COCO-COLA-SUSTAINABILITY

Sustainability Challenge: Coca-Cola’s Global Marketing Strategy

Coca-Cola faces a significant sustainability challenge due to its global marketing strategy

Coca-Cola stands as one of the most globally recognized brands. The 2020 commercial featured families drinking Coke with their meals in cities including Orlando, Florida, Shanghai, London, Mexico City, and Mumbai, India, to highlight its global reach, which spans more than 200 nations.

That kind of operation leaves a significant carbon imprint. Every day, the business distributes its goods using more than 200,000 vehicles and operates hundreds of bottling facilities and factories around the world.

But Coke’s refrigeration system is the single factor that contributes the most to global warming.

Electricity is used in large quantities to run freezers, and some of the coolants used in these systems are greenhouse gases that trap heat in the atmosphere. Electricity use accounts for around two thirds of refrigeration’s climatic impact, with refrigerants making up the remaining third. By 2020, refrigeration was responsible for over 8% of all greenhouse gas emissions.

Historical evidence indicates that questioning the necessity of running Coca-Cola’s refrigeration equipment 24/7 at convenience stores worldwide may be the most effective approach to reduce emissions. This unconventional idea challenges the company’s obsession with ensuring Coca-Cola is always readily available, as expressed by one of Coke president as being “an arm’s reach of desire.”

Desired: The ideal refrigerant that meets all criteria

Refrigerants first came under the spotlight as an environmental problem due to worries about ozone depletion, not climate change. Chlorofluorocarbons, or CFCs, were the main coolants used in refrigerators prior to the 1980s. These compounds were found in the 1920s by a chemist at General Motors, and their features of being odorless, nonflammable, and presumably harmless made them helpful to industry. Following then, CFCs took over as the main refrigerant used to maintain temperature.

A gas in the atmosphere called stratospheric ozone, which shields life on Earth from the Sun’s ultraviolet radiation, was later discovered in the 1970s by researchers at the University of California to be susceptible to destruction by CFCs. Through the 1987 Montreal Protocol, one of the most effective environmental treaties ever, nations eventually moved to outlaw the use of CFCs.

New chlorine-free refrigerants, known as hydrofluorocarbons or HFCs, that would not destroy the ozone layer were first promoted by chemical firms like DuPont. HFCs, like CFCs, were attractive to industry due to their lack of inflammability and potential risks to human health.

However, HFCs had a significant disadvantage: as potent greenhouse gases, they retained heat in the atmosphere of the Earth and warmed the surface of the globe. Compared to carbon dioxide, the most prevalent greenhouse gas, some HFCs showed warming effects that were more than 1,000 times larger.


Politics of HFCs: Navigating the Complexities

When companies like Coca-Cola started switching to this new refrigerant in the 1990s, they were aware of the effects HFCs have on the planet’s temperature.

Bryan Jacobs, a Coca-Cola engineer who worked on this transition, in an interview said that early on, refrigeration technicians in Europe recommended another promising path instead.

In Germany, Greenpeace activists and refrigeration experts collaborated closely to create what became known as Greenfreeze cooling equipment: devices that employed hydrocarbons, such as isobutane and propane, as refrigerants. These refrigerants presented the possibility of preserving the ozone layer and the planet because they had a drastically lower global warming impact than HFCs.

Jacobs further added in interview that “pretty dismissive,” largely because his team was concerned that these refrigeration units could blow up, especially in remote places without enough technical support. Coca-Cola changed to HFCs instead.

Greenpeace responded by launching a significant campaign at the 2000 Sydney Olympics to draw attention to how Coca-Cola’s HFC units were contributing to global warming. Coke’s then-CEO, an Australian named Doug Daft, pledged that the business would get rid of HFC refrigeration in the next years

Always within arm’s reach

Since 2000, Coca-Cola has established itself as a global innovator in the design of HFC-free refrigeration technology. It first made significant investments in a cutting-edge refrigerator design that utilized carbon dioxide as the primary refrigerant. However, after realizing that hydrocarbon refrigerants weren’t as dangerous as they had first thought, the company soon started using these units as well.

Coca-Cola persuaded additional businesses to stop using HFCs. The company established Refrigerants, Naturally!, an organization dedicated to moving major food and beverage industries towards HFC-free refrigeration, in collaboration with Unilever, Pepsi, Red Bull, and other large corporations. Around 400 consumer products businesses made a commitment to getting rid of HFCs from their refrigeration systems after Coke CEO Muhtar Kent encouraged them to do so in 2010.

By 2016, 61% of all new cooling equipment purchased by Coke was HFC-free, according to the company. That percentage rose to 83% four years later.

Nevertheless, as of 2022, more than 10% of Coke’s new refrigeration units still used HFCs, and this industry’s major source of greenhouse gas emissions was refrigeration. The fact that all of these appliances need power, much of which is produced by burning fossil fuels, contributes to the issue. Keeping Coca-Cola cool still leaves a significant carbon impact due to the company selling about 2.2 billion beverages daily. For Coke’s rivals, the same is true

In an interview, Coca-Cola’s former chief sustainability officer, Jeff Seabright, was asked whether the company had ever contemplated the broader implications of constantly cooling their beverages. Seabright’s response was a resounding “No,” and the corporation continued to be motivated by the maxim of having Coke readily available for consumption at the point of sale.

Despite Coca-Cola’s significant investments in transitioning to alternative refrigerants, their cooling equipment continues to contribute to global warming. It may be time for Coca-Cola to reevaluate the necessity of maintaining a large number of cooling machines, while consumers should also reflect on whether their immediate gratification expectations are worth the environmental consequences they entail.

Conclusion:

Coca-Cola’s global operations, including its extensive distribution network and refrigeration systems, contribute significantly to carbon emissions and global warming. Despite efforts to transition to alternative refrigerants, the company’s cooling equipment remains a major source of greenhouse gas emissions.

Coca-Cola must reconsider the need to maintain a big number of cooling units and look into creative ways to cut emissions in order to address this issue. Customers should take into account how their demands for rapid access to Coca-Cola goods may affect the environment.

Coca-Cola can significantly reduce its carbon footprint by putting sustainability first and investing in more environmentally friendly refrigeration techniques. This will not only be in line with its environmental objectives but also encourage improvement in the sector. In the end, a joint effort between the business and its customers is necessary for a more sustainable future while still being able to enjoy Coca-Cola’s goods.

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Costa Rica to Welcome Starbucks' Groundbreaking Sustainability Learning and Innovation Hub

Starbucks to launch Sustainability Learning and Innovation Hub

Starbucks and Arizona State University collaborate to create a Hands-On and Virtual Learning Lab in Costa Rica, Giving Partners, Students, Researchers, and Business Leaders the tools they need to drive Innovation and Address Global Social and Environmental Challenges.

It is expected to physically open the lab within the next three years.

Seattle, WA — Today, Starbucks unveiled its intentions to establish a state-of-the-art sustainability learning and innovation lab at Hacienda Alsacia. Situated in Costa Rica, Hacienda Alsacia serves as the worldwide hub for Starbucks’ agronomy operations, focusing on groundbreaking research and development in the field. The lab will act as a focal point for in-person and online learning opportunities for Starbucks partners (employees), students, researchers, and business leaders to develop and scale sustainable solutions for some of the most difficult environmental and social problems in the world, such as agricultural economics and climate adaptation.

Select Arizona State University (ASU) students and Starbucks partners will have access to the lab’s initial wave of educational programming beginning this fall. The first wave will make the most of ASU’s top-notch faculty and cutting-edge educational technology to enhance the learning experience for students, and it will also offer study abroad opportunities connected to already-offered ASU degree programmes in sustainability, sustainable food systems, global agribusiness, environmental and resource management, among other things. Within the next three years, Starbucks Lab is anticipated to become physically operational.

The company’s first and only company-owned and operated coffee plantation, Hacienda Alsacia, has concentrated on the sustainability of coffee for more than ten years.  The farm is solely used for research and development, where the Starbucks team is experimenting with disease-resistant coffee plants, breeding new varieties of coffee, and developing and disseminating agricultural techniques in order to increase productivity and safeguard the future of coffee. While the ongoing research and development efforts at Hacienda Alsacia remain uninterrupted, the forthcoming lab will amplify the capacity for collaboration and innovation, extending its focus beyond coffee to foster positive social and environmental transformations.

Laxman Narasimhan (Starbucks chief executive officer) stated: “This is an opportunity for us to advance Starbucks environmental promise to give more than we take and our farmer promise to ensure the future of coffee for all,”

In addition he said: “We know we cannot do this important work alone, and the possibilities in front of us to scale solutions, partner with thought leaders and serve as a global hub for innovation are limitless.”

The mission of Starbucks reaches far beyond its customers, partners, and coffee shops. With a commitment to purchasing 3% of the world’s finest ethically sourced arabica coffee, sourced from over 400,000 farmers in 30+ countries, Starbucks recognizes the inseparable connection between its future and the critical social and environmental issues of our time. The company has a long-standing commitment to work alongside communities to become a resource positive company, including cutting its carbon, water and waste footprints in half by 2030. With the hope of creating a great business that scales for good and has a positive impact on the future, Starbucks is dedicated to finding new methods to give more than it takes in collaboration with others.

There has been a long-standing collaboration between Starbucks and ASU to develop cutting-edge educational programming. In a significant achievement, Starbucks and ASU have successfully graduated over 10,000 partners through the Starbucks College Achievement Program, marking a significant milestone in their partnership.

Michael Crow (President Arizona State University) said: “This is an exciting new chapter in our nearly decade-long partnership with Starbucks,’’

He further added: “The new sustainability learning and innovation lab will expand on our collaboration together, working closely to tackle critical challenges with a collective commitment to seek new and sustainable approaches that impact global communities.”   

Starbucks:

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee. The firm is the largest roaster and retailer of specialty coffee in the world today with over 35,000 locations across the globe. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at stories.starbucks.com or starbucks.com.      

Arizona State University:

In order to create a university that is dedicated to accessibility, excellence, and impact, Arizona State University has designed a new model for the American Research University. ASU measures itself by those it includes, not by those it excludes. As the prototype for a New American University, ASU pursues research that contributes to the public good, and ASU assumes major responsibility for the economic, social and cultural vitality of the communities that surround it. 

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How Does Sustainability Impact Media Selection (2)

How Does Sustainability Impact Media Selection?

Exploring the Influence of Brands.

The JCDecaux UK study sparks a new discussion on how to use media choice to advance sustainable goals.

Sustainability refers to the practice of meeting our present needs without compromising the ability of future generations to meet their own needs. It includes making decisions responsibly and equitably while taking into account economic, environmental, and social factors. Sustainability seeks to establish a peaceful coexistence between people and the environment, assuring a brighter future for all. It does this through supporting resource conservation, environmental protection, and social fairness.

In a delightful evening setting, Campaign and JCDecaux UK orchestrated a gathering of esteemed senior marketers, agencies, out-of-home specialists, and media owners. The event, which was held amidst London’s picturesque Petersham Nurseries, offered the chance to learn more about the results of ground-breaking research done by JCDecaux UK. The study dives into the viewpoints of 200 marketers to illuminate their sustainability philosophies.

Exciting revelations are on the horizon as the full results of the expert report, to be published in Campaign at the end of June, are eagerly anticipated. The vibrant conversation around the table during this gathering reflects the remarkable level of engagement advertisers have when it comes to sustainability. Their thirst for knowledge and information in this ever-evolving realm is palpable.

The discussion gave an intriguing glimpse into the mindset surrounding sustainability and the sense of obligation that businesses have in this rapidly evolving field. Incorporating free Wi-Fi and air quality gauges into settings, as well as distributing 200 defibrillators across the UK, according to Chris Dooley, head of social impact at JCDecaux, the outdoor media owner’s commitment to “giving back” is ingrained in its DNA.

He also said “We give back to the community in ways that people do not realize, including 50p in every £1 that we share with our landlord partners,”

He is correct: brands at the dinner discussion were curious to learn more and had limited knowledge about this. Including agencies. Dan Plant, chief strategy officer of Starcom, said, “50p in the £1 is what’s got me the most excited today,”

The group came to the conclusion that while there has been more discussion about sustainability recently and the topic has transitioned from being a niche to a mainstream problem, not everyone is at the same stage of their journey. The lack of knowledge and measurement was perceived as a significant hurdle to driving change in sustainability practices. However, the use of calculators was viewed as a limited solution, as they aimed to condense the multifaceted aspects of ESG (environmental, social, and governance) sustainability into a single carbonization number. This approach was deemed unrealistic and oversimplified.

Without giving away too much before to the report’s release, it poses the question, “Should sustainability influence media choice?” Here is a sample of what was spoken about.

An overview of the conversation:

-For measurability

In summary, when it comes to claims about sustainability, there is both a clear passion among marketers for the environment and impressive progress made, but also a level of confusion. So, in essence, the question is: Whom or what should we trust regarding sustainability claims?

Georgina Bramall (marketing strategy director at Giff Gaf) said that “It’s hard to measure and bring tangibility back to the business. A more solid measurement framework is needed,

Dan Plant, chief strategy officer at Starcom, concurred, “The econometrics aren’t up to it.” One marketer bemoaned, “There’s too much information; we don’t know what’s true or real.”

According to EON’s Somerville, the problem transcends the moral imperative in the end. To ensure that their marketing is successful, marketers need data, so it’s critical for the sector to cooperate. “It’ll be a slow march but we’ll get there – when consumer awareness and action forces us.”

Not a Number

Some people believed that the obsession with carbon calculators missed the point because ESG cannot be reduced to a single figure, said to Sophie Pemberton, global chief strategy officer of OOH specialist Talon.

“Bringing it back to carbon calculators and one number doesn’t do it any justice, but clients do want those numbers to compare – it’s insane.”

With the current rather crude tools at hand, it can be difficult to make a judgement on matters like diversity or social inclusiveness because the discussion is growing more nuanced.

In addition – “I never knew any of this information existed,” a marketer acknowledged. “Calculators are contradictory and there’s too much information around. I would have expected our top [media] partner to have told us about it.”

-Change is needed

Despite the urgent clamour for fast change, there are doubts about how quickly the industry can undergo real, significant change. Even though it is not frequently acknowledged, media plays a crucial role in the supply chain and will eventually be required by law to fulfil net zero goals. It is critical to recognize this. Therefore, it is not a choice to become complacent.

But according to Ollie Joyce, the global chief transformation officer at Mindshare, it will take two to three years before budgets start to change noticeably. To give the shift enough time, brands could proactively enquire about sustainability issues in the interim. Somerville insisted that the moment to start making changes is right now.

-Cultural Evolution

Sustainability must be thoroughly ingrained inside an organization, just like any big transition, with active participation from all parties. “Sustainability doesn’t sit within marketing, it’s normally someone reporting to the CEO,” Acknowledged Jawad Safdar, growth marketing director, international at Wex Inc. “Most marketers aren’t educated in any of this.”

Bramall added- “It’s not a department but part of the business culture,” The B Corp designation has made sustainability everyone’s responsibility at Giffgaff.

There are still concerns about who is accountable for ESG, but a broader acceptance of the topic and its integration into corporate culture as opposed to silos can only be beneficial.

Key Takeaways:


“The key messages have landed but we need to think what else we need to do to ensure that we share knowledge with each other in a clear and easy way” – Nicole Lonsdale, chief client officer, Kinetic.
 

“It’s always going to come down to effectiveness so if there’s a way of feeding the importance of sustainability and ESG into the econometrics then it can start to affect high level decision making”
– Pia Kingan, media strategy director, Sky.  

“Until ESG matters to the majority of our audience or is regulated, brands won’t really make decisions based on it” – Jawad Safdar, growth marketing director, international, WEX Inc.  

“Carbon and environmental impact are really tough to figure out. Think about media and its impact on the world around more broadly and how OOH contributes to the ecosystem. There are media that do and media that don’t and as an industry we should be focusing on the media that puts value back in rather than extracts it” – Dan Plant, chief strategy officer, Starcom.  

“People would not have had these conversations a few years ago, but we need to do more to make brands informed about what we do around sustainability. I hope we reach a tipping point where calculators do what we need them to do” – Chris Dooley, head of social impact, JCDecaux.  
 
“There is a clear passion about this space which inspires you to be louder and push the key decision makers more and be more vocal to get action off the ground” – James Thompson, executive director, Manning Gottlieb OMD.  

“There’s a lot of comfort that this is becoming a common conversation now and not a couple of us in a cupboard. But we need to watch that it doesn’t just become a conversation among ourselves and that it includes the customers” – Scott Somerville, chief marketing officer, EON.  

“It will take transparency and standardization of information to allow us to justify change”
– Ollie Joyce, global chief transformation officer, Mindshare.  

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