Inside every bottle of Coca-Cola is the commitment of a company that is deeply concerned about climate change. Our concern is based on the scientific consensus that global climate change is occurring and that human-caused greenhouse gas emissions are a contributing factor.
The implications of climate change on our planet are profound and wide- ranging. Public health, agriculture, biodiversity and water sources may all be negatively affected. The potential effects on people, communities and ecosystems are sobering to consider and demand immediate action.
Of course, climate change also poses risks to our business as well. More frequent and intense droughts and floods can harm global agriculture, limiting the supply or increasing the cost of ingredients we use in our products. Extreme weather could impair our bottling plants, disrupt our supply chain and affect consumer demand. Perhaps most seriously, climate change could significantly limit water resources for our operations, for our supply chain and for the communities we serve.
Our system generates greenhouse gas emissions by consuming energy through manufacturing, by consuming fuel in our global delivery fleet and by chilling our products for optimum refreshment. Our broader supply chain, which includes the manufacturing of our packaging and the farming that grows our ingredients, generates millions of additional tons of greenhouse gases.
Growing our business without increasing greenhouse gas emissions is a tall order, but it is a process we are committed to. We have made progress. But, like much of the world, we need to do more—and soon. Following is an overview of our progress from 2012, and a look at where we're heading in 2013 and beyond.
An Ambitious New Goal for Reducing Carbon in Our Value Chain
In July 2013, we joined our longtime partner World Wildlife Fund (WWF)in announcing a number of new environmental goals. Among them:a commitment to reduce the carbon footprint of our beverages by 25 percent by 2020. This new goal complements our existing goals for 2015. (Read about our progress against those goals below.)
Our new goal stems from the recognition that, to make a meaningful difference, we must not only reduce emissions generated by our bottling plants and distribution fleet, but also those from our entire value chain, including agriculture, packaging, and refrigeration. An initial analysis showed that, in our baseline year of 2010, our value chain emitted approximately 59 million metric tons of greenhouse gases, and only about 5.2 million metric tons came from manufacturing. We estimate that achieving our new goal will enable us to prevent more than 20 million metric tons of CO2 emissions by 2020. That’s four times our system’s annual carbon emissions from manufacturing, and the equivalent of taking 3.8 million cars off the road for a year.
This new goal is ambitious and is among the most progressive climate- related commitments from any company. To ensure that we succeed, we will collaborate with our partners and suppliers and continue to move forward with energy-efficiency and climate-protection initiatives already underway across our system. This work includes:
Continuing to improve the sustainability of our packaging through design optimization and the increased use of recycled and renewable materials such as PlantBottleTM packaging
- Improving the energy efficiency of our cooling equipment
- Committing to more sustainable sourcing of key ingredients
- Incorporating more fuel-efficient modes of product delivery
Improving energy efficiency within our manufacturing operations
- Phasing out the use of hydrofluorocarbons (HFCs) in all new cold-drink equipment
- Increasing our use of clean energy
To help us reach our new goal, we are developing annual reduction targets for the next seven years and working with our supplier partners to find ways of meeting them. We are also developing processes for measuring progress. And we are equipping “climate ambassadors” who will champion our goal systemwide and provide training and other assistance to help our Company, bottlers and suppliers strive to reduce emissions.
A 3 percent Increase in Manufacturing Emissions in 2012In 2008, we set the goal of growing our business but not our systemwide carbon emissions from manufacturing operations through 2015. Our manufacturing sites emitted 5.48 million metric tons of greenhouse gases in 2012, a 3 percent increase over 2011. That number puts us 15 percent higher than our 2004 baseline, and off track for reaching our goal of bringing emissions levels back down to that baseline by 2015. We consider this upward trend to be both disappointing and unacceptable. We are working diligently to reduce emissions through a variety of measures, including expanded use of clean energy.
Though our manufacturing-related emissions increased in 2012, our emissions intensity—the ratio of emissions to production volume—- improved by nearly 2 percent over 2011. In all, our emissions intensity has improved 19 percent since 2004. Even with our year-over-year increase in emissions in 2012, our emissions are still 1.2 million metric tons lower than “business as usual” forecasts for the year. We have successfully slowed growth in emissions relative to volume; now we are aiming to stop and, ultimately, reverse it.
Emissions in Developed Countries Down 8 Percent Since 2004In 2012, our emissions from manufacturing operations in developed countries increased slightly—about 2 percent— compared to 2011. Even so, manufacturing-related emissions in developed countries are approximately 8 percent lower than our 2004 baseline, keeping us well on track toward our goal of a 5 percent reduction by 2015.
We’re bringing emissions down in part through our continuing work with bottlers on the “Top 10 Energy-Saving Challenge.” The program, developed with WWF and launched in 2011, equips bottlers and plant managers with 10 high-return, low-risk energy-saving practices they can readily implement. Each practice delivers high financial return and contributes significantly toward achieving our climate targets. To date, 526 of our system’s nearly 900 manufacturing facilities are implementing the practices. A total of 127 facilities have completed the entire Top 10 challenge, and more than 270 have made at least 80 percent progress.
In September 2012, the United States Environmental Protection Agency recognized Coca-Cola Refreshments USA, Inc., the Company’s bottling and customer service organization for North America,with a Green Power Leadership Award for its agreement to generate energy from a 6.5 megawatt combined heat-and-power system at an Atlanta facility. This cogeneration plant captures methane gas from a nearby landfill and converts it to clean-burning fuel. The plant generates at least 48 million kilowatt-hours of electricity annually, resulting in an emissions reduction of approximately 20,000 metric tons of CO2 per year, equivalent to the CO2 emissions from the electricity use of more than 4,000 average-sized homes per year.
At our Company headquarters in Atlanta, Georgia, our information- technology staff are working to limit CO2 emissions from powering our corporate data centers even as the load on our computer servers increases. In 2013, we completed an upgrade of 30 air handlers in one of our data centers. We expect this improvement to reduce our CO2 emissions by an estimated 650 metric tons annually—the equivalent of taking 90 cars off the road.
As we make steady progress toward our goal for developed countries, we are also working hard to reduce emissions in developing countries. One example: Hindustan Coca-Cola Beverages Private Limited (HCCBPL), our largest bottling partner in India, has committed to expand the amount of energy it draws from renewable sources to 40 percent by 2020. HCCBPL will attempt to achieve that goal by exploring the use of a solar rooftop as well as wind- and biomass- generated power at several of their bottling plants.
Improved Energy Efficiency for Eight Consecutive YearsUsing energy more efficiently enables us to reduce our carbon footprint, conserve natural resources and contain costs. The total amount of energy consumed by manufacturing sites across our system has grown as our business has grown—from 54.4 billion megajoules in 2004 to 62.4 billion megajoules in 2012. But our energy efficiency ratio—the amount of megajoules used per liter of product—has continuously improved.
In 2012, our ratio was 0.43 megajoules per liter –a 2 percent improvement over 2011 and an 18 percent improvement overall since 2004. By improving our energy efficiency ratio, we avoided approximately $200 million in energy costs in 2012 and over $1 billion cumulatively since 2004.
Complementing efficiency efforts in manufacturing, we have also improved the energy efficiency of our cold-drink equipment worldwide by more than 40 percent compared to year 2000 levels. We have deployed nearly 5.5 million energy management devices (EMDs) for cold-drink equipment, reducing average energy consumption by an estimated 5 billion kilowatt-hours per year and delivering corresponding annual emissions reductions of approximately 3.1 million metric tons—equivalent to the electricity used by over 464,000 homes. Energy-efficient cold-drink equipment saves our customers money, too—an estimated $440 million per year.
In 2012, to help our manufacturing facilities continue to improve energy efficiency, we developed 20 step-by-step guidelines to implementing energy- saving actions and shared them with our bottlers. We also upgraded our internal website dedicated to strategies for saving energy, and our system held more than 20 workshops on increasing energy efficiency.
Improving Packaging to Reduce Our Carbon FootprintPackaging is the largest contributor to our potential carbon emissions, making up 38 percent of our CO2 emissions as of 2010. Our system’s efforts to design more efficient packaging, use more renewable packaging material and increase the amount of recycled content will make a significant contribution toward reducing our carbon footprint.
A 14 Percent Decrease in Our Fleet EmissionsMore than 200,000 of our signature red delivery trucks say “Coca-Cola” around the world. We aspire for them to say “sustainable” as well. So in addition to conventional fuels, we are powering our fleet with a mix of efficient alternative fuels, including electricity, natural gas, diesel-electric and biodiesel. In North America, we operate a hybrid electric fleet of more than 750 trucks that use about 30 percent less fuel than conventional diesels—the largest such fleet on the continent. For our presence at the London 2012 Olympic Games, we deployed 14 delivery vehicles powered by landfill gas,
Our system’s trucking fleet, which includes trucks operated by our Company and our bottling partners, accounted for about 8 percent of our emissions in 2012. Our fleet emitted 4.6 million metric tons of greenhouse gases in 2012—a 14 percent increase from our 4.03 million metric tons of fleet emissions in 2011.
Pushing Forward With HFC-free Cooling EquipmentBecause of the high global warming potential of hydrofluorocarbons (HFCs), we are phasing out the use of HFC refrigerants in our cold-drink equipment. With more than 14 million dispensers, vending machines and coolers in the marketplace, we have an enormous opportunity to make a difference. We believe we can avoid the emission of more than 52.5 million metric tons of CO2 equivalent over the next several years—equivalent to the annual greenhouse gas emissions of over 10.9 million passenger vehicles.
In 2011, we reaffirmed CO2 as our system’s HFC-free refrigerant of choice for new equipment purchases; at the end of 2012, HFC-free deployments across our system exceeded 800,000. Still, our efforts to deploy more HFC-free cooling systems in 2012 fell short of our ambition. Our goal was for 50 percent of all new cold-drink equipment to be HFC- free by the end of 2012. But only about 21 percent (approximately 245,000 units) of our 2012 cold-drink equipment purchases were HFC-free. Difficulties in procuring HFC-free equipment in Brazil, India and other countries contributed to the slowdown in our progress. We are developing strategies to address these challenges and get back on track for our 2015 goal.
Carbon-Neutral at the London 2012 Olympic GamesAs the longest continuous sponsor of the Olympic Movement, we have a significant presence at all Olympic Games. We provide hydration and refreshment through our products, sponsor Games-related events and activities and much more. In London in 2012, our presence at the Summer Olympic Games was, for the first time, carbon neutral. (We achieved our first carbon-neutral presence at a Winter Olympics during the Vancouver 2010 Olympic Winter Games.) We achieved carbon neutrality in London through a combination of reduction activities and carbon offsets. Reduction activities included investment in a state-of-the- art, low-carbon warehouse and storage facility, the purchase of 14 delivery vehicles powered by landfill gas and the use of beverage coolers that were entirely HFC- free. We compensated for the emissions we could not prevent through the purchase of Gold Standard certified carbon offsets.
CDP Recognizes Our ReportingWe strive to be transparent in our carbon reporting. In 2012, we were featured in CDP’s (formerly the Carbon Disclosure Project) Carbon Disclosure Leadership Index (CDLI). The index, an evaluation tool for investors and other stakeholders, highlights companies in the Global 500 that have displayed a strong approach to climate change information disclosure. Companies are scored on their climate change disclosure. High scores, according to CDP, “indicate good internal data management and understanding of climate change related issues affecting the company.” In 2012 the CDLI comprised 51 companies from the Global 500 based on analysis of responses to CDP's annual Climate Change questionnaire, which focuses on greenhouse gas emissions, emissions reduction targets and the risks and opportunities associated with climate change.
Climate Counts Says We're "Soaring"In December 2012, we scored ten points higher than in 2011 in the annual rankings by the nonpofit organization Climate Counts. Climate Counts scores the world’s largest companies on their climate impact to “spur corporate climate responsibility and conscious consumption.” Climate Counts awarded us a score of 85 in 2012, putting us in the “Soaring” category—Climate Counts’ highest— for “companies demonstrating exceptional leadership on climate change.” Only 15 companies of 145 were recognized in that category.
Expanding Arctic Home to EuropeIn early 2013, we extended our successful Arctic Home campaign to 17 countries in Europe, with a multimedia advertising campaign, special packaging and a launch event at London’s Science Museum. Arctic Home aims to raise awareness and funds to preserve the habitat of polar bears, which is being seriously threatened by climate change. Beginning its third year in November 2013, Arctic Home is a five- year, $2 million commitment initiated with our longtime conservation partner, WWF. Read more about Arctic Home.
Collaborating to Curb EmissionsWe continue to partner with peer companies, NGOs, governments and others in addressing our greenhouse gas emissions and to encourage progress in response to climate change. We are proud to have recently supported The 3% Solution, a study by WWF and CDP that demonstrates how U.S. business can address climate change while driving significant economic value. Released in June 2013, the report identifies emission reduction investments with positive net present value that can save the U.S. private sector $780 billion while cutting carbon emissions by 1.2 gigatonnes over 10 years. A 3 percent annual reduction would not only curb greenhouse gas emissions, but it would also address the U.S Corporate ‘share’ of global emissions. Built upon rigorous analysis by leading consulting firms, including McKinsey&Company and POINT 380, The 3% Solution includes case studies from various sectors and offers the most compelling business case made to date for setting ambitious carbon reduction targets.
Moving Forward as the Evidence MountsCommunities around the world are already confronting the effects of climate change, including drought, flooding, storms, wildfires and record high temperatures. In 2012, Arctic sea ice diminished to its lowest level ever recorded. And in May 2013, atmospheric CO2 concentrations exceeded 400 parts-per-million for the first time in human history. Though we believe it is still possible to mitigate the worst effects of climate change, we believe the global community—civil society, governments and businesses, including us—must act quickly and do more to address greenhouse gas emissions.
Our Company aspires to do much.
We will continue to expand our sources of clean energy. We are developing
the means by which we will achieve our new goal of reducing the carbon footprint of “the drink in your hand” by 25 percent. And we will continue to lend our voice in support of relevant public policy and cross-sector initiatives that seek to reduce greenhouse gas emissions and protect the climate and communities worldwide.
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