Serving as Good Stewards of our Environment and Natural Resources

As an agricultural-based company, Constellation Brands relies on water, land and other resources for our continued growth and success. In order to safeguard natural resources, we are committed to serving as good stewards of the environment by ensuring that our facilities operate sustainably and by putting measures in place to help reduce our use of precious natural resources. Beyond our operations, this focus on sustainability is also critical to the people, communities, and environments where we operate.

Modeling Responsible Water Stewardship for Our Industry

We recognize access to clean water is a human right and critical to helping build strong communities. It is, therefore, our responsibility to be good stewards of the water we use while doing our part to help ensure the resiliency of water resources for future generations. As such, in our operations, we continue implementing disciplined water management strategies and investing in water efficiency measures, driven by our companywide water restoration target.

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 our communities’ water resources where we live and work by collaborating with leaders and organizations to support local watersheds and enable the restoration of water consumed by our operations.

Between fiscal year 2023 and fiscal year 2025, we are targeting to restore approximately 1.1 billion gallons of water withdrawals from local watersheds, while improving accessibility and quality of water for our communities where we operate. To achieve our ambitions, we have established and are implementing a three-year strategy and operating plans focused on water efficiency, watershed restoration, and water accessibility and quality that considers the needs of local communities, while maintaining focus on operational improvements that align with the unique aspects of each production process.

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

The near-term focus for our Wine and Spirits Division is on opportunities within California, which represents 70% of water use by the division. Within our California operations, we plan to improve our water efficiency by implementing employee education programs and enabling 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 that will provide improved monitoring and tracking helping to optimize the operational management of water.

Similar to our beer operations, we recognize the most significant opportunity to advance our water stewardship impact is through community engagement. As such, we are exploring affiliations and programs focused on protecting the higher risk watersheds. Here, we seek to engage in more nature-based solutions such as reforestation, waterway rehabilitation and wetland and ground water restoration to help protect and ensure the future resiliency and integrity of the watersheds for all.

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 are working to decrease our dependence on non-renewable energy sources and our overall energy consumption, in order to reduce our GHG emissions. We monitor certain aspects of our GHG footprint and work to reduce our emissions per liter of product produced over time.

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 Scope 1 and Scope 2 GHG 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

Over the next three years, we plan to implement solar energy technology across several of our California locations and at an additional location in Italy to provide local renewable energy that helps 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.

Similar to our water stewardship plans, we recognize that the opportunity to deliver a more positive impact requires thoughtful collaboration and alignment across our value chain. We’ve made progress by improving and expanding our Scope 3 GHG emissions data collection process and we continue to strive to increase the accuracy of the data we report while working to better understand our opportunities to help reduce GHG emissions in our value chain through stakeholder assessments, supplier surveys, and sharing of best practices to inform a more comprehensive value chain engagement strategy.

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 Reducing Waste

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. At our sites across the globe, our mitigating actions involve materials reduction, reuse, substitution, and recycling, as well as composting and diverting waste materials from landfills.

Our Nava and Obregon Breweries in Mexico each diverted 99% of the waste produced in fiscal year 2022. In the last two fiscal years, more than 670,000 tons of byproducts generated during production at the Nava Brewery have been used by others in the region as feed for cattle, sheep, and pigs.

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.

Enhancing our Sustainability Rigor Through Certification

DRIVING IMPROVEMENT THROUGH COLLABORATIVE INDUSTRY PROGRAMS