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For more information contact:
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| Conrad Mackerron |
| As You Sow Foundation |
| San Francisco, CA 94104 |
| Phone: (415) 291-9867 |
| email: |
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Ken Scott
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| Research Analyst |
| Walden Asset Management |
| 40 Court St. . |
| Boston, MA 02108 |
| Phone (617) 726-7003 |
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Coke - Fact Sheet
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The Problem:
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- About 114 billion beverage containers (all brands) are buried,
burned, or littered annually in the United States.
- Beverage container recycling rates have declined dramatically
over the last decade. Less than 41% of all such containers are
recovered for recycling in the U.S. (See Figures 1 and 2).
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Figure 1: Decrease in PET Recycling
Figure
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2: Decrease in Aluminum Can Recycling
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Source: NAPCOR Final Report 2000
Source: Container Recycling Institute |
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Recovery of PET plastic bottles, Coca-Cola’s most profitable and
fastest-growing package, has declined by half to 22.3% in the U.S.
since 1995, while national production of recycled plastic PET has
increased by 70%.
The environmental, energy and climate change impacts of this waste
of resources – including 46.3 billion aluminum cans and 34.5 billion
plastic bottles annually-- are enormous.
The overall container recovery rate is as high as it is largely because
of container deposits required in 10 states. Recovery rates are two
and a half times higher in states with a deposit system than in
states without one.
Despite investing significant financial resources in opposing bottle
bill legislation, Coca-Cola has not put forth a public alternative
plan for increasing container recovery rates in non-deposit states
to levels achieved in states with deposit laws (about 80% for containers
covered by deposits).
The high visibility of Coca-Cola’s brand on littered packaging waste
represents a brand liability.
Our Resolution asks the company
to report to shareholders on the feasibility of achieving a recovery
rate of 80% for beverage containers bottled in North America. We ask
the company to perform a cost-benefit analysis of options such as curbside
recycling, drop-off programs, container deposit systems and voluntary
company and industry programs. We do not endorse a particular method.
We leave it to the company to decide how best to achieve such a goal.
Our Resolution Seeks to Protect Brand Value
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Container recovery goals can reverse the decline
in container recycling rates and protect the Coca-Cola brand, valued
at $84 billion.
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Increasing container recovery protects sales
of the 20 oz. single-serve soft drink, the company’s most
profitable product. By further closing the loop of the product life-cycle,
Coca-Cola effectively protects itself from further consumer boycotts,
strengthening the product’s brand value.
Sound Risk Management
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Diversifying container feedstock will
protect bottlers against price increases of virgin plastic, which
have fluctuated over time (see Figure 3).
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Increasing recovery rates will secure supply
for recycled PET, which has recently reached critically
low levels, and will decrease costs of recycled PET.
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Investing in recycled PET provides price protection
and a diversification strategy to reduce risk.
PET Price Volatility
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Figure 3: Average Historical Price of Virgin PET and
Recycled PET
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Source: Plastics News Commodity Resin
Price Index
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Gaining Competitive Advantage
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Coca-Cola will benefit from "first-mover" advantage by
increasing recovery rates before PepsiCo and other competitors,
gaining access to lower priced recycled PET, and building knowledge
of recovery operations.
Cost Effective Solutions Are Currently Available
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A new study that Coca-Cola participated in and help fund showed
that significant cost savings in deposit systems are possible, for
example by using reverse vending machines or a central fund to eliminate
brand sorting.
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Coca-Cola bottlers argue that recovery costs are prohibitive. However,
Coca-Cola’s profits of 21 cents per container greatly exceed bottlers’
recovery costs of less than a penny.
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Your YES Vote on Item No. 4 will send a message to management
to resolve the critical environmental issue of beverage container
recovery.
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The Educational Foundation of America, Walden
Asset Management and other shareholders filed this resolution.
For more information, please contact: Conrad MacKerron at As You
Sow Foundation (415) 291-9867, ,
or Kenneth Scott at Walden Asset Management (617) 726-7003, .
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