Making and Embracing Sustainability Connections

The health of our business and the health of the communities where we operate are closely connected. When viewing sustainability across our operations and value chain, we consider the correlation between our business, the environment and the communities we touch across the planet. We are mindful of how factors in one area could impact others.

I have always believed – and continue to believe more than ever – that sustainability makes good business sense. Sustainability cannot be boxed in to social and ethical decisions – it must permeate every aspect of our business. At Coca-Cola, sustainable business practices help us improve efficiency and productivity in more than 800 production facilities across the Coca-Cola system. Beyond the extensive benefits to the environment and communities – benefits this report lays out in depth – sustainability efforts also translate into cost savings.

For example, we estimate that energy efficiency initiatives since 2004 have saved our global system more than $1 billion, and looking forward, we believe our system can avoid approximately $1 billion (cumulative from 2011 through 2020) in water acquisition, internal handling and wastewater discharge fees based on water efficiency initiatives.

We need to be more efficient not only because it’s right for the planet, but also because it’s best for our business and, ultimately, our shareowners.

Every liter of water we don’t use, every kilowatt hour of electricity we save, and every gram of packaging we recycle goes to the bottom line eventually. So not only do we keep these things out of landfills and our air, but we save money and grow the business even faster.

Putting People at the Center

Our goal is to use our entire value chain to grow the business while making a lasting positive difference for consumers, communities and the environment.

Since becoming The Coca-Cola Company’s first Chief Sustainability Officer in 2011, the world has evolved, and so have we. We realigned our focus from physical activity to the broader well-being of entire communities. The past year we took a deep, hard look at how we were operating and how we could make changes to our approach, including to what we make and sell. Consuming less sugar is an increasingly important issue for many people, so we’ve taken action to help them do that. We have an opportunity to make real, purposeful changes.

In 2016, we started putting into motion a new plan to ensure consumers are firmly at the center of our business. We call it Our Way Forward. In this report you will see the progress we have made toward this goal. This is not about us as a Company, it’s about people: what they want and need and how we’re giving that to them.

As our new Chief Executive Officer James Quincey has said, we will continue to listen and evolve. With Our Way Forward initiated, this is an opportune moment for us to continue to reflect on and re-evaluate our sustainability strategy and targets beyond 2020. While we clearly have some work to do, we have continued to make progress toward our established 2020 goals. As we look to the future, the United Nations’ Sustainable Development Goals continue to provide a vital framework that helps to guide our collective actions, propel us to achieve these necessary goals, and build a better world for 2030 and beyond.

Water

In 2016, we continued to replenish 100 percent of the water used in our finished beverages back to communities and nature, providing a replenish benefit of 221 billion liters per year through community and watershed projects around the world, as estimated with the help of our many reputable partner organizations using peer reviewed scientific and technical methods. Some of the projects contributing to our replenish results can be found on a water map we launched in 2016.

Sustainable Agriculture is a critical part of our water strategy. It has to be: agriculture represents approximately 70 percent of the world’s water withdrawals, and our products are dependent on agriculturally supplied ingredients. In 2016, we launched our Sustainable Agriculture Sourcing Map, which offers a transparent look at how we are working to promote improved sustainable agriculture practices across Coca-Cola’s supply chain. The map reflects over 90 percent of our supply volume for each of 12 major ingredients - including fruits, sweeteners, coffee and tea - that go into our more than 3,800 sparkling and still beverages.

Setting a High Bar

We continue to give back. In 2016, The Coca-Cola Company and The Coca-Cola Foundation together donated $106 million, which is 1.2 percent of our 2016 operating income. Fully 97 percent of grants were given across our core priorities of water, women and community well-being. The grants reached over 230 organizations in more than 200 countries and territories.

Unfortunately, some of our sustainability efforts fell short, and we feel the urgent need to redouble our efforts. Specifically, our total manufacturing emissions stand 13 percent higher than our 2004 baseline while our aim was to steadily decrease them. Contributing factors to our manufacturing emissions increase include volume growth outpacing emission ratio improvements and insourcing of external manufacturing processes. But we are not taking those reasons as excuses.

Packaging is another area where we have not yet had the progress we desired. Obstacles based on economics, existing regulatory schemes, lack of required infrastructure and collaboration needs present challenges that we continue to address. Rapidly improving the recovery and recycling rates for our packaging will require collective action to solve the bigger issue of waste management and recycling.

This reality means we’re going to have to make investments. There are places in the world where recycling is scarce, if existent at all. As we move from refillable glass to one-way packaging to satisfy the growing middle class’s desire for convenience, we can’t sit by and wait for municipalities to take action. We must act on our own if necessary because many, if not most, local governments are ill-equipped to respond.

The Company and our bottling partners remain fully committed to our work in these priority areas and to realizing progress on these important programs. As we work to address gaps in a holistic way with broader industry, government and civil society partners, we hope that our efforts move us in a positive direction.

As we continue to learn on our sustainability journey, we analyze our strengths and weaknesses. We look forward to continue working with partners to address pressing challenges. It’s going to take collaboration with our employees, partners, suppliers, consumers and other stakeholders to find innovative solutions to complex challenges, whether relating to water stewardship, energy efficiency or waste prevention.

In addition to our invaluable partnerships, we have learned that achieving maximum positive social and environmental impact from our sustainability efforts requires identifying and implementing integrated programs. By linking related issues, we are able to take a holistic approach with projects.

As this year’s report makes clear, we’ve achieved significant progress, but remain constructively discontent. There’s much more to do, and we are ready to continue the work – together with you.

Bea Perez
Sr. Vice President & Chief Public Affairs, Communications & Sustainability Officer
The Coca-Cola Company

Read a handwritten version of the letter from this year's report