Coca-Cola close to climate progress but still missing the 1.5°C mark
Latest research finds the world’s largest non-alcoholic beverage company, Coca-Cola, is set to miss its alignment with a 1.5°C scenario by 2030 due to disclosure failures
LONDON, 15 December 2022: The Coca-Cola Company (Coca-Cola) is the world’s largest producer of non-alcoholic beverages and it is currently on track for a +2°C scenario by 2030, according to the latest report from the financial think tank, Planet Tracker.
While the company has taken positive steps to promote sustainability practices, failure to disclose quantified mitigation actions and the required investment, as well as the lack of an overall Net Zero commitment, could cause it to miss the crucial 1.5°C alignment by 2030.
In terms of its greenhouse gas emissions, Coca-Cola dropped from 56,891 KTCO2e in 2016 to 52,016 KTCO2e in 2020, an annual average decrease of 2.2%. Although this is at least in part due to the company’s revenue decreasing from 2016 to 2020 at a rate of 5.8% per year.
In 2021, Coca-Cola’s five largest independent bottling partners accounted for 41% of its total worldwide unit case volume. Reassuringly, the company included them in its Climate Transition appraisal.
However, Coca-Cola Company’s latest approved Science Based targets (SBTs) in 2019 to reduce its absolute Scope 1, 2 and 3 greenhouse gas emissions by 25% by 2030, from a 2015 base year, would align the company with a 2°C scenario by 2030.
Meanwhile, Coca-Cola’s independent bottling partners’ SBTs are more ambitious than those set by The Coca-Cola Company. Most of them aim for a 1.5°C scenario by 2030. This coupled with the fact it doesn’t currently have a Net Zero commitment, suggests that Coca-Cola is relying on its independent bottling partners for the achievement of its Paris Aligned Climate Transition. Whilst Coca-Cola’s historical GhG emissions trend might indicate a trajectory in line with a 1.5°C scenario by 2030 (mainly due to its bottling partners’ efforts), the company fails to disclose concrete mitigation actions linked to emissions reduction and the investment required for it.
Ion Visinovschi, Research Analyst at Planet Tracker comments, “Without properly quantified mitigation actions and tracking systems set in place, supported by invested capital, it cannot be determined if the company is closing the gap towards its ideal SBTs, or is slipping further away. Thus, we cannot confirm the company’s alignment with 1.5°C by 2030”.
The Climate Transition Analysis of Coca-Cola is the third in a series examining the climate transition plans of the Consumer Goods companies in the Climate Action 100+ list. It can be downloaded in full here.
ABOUT PLANET TRACKER
Planet Tracker is a non-profit financial think tank producing analytics and reports to align capital markets with planetary boundaries. Our mission is to create significant and irreversible transformation of global financial activities by 2030. By informing, enabling and mobilising the transformative power of capital markets we aim to deliver a financial system that is fully aligned with a net-zero, nature-positive economy. Planet Tracker proactively engages with financial institutions to drive change in their investment strategies. We ensure they know exactly what risk is built into their investments and identify opportunities from funding the systems transformations we advocate.
ABOUT THE CLIMATE TRANSITION ANALYSIS
As part of its Food and Land Use programme, Planet Tracker is examining the transition plans of the food system (Consumer Goods) companies covered by the Climate Action 100+ list (https://www.climateaction100.org/whos-involved/companies). The goal is to provide investors with the key information and analysis they need to be able to hold food system companies to account for the quality of their climate transition plans and their execution against those plans, and to encourage them to use this information to engage effectively with these companies with the ultimate aim of driving the sustainable transformation of the global food system.