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Status Update

May 20, 2021

Ivan Menezes
CEO, Diageo

Hello and welcome. I'm delighted to be able to spend the next 45 minutes providing a deeper dive into our 10-year ESG action plan, Society 2030: Spirit of Progress, and how the ambitious goals we've set ourselves are fundamental to the delivery of our performance ambition. I'm joined today by Javier Ferrán, our Chairman, Ewan Andrew, President of Diageo Global Supply Chain and our Chief Sustainability Officer, Mairéad Nayager, our Chief Human Resources Officer, and Kate Gibson, Global Director of Diageo in Society. I want to set out why I believe our strategy is different and why, through the 25 ambitious goals that make up our Society 2030: Spirit of Progress plan, Diageo is committed to shaping a more sustainable and inclusive business and society. This is a business tuned to respond to the needs of all our stakeholders and society at large.

Arthur Guinness, Charles Tanqueray, John Walker, and those that followed in their footsteps were incredible innovators and entrepreneurs. They understood, as we do today, that our distilleries, breweries, and the hospitality industry we serve are at the heart of local communities, and that our business will only thrive if it helps these communities prosper too. Today, we're building on a successful track record of ESG progress and have made great strides in recent years. We have reduced our greenhouse gas emissions from direct operations by over 50% since 2007, despite increasing our production volume. We have achieved a 46% improvement in water use efficiency. We have reached over 225 million people with moderation messages from our brands, and 39% of our leadership roles are held by women, taking us beyond the target we set for 2020.

We have worked hard to build strong analytical rigor and capability within our business, generating data-led insights to drive our performance. Our approach to the delivery of our ESG goals is no different. We understand the importance of measurement and transparency and are moving towards a fully integrated approach to reporting with all our commitments directly linked to our strategic priorities. Our plans are a core part of the operational delivery of the business day in, day out. Ewan will bring this to life in more detail shortly. We continue to extend our existing disclosures to be in line with TCFD guidelines and already provide quantitative progress against our targets in our annual report.

ESG and our Society 2030: Spirit of Progress plan is fully owned by the Executive Committee and Board, with every senior leader in the organization incentivized to deliver our key commitments from the start of fiscal 2021, with 20% of LTIP grants directly linked to our ESG measures. Since we launched our new action plan in November 2020, Spirit of Progress quickly became the top trending topic across all our internal channels, with strong engagement from employees keen to understand their role and get involved in its delivery. While our ESG performance to date has been strong, we recognize there's much more to do, which is why each of our 25 goals have an innovation gap built in by design based on what we know today, what we will need to do in the future, including where we will need new technology and partnerships.

In developing our plan, we considered where we are today, what we knew we could achieve, then looked at what was required to close the gap to achieve the UN Sustainable Development Goals through to 2030. Our goals are built on the most material issues affecting our business and the opportunities we see based on what we've learned through the delivery of our previous targets. We strongly believe there are commercial benefits from ambition on ESG, not just meeting the regulatory requirements and stakeholder expectations, but in attracting and retaining the best talent, building deep consumer loyalty, creating new partnerships, and increasing innovation, efficiency, and resilience across our operations. We know that the issues facing society are complex and connected, we are focused on the impact we can have throughout our value chain across communities, suppliers, our partners, customers, and consumers.

As a consumer-centric business, we know that our brands must be authentic and consistent in the way they meet the expectations of our consumers. This equally applies to their impact on society as it does their role in occasions and celebrations. If there is one positive to come from this pandemic, governments and society are beginning to understand the critical importance of a thriving hospitality sector to our social fabric as an employer, a significant creator of value and economic growth, and the cornerstone of communities the world over. We believe that our responsibility and influence extends beyond our direct operations. We're building and nurturing some of the world's most iconic brands rooted in culture and local communities, which is why we're focused on creating an inclusive, sustainable business in its widest sense.

From our people to our brands and the way we promote our category, we will leverage the full breadth and reach of Diageo to shape market-leading policies and practices. We will promote a positive role for alcohol, champion inclusion and diversity, preserve the natural resources on which our long-term success depends, and make a positive contribution to the communities in which we live, work, source, and sell. Ewan will now talk you through our Society 2030: Spirit of Progress goals, the frameworks we follow, the costs associated, and show you how we compare with peers.

Ewan Andrew
President of Global Supply Chain and Chief Sustainability Officer, Diageo

Thank you, Ivan. I want to start by recognizing the progress we've made in the last decade with the delivery of our 2020 targets, which we believe were industry-leading when we set them. It has taken incredible engagement, effort, and focus from our people and our partners, and we were incredibly proud of our results but determined to go further. We have a track record of setting ambitious targets, and our Society 2030: Spirit of Progress plan is no different. The power of ambition has a mobilizing effect on our people and is a catalyst for innovation. We developed these goals over a year through engagement with a wide range of stakeholders and rigorous trend analysis. All 25 goals are aligned to the UN Sustainable Development Goals, and while bold and ambitious in their own right, they build on the significant progress we've already made.

As you can see, they are grouped according to the most material issues and opportunities for Diageo. Their delivery will require focused and sustained work, largely leveraging known technologies, combined with a need to close a purposefully built-in innovation gap. Where the technology is not yet there or is sub-scale, we will partner to establish it. This will require consortium-led breakthroughs, combining the power of our own innovation and research capabilities with the skills and resources of others. We are excited by this and the role we can play as a leader in consumer products to drive change. We are continuously improving how we track and measure progress and integrating our approach within the day-to-day operations of the business. Our General Managers review their progress as part of their usual business cycle.

Market-level integrated performance dashboards are then consolidated to provide both a regional and a global view for the Executive Committee and Board to review quarterly. This approach brings together the most important data streams and provides both a local and a global accountability. It also provides insights, enabling our markets to share best practice, course correct where required, and enables us to apply predictive analytics within our supply operations to understand future opportunity or risk to delivery. Consumers are rightly becoming more insistent that companies and brands act responsibly towards their communities and the environment. By addressing the growing consumer interest and acting to continually improve our sustainability performance, we will be able to create increased awareness and preference for our brands and ensure their long-term success.

We lead our industry in the progress we've made to- date and the goals we have set, specifically across tackling the harmful use of alcohol, inclusion and diversity, and water stewardship. Our carbon reduction achievements also place Diageo in the top quartile of peer companies, and I'm hugely excited about the progress we are making on packaging and regenerative agriculture. We are building partnerships with cutting-edge innovators, launching Pulpex Limited with Pilot Lite, for example, to transform the packaging landscape over the next few years. I have the pleasure of leading our Global Supply Chain and Procurement teams, as well as being Chief Sustainability Officer. I know firsthand how critical grain-to-glass sustainability is to the efficiency and effectiveness of our operations. Let me unpack in more detail where we focus within this pillar of our Society 2030: Spirit of Progress plan.

We have long been committed to preserving the natural resources on which we all depend, working together to tackle climate change, water stress, and biodiversity loss. We were an early adopter of absolute rather than relative reductions in our carbon emissions, setting both our 2020 and 2030 targets in line with the principles of the Science Based Targets initiative. We are a recognized leader in our approach to integrated reporting and provide disclosures in line with the Sustainability Accounting Standards Board and the GRI Standards. We are extending our disclosures in line with TCFD guidelines, further embedding climate risk in our strategic decision-making and understanding of the impact of climate change on our business.

For example, in fiscal 2021, we completed a comprehensive assessment of physical and transition climate risks of our directly owned assets in Scotland and North America, as these sites represent over half of our net sales value. In November 2020, Diageo was recognized for the third year in a row in the Dow Jones World Sustainability Index 2020, considered the gold standard for measuring corporate sustainability. In December 2020, we were delighted to retain our place on the CDP's Annual A List for Water and regain our place on the A List for Carbon. We were also recognized as a CDP supplier engagement leader in February 2021. The CDP A List recognizes the world's most progressive companies leading on environmental performance and transparency. To achieve our goals on environmental sustainability, Diageo expects to invest up to GBP 1 billion in capital expenditure over the next 10 years.

We see this investment as manageable in the context of our existing capital framework and critical to the long-term sustainability of our business operations. The projects we invest in are chosen and assessed on their environmental credentials and benefits. Within the decade, we also expect a secondary financial benefit driven through improved efficiency, but also reduced consumption of raw materials. There will be areas such as purchase of renewable energy through power purchase agreements as part of our goal to reach use of 100% renewable energy for our own operations and investment in water efficient technologies that will reduce costs. Our goal is to improve our water use efficiency by 30% globally and by 40% in water-stressed areas.

Based on our fiscal 2020 production volumes, this is the equivalent to saving enough water to meet the needs of 2.9 million people in water scarce environments or 2,000 Olympic-sized swimming pools. Increased forecasted growth would see an even larger reduction in absolute water usage. However, in other areas, costs may rise as a result of external factors such as increased costs due to carbon taxation and the impacts on resources such as agricultural raw materials and water. The value of these investments in environmental sustainability is multidimensional, ranging from supply chain resilience to meeting the expectations of our stakeholders such as consumers, customers, employees, and the talent we are seeking to recruit. As one of the world's leading distillers and brewers, the two most fundamental material inputs to our business, aside from raw materials, are heat and water.

I will start with water, our most important ingredient, and a precious shared resource, which is coming under increasing pressure in many parts of the world. Managing our impact on water and being good stewards of this resource is integral to our management of climate risk. We achieved a 46% improvement in water use efficiency through to 2020, and although we fell short of our 50% target, this result was industry leading. Our approach to water is holistic, based on our experience over the past decade, recognizing the multiple dependencies between our use of water and the impact on local communities, supply chains, and the environment. We invest in our own operations to be as water efficient as possible with a goal that on average, every drink we make will use 30% less water by 2030 than today. We're doing much more than just increasing our water efficiency.

By 2026, we will also replenish more water than we will use for production in all our water-stressed sites. We are also committed to collaborating with other stakeholders in the most vulnerable catchments to improve water security and climate resilience for all, recognizing that collective action will have the greatest impact. This work enables our growth, supporting local communities to develop sustainably and build resilience to risks. Investment in community water projects, particularly for sanitation and hygiene, unlocks development. At a global level, the economic case for investing in water, sanitation, and hygiene, or WASH, is well established. The WHO and UNICEF estimate that every dollar invested in sanitation returns $5.5 in increased productivity within the community. While every dollar invested in drinking water supply returns $2.

The pandemic has brought into sharp relief the importance of WASH as a first line of defense against the spread of COVID-19 and other diseases, and the critical role of water for communities and resilient business operations. For nearly 20 years, we have supported WASH projects. Most recently, Uganda Breweries partnered with humanitarian organization, Rotary International, to fund the construction of a water gravity scheme in Bududa district in eastern Uganda. This included the construction of 3 km of transmission and distribution lines, a reinforced foundation for the reservoir, and 13 public stand taps for the local community. Investment in our direct operations in Africa has also been significant. In 2019, we announced an unprecedented investment of GBP 180 million focused on both carbon and water projects across 11 sites in seven countries to support climate change resiliency in sub-Saharan Africa.

Uganda Breweries also invested in a water recovery plant to minimize our own water use and increase water replenishment. The water treatment plant has slashed our consumption of water in Uganda by millions of hectoliters, as well as converting wastewater into water that can be reused for irrigation or even cleaning the brewery itself. We apply a relentless focus on continuous improvement across all our sites. Week- by- week, month- by- month, systematic execution of improvement activities has combined to have a significant impact on our total water performance. Moving from water to heat, typically, 80% of Diageo's energy requirements is from heat. We have committed to accelerating the transition to a low carbon future. Overall, we are working to achieve Net- zero carbon across our full business, Scope 1 and 2 by 2030, and then in Scope 3 by 2050 or sooner.

We have aligned ourselves with Science Based Targets, adopting best practice firmly aligned with a 1.5 degree Celsius trajectory to ensure we follow a robust and authentic pathway to zero carbon. I'll start by focusing on our direct operations referred to as Scope 1 and 2 emissions. We have already achieved a 50% absolute reduction in our Scope 1 and 2 emissions from our 2007 baseline. We are rapidly moving to renewable electricity and are using our innovation capability to find the right solutions to reduce carbon emissions associated with heat generation. For example, in Scotland, we have invested over GBP 150 million in renewable energy innovation, converting our heat supply from fossil fuels to be based on renewable feedstock from our own co-products. This has taken long-term commitment and leadership but has resulted in a closed-loop renewable energy system fit for a low-carbon economy.

Later this month, our Oban and Royal Lochnagar distilleries are due to be certified as carbon neutral. Yesterday, I hope you will have seen that we just formally reopened our Brora Distillery. This beautiful distillery has been built back brick- by- brick to how it ran in 1983, when it last produced whisky. The only new element on-site is the biomass operation to ensure it was a carbon neutral distillery from day one. All these sites in Scotland have been converted to use 100% renewable wood chips or vegetable oil residue, as well as all operating using renewable electricity. We see our ability to successfully export our insights from Scotland to other parts of the world as being core to our progress.

We have expanded our renewable energy investment in India and most recently in Africa, where in both Uganda and Kenya, we are investing in biomass boilers for our brewing operations. This is particularly pioneering as the biomass supply chain infrastructure in Africa is nascent, and so we are addressing this innovation gap by developing new supply chains, which will benefit our breweries and our local communities while also encouraging others to switch to renewables. At the new Bulleit distillery in Kentucky, which is one of the largest carbon neutral distilleries in North America, we took a different approach. This distillery will be powered by 100% renewable electricity from electrode boilers as well as other renewable electricity sources. We are applying the same rigor to our new investments in consumer-facing experiences and our offices, all of which will meet the same external sustainability standards.

While this work is hugely exciting, it is largely leveraging known technologies. Accelerating to a low-carbon world and achieving our new target of Net-Z ero direct carbon emissions cannot be achieved without consortium-led breakthroughs, and as a result, we are already involved in a number of hydrogen projects, including the Green Hydrogen Hub at the Port of Cromarty Firth. We recognize this work doesn't stop at our doors, and we need to work closely with our suppliers on what are known as Scope 3 or indirect emissions, widely accepted as being the greatest challenge, but also where there will be the biggest impact on climate change mitigation. By June 2020, we had surpassed our 2020 target of a 30% reduction in absolute greenhouse gas emissions along our total supply chain while continuing to grow our business.

We have set a new ambitious goal of achieving a further 50% reduction in our Scope 3 emissions by 2030, and we plan to achieve Net -Zero in our supply chain by 2050 or sooner. To do this, we are focusing particularly on packaging and regenerative agriculture, which make up the biggest components of our Scope 3 emissions. We have long been focused on responsible sourcing, working with our suppliers towards more sustainable agricultural practices, and through our ambition to become sustainable by design, we are continuously looking for ways to ensure that our packaging is both sustainable and effective. Partnerships will be critical here. You will have seen our launch of Pulpex Limited last July, a new partnership between Diageo and Pilot Lite to create a new spirits bottle. Paper-based, it is made entirely from sustainably sourced wood.

Together, we are building a consortium of global FMCG companies, including PepsiCo and Unilever, to develop the technology further. We have also recently taken part in an exciting trial with glass container manufacturer Encirc, using an innovative furnace powered by renewable biofuel to reduce the carbon footprint in producing glass bottles by up to 90%. Our Black & White Scotch whisky will be the first brand to trial the new process. While I've covered a lot of ground, there is plenty more detail available for you on diageo.com. While we have a strong track record, we are not complacent. We know there is much more to do. We are excited by that and confident in our ability to deliver our grain-to-glass sustainability goals.

Kate will now talk you through the positive contribution alcohol makes to society, and we'll begin with the leadership role Diageo plays in promoting moderation and addressing the harmful use of alcohol.

Kate Gibson
Global Director of Diageo in Society, Diageo

Thank you, Ewan. Promoting moderation and addressing the harmful use of alcohol is not only the right thing to do, but also a critical part of our premiumization strategy. We want people who choose to drink, to drink better, not more. We want the millions of people around the world who choose to drink alcohol to trade up to higher quality, better-tasting drinks, from consumers in developing countries, switching away from illicit home brews to responsibly made quality products, to Scotch aficionados treating themselves to a bespoke blend, and the many other choices in between. Encouraging moderation lines up very clearly with our values and aims as a business. There is no drink of moderation, only a practice of moderation, and we are determined to provide consumers with the information they need to make informed choices.

The prevalence of harmful drinking, including heavy episodic or binge drinking and underage drinking, has been falling in many regions over the last decade. There is, however, much more to do. The industry has an important role to play in reducing the harmful use of alcohol in partnerships with governments and civil society. In 2015, Diageo was a formative member of IARD, the International Alliance for Responsible Drinking, a not-for-profit organization comprising the 12 leading beer, wine, and spirits companies that work together to actively support the WHO's target in the NCD Global Monitoring Framework of an at least 10% relative reduction in the harmful use of alcohol by 2025. Our brands are made to be enjoyed responsibly.

That's why through Society 2030: Spirit of Progress, we commit to reaching 1 billion people with a dedicated message of moderation from our brands by 2030, and to educate people on the risks of the harmful use of alcohol through our industry-leading platform, DRINKiQ. For example, in Mexico, we reached over 46 million people with messages of moderation through an Alcohol is Alcohol campaign, which ran across social media, supported by Johnnie Walker, Smirnoff, Don Julio, Buchanan's, and Black & White to educate consumers and encourage moderation. Many of our larger brands also leverage topical moments or major sponsorships to reinforce the importance of moderation. DRINKiQ is our global platform for championing consumer health literacy and tackling the harmful use of alcohol by helping people make responsible choices about drinking or not drinking.

It hosts a range of digital tools and articles that provide information and practical advice, as well as providing links to relevant external resources where people can find further advice and information. Visitors to the site are also able to assess whether they're drinking at higher risk levels by completing a self-assessment based on the WHO's Alcohol Use Disorders Identification Test, encouraging those at higher risk to consider cutting back or seeking help from medical practitioners. A quick, engaging online quiz can also help consumers learn some of the basic facts about alcohol to help them make responsible choices. We have recently refreshed the site with new content and features. DRINKiQ is live in 21 countries, including the U.K., U.S., South Africa, Ireland, India, Australia, and Kenya. Our aim is that the refreshed site will be live in 35 countries by the end of the calendar year.

When it comes to those underage, no amount of drinking is safe, which is why by 2030, we will educate 10 million people on the dangers of drinking underage through Smashed, our award-winning alcohol education program, through which we are measuring attitudinal change, not just the numbers of people reached. Since launching Smashed in the U.K. over 15 years ago, the program has now reached over 1 million people and is available in 25 countries across five continents and in 17 languages. Attitude change survey data shows that 93% of students are less likely to drink underage as a result of watching Smashed. The closure of schools through the pandemic meant we had to pivot to reach students virtually through the development of Smashed online, recently launched in Great Britain and India, with further modules close to launch in Mexico and Australia.

More localized versions of this innovative educational tool will be rolled out in the year ahead. Our engagement with stakeholders over many years has shown us that we need to move beyond reach in order to focus on changing attitudes to the harmful use of alcohol. That's why our Society 2030: Spirit of Progress plan includes a commitment to changing the attitudes of 5 million people towards drink driving in partnership with UNITAR and supporting the second UN Decade of Action for Road Safety. We have partnered with UNITAR since 2016, and through our work together, we've designed and implemented a flagship high-visibility enforcement training program to support government authorities and police officers in their work to reduce road traffic accidents as a result of drink driving.

Building on this work in Kenya, for example, our partnership with the National Transport and Safety Authority enabled DRINKiQ to be embedded into the national driving school curriculum. This is groundbreaking and means that every Kenyan taking a driving test will go through our DRINKiQ module. We are focused on the areas where the greatest challenges lie. The illicit sector, for example, is still very large in many emerging markets and can be very harmful for people when, at its worst, the consumption of illicit alcohol can have fatal consequences. The illicit market is often linked to organized crime and deprives governments of tax revenue. It is critical that governments create an environment where legal businesses can thrive and avoid punitive regulation that creates unintended consequences, including driving consumers towards unregulated channels that endanger public health.

Producing affordable branded alcohol alternatives is part of the solution to illicit alcohol production and results in high-quality, regulated products being accessible for consumers. This supports growth, generates tax revenue, and most importantly, serves an important public health goal for consumers and governments. Globally, the hospitality sector is a major employer, particularly of younger adults, employing hundreds of millions of people. Prior to the pandemic, the sector contributed nearly $9 trillion to the world's GDP and accounts for one in 10 jobs. We are focused on creating a hospitality sector that works for all. It is vital for communities that this sector can fulfill its role as a job creator and engine for economic recovery and growth. In fiscal 2020, we launched the Raising the Bar program, our $100 million recovery fund to help pubs and bars to welcome back customers after lockdown.

Raising the Bar has been hugely well-received by the trade. For example, we've already supported over 25,000 pubs and bars in the U.K. alone as they start to reopen. The targets for our Learning for Life and the Diageo Bar Academy training programs are linked, and in fiscal 2021, Diageo Bar Academy programs have been adapted to reflect the impacts of the pandemic on the on-trade channel. The hospitality sector and our category in particular, brings people together to celebrate. We know we play a leading role in championing inclusion within Diageo, with our suppliers, and in our communities, and we know we can have an even bigger impact on society as a whole. Mairéad will now explain how we're doing just that.

Mairéad Nayager
Chief Human Resources Officer, Diageo

Thank you, Kate. At Diageo, we are committed to creating the most inclusive and diverse culture, not just because it's the right thing to do, but because we believe this commitment allows us to recruit and retain the best employees, achieve better performance, and have a greater impact on society. Our position on diversity is not just industry-leading, but we believe we are also playing a role in shaping change within the FTSE. 11 years ago, the Diageo Executive Committee were all men, whereas today 60% of our Board and 38% of our Executive Committee are women. This work has been recognized with Diageo most recently ranked the number one FTSE company for female Board and leadership representation in the 2020 Hampton-Alexander Review.

Increasing diversity should be led from the top, but the responsibility for change and the benefits therein must be felt by the whole organization for it to be sustainable. We are proud of the culture we've shaped at Diageo and the performance we are driving. We have made good progress, but we know we have much more to do. We have witnessed the impact our inclusive culture has had on our ability to attract and retain terrific talent around the world. It has widened our talent pool and is a source of competitive advantage. Many recent senior hires have cited our approach to flexible working and our inclusion and diversity agenda as key drivers in their decision to join us.

The majority of candidates on our recent graduate hiring processes refer to the level of ambition within Society 2030: Spirit of Progress, with many graduates accepting roles as they felt their values were aligned with the company's. In our recent global employee survey, 89% of our employees are proud to work for Diageo, and 81% would recommend Diageo as a great place to work. That is 10% above the external best- in- class and a 4% increase since our 2019 survey. When asked about inclusion and diversity specifically, 84% of employees agreed that people from different backgrounds and opinions can be themselves and thrive in the company. We are being ambitious in driving both gender and ethnicity at the same time, and we believe that making progress in inclusion and diversity requires both ambition and action.

We have set new goals to ensure 50% of all leadership roles are held by women, as well as increasing representation of leaders from ethnically diverse backgrounds to 45% by 2030. By July the 1st, 38% of our Executive Committee will be ethnically diverse. As with our other ESG goals, we have backed up our ambition by directly linking our long-term incentive plan awards to the delivery of these goals, ensuring every senior leader is incentivized to make progress on our inclusion and diversity agenda. From the way we retain and recruit diverse talent to the way we source services and progressively portray diversity through our brand advertising, we are taking a holistic view of the world and are determined to remove barriers while having a positive impact on our partners, suppliers, and communities.

Internally, we make it a priority to support our growing employee resource groups, from our women's network, Spirited Women, to our Race, Ethnicity, and Cultural Heritage group, REACH, our Africa Heritage Employees group, AHEAD, and our LGBTQ+ Rainbow networks. Every year, passionate employees organize a global inclusion week comprising celebrations, discussions, and personal storytelling on a range of important and challenging topics. In 2019, we announced that parents employed by Diageo in the U.K. were eligible for the same fully paid 26 weeks paternity leave, retaining benefits and bonuses regardless of gender, sexual orientation, or whether they become parents biologically, via surrogacy, or adoption. We have now also rolled out an ambitious global family leave policy, which offers female employees in all markets a minimum of 26 weeks fully paid maternity leave and a minimum standard of four weeks paternity leave.

In the majority of our markets, we fully equalized maternity and paternity leave. This work has helped to challenge traditional stereotypes around roles, and we are pleased to see other companies follow suit. In March 2021, we launched Menopause guidelines in Great Britain, Ireland, and North America, with more countries to follow. Through the launch of these guidelines, we actively encouraged all of our employees to build their understanding of how the menopause impacts individuals, as well as providing strengthened support and flexibility. As we look at our industry as a whole, manufacturing or STEM roles have traditionally been very male-dominated, but we're committed to shifting the narrative on this in order to create an industry that is truly diverse and inclusive. Since 2015, we've run our Women in Leadership Program for our manufacturing business and have seen more than 350 women take part over the past five years.

Today, 50% of our Johnnie Walker blenders are female, and we are working hard to increase the number of women in STEM roles at Diageo and in the broader industry through apprenticeships, returnerships, and scholarships. In our communities, we are also focused on tackling barriers to gender equality through our programs in partnership with CARE International. This includes tackling barriers for women in smallholder farming, improving safety and inclusivity in the hospitality industry, hospitality skills training, and initiatives to support female entrepreneurs. These efforts enabled us to empower 435,000 women in our communities by the end of 2020. By ensuring our supply chain reflects our values of inclusion and diversity, we believe we can have a much bigger impact on equality beyond our business.

As part of our new Society 2030: Spirit of Progress commitments, we are increasing the amount of money we spend with diverse suppliers, female or minority-owned businesses. In North America, for example, our largest market, we've already made great strides, tripling the amount we spend with woman-owned suppliers and doubling our spend with minority-owned businesses over the last five years. As advertisers of some of the world's most loved brands, we know we can make a difference in culture with who we portray in our advertising and content, who we choose to make this work, and through where we place our advertising. We firmly believe diverse teams produce better creative work and are committed to increasing the number of female and ethnic minority directors working on our advertising content. We are one of the founding members of the United Nations Unstereotype Alliance to combat harmful stereotypes in advertising.

We were the co-author of the industry-wide playbook to Unstereotype content. We are proud members of the World Federation of Advertisers Diversity and Inclusion Task Force. We want to encourage more women to stay in the advertising industry. We partner with Creative Equals on a returner scheme to support women across the U.K., North America, and India to return to the industry following a career break. Education and support for future talent is critical to delivering long-term sustainable change. In February 2021, we pledged $10 million to support Historically Black Colleges and Universities in the U.S., enabling these institutions to provide financial assistance and internship platforms. As Kate mentioned, we are committed to supporting people with career paths in hospitality through Learning for Life and through Diageo's Bar Academy. With ambitious goals to provide business and hospitality skills to over 1.7 million people by 2030.

Creating a truly inclusive and diverse culture is at the heart of our ambition at Diageo. Put simply, we believe it makes for a better business and a better world. Javier will now provide the Board's perspective and the focus applied to good governance to ensure we continue to build the trust of our stakeholders for doing business the right way from grain-to-glass.

Javier Ferrán
Chairman, Diageo

Thank you, Mairéad. Accountability for our Society 2030: Spirit of Progress commitments sits across the board and the executive committee. This is a conscious choice we have made, and we believe this is a whole of business agenda. It is everyone's job and should not be siloed. We announced in February 2021 the performance measures and targets for the 2020 Diageo long-term incentive plan, and for the first time, 20% of the LTIP will be linked to ESG measures across all three of our focus areas: positive drinking, inclusion and diversity, and grain-to-glass sustainability. We are amongst the first companies to create such a clear link and direct accountability for ESG commitments with our senior management committee.

Those of you that know Diageo well and have covered us for some time will know that as a business, we have long been passionate about our ESG performance and track record. Diageo's focus on doing business the right way is embedded in our culture. This doesn't just have the benefit of being the right thing to do. Our commitment and actions to date have already allowed us to shape our operating environment by enabling us to recruit the best talent and retain our best people, strengthening our brands to increase consumer awareness and preference, and increasing the resilience and durability of our supply chain. In my capacity as Chairman, I am responsible for the operation, leadership, and governance of the Diageo Board. Diageo already had a strong governance track record when I took on this role in January 2017.

As well as already having in place amongst the most ambitious and stretching sustainability and responsibility targets in the industry. Society 2030: Spirit of Progress builds on this work with commitments that are even more stretching and truly holistic across our entire value chain. We are determined to build a sustainable business for the very long term and seek to make a positive impact on the issues that matter most to our stakeholders and to wider society. The Board is confident that through the ambitious goals outlined in Society 2030: Spirit of Progress plan, Diageo will continue to play a leading role in value creation for all of our stakeholders and actively support our industry and our communities through 2030 and beyond.

Ivan Menezes
CEO, Diageo

Thank you, Javier. I hope that the last 45 minutes or so has brought to life how Diageo will continue to be a leader in sustainable business and how, through our 10-year action plan, we will play our part in creating a more inclusive society that enables more people to thrive. It is fundamental to our performance ambition that we do business in the right way, which is why Society 2030: Spirit of Progress sits at the heart of our strategy. Therefore, we will report on our progress towards these goals every year. I am proud of our track record to- date, but this plan will challenge us even further. I am confident that we will deliver on our commitments to change the way the world drinks for the better by promoting a positive role for alcohol. We will champion inclusion and diversity while shaping market-leading policies and practices.

We will preserve the natural resources on which our long-term success depends, and we will make a positive contribution to our communities.