Flexible Budgeting and Bacardi Environmental Sustainability

Efforts

The Bacardi Environmental Sustainability Tracker (BEST) method uses
flexible budgeting to track performance each year against its base year.
Bacardi Limited is the first company to apply such a strategy for monitoring
environmental impact metrics. Using 2006 as its base year, Bacardi
calculates water use, energy use, and greenhouse gas emissions if no
improvements to facilities and processes have been made. By comparing
this figure, the flexible budget, to the actual one, the company can
demonstrate tangible improvements to efficiency and create an index
figure.

Through the flexible budgeting approach, Bacardi can accurately reflect
performance improvements without distortions caused by sourcing
locations, mergers and acquisitions, and changes in product mixes.

To obtain a companywide figure, Bacardi calculates the flexible budgets for
each metric for all of its operating activities and applies efficiency rates to
the actual production output. By adding the figures together, the company
achieves a complete flexible budget that represents the efficiencies
achieved by the company as a whole.

With reliable benchmarks, Bacardi can more accurately track its efforts to
promote sustainability and move forward with necessary adjustments to its
initiatives to achieve the best results.