Coca-Cola’s ecological footprints prior to its collaboration with TNC

 

 

The Coca-Cola Company has established the world’s most conspicuous brand in the soft drink industry. In 2013, the massive production of Coca-Cola awarded this multinational company fifth place among the world’s most valuable trademarks.[1] To secure its leading position, Coca-Cola lobbied the government and private sectors to extract raw materials for their production inputs at low costs. A 125-year environmental history of Coca-Cola shows that with the support of capitalism, this company has lead the soft drink industry as it pushes the supply of resources to the limits of sustainability.

Since Dr. John Stith Pemberton started Coca-Cola on May 8, 1886, the Coca-Cola Company succeeded in minimizing production costs by squeezing nature to its carrying capacity.[2] In 1899, the company erected a bottling franchise system relying on public pipes to supply regional markets across America. The company drained millions of gallons of water from public pipes to produce its beverage without losing a cent from its pocket thanks to a federal subsidy in the early twentieth century. Since the 1950s, Coca-Cola built partnerships with the government and industry giants, both producers and distributors, to generate the commodity surplus of raw inputs including sugar and coca leaves for its production. The company also received financial support from the federal government and international agencies to expand their bottling system all over the world.

By the mid-twentieth century, Coca-Cola was leading the world’s consumption of sugar, processed caffeine, aluminum cans, and plastic containers.[3] The company helped to contribute an enormous amount of aluminum cans and plastic bottles to landfills, which ultimately polluted underground freshwater in America. Coca-Cola’s mass production methods and use of high-fructose corn syrup required an intensive use of fertilizers and pesticides on monocrop fields for corn production. Moreover, the Coca-Cola Company released tons of waste into waterways and natural habitats, which imposed the environmental externalities of soda production onto society.

Towards the 1980s and 1990s, the production of Coca-Cola experienced some downfall due to the depletion of natural capital. In addition, public criticism towards the company’s footprint made the company decide to promote sustainability. The company started to partner with environmental organizations like The Nature Conservancy. Prior to its commitment to corporate sustainability, Coca-Cola’s environmental history exemplified why conservationists should help corporations change the economic model and encourage proactive solutions to mitigate environmental crises.

[1] Elmore, Bartow J. “Citizen Coke: An Environmental and Political History of the Coca-Cola Company”. Business History Conference. 2013: doi:10.1093/es/kht085.

[2] “The Chronicle of Coca-Cola: Birth of a Freshing Idea”, The Coca-Cola Company, last modified Jan 1, 2012, http://www.coca-colacompany.com/stories/the-chronicle-of-coca-cola-birth-of-a-refreshing-idea/

[3] Ibid, p718.

TNC and The Coca-Cola partnership

When The Coca-Cola Company began to envision potential long-term impacts of water scarcity and poor quality on their production in 2004, its executives revised their business strategy for sustainable growth by taking into account water stewardship.[1]   In an interview on June 19, 2012 with Jeff Seabright, a former Vice President of Coca Cola’s Environment and Water Resources Division, he emphasized Coca-Cola’s 2007 commitment to sustainability as a key to balance short-term and long-term management.[2] The leaders of Coca-Cola acknowledged the vital role of collaboration with other stakeholders, including communities, institutions, governments, and organizations in achieving their goals of sustainable water use and conservation. Among those partnerships, Coca-Cola started working with TNC in 2007 to gain a better understanding of the positive impacts and effectiveness of water conservation activities. By quantifying the benefits of Coca-Cola’s investment in community watershed partnership (CWP) projects, TNC helped the company design and develop future conservation projects.

The Conservancy assisted Coca-Cola in measuring the amount of water coming from water conservation projects in which Coca-Cola participated. In addition, experts from TNC evaluated water-related risks and vulnerabilities of their current and future business interests. Since Coca-Cola realized increasing water scarcity could impact production costs, involvement in conservation became a profit motive for the company. TNC’s technical tools offered Coca-Cola a better understanding of the health of the watersheds that Coca-Cola relied on and their cooperation with suppliers, governments, and stakeholders.8

In return, Coca-Cola contributed financial support to TNC’s watershed restoration activities. The company donated approximately two million dollars for at least nine freshwater replenishment projects that TNC was developing.[3] These projects took place from 2009 to 2012 in many large watersheds across many states, including the Etowah and Flint Rivers in Georgia, Michigan’s Paw Paw River, the Trinity and Brazoes River Watersheds in Texas, the Everglades Headwaters in Florida, and the Sacramento River Watershed in California.10 The partnership with Coca-Cola enhanced TNC’s efforts in informing policy initiatives and working with farmers and landowners on the best watershed management practices.

[1] “The Water Stewardship and Replenish Report”. The Nature Conservancy and The Coca-Cola Company. January 2011. http://www.nature.org/media/companies/coke_replenish_report_2011.pdf

[2] “Importance of Corporate Sustainability – The Coca-Cola Company.” The Nature Conservancy.  Accessed by March 6, 2016. https://www.youtube.com/embed/_INXZSEHOh0

[3] Limno Tech. “Quantifying Watershed Restoration Benefits in Community Water Partnership Projects”. January 25, 2010: http://www.nature.org/media/companies/coke_watershed_restoration.pdf

 

Results of TNC- Coca-Cola collaboration

Coca-Cola’s sustainability program proposed to increase water efficiency during operation by 20 percent from 2004 to 2012, recycle water use at a level that supports aquatic life by the end of 2010, and offset the amount of water used in its production process by 2020.[1] To replenish the volume of water Coca-Cola has been using for finished beverages, their CWP projects embraced activities to increase water access and water filtration. In the first report of their partnership in 2011, TNC estimated that from 2008 to 2013, 320 CWP projects increased the water volume brought back for communities from 10 percent to nearly 40 percent of its production. [2] Coca-Cola succeeded in replenishing 42.8 billion liters of water, equal to 31 percent of the water used in the finished beverages, to communities and nature.[3] The outcomes reflected Coca-Cola’s efforts in providing local communities with access to water and sanitation, protecting watersheds, and increasing education and awareness. When Coca-Cola began to protect water resources, all three stakeholders including the Coca-Cola Company, local communities, and the environment could sustainably thrive together.

By pointing out the gains of Coca-Cola’s investment in preserving its natural capital, TNC was able to raise donations from the company for the establishment of watershed restoration projects in other places across the states. TNC restored natural habitat and replanted vegetation to reduce erosion and enhance the flow of groundwater in several watersheds, such as Etowah River, Flint River, Trinity River, and Paw Paw River, with 100 percent of Coca-Cola contribution.[4] Because TNC applied innovative natural-based solutions to water conservation, the contribution of Coca-Cola reinforces their social responsibility to nature.

Brian Richter, TNC Freshwater Program Co-Director, said that “More important than the numbers associated with a water footprint are the impacts of water use. When properly managed, even large volumes of water use can be sustainable in locations where the resource is sufficient to support the use and sustain ecological health.”[5] Richter affirmed the positive outcome of the partnership with Coca-Cola and the necessity of sustainable management of water resources. As open-access natural resources are often taken for granted, costs of overexploiting and benefits of conserving these resources (like freshwater) are often underestimated and overlooked by corporations. The measurement of water conservation benefits and the water footprint created incentives for Coca-Cola’s commitment to long-term sustainability and social responsibility.

[1] “The Water Stewardship and Replenish Report”. The Nature Conservancy and The Coca-Cola Company. January 2011. http://www.nature.org/media/companies/coke_replenish_report_2011.pdf

[2] Ibid

[3] Ibid

[4] Limno Tech. “Quantifying Watershed Restoration Benefits in Community Water Partnership Projects”. January 25, 2010: http://www.nature.org/media/companies/coke_watershed_restoration.pdf

[5] See note 1.