Raise a glass to the whisky industry’s green evolution - Pamela Coulthard

With its rich history, distinctive flavours, and cultural significance, there can be no doubt that Scotch whisky holds a unique place in the world of spirits. However, in an era where ESG concerns are top of boardroom agendas, the whisky industry faces scrutiny regarding its impact on the environment. In recent years, distilleries have recognised the need for sustainable practices, and taken significant steps towards minimising their environmental footprint.

Like many sectors, the whisky industry faces considerable challenges in realising its environmental ambitions. Mashing and distillation are heat-intensive processes which use a significant amount of energy. Older distillery buildings are not usually energy-efficient and there is still no obvious substitute for the carbon-rich peat burned to dry malted barley, crucial to achieving the smoky flavour upon which so many whiskies are based. Long-established traditions around production and consumption must also be factored in, as well as the need to protect the quality and premium value of the product.

The Scotch Whisky Association (SWA) has set ambitious targets to reduce environmental impacts and combat climate change. Between 2008 and 2020, the industry achieved an impressive 53 per cent reduction in greenhouse gas (GHG) emissions, the ultimate aim being to reach net-zero by 2040. Other noteworthy achievements include the utilisation of non-fossil fuel sources for 39 per cent of primary energy use and the transition from fuel oil to lower carbon-intensive fuels such as LPG, CNG and biomass.

Responsible use of water is a key commitment. The SWA aims to ensure all whisky companies fall within a responsible water use range by 2025. Progress has been made, with a 22 per cent improvement in water efficiency since 2012. Distilleries have implemented detailed site water audits to drive further progress in this area.

Pamela Coulthard is a Senior Associate, Dentons

We have also seen notable progress in the use of sustainable packaging. Distilleries are increasingly using recycled and recyclable materials for bottles, labels and packaging, reducing reliance on single-use plastics and virgin glass. Some brands have fully embraced alternative packaging such as biodegradable or compostable materials. The challenge lies in increasing the recycled content of glass bottles while maintaining quality and ensuring premium value.

Spent grains, a residue of the mashing process, can be converted into animal feed, minimising waste. Additionally, pot ale, the liquid left in the still after distillation, is used as a nutrient-rich fertiliser in agriculture. By implementing such circular economy initiatives, distilleries not only reduce waste but also contribute positively to local agricultural systems. SWA members have reduced general waste to landfill to just one per cent and additional collaborations with waste management companies have further reduced landfill reliance.

Sustainability-linked loans are starting to appear within the industry, with one global player reportedly signing a €2.1 billion agreement, linked specifically to the reduction of greenhouse gas emissions and water consumption per unit produced at its distilleries. Commitments by the industry to protect and enhance surrounding biodiversity, engage in reforestation projects, wildlife conservation programmes and habitat restoration efforts are now commonplace. By supporting biodiversity, distilleries contribute to environmental conservation and promote the long-term sustainability of operations.

The Scotch whisky industry’s drive towards sustainability now sits neatly alongside the tradition, heritage and cultural significance of the product itself. Most distilleries are adopting sustainable practices throughout their operations, encompassing responsible ingredient sourcing, energy efficiency, waste reduction and biodiversity preservation. By prioritising environmental stewardship, the whisky industry is not only reducing its ecological footprint but also meeting the rising demand for sustainable products. Through ongoing innovation and industry-wide collaborative efforts, the whisky industry is well positioned to continue to deliver positive change.

Pamela Coulthard is a Senior Associate, Dentons