Diageo fined £1.2m over pollution permit

Johnnie Walker owner Diageo has been handed a £1.2 million (US$1.5m) penalty by the Scottish Environment Protection Agency (Sepa) for failing to secure an emissions permit for three of its sites.

The world’s biggest Scotch whisky distiller was initially fined £1,398,911 (US$1.8m) for operating three sites in Scotland without an Emissions Trading Scheme (ETS) permit for six years, Sepa claimed.

The ETS is a ‘cap and trade’ scheme that sets limits on companies’ carbon emissions and other forms of pollution.

Diageo appealed against the penalty notice, which was then reduced to £1,212,389.

Sepa said that Diageo has since obtained ETS permits for the three sites in 2019. The sites are Speyside distillery Roseisle, Burghead Maltings in Elgin, and Highland whisky distillery Glen Ord, home to The Singleton brand.

Jamie McGeachy, Sepa’s carbon reduction, energy and industry manager, said: “Sepa is clear that compliance is non-negotiable.

“ETS is a crucial step towards achieving Scotland’s goal of a 75% reduction in CO2 emissions by 2030 and net zero emissions by 2045, and participation and full compliance is not optional.

“These civil penalties demonstrate Sepa’s commitment to enforcement of obligations under ETS. Our message is clear: if you do not follow the regulations designed to protect and improve our environment, there are consequences.

“These penalties should serve as a warning to not only the company involved, but all others in Scotland, that we will take the appropriate action to ensure compliance.”

Diageo, which also operates Isle of Skye distillery Talisker, blamed the move on an administrative mistake.

A Diageo spokesperson said: “This was an unfortunate administrative error at three of our sites in Scotland during the period concerned and we have since implemented a number of procedural changes to ensure this does not happen again. We have always and will continue to put significant focus behind reducing our environmental impact.”

In 2020, Diageo unveiled its Society 2030: Spirit of Progress plan, which is committed to reaching zero net carbon emissions by 2030.

“In Scotland, we have invested over £150m [US$196m] in bioenergy plants, reduced our carbon emissions from direct operations by 50% up to 2020 and aim to be net zero by 2030,” the Diageo statement continued.

In February 2020, the Securities and Exchange Commission fined Diageo US$5m after its North American arm created a “misleading picture” of its financial results.