Coca-Cola delivers on substantive sustainability efforts, despite weak messaging around obesity

Active in more than 200 countries and packing a powerful economic punch – about $26.6bn in direct and indirect impacts in 2010 – Coca-Cola can rightfully claim to be a heavyweight.

Coca-Cola unleashed its potential with programmes such as the Replenish Africa Initiative, a $30m, six-year effort to provide clean water and sanitation to at least two million people in Africa by 2015. Similarly astounding in ambition is the “five by 20” project, an initiative to economically empower five million women by 2020. Both projects illustrate how Coca-Cola contributes to moving the needle on the UN Millennium Development Goals.

Yet it is clear that Coca-Cola cannot act alone. The company’s vast “system”, which includes the company and its (largely independent) bottling partners, sells 1.7bn servings of drinks each day. Given Coca-Cola’s role as an influencer of partners’ behaviour, the report would have benefited from clearer boundary descriptions.

For example, in the climate and energy section, the company discusses the “more than 200,000 signature red delivery trucks” in use across the globe. It is unclear whether this fleet is wholly owned by Coca-Cola or if it includes bottlers’ vehicles. If not fully owned, how is Coca-Cola supporting investment in alternative powered trucks among bottlers?

The end consumers of the company’s products also account for major sustainability impacts, good and bad. Coca-Cola’s sustainable packaging goal includes recovering 50% of the equivalent bottles and cans it uses annually. Consumers’ action as well as the existence of viable local systems for recycling will make or break this goal; thus Coca-Cola’s investments in many recycling networks around the world.

Coca-Cola is refreshingly frank about consumer resistance to new types of packaging materials and sizes. Smaller or lightweight bottles are perceived not to be as good value for the money, even with the same volume of drink. Consumers can also be confused about what materials are recyclable and how. For example, Coca-Cola’s innovative PlantBottlepackaging is not compostable or biodegradable, even though a percentage of the bottle is made of plastics derived from plants.

Despite these challenges, Coca-Cola saved $90m in 2010 through the reduction of packaging waste – an interesting figure to compare with total philanthropic donations of $102m during the same time period.

Water, water everywhere

Not surprisingly, Coca-Cola’s foremost priority is responsible water use. It has set aggressive goals to be water neutral in its direct operations by 2020 (not inclusive of bottling operations, apparently), and to assess water resources and implement water stewardship plans around each of its bottling plants by the end of 2012. Progress is under way, though Coca-Cola may not reach its implementation goal by 2012, as only 370 of 589 plants have completed initial assessments to date.

Coca-Cola also introduces the concept of “water replenishment”, a new and somewhat problematic metric. The company aims to “replenish” an amount of water equal to that used in finished drinks and their production, by 2020. Yet Coca-Cola defines replenishment not solely as the recharging of aquifers or other water sources, but as an umbrella concept for water returned through access to water and sanitation, watershed protection, and water for productive use.

Coca-Cola acknowledges that the replenishment concept is new; and that it “may be premature to rely on our water benefit calculations as hard fact”. Fair enough – hopefully it will publish feedback in future reporting along with refinements to its methodology.

Despite greater frankness and inclusion of challenges throughout the report, it loses its fizz in the final section on health and well-being. Here Coca-Cola adopts an opaque approach to discussing the role of the company and its products in global obesity, issuing vague statements such as “we care about obesity” and “weight gain is primarily the result of energy imbalance”, and uses the term “sparkling beverages” to denote soda and other carbonated drinks.

Given the sophisticated nature of the rest of the report, a deeper and more nuanced conversation about the potentially competing interests of health and profitability, obesity and consumption would have been much more refreshing. 

Snapshot

Follows GRI?             Yes, self-declared B+ Application Level. However, the Disclosures on Management Approach for fully reported indicators – which are required by GRI to qualify for a B – are not apparent.

Assurance?                  Yes

Materiality analysis?   No formal process description; however, the report is structured around “priority issues”.

Goals?                         Yes

Targets?                       Yes

Stakeholder input?      Yes

Seeks feedback?         Yes

Key strength:              Concise but thorough coverage of priority issues, opportunity to dig deeper.

Chief weakness:          Lack of precision in defining report scope; weak and obfuscating language used in discussing Coca-Cola’s role and responsibility in global obesity.

Pleasant surprise:         Great introduction: the Believe in a Better World section lays out context(global challenges), collaboration (how Coca-Cola gets things done), and proof of concept (the face of Coca-Cola’s sustainability efforts as exemplified in the lives of four individuals).

Aleksandra Dobkowski-Joy is a principal at Framework LLC.