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Corporate Social Responsibility (CSR) is an idea that corporations have to consider the interests of customers, employees, shareholders, communities, and ecological considerations in all
Socially responsible investing (SRI) describes an investment strategy which combines the intentions to maximize both financial return and social good.

green@work : Magazine : Back Issues : July/August 2007 : CSR


Coke vs. Pepsi: A Battle to be Green
Historic rivalry encourages “greening” competition between Coca-Cola and PepsiCo.

by Lisa Laitinen

Coca-Cola and PepsiCo have recently announced achievements and initiatives toward combating climate change. Now that a large number of consumers are more likely to purchase environmentally friendly products, companies are battling for the top spots on everyone’s eco-friendly lists. Both Coca-Cola and PepsiCo are trying to one-up each other in this “Anything you can do, I can do greener” bout of environmentalism. However, the methods that these major companies have chosen to “green” themselves with are very different.

PepsiCo jumped on the “green” bandwagon earlier than Coca-Cola by purchasing its first renewable energy certificates (RECs) in April 2007. This step propelled the company to the head of the list of U.S. green power buyers. Pepsi will buy more than 1.1 billion kilowatt-hours of renewable energy over the next three years, which is enough to offset the electricity use of all of its U.S. manufacturing, distribution and administrative offices.

PepsiCo North America’s chief executive officer, John Compton, said that energy is a key focus of PepsiCo’s environmental sustainability agenda. “The purchase of these RECs is not only in line with our progress to date, but further advances our commitment to sustainability,” he said. As a result of these initiatives, PepsiCo now tops the U.S. Environmental Protection Agency’s quarterly list of America’s 25 greenest energy users, a position that grants the company marketing leverage over its competitors.

Another environmental initiative of PepsiCo is its commitment to green building. The company’s 950,000 square foot Gatorade facility in Wytheville, Va., has received a gold level Leadership in Energy and Environmental Design (LEED) certificate from the U.S. Green Building Council (USGBC). LEED promotes a whole-building approach to sustainability by recognizing performance in five key areas of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality.

“By constructing its new manufacturing facilities to LEED standards, Gatorade and its parent company PepsiCo have demonstrated a strong commitment to the green building program — and to the long-term goals of conserving energy and protecting the environment,” said Rich Fedrizzi of the USGBC. “The Gatorade and PepsiCo model is one we hope other industries will follow.”

Coca-Cola has chosen to embark on a very different path to sustainability. On June 5, 2007, the Coca-Cola Company announced a new commitment to replace the water used in its beverages and their production. The company will:

• Reduce the amount of water it uses to make its beverages.

• Recycle the water used in production processes such as rinsing, cleaning, heating and cooling.

• Replenish water by expanding support of initiatives that protect, conserve and improve access to water in communities around the world.

On its Web site, Coca-Cola explained its decision to focus on sustainable water use practices. “We want to sustain our business and therefore, we need to be careful with our resources and use them efficiently,” said Bruce Karas, the Coca-Cola North America’s director of Environmental Programs, Workplace Health and Safety. The company plans to preserve water resources by using it more efficiently and ensuring that every gallon of water used will make a gallon of product. With 1.3 billion people around the world without access to safe drinking water, and projections that by 2025, an estimated one-third of the world’s population will face severe and chronic water shortages, Coca-Cola is committed to doing its part to protect and preserve water resources.

Coca-Cola is also making the packaging of its product more sustainable. Coca-Cola beverages are consumed more than 1.3 billion times a day, and because of this demand, environmentally responsible packaging is now being used. Coca-Cola has sought to advance the development of a recycling-based society and design consumer-preferred, resource-effective packaging, to encourage recovery and reuse. Part of Coca-Cola’s packaging initiative has been to use sustainable bulk packaging systems such as refillable steel tanks or the bag-in-box (BIB). BIBs and steel tanks now make up 12 percent of Coca-Cola’s global volume distribution. The standard five-gallon BIB container consists of recyclable cardboard and a light-weight, five-gallon plastic syrup bag that produces 30 gallons of product when mixed with local water.

Coca-Cola has made other efforts toward becoming environmentally responsible and self-sustaining in the future. In 2005, Coca-Cola was one of the first companies to join the Global Greenhouse Gas Register of the World Economic Forum. The company also adopted the Greenhouse Gas (GHG) Protocol, a joint initiative of the World Business Council for Sustainable Development, and the World Resources Institute, which aims to harmonize GHG accounting and reporting standards. In 2005, Coca-Cola was acknowledged as one of the most-improved company responses by the Carbon Disclosure Project, a world registry of corporate GHG emissions made available to institutional investors concerned about corporate climate policies.

Few organizations have the global reach of PepsiCo and Coca-Cola. Hopefully, the companies’ historic rivalry will generate further tangible results in combating climate change.

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