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Coca-Cola continues progress in its reporting, but growth plans stick in the throat
At first glance there’s no faulting Coca-Cola on this year’s sustainability report. The company’s goals are laudable; it is working doggedly at meeting these goals; and it has demonstrated the ability to rise to the leadership challenge of acknowledging systemic problems the world faces – especially with water – and offering solutions.
The company has focused its work in three priority areas – women, water, and well-being. Highlights of Coca-Cola’s progress in the past year in these “three W’s” include aiding 550,000 women in entrepreneurial aims through the 5by20 programme; returning nearly 70% of water used in its products to communities and nature; and providing “an ever expanding selection of reduced-, low-, and no-calorie beverages along with front-of-packaging nutritional labeling.”
Goals for 2020 for these areas are also clear – 5 million women helped in 5by20; 100% of water used returned to communities or nature; and physical activity programmes in all 200 of the markets the company serves. Beyond the priority areas, Coca-Cola reports on other progress using a “Me, We, and World,” framework, and this works well as a way for the lay reader to understand how the company’s operations affect us individually, in our communities, and globally. The crunchier section called “Reporting” details the effort to meet GRI G4 standards, and includes a good materiality matrix.
Where the report is most interesting is in its description of how Coca-Cola is listening to critical stakeholders’ views on its progress. After a first round of company-stakeholder meetings in 2011, Coca-Cola disclosed feedback as well as the actions it was taking based on the feedback. That’s commendable. In August 2013 Coca-Cola held another round of stakeholder meetings. One of the top issues mentioned was the need for honest discussion of how to provide products that are more sustainable while also doubling “system” revenues – its own and its bottlers’ – by 2020. According to Reuters, that would mean $200bn in revenue in 2020.
To get to that $200bn revenue figure would entail 3bn drinks in peoples’ hands every single day, by 2020. And around 60% of these drinks would probably be served in single-serving, non-refillable PlantBottles. PlantBottles – bottles made with up to 30% PET plastic derived from sugar cane or cane waste rather than fossil fuels – seem to be what Coke is counting on to reach its sustainable packaging goals, for a big part of its greenhouse gas reduction goals, and even for much of its aim to balance business imperatives with sustainability.
In the past five years Coke has deployed 25bn PlantBottles for use in its different global markets, and this five-year effort has saved more than half a million barrels of oil. By 2020, Coca-Cola plans to transition to 100% usage of PlantBottle packaging for its PET needs. The scope and scale of this goal and undertaking are truly impressive, if not breathtaking. (The company also has PlantBottle 2.0 in longer-term development, which will be 100% plant-based.)
PlantBottle, however, is predicated on an assumption that it is okay for all of us to drink our water, our low-calorie, or our high-calorie drinks out of non-refillable single-use plastic bottles. (PlantBottle is recyclable rather than compostable.) Therein is a sticking point. Coke’s 2015 goal to source 25% of its PET plastic from recycled or renewable material isn’t being met – the company is at only 6%, because supplies of recycled PET (rPET) are scarcer and more expensive than predicted. The world’s recycling of plastic is in no way keeping up with its usage.
Coca-Cola said it is working to improve both recovery and recycling of PET bottles. A new goal in this area would be welcome. In addition, Coke may need to face more fully the negative health effects of increased drinking of its sugary sodas and juices, which are pretty clearly linked to the global rise in diabetes and obesity. Coke is exploring sugar substitutes, and its launch of partially stevia-sweetened Coca-Cola Life is a move in that direction. Both of these seem key to decoupling the astounding projected growth for the company’s products from the negative effects to ourselves, our communities, and our planet. Otherwise, as time goes on, our taste for Coke’s bubbly signature drink may just go flat.
- Follows GRI? Uses G4 guidelines.
- Assurance? Yes, by Ernst & Young on five performance indicators.
- Materiality analysis? Yes.
- Goals? Yes.
- Targets? Yes.
- Seeks feedback? Through stakeholder channels, yes. Though website, yes, though not to a real person.
- Key strength: Thoroughness.
- Chief weakness: Doesn’t address holistically the link between increased sales of sugary drinks and negative health effects such as obesity.
- Pleasant surprise: So many goals, so many initiatives.
- Level of integration: (1 to 5): 4