the sheer size of FEMSA’s workforce and the demands of aligning all its variables around sustainability targets: culture, behaviors, decision-making and internal processes.
Unsurprisingly, digital has a role to play, together with in-person contact. “We have strategies for communicating and promoting these ideas. In fact, next week we have our annual sustainability summit. About 100 people will be personally attending, but we’ll also have 600 to 700 people from our business units connected online. So, it’s a hybrid event where we share a lot of information about the strategy, what we’re doing, what we expect from the business units, our targets… We try to be very transparent, we have to be very accountable in reporting how we’re doing, where we’re having difficulties in making progress, and what we’re going to do to reach the goals.”
Given all of this, how does it feel to work for FEMSA? In its organizational climate survey conducted during 2021 and 2022, the group measured several key indicators. All scored between 85 and 91%. If sustainability rests in the hands of people as Mr. Treviño states, FEMSA’s success looks built to last.