U.S. Political Engagement Policy
The Coca-Cola Company’s purpose is to refresh the world and make a difference. Coca-Cola is committed to making a difference in our communities and within our company by mobilizing our history of advancing human and civil rights and by rallying the strength of our employees, families and friends. Our company must play a visible and proactive role in creating the change that is needed.
Political debates take many forms. One version is lobbying: Lobbying is a way for organizations – including NGOs and companies – to ensure that their views get heard, or at least considered. In the United States, political contributions to candidates – those who are running, as well as incumbents – are another way for organizations to participate in the political process. A third way is via trade associations, which lobby on behalf of the companies, organizations, causes and industries they represent. A fourth way is direct advocacy, which is central to policymaking.
Because we have a diverse array of constituencies to serve – customers, distributors, bottlers, small businesses, government, community partners, shareowners and more – we participate in all of these political avenues.
We consider it our duty, and our responsibility, to make our views clear to those who have the potential to impact the laws, regulations and policies that can influence our global business.
Key Advocacy Areas
The list of things we focus on day-to-day is practically endless given the size and scope of our business. However, we have a few top advocacy areas where we often focus our discussions with policymakers in the United States:
Oversight and Compliance: We act responsibly in all of our political activities – as detailed below. Our Chief Public Affairs, Communications and Sustainability Officer oversees our activities. But we also go a step further, ensuring that the Public Policy & Sustainability Committee (PPSC ) of our Board of Directors has complete visibility into all our activities and actively reviews them. As with other public companies, our Board has ultimate oversight of our operations and performance
Political contributions, public policy advocacy and trade association memberships in the United States are governed as follows:
Legal Compliance: Our political contributions and those of our affiliated Political Action Committees (PACs) are executed in compliance with all applicable U.S. laws, regulations and corresponding legal reporting requirements. To ensure compliance, as well as consistency, senior government relations leaders and senior legal counsel review and approve political contributions.
Board and Management Oversight: The PPSC of our Board of Directors annually reviews and approves our advocacy efforts, including all U.S. political contributions from both PAC funds and, where allowed by applicable law, the Company’s general treasury funds. Among other things, these reviews ensure that our activities align with our positions on public policies, serve the needs of our shareowners and also reflect our overall values
In addition – and for the same reasons – the PPSC reviews the Political Engagement Policy that you are now reading. The PPSC’s charter requires this periodic, self-imposed review.
Political Giving Criteria: Our responsibility to help create a better shared future extends into our political contributions from both a company and Coca-Cola Political Action Committee (PAC) perspective. Coca-Cola PAC and corporate political contributions are based on multiple criteria and are not determined solely on the basis of political party affiliation. The company and the Coca-Cola PAC make political contributions in a bipartisan fashion.
Our Government Relations team and Coca-Cola PAC Board of Directors evaluate a candidate’s eligibility for receiving a political contribution based on the criteria below. A candidate must meet a majority of our criteria in order to be considered for a contribution.
The five areas we will use to evaluate candidates are:
No single issue or criteria category determines whether a candidate does or does not receive a contribution. However, candidates will not be eligible for a political contribution from The Coca-Cola Company or the Coca-Cola PAC if they have made egregious or inflammatory remarks in the Equality & Inclusion area. Areas that comprise Equality & Inclusion include, but are not limited to, the following:
Political contributions are evaluated every election cycle. Where we may have supported a candidate in one election cycle, we may elect to support a different candidate in the next cycle based on the criteria outlined above. We are iterative in our process, as priorities and issues evolve.
And it should go without saying, but the personal political preferences of our Board members, officers and other Coca-Cola executives are not a consideration. Ever.
Senior government relations officials update the PPSC on our advocacy efforts regularly throughout the year. Our efforts align with relevant Risk Factors that can be found in our Annual Report on Form 10-K published under U.S. Securities & Exchange Commission rules and that is available to the public.
In addition, we provide a direct link on our website to our federal lobbying disclosure reports under the U.S. Lobbying Disclosure Act, 2 U.S.C. § 1601 et seq.
Political Contributions and Trade Association Membership: Each year, The Coca-Cola Company, The Coca-Cola Company Non-Partisan Committee for Good Government – our federal Political Action Committee (PAC) – and our state PACs make political contributions in support of U.S. federal, state and local candidates for office listed in the links below. All political contributions to federal candidates were made and funded by our PAC and not from our Company’s general treasury funds, because the latter is prohibited by law. Any political contributions made to state or local candidates from the Company’s general treasury funds are made only where allowed by applicable law.
The Company does not make independent political expenditures, including electioneering communications, in support of the election or defeat of a particular candidate independent of that candidate or his/her campaign committee. Since we are a for-profit corporation and have contracts with the federal government, by law we are also prohibited from using Company money to make these kinds of expenditures. Therefore, we do not make independent political expenditures from our PAC or Company funds as a matter of Company policy.
*Below illustration and accompanying data reflect the 2018 election cycle contributions (November 7, 2018 – December 31, 2019)
Public Disclosures: We strive to be as transparent as possible, in all aspects of our business. This includes our public policy engagement activity. To further our goal of transparency, and in keeping with all legal requirements in this area, we post the following on our web site: this engagement policy; semi-annual reports of all U.S. political contributions (PPSC Report), including those to any entities organized under 26 U.S.C § 501 and § 527 of the Internal Revenue Code; and a list of U.S. trade associations that received more than $25,000 in non-deductible fees for federal lobbying expenditures over the course of the year.
§ 501(c)(4) Organizations: The Company does not support groups organized under § 501(c)(4) of the Internal Revenue Code for electoral purposes. The Company does, however, support such organizations for public policy and social welfare purposes and voluntarily discloses that information below for the 2020 cycle.
§ 527 Organizations: The Company does support groups organized under § 527 of the Internal Revenue Code. We voluntarily disclose that information below for the 2020 cycle:
Trade Associations: As a leader in the global beverage business, we support trade groups and other organizations that represent a broad spectrum of views on industry and policy issues. Mission consistency is important to us, and we review our participation – with this in mind – on a regular basis.
While we don’t always agree with the views of these groups, nor do we always agree with our industry peers, we are fully committed to collaborative problem-solving and to working within these political frameworks. We believe that’s the best way to address a problem, have the greatest impact, and get to the best outcome.
How we decide which trade associations to join or align: Our group president of our North America business, together with senior representatives from our public affairs and communications team, oversee and approve U.S. trade association memberships. We define “trade associations” as organizations that represent the non-alcoholic beverage industry, the broader food and consumer goods industry, key customer and supplier industries and the overall business community.
In compliance with U.S. law, we disclose the portion of the dues and special assessment payments we make to trade associations that are non-deductible and used for federal lobbying expenditures in quarterly lobbying reports. Amounts attributed to lobbying have been identified by those organizations as non-deductible expenditures under § 162(e)(1) of the Internal Revenue Code. Below we voluntarily disclose the list of trade associations that received more than $25,000 in non-deductible fees for federal lobbying expenditures in 2019 and will update this list on an annual basis:
More information about how much we spent on lobbying as well as the specific issues on which we lobbied in a given quarter can be found in our federal quarterly lobbying reports (see “LD-203 Lobbying Contributions Reports” links below)..
Additionally, we expect any third-party groups with which we are affiliated to report political contributions – just as we do and as the law requires.
Coca-Cola PAC Match Program: Coca-Cola PAC members can designate charitable organizations to receive contributions in a dollar amount equal to their year-end PAC total. Any gifts to the matched organization come from a general corporate treasury fund – neither The Coca-Cola Company nor the individual PAC contributor receives a tax deduction for these donations. The Coca-Cola PAC Match program provides support to organizations that focus on the environment, well-being and community involvement.