Water is the primary ingredient in Coca-Cola’s and PepsiCo’s beverages, and both companies recognize that increasing stress on supply is a risk to their businesses. This week, both beverage giants announced progress updates for their global stewardship efforts.
This week, The Coca-Cola Company announced that it exceeded its replenishment goal five years early. The Company reports that it returned just under 200 billion liters of water to nature and communities — the equivalent of 115 percent of the water used in its beverages last year — making it the first Fortune 500 company to replenish all of the water it uses globally. The company achieved this through 248 community water partnership projects in 71 countries focused on safe water access, watershed protection and water for productive use. Some replenish projects directly return water to the source, while others are outside the watershed its plants use but are important to help meet needs of local governments, communities and partners where there is a pressing need. Coca-Cola says it and its partners seek out projects that have direct benefit, can be scaled up, are easy to replicate elsewhere, and can be built to be sustained by the community to continue to replenish water over time.
“This achievement marks a moment of pride for Coca-Cola and our partners. A goal that started as aspiration in 2007 is today a reality and a global milestone we plan to maintain as our business grows,” said chairman and CEO Muhtar Kent. “Now, every time a consumer drinks a Coca-Cola product, they can have confidence that our company and bottling partners are committed to responsible water use today and tomorrow. We are keenly aware that our water stewardship work is unfinished and remain focused on exploring next steps to advance our water programs and performance.”
Coca-Cola says many of the projects also provided access to sanitation and education, improved local livelihoods, assisted communities with climate change adaptation, improved water quality, enhanced biodiversity, and engaged stakeholders on policy and water issues. The ‘replenish volume’ measure, which was assessed and validated by LimnoTech and Deloitte, and conducted in association with The Nature Conservancy (TNC), did not take these other program aspects into consideration. Their work is reflected in a 1,188 page report.
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While each Coca-Cola plant may not replenish all water to its direct source, the company’s policy requires that all plants work to ensure they do not negatively impact water sources and work with the community on longer-term solutions. By the same token, it also works towards a water efficiency goal; the company and its partners improved water use efficiency by 2.5 percent from 2014 to 2015, adding to a cumulative 27 percent improvement since 2004.
Water used in manufacturing and in finished beverages — including water from fountain sales — is included in Coca-Cola’s water use measure. The water footprint of growing agricultural ingredients is not included in the replenishment goal, although the company does require suppliers to adhere to its ‘Sustainable Agriculture Guiding Principles.’
Meanwhile, PepsiCo has reduced its operational water use per unit of production by 26 percent versus a 2006 baseline, exceeding its previously stated goal to reduce it 20 percent by the end of 2015. The company’s water conservation efforts over the past five years have saved the company $80 million.
At the same time, PepsiCo reports that PepsiCo Foundation partnerships — such as those with TNC and the Inter-American Development Bank — have helped to provide 9 million people access to safe water since 2006, far exceeding its original goal of 6 million by the end of 2015.
“Companies have an important role to play in solving global water challenges, and we must continuously seek new ways to apply our unique capabilities and expertise to conserve this most precious resource,” said Dr. Mehmood Khan, Vice Chairman and Chief Scientific Officer for Global Research and Development at PepsiCo. “All across PepsiCo, we continue to find innovative new ways to grow our business while using fewer natural resources — water among them. By driving down our operational water use and replenishing water within the local watershed, promoting innovative agricultural practices that yield more crop per drop, and enabling access to safe water and sanitation for millions of people, we have achieved important progress and are committed to doing much more in the years ahead.”
PepsiCo reduced its absolute water usage in its operations by approximately 3.2 billion liters in 2015, while increasing its manufacturing volume. It’s operational water efficiency targets are complemented by initiatives with its suppliers in agriculture, such as the Sustainable Farming Initiative that has expanded to include farmers across 15 countries, with active programs representing over 28,000 growers since the initiative’s launch in 2013. For instance, developing and deploying a direct seeding machine for rice farmers in India enabled PepsiCo’s participating growers to save more than 10 billion liters of water since 2013.
Such projects fit into PepsiCo’s broader environmental sustainability agenda, which it reports has delivered more than $600 million in cost savings between 2011 and 2015 through continued progress on its water, energy, packaging and waste-reduction initiatives.