Improving Water Availability & Resilience for Our Communities Where We Operate

We recognize access to clean water is a human right and critical to help build strong communities and businesses. It is, therefore, our responsibility to be good stewards of the water we use while working to help ensure the resiliency of water resources for future generations. In our operations, we continue implementing disciplined water management strategies and investing in water efficiency measures.

But that’s only part of our approach, as we believe water challenges are bigger than any one organization can tackle. Our people and our communities make us who we are, so we are promoting water resiliency where we live and work—listening, collaborating, and treating natural resources with respect while investing in public infrastructure and watershed health for our collective benefit.

Our ambition is to protect the water resources in the communities where we operate by collaborating with community leaders and organizations to support local watersheds and enable the restoration of water consumed by our operations. As such, the water accessibility projects and water infrastructure improvements we have supported are expected to help approximately 11,150 people.

In fiscal year 2022, we developed a water restoration target to restore approximately 1.1 billion gallons of water withdrawals from local watersheds between fiscal year 2023 and fiscal year 2025, and in fiscal year 2023, we surpassed our initial water withdrawal restoration target ahead of our fiscal year 2025 timeline.

Now we have set a more ambitious target, we are targeting to restore 5 billion gallons of water withdrawals from local watersheds, while improving accessibility and quality of water for communities where we operate between fiscal year 2023 and fiscal year 2025.

Our Operating divisions are contributing to our total company targets by leaning into the components of our strategy that best meet the needs of communities they operate in while maintaining focus on operational improvements that align with the unique aspects of each production process. Here’s how our divisions are turning the strategy into practice.

Water Stewardship Efforts in our Mexican Beer Operations

With our beer operations achieving some of the best-in-class water efficiency metrics in the industry, the strategy for our Mexican beer operations puts greater emphasis on water restoration and infrastructure improvement for the communities where we operate in Mexico. Critical projects have been identified through community collaboration and input and guidance from third-party water restoration organizations. For example, to improve water quality in the Nava area, we have partnered with Pronatura Noreste, investing in a 10-year project that will help restore the Bravo Conchos basin in the Serranía del Burro. In Obregon, we have worked with local organizations to construct three dams along the Yaqui Valley canal that help improve water management efficiency, recovering volumes of water that play a vital role in the sustainability of the region.

Water Stewardship Efforts in our Wine & Spirits Operating Regions

In our California operations, we are working to improve water efficiency by implementing employee education programs and supporting greater adherence to water management best practices to further reduce our overall water withdrawal and use. We have invested in expanded sub-metering and instrumentation within our facilities to provide improved monitoring and tracking, helping to optimize the operational management of water.

While we remain committed to efficient operations and employee education within our company, we know that effective water stewardship is not something we can achieve alone. We believe the most impactful opportunity to advance our water stewardship is through broader community engagement. We continue to evaluate affiliations and programs focused on protecting higher-risk watersheds to engage in more nature-based solutions such as reforestation, waterway rehabilitation, and wetland and groundwater restoration, and to help protect and ensure the future resiliency and integrity of the watersheds.

Progress on Water Stewardship

Constellation Brands participates in the CDP Water Security annual reporting process. For a copy of our report, please visit http://www.cdp.net/.

Reducing GHG Emissions & Doing Our Part to Limit Global Warming

As part of our commitment to protect the environment and the communities where we operate and live, we continue our efforts to reduce GHG emissions by decreasing dependence on non-renewable energy sources and lowering overall energy consumption. We monitor certain aspects of our GHG footprint on a per liter of product produced over time basis.

To help us better understand continued opportunities, we track our emissions of four major GHGs that are relevant to our business: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and hydrofluorocarbons (HFCs), in accordance with the international guidelines of the Greenhouse Gas Protocol, which was developed by the World Resources Institute and the World Business Council for Sustainable Development. We express our carbon footprint in terms of carbon dioxide equivalents (CO2e).

Our near-term focus to help reduce the impacts of climate change is a target to reduce our GHG Scope 1 and Scope 2 emissions by 15% by Fiscal Year 2025* To deliver this target we are focused on three areas of opportunity:
• Optimizing our energy efficiency
• Investing in renewable energy
• Supporting green energy initiatives of our footprint by participating in the carbon market

*From baseline Fiscal Year 2020 Scope 1 and Scope 2 emissions

We are working to convert our operations to optimize energy efficiency and implement sustainable energy solutions and technologies. Within our Wine & Spirits operations, we are investing in renewable energy. We have implemented solar energy technology at The Prisoner Wine Company in California and at three Ruffino facilities in Italy to provide local renewable energy that advances our ongoing transition away from fossil fuel-derived energy sources. Meanwhile, we plan to convert a portion of our Beer operations to natural gas and invest in wind farms. We anticipate these collective efforts will represent approximately half of our target GHG emission reductions by fiscal year 2025.

We recognize that thoughtful collaboration and alignment across our value chain is needed to improve our Scope 3 GHG data collection and benchmarking in an effort to enhance data accuracy. We’re continuing to make progress by improving and expanding our Scope 3 GHG emissions data collection process while working to better understand opportunities to reduce GHG emissions in our value chain through stakeholder assessments, supplier surveys, and sharing of best practices.

Progress on Global GHG Emissions

Constellation Brands participates in the CDP Climate Change annual reporting process. For a copy of our report, please visit http://www.cdp.net/.

Commitment to Waste Reduction and Circular Packaging

Waste is a part of any production process, and we are continually improving the ways we manage our waste to reduce the environmental impact of our waste generation, transportation and disposition. For this reason, we are implementing plans to reduce our operational waste and significantly enhance our use of circular packaging across our beverage alcohol portfolio.

As part of this commitment, the company will execute plans to attain TRUE Zero Waste to Landfill Certification in its key operating facilities₁ by fiscal year 2025 by further reducing operational waste across our facilities and enhancing diversion from landfills. TRUE Zero Waste to Landfill Certification is the first zero waste certification program dedicated to measuring, improving, and recognizing zero waste performance by encouraging the adoption of sustainable materials management and reduction practices which contribute to positive environmental, health, and economic outcomes.

To achieve our goal of significantly enhancing circular packaging across our beverage alcohol portfolio by fiscal year 2025, we plan to:

• Reduce ratio₂ of packaging weight to product weight by 10% across our Wine & Spirits portfolio₃.
• Ensure that 80% of packaging from our Wine & Spirits portfolio is returnable, recyclable, or renewable.
• Replace hi-cone plastic rings with recyclable paperboard for all applicable 4-pack and 6-pack SKUs across our Beer portfolio.

1 Key operating facilities, for the purposes of this target, consist of our major production facilities (i.e., our breweries in Mexico and our U.S. wineries generating the vast majority of waste).
2 Total packaging weight vs weight of wine or spirits liquid.
3 From baseline fiscal year 2022 ratio of packaging weight to product weight in Wine & Spirits portfolio.

Environment, Health, Safety & Sustainability (EHSS) Global Policy Statement

Constellation Brands is committed to providing a safe and healthy working environment and developing a culture where every employee takes responsibility for their own safety as well as the safety of others while minimizing our impact on the environment in the communities where we live, work and source. Our management team and employees work together with a sense of shared responsibility to ensure that we operate our business in compliance with all applicable regulatory requirements in each market where we operate around the world.

As an agriculture-based company, environmental issues are not only important to us – they are an essential component to our continued growth and success. Because we rely on the land for our livelihood, it is critical that Constellation does all it can to ensure clean water, air and soil at all of our sites and in all of the countries and communities where we operate. Our aim is to look for ways to improve the environment, while also minimizing Constellation’s collective environmental impact.

Amplifying Our Efforts Through Certifications & Programs

We understand that much of what we do to advance sustainability can be amplified through our conservation and sustainability certifications and our participation in industry programs, which share a wide range of best practices and help us measure progress.