Coke Sustainability Report: Emissions Intensity Down 2%
Its emissions ratio in grams CO2 per liter fell to 37.81 last year, down 2 percent from 38.64 in 2011 and down 10 percent from 41.66 in 2009.
The company is reducing emissions in part through WWF’s “Top 10 Energy-Saving Challenge,” which equips bottlers and plant managers with 10 high-return, low-risk energy-saving practices they can readily implement. To date, 526 of Coca-Cola’s nearly 900 manufacturing facilities are implementing the practices, and 127 have completed the entire Top 10.
But the company is off-track of a goal to keep its system-wide carbon emissions stable, from 2004 to 2015, as its business grows. Global manufacturing emissions in 2012 were 15 percent above the 2004 baseline, though they were 1.2 million metric tons lower than the business-as-usual forecast for 2012.
“We consider this upward trend to be both disappointing and unacceptable,” the company says, using unusually harsh language for a sustainability report. Coca-Cola adds that it is working to reduce emissions through a variety of measures, including using more clean energy.
Total GHG emissions last year were 5.48 MMt CO2e, including direct GHG emissions of 1.85 MMt CO2e.
Last July, Coca-Cola established a goal to reduce the carbon footprint embedded in its finished products by 25 percent by 2020, against a baseline year of 2010.
This is the company’s first goal targeting its entire end-to-end value chain, and Coca-Cola says the effort will involve improving the energy efficiency of cooling equipment, committing to more sustainable ingredient sourcing, using more fuel-efficient product delivery, phasing out hydrofluorocarbons (HFCs) in new cold-drink equipment, and increasing its use of clean energy.
Coca-Cola says these efforts will prevent the release of 20 million metric tons of CO2 by 2020. It is developing annual reduction targets for the next seven years, working with suppliers to try and meet these goals, and developing processes for measuring progress.
The company self-declared this year’s report at a GRI application level of B+. Ernst & Young provided external assurance on several sustainability indicators including water use ratio and PlantBottle packaging.
The report reiterates the 2020 sustainability goals that Coca-Cola announced in July. The document also includes many water-related results already published in Coke’s 2013 Water Stewardship and Replenish Report, published in June.
For areas such as water use and carbon emissions, the report provides most of the data one would expect. Notably absent is any information on the company’s renewable energy use, except for the example of a renewable energy commitment by one Coca-Cola bottling partner.
Packaging is the largest contributor to Coca-Cola carbon emissions, making up 38 percent of its CO2 as of 2010. (Less than 10 percent of value-chain emissions came from manufacturing.)
Coca-Cola expects its use of PlantBottle packaging to be a key contributor towards its goal of cutting supply-chain CO2 emissions by 25 percent by 2020. The bottle, introduced in 2009, is a PET container comprising up to 30 percent plant material.
Through 2012, Coca-Cola has distributed about 14 billion of its PlantBottle packages in about 24 countries, which it says has helped save about 130,000 metric tons of CO2. Last year it launched PlantBottle into Serbia, South Korea, India and other countries, and expanded the number of brands using the bottle in the US, Canada, Mexico and Brazil.
Coke has a goal of sourcing 25 percent of its PET plastic from recycled or renewable material by 2015 (today, 5 percent of its packaging comes from such materials), and using PlantBottle for all PET packaging by 2020.
Coca-Cola’s system has invested in six bottle-to-bottle facilities that improve its capacity for using rPET. The company is investing in research to make more cost-effective rPET, and to create PlantBottles out of agriculture residues.
Coca-Cola says about 85 percent of its unit case volume comes in recyclable bottles and cans.
By 2015, it has a goal of improving packaging material efficiency per liter of product sold by 7 percent compared with a 2008 baseline. Between the baseline and 2012, it made a 7 percent improvement for at least 85 percent of its packaging volume.
Its bottling partner in Puerto Rico developed a 500-milliliter Dasani bottle that weighs 9.8 grams – the lightest bottle in the Coca-Cola system. The company is now working to introduce an 8-gram bottle, globally, in 2014.
Coca-Cola’s energy use ratio, defined as MJ of energy per liter of product, fell to 0.43 last year, from 0.44 in 2011 and 0.46 in 2009. The company says improvements in energy efficiency helped it avoid about $200 million in energy costs last year, and over $1 billion since 2004.
Coke also says it has improved the energy efficiency of its cold-drink equipment worldwide by more than 40 percent compared to year 2000 levels. It has deployed nearly 5.5 million energy management devices for cold-drink equipment, reducing average energy consumption by an estimated 5 billion kilowatt-hours per year and cutting about 3.1 MMT of CO2e.
In total, the Coca-Cola system used 62.4 billion MJ of energy last year, up from 59.7 billion in 2011 and 54.4 billion in 2004.
Coca-Cola’s largest bottling partner in India, Hindustan Coca-Cola Beverages Private Limited, has committed to expand the amount of energy it draws from renewable sources to 40 percent by 2020.
The company is off-track of its goal for all new cold-drink equipment to be HFC-free by 2015. Last year its system bought 243,688 HFC-free units, or about 21 percent of new equipment purchases. It now has about 800,000 HFC-free units, out of over 14 million dispensers, vending machines and coolers in the marketplace.
The Coca-Cola trucking fleet, including trucks operated by the company and its bottling partners, accounted for about 8 percent of emissions in 2012. In North America, Coca-Cola operates 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, the company says. Coke also uses natural gas, diesel-electric and biodiesel.
The fleet emitted 4.6 MMt last year, up 14 percent from the 4.03 million metric tons emitted in 2011, but down substantially from 7.18 MMt in 2009. The company did not say why fleet emissions rose last year, although presumably some of the increase can be attributed to a rise in sales. The report also appears to make an error in a sub-heading, referring to a “14 percent decrease.”
Coca-Cola’s waste ratio last year, in grams of manufacturing waste per liters of product, rose to 9.69, from 9.52 in 2011, but down from 10.22 in 2009. The company diverted 85 percent of manufacturing waste from landfill, down from 86 percent in 2011 but up from 82 percent in 2009.
Last year about 39 percent of the bottles and cans that the company introduced into the marketplace were recovered, up from 37 percent in 2011 and 36 percent in 2009 – but shy of its 50 percent goal. In July, Coca-Cola announced a new goal of a 75 percent recovery rate, equivalent to what it introduces in developed markets, by 2020.
The company says precise measurement has been hampered by a lack of data. In select markets in Latin America, the Asia Pacific region, Eurasia and Africa, it is piloting its Recovery Tracking Methodology, which involves locating credible sources of recovery data in each market and then assigning one of three quality levels to each data set. Coke is working to roll out the RTM in all markets by the end of 2013.
The company last year achieved a 5.9 percent improvement in water efficiency compared with a 2010 baseline. In June, Coca-Cola committed to improving water efficiency in its manufacturing operations by 25 percent by 2020, compared with the baseline.
Its water use ratio, defined as liters of water used per liter of product produced, fell to 2.12 last year, from 2.16 in 2011 and 2.36 in 2009.
By 2020, the company aims to safely return to communities and nature an amount of water equal to what it uses in its finished beverages and their production. So far, the company estimates it has balanced 52 percent (81.1 billion liters) of the water used in its finished beverages (based on 2012 production volume), up from 35 percent in 2011 and 22 percent in 2009, and returned approximately 160 billion liters through treated wastewater.
But the company says that the science behind such measurements is new, and “it may be premature to rely on our water benefit calculations as hard fact.”
The company is behind on a goal to begin implementing locally relevant source water protection programs by the end of 2012. By that point, 788 of the 863 bottling plants in its system (91 percent) had completed source vulnerability assessments and 587 plants had begun implementing source water protection plans. Coca-Cola blames the delay on challenges in obtaining data, ongoing discussions with stakeholders and the sheer volume of work required. It says it is aiming for all plants to have source water protection programs in place by the end of 2013.
Coca-Cola continues to fall just shy of its goal, targeted for 2010, that all water from its operations be discharged at a level that supports aquatic life. By end-2012, 98 percent of plants – all but 17 – were aligned with the goal. The Coca-Cola plant in Lachine, Quebec is working to upgrade its wastewater management system by early 2014. Delays in financing, government permitting and construction have slowed this process at various plants, as have war and civil unrest. The company is hopeful that 16 of the 17 plants will achieve compliance by early 2014. (The 17th noncompliant plant is in Syria.)
In 2012 Coca-Cola used the Ceres Aqua Gauge, a tool that assesses corporate water management, and says that the gauge is helping it to set new sustainability goals.
The companies’ studies have also found that about 80 percent of its products’ total water footprint comes from its agricultural supply chain.
Coca-Cola says it expects to increasingly assess not just the quantity of the water used to grow product ingredients, but also the impact of that use – which depends on the water scarcity of individual areas.
Coca-Cola aims to sustainably source key agricultural ingredients by 2020. It has established Sustainable Agriculture Guiding Principles for suppliers, and is working with WWF to implement the guidelines. In April, the company a asked suppliers to provide action plans for meeting its sustainability criteria, along with baselines of where they currently stand. In the coming months, Coke says, it will identify the best sustainability practices among suppliers and encourage their application across the supply chain.
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