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By RL Expert Leesa Soulodre

RL EXPERT Leesa Soulodre speaks with Katherine Neebe, Manager Business and Industry, WWF and Greg Koch, Managing Director, Global Water Stewardship, Coca-Cola.
LS: Greg, tell us about the challenges Coca-Cola faces with management of water use.
Greg Koch: The Coca–Cola Company (TCCC) is the world’s largest beverage brand. Moreover, it’s a company that’s tied closely to every community in which it operates.
What happens in the Mekong river basin, for instance, affects business decisions in Atlanta, and vice versa. Those decisions impact how our more than 500 brands and 3,500 beverage products get into the hands of consumers worldwide. The turn of the millennium brought a much greater awareness of the plight of water. While water is the basis of life and a renewable
resource, it faces daunting challenges, including pollution, improper management, over–allocation in many places, uneven distribution, and non–universal access to a clean, safe supply for many people who are the most in need. These challenges are exacerbated by global population growth, climate change and the dramatic increase in global development.

As a company that includes six operating groups and 300 independent bottling partners with
more than 850 plants across 200 countries, with varying cultural norms and political systems,
the company has experienced a diverse array of water challenges. In 2003, it was among the first corporations to disclose to shareowners that water quality and quantity were a material risk
to its business; a unique risk given the company’s size, well–recognized brands, geographic scope, non–diversification, and, perhaps most critically, its local business model.
Every product Coca–Cola makes depends on access to quality fresh water. It sources water for
its beverages, as well as many ingredients, such  as fruits, tea and sweeteners, which rely on water from local suppliers, so the viability of its business is inherently connected to viable local ecosystems and available natural resources.
LS: How does WWF’s partnership with Coca–Cola work?
Katherine Neebe: We have a role to play in helping the communities we rely upon. We know that to make a meaningful difference, we must focus our efforts beyond the confines of Coca-Cola’s own bottling plants. Today, as Coca–Cola describes on its website, nearly one–sixth of the world’s population – more than 1 billion people – do not have access to safe drinking water. Approximately 2.6 billion don’t have adequate sanitation. Due to the issues surrounding water, billions of people are vulnerable to disease and food insecurity.

Since 2007, WWF and The Coca–Cola Company have joined forces to conserve priority river
basins around the world and further integrate sustainability initiatives into Coca–Cola system
operations worldwide. We moved forward on an initiative focused on fresh water, because water is the primary ingredient in every single product that Coca–Cola makes and also fundamentally important to healthy robust ecosystems.

So there was a real common issue that we both had a vested interest in and that we could both
rally around. We have been working together on plant efficiency; greenhouse gas emissions
reduction; supply chain; river basin conservation; and communications.
LS: Why did WWF select specifically Coca-Cola as the appropriate partner to work with?
KN: We have had a long–standing relationship with Coca-Cola. We have been around 50 years
and they have been philanthropically supporting our conservation work for almost that long. We
started talking to them about freshwater about 7 years ago, really thinking that there would
be an opportunity for us to align on something that is fundamental to conservation and healthy
ecosystems. But it also needed to be something that was important to Coca–Cola and their
business practices.
LS: What kind of working relationship do you have on the ground together?
KN: We have a strong relationship, but also one where we challenge each other to do better.
Corporate partnerships start with actions – we have very specific targets and milestones with
Coca-Cola and in fact any corporate partner that we work with. We want to work with companies that can play an important role in terms of business practice.
LS: It could be argued that there are other players in this industry that are just as big purveyors on water scarcity, why did you not choose one of them?

KN: WWF has a non–exclusive partnership with Coca-Cola. We want to be able to maintain
autonomy in the partnerships we build. CocaCola is the world’s largest beverage maker so to
us it makes sense to work with one of the biggest companies in the sector. The theory of change is that the leading companies will set best in class standards and practices that will really bring the whole industry along with them.
LS: What are the core progress milestones you have achieved to date?
KN: We have 3 core progress items that we would like to share: Plant Performance – target of 20 percent improvement in water efficiency in Coca–Cola’s entire manufacturing process by 2012, against a  2004 baseline. That target reached its deadline this past December. The most recent data we’ve seen shows that Coca–Cola has made a 16 percent improvement in water efficiency and they have improved each of the past 8 years, so we are optimistic they will reach that target. Greenhouse Gas Emissions – Coca–Cola achieved a reduction of 2 percent in global emissions from manufacturing in 2011 – so we’re really moving towards some great work.
In terms of conservation –we just recently announced that Tram Chim National Park , which
is a part of the Plain of Reeds in the Mekong where Coca–Cola operates, has been recognized as the 2000th RAMSAR site, meaning it’s a wetland of international importance. We were really pleased to see not only the work in the business take shape but also to see some milestones achieved in the basins.
LS: WWF has received harsh criticism on its partnerships with big business. Your critics claim that your aims are not conservation but rather profiteering from controversial business partnerships and projects at the expense of the environment. What role does private enterprise have to play?
KN: You can see from our work with Coca-Cola just one example of WWF’s commitment to transform business practices. In fact, WWF has identified 100 companies that most directly impact the places and species we seek to protect. These companies have an increasingly vital role to play for the welfare of our planet. That’s a big issue.

Our living planet report currently notes that the human footprint of consumption is approximately 1.5 times what the planet can sustain and a critical component of humanity’s footprint is how commodities are produced. By 2050, human population will have exceeded 9 billion and per capita consumption on average will double, particularly in the developing world. These trends have implications for how we will feed, house, clothe and transport everyone in a way that preserves our planet for future generations. We believe that one way to address this challenge is to transform global commodity markets.
LS: How do you maintain momentum with corporate partners and keep corporate donors engaged and committed?
KN: I really view Coca-Cola as a partner – not a donor. It may have begun in a philanthropic
space but we have now transitioned to what we call a transformative partnership. We are really
working hand–in–hand to understand impacts, to encourage significant change in energy use, in water use and in their supply chain.
So how do we keep them engaged? We find an issue that is a shared concern for both partners, we set concrete actions that have a very specific timeline and milestone and then we ask that the information be shared publicly so that we can have a larger discourse on the issues. By building transparency, by constantly reporting on progress of all of our activities, we are really able to keep people engaged and committed
This interview was written by RL EXPERT Leesa Soulodre and published in the August 2012 Food and Beverage edition of RepRisk Insight, an ESG Risk publication co-founded by RL Expert and its partner RepRisk AG for the financial markets and their investee multinational corporations.
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