The Coca-Cola Company today announced a holistic strategy to achieve water security for its business, communities and nature everywhere the company operates, sources agricultural ingredients for its beverages and touches people’s lives by 2030.
The strategic framework – which was developed following detailed water risk assessments and shaped by feedback from bottling partners, NGOs, governments and peer companies – focuses on three priorities: reducing shared water challenges around the world; enhancing community water resilience with a focus on women and girls; and improving the health of priority watersheds. Localized, context-based targets, to be announced later this year, will support the global framework.
“These are strong results, but we must do more,” said James Quincey, chairman and CEO, The Coca-Cola Company. “While we remain committed to provide leadership on water through ambitious water stewardship and 100% replenishment, we are shifting our focus toward making a greater impact on people and ecosystems.”
The science-based strategy acknowledges the growing urgency of shared water risks and need for systemic action across the value chain. About one-third of the Coca-Cola system’s bottling plants operate in water-stressed areas, and more than 73% of its global water footprint is used to grow agricultural ingredients like cane sugar, oranges and apples.
• Achieving 100% regenerative water use in bottling operations in water-stressed areas by reducing, reusing, recycling and locally replenishing the water they use;
• Using a five-element watershed health scorecard to address systemic issues around scarcity, quality, ecosystems, infrastructure and governance, with a priority on nature-based solutions;
• Refocusing and broadening replenishment efforts to create systemic impact in priority watersheds;
• Continuing to support access to safe drinking water and sanitation for vulnerable communities and helping communities adapt to the water-related impacts of climate change; and
• Deepening engagement with agricultural suppliers in priority sourcing watersheds to ensure water-sustainable ingredients and landscapes.
What were the key drivers for this new strategy?
While we’ve made fantastic progress and helped set the corporate benchmark for water stewardship, the risks and shared challenges we face on water resources – for our business, our supply chain and our communities – have outpaced our efforts. With our previous strategy, we set goals and invited others to follow our lead. Many did, and we collectively reshaped what water stewardship means.
For example, we will use the Alliance for Water Stewardship (AWS) Principles as common requirements for our bottling operations. We also helped develop an industry standard approach to replenishment quantification, the Volumetric Water Benefit Accounting, and are adopting the WASH4WORK framework to improve water access and sanitation for workers in our system and suppliers, and for the communities in which we operate. Across the board, we are seeking greater impact against these shared challenges.
Why have water risks and challenges intensified over the last decade or so?
First, there is a growing supply and demand gap. As a global community, we are increasing demand, particularly from agriculture water use globally, but also from growing urban populations and a booming middle class, and that generally brings water use up. Fundamentally, there will soon be 40% more demand for water than supply globally. In some areas, including India, Mexico and parts of the United States, the gap is much more extreme. Secondly, there are still a billion people in the world who do not have access to safe drinking water. COVID-19 has driven this number up. And finally, climate change is leading to more erratic weather patterns like droughts and flash floods, which impact communities worldwide. There’s a saying that if climate change were a shark, then water is its teeth.
The company’s water stewardship work has, historically, focused on replenishment – returning to communities and nature the amount of water used in beverage production. Will it still be a priority going forward?
It will, indeed, and we will build on what we’ve done. Replenishment is an important metric to measure commitment and scale of action but not a goal in itself. We will maintain the global metric of 100% replenishment globally, but we will make it work harder toward our goal of improving watershed health in water-stressed areas that are critical to the business and our agricultural supply chain. We will assess our priority watersheds systematically against five key criteria and engage local stakeholders to devise integrated and holistic plans for collective action across all of them. Replenishment interventions will play a role or contribute, but it’s not the only solution to address the root causes of risk in many places.
What goals and targets are included in the 2030 strategy?
We have several quantifiable global goals in place. In all leadership locations we currently define, for example, we aim to achieve 100% regenerative water use, i.e. reduce, reuse, recycle and replenish the water they use locally. We also have a goal to drive accelerated water efficiency improvement in water-stressed locations versus 2015, which we will validate through context-based targets with our bottlers. And we aim to implement watershed health plans in 100% of our priority watersheds.
This strategy leans heavily on our agricultural supply chain. Why?
We conducted our first global water footprint assessment across our value chain – from ingredient to consumer – and found that more than 73% of our global water footprint is used to grow agricultural ingredients like cane sugar, oranges and apples. Water efficiency in agriculture, for example through modern irrigation systems, can be part of the answer, but our goal here as well is to not only manage our impacts but to contribute to overall watershed health. What we’re doing is to look at our agriculture ingredients with the highest water-use intensity – that use the most water for any ton of produce and are grown in water-stressed areas – to identify priority sourcing watersheds. We will engage with our suppliers and the farmers to understand current practices, and identify issues and potential solutions and opportunities for collective action with other buyers and supply chain partners. Irrigation efficiency could be one answer, but a lot of answers lie in conservation agriculture, or soil management, or ecosystem improvement, or looking at the overall watershed outside our direct supply chain.
How does this water strategy overlap with or support the company’s other sustainability priorities and goals?
Water is a great connector for creating benefits across our different goals. Let’s use climate as an example. Our water work supports our climate targets by helping to reduce our carbon emissions through efficiency and reuse but also creates significant ecosystem and carbon benefits through nature-based solutions and replenishment. To capture these multiple benefits systematically, we have piloted Natural Capital accounting based on our replenish work in Europe and are contributing to a global, multi-stakeholder methodology on co-benefits accounting.
We also have made a clear link between agriculture and water by integrating supply chain water use into our water strategy, and the ambitions we’re articulating build on our sustainable agriculture program. Our community water resilience goals to support access to safe water and sanitation are focused on supporting women and girls to enable empowerment and socio-economic development as well as building greater capacity to adapt to the impacts of climate change.