Posted by Tom Fitz
Tom Fitz
Tom utilizes over eighteen years of manufacturing experience to help companies c
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on Wednesday, 08 February 2012
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Water Stewardship at Coca-Cola

A Commitment to Improving Water Use Efficiency

On January 18th, I posted a blog about the importance of reporting sustainability goals from both a normalized and absolute perspective. In summary, companies can report one result instead of the other to paint a picture they are making tremendous strides to reduce their impact, when in fact, they haven’t made any progress or have even gone in the opposite direction. This leaves consumers feeling uncertain as to whether companies believe in changing their ways to preserve the environment, or they are egocentrically piggy-backing on the green movement to increase sales.

Coke’s water use metric

The Coca-Cola Company recently published its eighth system-wide sustainability report. Contained within the report was a section covering their commitment to water stewardship on a global basis. To measure progress, they’ve established a normalized metric that tracks the amount of water used to produce one liter of beverage. Since one liter is the amount of water that goes into the beverage itself, they are in essence measuring the total amount of water used to produce a sellable liter.

Water improvements year to year

In 2010, the water use efficiency ratio was 2.26. To further clarify, on average their nearly 900 bottling plants around the world used 1.26 liters of manufacturing water (i.e.- bottle rinsing, cooling, cleaning) and 1.0 liter for the beverage itself. This was a four percent reduction from 2009 levels and a 16 percent reduction since 2004, the company’s baseline year. The company’s goal for 2012 is a ration of 2.17 liters per liter, or a 20 percent improvement versus 2004 baseline figures. Obviously their Everest Goal would be to achieve a ratio of 1 meaning the only water used is that which goes into the beverage.

Why is this ratio such an effective metric? First, it is factual. There really isn’t a way to fudge the numbers for their own benefit. All of the water used to produce a sellable good is tallied and factored into the ratio.

Next, the ratio won’t be influenced by production volumes or annual sales. Too many metrics used by other companies are subjected to volatile sales. Sure, water use numbers will drop if sales are down because you won’t have to make as many finished goods.

Make an absolute metric normalized

Tip: I recommend to my clients to either break the analysis down to an “each” or sellable good level similar to what Coca-Cola is doing; or to use an absolute value versus total sales dollars to make it normalized. For instance, if I was reporting water as total water usage that would be an absolute figure and can fluctuate with sales. If we take the same value and divide it by the net sales, we would have a normalized value that factors sales volatility into the final results. Lower sales would equate to lower water usage, but the ratio would still be a solid indicator of progress- or lack of.

Coke should think bigger

I applaud the Coca-Cola Company for tracking their water usage globally via a normalized metric. What I urge them to do is begin tallying all the water used to make their products throughout rather than just that during the manufacturing process. For instance, where do they factor in the water used by their suppliers to irrigate the sugar cane that’s used to make their syrups? How about the water used to blow mold their caps and bottles? Make their labels? Water used to clean and sanitize tankers, rail cars, totes, etc.? They have indeed taken a good first step, but being a major player in the sustainability realm, I think it’s time for them to broaden their scope.