A company’s value chain sustainability analysis accommodates the supply chain structure and third-party systems that move the organization’s products into the market. There are various strategic approaches for ensuring a company’s supply chain is sustainable, most of which must cover the social, environmental, and financial goals with long-term plans for beating industry competitors. Coca-Cola runs an ESG framework for its value chain system, ensuring that the environmental, social, and governance strategies align with the company’s goals to ensure supply chain sustainability. This analysis explains Coca-Cola’s practices on E for carbon emission reduction and water consumption reduction, S for reduced workforce accidents and child labor eliminations, and G for partnerships with third parties.
Coca-Cola’s carbon emission reduction framework aligns with the global strategies for combating the climate crisis. The company’s environmental goals are to reduce carbon emissions by 25% in 2030 and achieve net-zero carbon emissions by 2050 (The Coca-Cola Company, 2021). The strategy aligns with Coca-Cola’s value chain sustainability techniques, where the company partners with its multi-tier systems to support a healthy and emission-free environment (Van-Ristell, 2020). The company is committed to global water leadership, having reduced consumption by 19% between 2010 and 2020 (The Coca-Cola Company, 2021). Coca-Cola’s key operations on responsible water consumption are reducing water allocation, ensuring efficiency, treatment, replenishment, and providing water to immediate communities (The Coca-Cola Company, 2022). The most admirable aspect of the company’s value chain approach is that it combines environmental goals with social approaches, especially by reducing water consumption while providing local communities with the precious resource.
Coca-Cola’s recycling and waste reduction goals strategize the economical use of plastic bottles to ensure a healthy, debris-free environment. The company’s vision is to reduce virgin plastic production by 20% in 2025, ensuring a gradual increase in recycled plastic bottle use (The Coca-Cola Company, 2021). Waste reduction goals target the company’s plastic and metal cans, where the total recycling index rose to 60% of the total packaging materials filled with drinks (The Coca-Cola Company, 2021). Yang et al. (2022) observed that companies with waste elimination or reduction frameworks achieve cost-effective production cycles which align with their circular economy strategies. The implications of Coca-Cola’s solid waste reduction through recycling are global reduction of climate crisis impacts and cost-efficiency on the company’s part.
Worker safety and general well-being are top priorities in Coca-Cola’s social responsibility approach to value chain sustainability. The company ensures worker safety in North America by installing proactive plastic shields at the workplace (The Coca-Cola Company, 2021). Coca-Cola ensures workers in its supply chain are under safe working conditions, an example being the rollout of responsible recruitment practices in Mexico in 2017 (The Coca-Cola Company, 2021). The company’s workforce safety strategies align with sustainable practices for optimized value chains, ensuring integrated approaches with multi-tier partnerships to extend social responsibility values across a company’s global markets (Na et al., 2022; Sgroi et al., 2020). Coca-Cola has achieved 95% partner compliance with human rights protection, including eliminating forced child labor and handling over 2 279 audits in 2020 alone (The Coca-Cola Company, 2021). Therefore, not only is Coca-Cola reducing workforce accidents by installing protective devices, the company strongly opposes forced labor on children and unsafe working conditions in its global value chain system.
A remarkable aspect of the Coca-Cola ESG strategies is that the company achieves incremental results every year. The company statistics show that it is concerned with the practical aspects of managing its environmental, social, and financial strategies for supply chain sustainability. Transformative strategies by Coca-Cola benefit the company’s communities and workforce in equal measures as they promote overall value chain strength. That implies social responsibility by Coca-Cola is more of a business risk management than altruistic, ensuring total safeguard to any internal and external environmental uncertainties that could disrupt the company’s value system.
References
Na, C., Chen, X., Li, X., Li, Y., & Wang, X. (2022). Digital Transformation of Value Chains and CSR Performance. Sustainability, 14(16), 1-24.
Sgroi, F., Donia, E., Franco, M., & Mineo, A. M. (2020). Marketing strategy, social responsibility, and value chain in the agri-food system. HortScience, 55(2), 208-215.
The Coca-Cola Company. (2021). 2020 business report. Web.
The Coca-Cola Company. (2022). Water stewardship. Web.
Van-Ristell, C. (2020). Coca-Cola European partners sets ambition to reach net zero emissions by 2040.Climate Action. Web.
Yang, M., Chen, L., Wang, J., Msigwa, G., Osman, A. I., Fawzy, S., Rooney, D., & Yap, P. S. (2022). Circular economy strategies for combating climate change and other environmental issues. Environmental Chemistry Letters, 1-26.