Coca-Cola 2009-10 Sustainability Report: Bright Spots and Gaps

Coca-Cola just released their 2009-10 Sustainability Review calling it “Our commitment to making a positive difference in the world.” In many ways it’s an impressive document, laying out both strategy and accomplishments as well as their overall CSR framework that they call “Live Positively.” In an opening letter from Chairman Kent Muhtar, it’s clear that they have a good grasp of what role sustainability must play in our collective future when he says,

“In a world where populations are growing, natural resources are stressed, communities are forced to do more with less and our consumers’ expectations are expanding, we understand that sustainability is core to our business continuity and how we create long-term value.”

Live Positively, which the report claims is embedded in the entire business at every level includes seven cores areas that they have defined as their sustainability workspace including: Beverage benefits, Active Healthy living, Community, Energy Efficiency and Climate Protection, Sustainable Packaging, Water stewardship, and Workplace.

Beverage benefits is where they talk about the product itself. Among their accomplishments for the past year, they list over 600 new beverage products, including 180 that are low- or no-calorie, which now represent 15% of their total global sparkling volume.

The report then quickly moves on to Active Healthy Living where they boast of 150 new funded physical activity programs operating in over 100 countries on the way towards their goal of funding at least one such program in every country that they operate in.

It’s hard not to see this activity program as a way to compensate for the fact that most of their products are simply not very healthy in a world that is groaning under twin epidemics of obesity and diabetes. If Coca-Cola truly wants to embody the principles of embedded sustainability, which, according to the authors of the book by that title Chris Laszlo and Nadya Zhexembayeva, incorporates “environmental, health, and social value into the product life cycle with no trade-off in price or quality,” they still have, in this writer’s opinion, a lot of work to do on what they are putting in those bottles, before they make the kind of health impact that represents “the greatest contribution to communities worldwide,” and not just creating value for the Company.

To their credit in this arena though, they have increased the number of fortified beverages they offer and have a variety of products with “added vitamins, minerals and other beneficial ingredients to meet consumer needs around the world.” But the unavoidable fact of the matter is that the bulk of their revenue (they made $35.1 billion last year) comes from selling the sugary stuff, regardless of what they call it.

From that point on, things get better. Under Community, their Micro-distribution centers, Project Nurture and fivebytwenty have done a great deal to help families and women in particular in developing countries.

Under Energy Efficiency and Climate Protection, energy usage increased from the previous year, although product volume increased even more indicating improved efficiency. They are on track to meet a 5% reduction in greenhouse gas emissions compared to a 2004 baseline by 2015, but a company of this magnitude, with the resources they have, needs a more ambitious goal if our society as a whole is going to meet its target reduction.

Under Sustainable Packaging they have developed and launched their PlantBottle which is similar to the previous bottle except that 30% of the PET is derived from plant sources (sugar, as if there wasn't enough sugar inside the bottles) instead of petroleum resulting in a 12-19% reduction in carbon footprint. While it’s true that 85% of the drinks are delivered in recyclable bottles, only 27% of PET bottles are currently being recycled. If Coke would utilize recycled PET  in their bottles as Naked Juice is now doing, that would create an enormous demand for recycled plastics which would surely have an even greater impact.

As for Water Stewardship, they are doing a lot of good things, as they should be considering that they used 309 billion liters of water last year. That’s over 250,000 acre-feet if you can visualize that (it’s a 5000 acre lake that’s 50 feet deep). In a previous post, I praised a number of their impressive efforts in this area while suggesting that they could do more in raising awareness of water issues among consumers by doing things like adding messaging to their cans and bottles. Their response is posted here.

If we assess these actions according to the Sustainable Value Framework developed by Peter Senge et al, in their book The Necessary Revolution, we find some of them, like the work they have done with farmers on water stewardship, or the community work on Micro-distribution centers, rise to the level of the fourth and highest quadrant of "Sustainability Vision" achieving as much or more than what Porter and Kramer among others have called "shared value." While at the same time, other efforts, like those in energy conservation reflect more incremental innovation or "Pollution Prevention" (1st quadrant) as opposed to what Andrew Winston calls "heretical" innovation in which fundamental assumptions are challenged.

Overall, I think Coca-Cola has a ways to go before their name becomes synonymous with sustainability, but they are making a serious and respectable effort to get there and doing some great things along the way.

RP Siegel, PE is the co-author of the eco-thriller Vapor Trails.  Like airplanes, we all leave behind a vapor trail. And though we can easily see others’, we rarely see our own.

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