Tuesday, October 4, 2016

Coca-Cola's Sustainability in Water Replenishment

Coca-Cola and its bottlers 'replenish' all the water they use

 

At a time when even the 1 percent of the globe’s water supply that is fresh is under threat and when water crises have been deemed the biggest risk to global security, the world’s largest beverage company and voracious water user manages to replenish all the water it uses.

The Coca-Cola Company, which uses about 300 billion liters of water a year — a quantity so big it's as if every person on earth donated 40 liters of the shared resource of water to its operations —  announced Monday that it reached a goal it set a decade ago: To "replenish" or restore the equivalent quantity of all the water it uses in a year in its global operations to produce, bottle and sell Coke, Sprite, Fanta, Minute Maid orange juice and hundreds of other beverages.

Its definition of "replenish" doesn’t mean treating and recycling every liter of water used back to its source — that would be impossible because half of it is consumed by humans drinking its beverages. Rather, it's through myriad activities to restore or support the restoration of the equivalent amount of usable water in community projects for water sanitation and infrastructure, watershed support and even reforestation, while 145.8 billion liters are treated and recycled into local supplies. 

 

Coca-Cola
 

Or, as the company put it: "The Coca-Cola Company and its global bottling partners (the Coca-Cola system) today announced they have met their goal to replenish, or in other words balance, the equivalent amount of water used in their global sales volume back to nature and communities,” in a statement released Monday. 

"Some replenish projects directly return water to the source we use while others are outside the watershed our plant uses but are important to help meet needs of local governments, communities and partners where there is a pressing need."

Coca-Cola said that last year it returned nearly 192 billion liters of water to nature.  

And it improved water efficiency in its own operations by 2.5 percent for the year 2015 and by 27 percent since 2004.

Business imperative, amid threats to brand and supplies

It might seem like a nice thing to replenish its water use, but Coca-Cola learned the hard way that water availability and stewardship are material issues and material risks —  listed as such in its 10K financial reports to shareholders.

A decade ago, Coca-Cola was widely accused of diverting groundwater from farmers and households in rural drought-plagued areas in Africa and India to supply its bottling operations. The War on Want campaign waged both on U.S. college campuses and in communities around the world shone a spotlight on Coca-Cola’s voracious water use in places where subsistence farmers and even households didn’t have enough water.  

Even as recently as last winter, Coca-Cola bottling operations in India were protested by local residents and activists who claimed that the company's bottling operations were hogging the local groundwater supplies. In 2015, Coca-Cola ceased operations at three bottling plants in India after civil unrest in drought-plagued areas.

Coca-Cola CEO and Chairman Muhtah Kent spoke to these stresses and the lessons the company learned in an op-ed published on its site to accompany the announcement of reaching 100 percent replenishment of its water use. 

"Our world has a water problem. It is an issue my company has grappled with for years in many parts of the world," Kent wrote.

He recalled that 12 years ago, "our business was accused of misusing water in India during a time of drought. While we were ultimately found to be acting within the law and using our own water supplies, we suffered plant closures and our reputation was damaged. Some consumers walked away from our brands."

He said that back then, Coca-Cola concerned itself with water use inside its plants: "It was our wake-up call. As a result, we made water a key business priority and did a comprehensive assessment of our water use and risks associated with it as well as opportunities for reduction." 

In an interview Monday, Greg Koch, head of Coca-Cola's global water stewardship, said that the company and its bottlers had to step back to make sure they understood local water issues to head off criticism and repair loss of local consumer faith. Coca-Cola first would make the business case to its bottling partners, but then negotiate with local governments and community groups to figure out ways to improve water supplies for all.

"It took a extra level of education to step outside the walls to understand communities you share that water resource with, so you have to share your data and (discuss) quality issues and quantity issues," he said.

"The beauty of water that's both a blessing and a challenge is that everyone depends on water, so when water is stressed in some way, quality or quantity, everyone is at the table."

Moreover, said Bea Perez, Coca-Cola's chief sustainability officer, "there's no one-size fits all solution," because each country's water stress — and often each communty's water stress — is unique. In Latin America, water safety and cleanliness are at issue while in Africa and India, water quantity is the biggest stress.

Overall, the Coca-Cola system achieved its water replenishment goals through 248 community water partnership projects in 71 countries focused on safe water access, watershed protection and water for productive use, the company said. Some projects also provide access to sanitation and education, improve local livelihoods and assist communities with adapting to climate change.

Restoring water to nature? 

Returning nearly 192 billion liters of water to nature took various forms in projects all over the world.

Coca-Cola said its basis for having reached "replenish" standard was reviewed by LimnoTech, verified by Deloitte and documented in a long report. The methodology used to calculate water replenishment was developed with the Nature Conservancy and Limno Tech and then subjected to a scientific technical peer review.

Coca-Cola partnered with numerous non-profits such as the Nature Conservancy and World Wildlife Fund and public agencies such as the U.N. Development Programme to develop and carry out replenish activities. In some cases, Coca-Cola initiated its own water and community development projects, such as Replenish Africa Initiative (RAIN) program, which finances water sanitation projects to bring potable water to rural communities.

Those are big numbers: 192 billion liters means returning about 403 billion pint-size drinks — or enough for every person on earth to have 55 pint-size glasses of water a year. Then again, Coca-Cola uses 300 billion liters. If water is understood as a shared natural resource belonging to all of humanity, it is as if everyone on earth donated 40 liters or 86 pint-size drinks of water to Coca-Cola operations.  

Water efficiency

Coca-Cola also said it improved water efficiency in its own operations. A decade ago, Coca-Cola used 2.7 liters of water for every liter of beverage it sold, or an extra 1.7 liters of water for each liter of soft drink, juice, tea, etc., just to run its factories and clean equipment. By 2014, it got that ratio down to 2.3 liters per 1 liter of product. Now the ratio is almost 2-to-1. 

 

 

 

 

For such a voracious water user to effectively replenish all the water it uses could throw the gauntlet down to corporations worldwide to pay attention to their water footprint and do more to replenish what they use. Reports find that a majority of companies ignore water risks.

Carter Roberts, president and CEO of the World Wildlife Fund which partnered with the beverage giant on some projects, said that for Coca-Cola to achieve the milestone of replenishing all the water it uses "sets a standard for other water users to build from."

 

 

Kent, in an op-ed released Monday, admonished the business world to pay attention to water: "Many experts predict conflict and population shifts linked to the struggle for water. I predict that if you aren’t responsibly managing water in your business, you won’t be in business 20 years from now."

To assure that it shares water with local communities and understands their needs, Coca-Cola requires that each of its 863 plants globally "determine the sustainability of the water supply they share with others in terms of quality, quantity and other issues such as infrastructure to treat and distribute water."

If a water supply is deemed not sustainable for both the plant and the local community, a bottling plant must develop a Source Water Protection Plan. One thing each bottling plant has to examine is whether its use of water and discharge of water has the potential to impair the ability of other community members to access water in sufficient quantities and quality. 

 

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Coca-Cola has come a long way since a decade ago when it was the target of boycotts and consumer anger over its water use. Now, in corporate sustainability circles and ratings by CDP and Ceres, it ranks as among the most responsible on water stewardship.

Because Coke, Sprite and other Coca-Cola drinks are on street corners in just about every city in the world and it has operations in more countries and territories than the United Nations has members, its actions reverberate. 

Coca-Cola's replenishment announcement comes during World Water Week in Stockholm. Kent, in his op-ed, warned his business colleagues to pay heed to water issues:

"Some estimates suggest just 15 years from now our world will need 40 percent more fresh water than we can easily access today. And while the situation is likely to get worse before it gets better, I’m concerned by the lack of urgency in business and society as a whole to address it. Meaningful action is happening in some spheres, but it seems those not facing immediate scarcity or quality issues often take water for granted."

 

 

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