Coca-Cola pledges US$4m to cut impact on world's water supply
Coca-Cola wants to have 'nil impact' on the world's water supply by 2020 and yesterday pledged US$4 million for two projects in China to meet this goal.
But the figure is just a drop in the ocean for the beverage giant, which posted a 16 per cent increase on cash earnings to US$9.5 billion last year.
China, which is Coca-Cola's third-largest market, is home to 42 bottling plants which produce millions of drinks every year, but it also uses a significant amount of local water resources which can cause environmental havoc in rural parts of the country.
Geoff Walsh, director of public affairs for Coca-Cola in Asia, says this trend was set to reverse, with the company focused on 'reaching water balance so we are not net takers of water'. Walsh was in Shanghai yesterday when he announced a second round of funding for two projects which started in 2007.
'We want to have a nil impact in terms of that water that doesn't actually go into our product,' he said.
Half of the US$4 million will go to the United Nations Development Programme's (UNDP) water stewardship programme which started in 2007 with US$1.5 million. The other half will fund the WWF's Yangtze partnership, which also started in 2007, with US$2.5 million.
The projects fall into Coca-Cola's three-pronged approach to water sustainability across Asia-Pacific which is to reduce, recycle and replenish.
By 2020, the company expects to 'safely return to nature and communities an amount of water equivalent to what is used in all of its beverages and their production', Coca-Cola said in a statement yesterday.
A key component of this goal is improving the efficient use of water by 20 per cent by next year and expanding its efforts in the region.
The UN programme focuses on water resource efficiency and drinking water safety in rural areas of the mainland.
It is a public-private partnership which has support from the Ministry of Water Resources and the China International Centre for Economic and Technical Exchanges, a department within the Ministry of Commerce.
Silvia Morimoto, deputy country director for UNDP China, said the continued support from Coca-Cola will bring to fruition the Guangxi sustainable sugarcane initiative that will help locals deal with water shortages. Sugarcane is one of the thirstiest crops in the world and a key ingredient in Coca-Cola's products.
The WWF programme focuses on the Yangtze river which is home to a third of the mainland's population and is a crucial element in the country's gross domestic product as well as its biodiversity.
Called 'Returning water to people and nature', the programme focuses on 25 wetland nature reserves in the Jialingjiang watershed. Its aims are to protect rivers, educate the public and policy advocacy.
By 2013, the WWF programme hopes to return one billion litres of water per year, with 200,000 Upper Yangtze residents set to benefit.
'We know that our business will only be sustainable if the communities and societies that we live within are sustainable, so we see it as a business imperative,' Walsh said. 'It is something that we owe the communities we live in.'
Last year, Asia accounted for 18 per cent of Coca-Cola's total sales, up 6 per cent from 2009. The number of soft drinks produced in Asia increased 2 per cent while still beverages grew 13 per cent.
China made up the bulk of Coca-Cola's Asian operations (41 per cent) followed by Japan (21 per cent) and the Philippines (12 per cent).
Company wants nil impact for water that does not go into drinks
The number of bottling plants Coca-Cola has on the mainland packaging its soft drinks and other beverages: 42