{"id":23318,"date":"2017-11-15T18:43:28","date_gmt":"2017-11-15T23:43:28","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/coca-cola-a-voluntary-climate-change-agent\/"},"modified":"2017-11-15T18:43:28","modified_gmt":"2017-11-15T23:43:28","slug":"coca-cola-using-carbonation-to-drive-a-nation-towards-climate-change","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/coca-cola-using-carbonation-to-drive-a-nation-towards-climate-change\/","title":{"rendered":"Coca-Cola Using Carbonation to Drive a Nation towards Climate Change"},"content":{"rendered":"

The energy sector has always taken the criticism and regulatory injunctions for processing fossil fuels that allow corporations and communities to function, but should they take the heat alone? Manufacturing industries account for roughly 30% of the world\u2019s carbons emissions and the EPA estimates that the industry and transportation sectors account for 48% the greenhouse gas (GHG) emissions in the US [1][2]. The Coca-Cola Company recognizes the impact their operations have on climate change and as a result have committed to specific and measurable emissions reduction goals throughout their value chain [3].<\/p>\n

\"\"<\/a><\/h6>\n
Resource: \u201cSources of Greenhouse Gas Emissions\u201d, United States Environmental Protection Agency [2]<\/h6>\n

Coca-Cola\u2019s ambition is to reduce the enterprise\u2019s carbon footprint of the \u201cdrink in your hand\u201d by 25% by 2020 [4]. Coca-Cola\u2019s sustainability goal spans the value chain from the manufacturer, to the supplier, to the bottler, to the distributor, to the retailer, and the consumer. The economic benefit to improve energy efficiency in manufacturing processes coupled with pressures from shareholders and the growing socially responsible consumer base are catalyzing companies to be pro-active instead of reactive towards potential climate change policy and carbon caps expansion into industry [3].<\/p>\n

Coca-Cola along with a host of other companies have adopted the Greenhouse Gas Protocol\u2019s Accounting and Reporting Standard to calculate their emissions inventory throughout the value chain [5]. There are two emission types\u2014direct and indirect\u2014that get categorized into three tiers\u2014scope 1, scope 2 and scope 3\u2014within this industry accepted protocol to delineate what emission sources are within a company\u2019s span of control and how the GHG emissions are produced [6]. Figure 1 illustrates the potential elements within Coca-Cola\u2019s value chain and how the direct vs. indirect channels are scoped according to Greenhouse Gas Protocol.<\/p>\n

Figure 1. Overview of GHG Protocol scopes and emissions across the value chain<\/strong><\/p>\n

\"\"<\/a><\/h6>\n
Resource: \u201cCorporate Value Chain (Scope 3) Standard\u201d, Greenhouse Gas Protocol [7]<\/em><\/h6>\n

For Coca-Cola\u2019s complex global business systems, some of the value chain entities cross over into multiple categories and Coca-Cola details what emissions type each item in the value chain is classified as [5, Table 1].\u00a0 Coca-Cola uses licensed bottlers and independent bottlers to reach the consumer, which adds a layer of complexity for the enterprise when trying to categorize and control those downstream activities within their value chain. Therefore, Coca-Cola must account for direct fossil fuel consumption for the company owned-fleet as well as for the bottler-owned fleet that account for Coca-Cola\u2019s indirect emissions from fossil fuel consumption.<\/p>\n

Although the lines of direct corporate accountability on GHG emissions for Coca-Cola are a little blurred, Coca-Cola has reigned in on three critical elements within their value chain that would have the greatest impact in reducing their carbon footprint\u2014manufacturing plants, the distribution fleet and cold drink equipment [9]. In the company\u2019s 2016 Annual Sustainability Report4<\/sup>, Coca-Cola estimates what percentage of their overall GHG emissions are attributed to the various elements of the value chain.<\/p>\n

\"\"<\/a><\/h6>\n
Resource: 2016 Sustainability Report: Climate Protection, The Coca-Cola Company<\/em> [4]<\/h6>\n

Refrigeration contributes the largest amount of GHG emissions for Coca-Cola through hydrofluorocarbon (HFCs) refrigerants. Over the past decade, Coca-Cola has developed cooling equipment that is 40% more efficient and has \u201celiminated 75% of direct GHG emissions by transitioning to HFC-free insulation foam for new equipment\u201d [10]. Coca-Cola has also made strides towards fleet enhancements through the use of alternative fuels, electric vehicles, and industry and government partnerships to support other socially responsible businesses while also minimizing the carbon emissions of their fleet [11][12]. Over the years, Coca-Cola has also been upgrading their manufacturing facilities in over 25 countries to source power from renewable energy sources.\u00a0 At end of 2016, Coca-Cola had 81 operational renewable energy projects and are actively pursuing 50 additional projects [13].<\/p>\n

Growth through acquisition, entrance into emerging markets, and product evolutions to appeal to a broader range of consumers may appear to have a negative effect on Coca-Cola\u2019s carbon footprint as their manufacturing GHG emissions saw an increase in 2010-2015 due to increase in sales.\u00a0 However, they\u2019ve remained focused on \u201cgrowing the business, and not the carbon,\u201d which is evidenced by the decline in the emissions ratio to liter of product produced shown the graphic below[13].<\/p>\n

\"\"<\/a><\/p>\n

Resource: Manufacturing Emissions, The Coca-Cola Company<\/em> [13]<\/h6>\n

There is potential for governments and regulatory entities do begin to hold big business accountable for their environmental impact on climate change either through an economic penalty for non-compliance or tax benefit. If that thought materializes, then Coca-Cola will need to make sure their value chain is fully bought into to the idea of The Coca-Cola Company owning both the negative and positive implications of the regulations or risk potential legal ramifications with their bottling partners.<\/p>\n

As Coca-Cola continues to be analytical and innovative in their carbon reduction strategy, how confident are you about big business\u2019 ability to influence and impact global climate change solutions and regulations?<\/p>\n

(word count: 769)<\/p>\n

Resources<\/p>\n

[1] \u201cTracking Industrial Energy Efficiency and CO2 Emissions\u201d, <\/em>International Energy Agency<\/em>, Sep 18, 2005. [<\/em>https:\/\/www.iea.org\/publications\/freepublications\/publication\/tracking_emissions.pdf]. Accessed November 2017<\/em>\u00a0<\/em><\/p>\n

[2] \u201cSources of Greenhouse Gas Emissions\u201d, <\/em>United States Environmental Protection Agency<\/em>,\u00a0<\/em>Apr 14, 2017. [https:\/\/www.epa.gov\/ghgemissions\/sources-greenhouse-gas-emissions]<\/em>. Accessed November 2017<\/em>\u00a0<\/em><\/p>\n

[3] Rosen, Julia, \u201cHere\u2019s What Happens When Companies Track Emissions,\u201d <\/em>Climate Central<\/em>, April 16, 2016. [http:\/\/www.climatecentral.org\/news\/corporations-track-climate-emissions-20249]. Accessed November 2017<\/em><\/p>\n

[4] \u201c2016 Sustainability Report: Climate Protection\u201d, The Coca-Cola Company, Aug 17, 2017. [http:\/\/www.coca-colacompany.com\/stories\/2016-climate-protection]. Accessed November 2017<\/em><\/p>\n

[5] \u201cCarbon Accounting Protocol\u201d, <\/em>The Coca-Cola Company, [assets.coca-colacompany.com\/d6\/70\/…\/tccc-carbon-accounting-protocol.pdf]. Accessed November 2017<\/em><\/p>\n

[6] \u201cCalculation Tools\u201d, Greenhouse Gas Protocol. [http:\/\/www.ghgprotocol.org\/calculationg-tools-faq]. Accessed November 2017<\/em><\/p>\n

[7] \u201cCorporate Value Chain (Scope 3) Standard\u201d, Greenhouse Gas Protocol. [http:\/\/www.ghgprotocol.org\/sites\/default\/files\/ghgp\/standards\/Corporate-Value-Chain-Accounting-Reporing-Standard_041613_2.pdf]. Accessed November 2017<\/em><\/p>\n

[8] \u201cThe Coca-Cola System\u201d, The Coca-Cola Company. [http:\/\/www.coca-colacompany.com\/our-company\/the-coca-cola-system]. Accessed November 2017<\/em><\/p>\n

[9] \u201cPosition Statement on Climate Protection\u201d, The Coca-Cola Company. [http:\/\/www.coca-colacompany.com\/stories]. Accessed November 2017<\/em><\/p>\n

[10] \u201cCooling Equipment: Pushing Forward with HFC-Free\u201d, The Coca-Cola Company, Sep 20, 2016. [http:\/\/www.coca-colacompany.com\/stories\/cooling-equipment-pushing-forward-with-hfc-free]. Accessed November 2017<\/em><\/p>\n

[11] \u201cCoca-Cola Electrifies the Road With Hybrid Electric Fleet\u201d, The Coca-Cola Company, Sep 8, 2011. [http:\/\/www.coca-colacompany.com\/press-center\/press-releases\/coca-cola-electrifies-the-road-with-hybrid-electric-fleet]. Accessed November 2017<\/em><\/p>\n

\u00a0<\/em>[12] Piellisch, Rich \u201cXL and Coke for Retrofit Precedent\u201d, Fleet & Fuels, <\/em>March 2, 2015. [http:\/\/www.fleetsandfuels.com\/fuels\/hybrids\/2015\/03\/xl-and-coke-for-retrofit-precedent\/]. Accessed November 2017<\/em><\/p>\n

[13] \u201cManufacturing Emissions\u201d, The Coca-Cola Company. Aug 16, 2017. [http:\/\/www.coca-colacompany.com\/stories\/manufacturing-emissions]. Accessed November 2017<\/em><\/p>\n

<\/end><\/p>\n","protected":false},"excerpt":{"rendered":"

Could The Coca-Cola Company have a first mover advantage on hedging climate change regulation in its strategic approaches to analyze, measure, and reduce its carbon footprint throughout their value chain?<\/p>\n","protected":false},"author":9977,"featured_media":24845,"comment_status":"open","ping_status":"closed","template":"","categories":[1778,1218,1593,838,161],"class_list":["post-23318","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-carbon-footprint","category-climate-change","category-emissions","category-industry","category-manufacturing","hck-taxonomy-organization-the-coca-cola-company","hck-taxonomy-industry-food-and-beverage"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"\nCoca-Cola Using Carbonation to Drive a Nation towards Climate Change - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/coca-cola-using-carbonation-to-drive-a-nation-towards-climate-change\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Coca-Cola Using Carbonation to Drive a Nation towards Climate Change - 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