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Coca-Cola Advances on Water Use Sustainability Goals, While Other Food Manufacturers Lag

Posted By Jeff Moad, August 27, 2015 at 10:52 AM, in Category: Sustainability

The Coca-Cola Company this week said it is on track to achieve its goal of replenishing all the water used to make its products by the end of 2015, five years ahead of its previously-announced schedule.

The company said that, as part of its program to replenish water used in its beverage and in manufacturing and cleaning operations, it has spent about $1 billion dollars to develop wastewater treatment plants around the world.

The company said that last year it used about 305 billion liters of water to produce about 16 billion liters of beverages. The company said it had replenished 94% of the water used in its products last year.

While Coca-Cola appears to be making significant strides in at least one aspect of water sustainability, many food manufacturers have yet to recognize water sustainability as an important obligation, according to a recently-released report. This could be putting manufacturers and their investors at significant risk as the availability of clean, inexpensive water becomes increasingly compromised in many parts of the world, including the U.S.

The report, by non-profit climate-change advocacy group Ceres, examined the water sustainability policies and practices of 37 major food and beverage manufacturers—most publicly-traded, and most domiciled in the U.S. The report found that, while some F&B manufacturers such as Coca-Cola have emerged as leaders in reporting and meeting goals around water discharge practices, few of the companies studied—just 30%--factor water-related risk into their business planning and investment decision-making practices.

The report also found that, at nearly half of the food and beverage manufacturing companies studied, oversight responsibility for water-related risk was relegated to executives two levels or more below the CEO. And, at most manufacturers studied, CEOs were not directly incentivized to address water risk. Campbell Soup, Dean Foods, Molson Coors, and Unilever were the exceptions.

While 70% of food and beverage manufacturers studied do account for their water usage in direct operations and have plans to reduce direct water consumption, far fewer attempt to monitor water policy and usage among suppliers or to work with regional agencies to protect local watersheds. Only 25% of companies studied ask suppliers to report on their water use, and fewer—16%--have sustainable policies that are applied to the use of water in agriculture, which much water consumption takes place.

Food and beverage production is heavily dependent on abundant, clean and affordable supplies of water from the agricultural fields to the production plants. But the Ceres report says, those supplies are increasingly threatened due to five factors:

  • Growing competition for water;
  • Weak regulation;
  • Aging and inadequate water infrastructure;
  • Water pollution;
  • Climate change.

 

The report recommends that food and beverage manufacturers take several steps to mitigate water risk:

  • Increase board oversight and understanding of material water risks;
  • Conduct robust water risk analysis;
  • Address watershed-level risks;
  • Tackle water risks and impacts in agricultural supply chains;
  • Improve disclosure.


Category: Sustainability
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Written by Jeff Moad

Jeff Moad is Research Director and Executive Editor with the Manufacturing Leadership Community. He also directs the Manufacturing Leadership Awards Program. Follow our LinkedIn Groups: Manufacturing Leadership Council and Manufacturing Leadership Summit



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