Company Profile - Coca-Cola
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Coke, the largest beverage company in the world, continues to show great concern over their green image. As their products rely heavily on water and the bottles and cans that contain them, they are bound to have a big environmental impact from their operations.
Coke has focused their environmental efforts on 3 main areas: water stewardship, sustainable packaging, and energy and climate protection.
In June 2007, Coke announced a new commitment to return to nature and communities water equivalent to what they take out for their production. To achieve this, they are reducing how much water is needed in each beverage, improving water recycling at their plants, and partnering with local projects to improve their water supply. They have made impressive progress, but have still refrained from putting a target date to this goal.
On the packaging front, Coke has made concerted effort to reduce the amount of packaging that goes into their drinks, and to improve the recycling of the bottles and cans. They have invested $60 million to build the biggest bottle recycling plant in the US.
Their last area, energy and climate protection, is focused on their transportation fleet, the manufacturing operations, and the vending machines and coolers that sell their drinks. For their fleet of about 200,000 vehicles, they make use of ‘idle reduction’ technology and
biodiesel fuel to reduce their carbon emissions. In some markets, although not very many, they are testing hybrid trucks. In their plants and offices they have improved energy efficiency by 10%. But the most important area by far is the vending machines, which are the single biggest sources of greenhouse gas emissions from their operations.
With over 9 million machines keeping the drinks cold around 24 hours, 7 days a week, there is huge potential to cut their carbon footprint, and Coke has launched some strong initiative in this area. They have developed an Energy Management System that reduces energy consumption in the machines by up to 35% and have implemented this in about half a million locations generating a savings of 650 million kilowatt hours each year. For all of their new vending machines, Coke has developed insulation that is free of HFC (a potent greenhouse gas). This lowers the emissions by about 75% per machine.
Outside their own operations, they launched Refrigerants Naturally! in 2004. This is an alliance in the food and beverage industry committed to improving refrigeration and developing environmentally friendly cooling technologies.
Yet there remain several gaps in Coke’s greening strategy. While their new vending machines are pretty eco-friendly, the improved technology is only used on a small fraction of their machines. If they want to have a more serious impact on global warming they absolutely must work to quickly replace all of their older, carbon emitting machines as fast as possible. This comes to a common problem in the corporate world – the struggle between doing what is morally right and doing what is right for their shareholders. But coupled with a strong PR campaign, there is no doubt that bolder gestures would help improve their image and give them a competitive advantage while also helping reduce their carbon footprint.
So how do they stack up?
Business Strategy: 3.5/5 – Coke has taken some strong steps to becoming a green company, but would be able to do more if they used it to improve their image at the same time
Products & Services: 3.5/5 – by reducing the amount of water and packaging in their drinks Coke has been able to cut their carbon footprint but these areas remain big sources of carbon emissions
Leading by Example: 2/5 - until more of the vending machines are replaced with their latest technology, this company icon will remain a big contributor to global warming
Overall: 3/5
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