Wednesday, November 26, 2008

Water Conservation and Coca-Cola

Considering the time of year (what will those pesky Polar Bears be up to this year?), and the fact that I heard the CEO of Coca-Cola Enterprises regale us with their activities in the realm of water conservation at the Net Impact Conference a few weeks ago, I thought this article about Coca-Cola's sustainability reporting was interesting. Remember Coca-Cola (Ticker: KO) and Coca-Cola Enterprises (Ticker: CCE) are two different entities; completely separate.

So the question I have: What kind of a halo effect (or pitchfork effect, depending upon the direction one is looking) do the organizations have upon each other? Does the "goodness" of CCE cancel the "badness" of KO (we're in shades of gray here) or vice versa? Their sites are similar, their logos are similar, the product they make & deliver are closely related.

Do they share board members?

The point, Ethical Corporation is taking Coca-Cola to task for some inconsistencies in their carbon reporting.
The global drinks giant fumbles its carbon figures
The Coca-Cola Company has been around for more than 130 years, operates in over 200 countries and markets more than 2,800 sparkling and still beverage products. Sales last year were more than $28 billion, achieved through serving up products to customers at an astonishing 1.5 billion a day. It owns four of the world’s top five non-alcoholic sparkling beverage brands namely: Coca-Cola, Diet Coke, Sprite and Fanta. With the release of its latest sustainability review last month we aim to find out whether this giant of the soft drinks industry is also leading the way in addressing climate change.

Coca-Cola states its climate strategy as: “working to grow our business but not the carbon emissions of our manufacturing operations”. This doesn’t sound like a particularly ambitious goal but even so Coca-Cola is not currently achieving this. In 2007, greenhouse gas emissions totalled 4.92 million metric tons of carbon dioxide, an increase of 0.06 million metric tons from 2006. Rather confusingly, this figure doesn’t match up with that given in its response to the Carbon Disclosure Project (CDP) – where direct emissions (scope 1 and 2) total 7.2 million metric tons. Whichever figure is correct they both show that, unsurprisingly for one of the largest companies in the world, Coca-Cola has a sizeable climate impact, and currently this is not decreasing.

Although an overall carbon footprint is given, the emissions sources included are not clearly specified. In fact Coca-Cola reports little in the way of quantitative data. The headline figures show that there was a 4% increase in energy efficiency last year however this merely cancelled out the 4% decrease the year before - so essentially the ratio of megajoules/litre of product has not improved for the last three years. No further information is given on how the energy consumed in Coca-Cola’s plants is generated – neither is there any information on the corresponding carbon emissions of this energy use.

The Coca Cola company does not own or control most of its bottling partners, which produce and distribute around four fifths of the total volume of Coca-Cola brands. This illustrates the much larger indirect impact the company has. Coca-Cola does produce its own Supplier Guiding Principles for its suppliers, that include “responsible environmental and workplace policies and practices”. But the extent to which these focus on climate change is not clear. No data at present appears to be collected on the climate change impact of either Coca-Cola’s suppliers or partners. Unlike its rival Pepsi-Co, it is not part of the CDP’s Corporate Supply Chain programme. However, in collaboration with the Carbon Trust, Coca-Cola is working on establishing a product carbon footprint.
View the rest of the article HERE.
  • What does this mean to Coca-Cola Enterprises?
  • What does this mean to shareholders?
Happy Thanksgiving.

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