The Coca-Cola Co.: Water is its essential element, in more ways than one

The Coca-Cola Co. knows you can’t make Coke without water. But as more of the world experiences water quality and supply problems, the 138-year-old soft drink producer is making water sustainability a cornerstone of its 2030 environmental goals.

“Water is the primary ingredient used in our beverages and an essential resource for the well-being of communities around the world,” said Madhu Rajesh, Coca-Cola’s senior director of water and agriculture, in a company Q&A last summer. “With presence in more than 200 countries and territories, we believe we have a responsibility to protect local water resources and help people who live in places that face water scarcity.”

Water stewardship is just one of Coca-Cola’s sustainability initiatives that set targets for 2030 and beyond. The company KO is also working toward ambitious goals in sustainable packaging, climate protection, waste reduction, net-zero emissions and community economic development.

The company

The first Coca-Cola was served in a downtown Atlanta pharmacy in 1886 by Dr. John Pemberton. From serving nine drinks a day that first year, the products made by the company Pemberton founded are now consumed 1.7 billion times every day worldwide.

Along the way Coca-Cola became on iconic brand, its distinctive bottles ubiquitous across the globe and its advertising (think the hilltop and “I’d Like to Teach the World to Sing”) legendary.

The company’s brands have blossomed over the years to include soft drinks Sprite, Fresca, Fanta, Barq’s and Schweppe’s, Dasani water, Glaceau vitamin water, Minute Maid juice and Gold Peak tea, among others.

The company reported third-quarter 2023 revenues of $12 billion, an 8% increase over Q2. Coca-Cola revenue for the 12 months ending Sept. 30 was $45 billion, a 6.4% increase year-over-year, according to Macrotrends. Coca-Cola stock is trading around $60 a share, off its July 2022 peak near $66. The stock pays a 46 cent quarterly dividend, with a yield of about 3.1%

The sustainability goals

Coca-Cola is no stranger to what today would be called ESG goals; in 1917 it began its disaster-relief partnership with the Red Cross, which is ongoing.

Also read: Why CEOs are shying away from the term ESG

Today Coca-Cola’s vision encompasses several key sustainability areas and aligns with global frameworks like the United Nations Sustainable Development Goals.

Here is a look at the current initiatives under way at Coca-Cola:

Water security strategy: The 2030 Water Security Strategy outlines specific goals, emphasizing the need to invest in areas most in need of water security improvements. Coca-Cola’s approach to water stewardship involves regenerative water use in bottling processes, especially in water-stressed regions. The company employs a five-element scorecard to address complex issues like water scarcity, quality, and governance. Developed through rigorous risk assessments and stakeholder feedback, this strategy prioritizes reducing global water challenges, enhancing community resilience with a focus on empowering women and girls, and improving watershed health.

Promoting healthy environments: Coca-Cola’s initiatives in the circular economy, climate action and regenerative agriculture aim to create healthier environments and build resilience in its business operations. Coca-Cola is focusing on climate resilience by collaborating with global experts like Business for Social Responsibility to analyze climate risks in critical markets and integrate resilience into its business strategy. This comprehensive approach ensures that the company’s global operations are mindful of their environmental impact.

World without waste targets: In 2018, Coca-Cola launched its ambitious World Without Waste program, aiming to revolutionize its approach to packaging. The initiative’s goals are bold: to make all of its packaging recyclable globally by 2025 and to incorporate at least 50% post-consumer recycled material in its packaging by 2030.

Net-zero emissions goal: Coca-Cola Europacific Partners aim to achieve net-zero greenhouse gas emissions by 2040, building on a 30.5% reduction in emissions across their value chain over the past decade. The company also focuses on using sustainably produced ingredients and has set science-based targets to reduce greenhouse gas emissions by 25% from its 2015 levels by 2030, a significant step toward its vision of a net-zero carbon footprint by 2050.

Circular economy in developing regions: In countries like Nigeria, Coca-Cola is contributing to the development of a circular economy for plastic waste collection and recycling, supporting social enterprises and civil society organizations.

Supplier engagement: Coca-Cola encourages its suppliers to set their own greenhouse gas emission reduction targets and commit to renewable energy sources, collaborating with initiatives like the Carbon Disclosure Project and the Science Based Targets initiative.

Technology innovation: Coca-Cola, along with its partners, has established a $137.7 million venture capital fund to invest in startups with innovative technologies. These technologies have the potential to revolutionize packaging and supply chain processes, making them more environmentally friendly and sustainable.

The challenges

Despite its efforts, Coca-Cola has faced significant challenges and criticisms, particularly in the areas of plastic pollution and water usage. The company has been criticized for its contribution to plastic pollution and has pledged to make 25% of its packaging reusable by 2030. However, Coca-Cola, along with other major brands, has been scrutinized for not meeting recycling targets and contributing to the global plastic waste problem.

The path to sustainable packaging is rocky. Since shifting its focus to secondary use in February 2021, Coca-Cola has observed a decline in sales volume for beverages in reusable packaging across most of its bottling operations. This trend raises questions about the effectiveness of the company’s commitment to reusable packaging and the prevalence of single-use plastic bottles.

Water scarcity poses another significant challenge for Coca-Cola. The company’s water usage has been controversial, especially considering the water footprint required to produce its beverages. While Coca-Cola cites a water usage figure of 2.16 liters to produce 1 liter of product, this doesn’t account for the entire supply chain’s water consumption, including the production of plastic bottles and sugar. Addressing these issues is crucial for Coca-Cola to meet its sustainability goals effectively.

The progress

Despite these challenges, Coca-Cola has made notable progress in sustainability on a global scale. For instance, in Austria, Coca-Cola introduced a new refillable glass bottle and paper wraps for its 1.5-liter multipacks, emphasizing efforts to reduce plastic use and promote recycling. Moreover, Coca-Cola Europacific Partners are exploring CO2 upcycling technology that could revolutionize packaging.

In the Philippines, the “May Ikbobote Pa” initiative by Coca-Cola aims to foster consumer behavior change regarding recycling. The company is also furthering its circular economy model for PET plastic by introducing bottles made entirely from recycled polyethylene terephthalate, excluding caps and labels. These efforts, however, face regional variability in effectiveness and consistency, underscoring the complexities in implementing global sustainability programs.

The upshot

Coca-Cola’s journey toward sustainability is more than a series of initiatives; it is a paradigm shift in how global corporations can integrate environmental stewardship and social responsibility into their core operations. The company’s expansive ESG initiatives, from water security to reducing greenhouse gas emissions, highlight its dedication to creating a greener, more equitable future.

Challenges remain, notably in plastic pollution and water usage, requiring robust, transparent efforts to address these issues effectively. However, Coca-Cola’s collaborations, alignment with global sustainability goals, and continuous adaptation and innovation position it as a leader in the charge towards a sustainable and responsible future.