Sustainability

Materiality Matrix

With our company’s achievement of key 2020 sustainability targets, we conducted a comprehensive materiality study to ensure that our sustainability priorities were aligned with stakeholder expectations and what our business needs to thrive over the coming years.

Through this analysis, we developed an updated set of priorities that:

  • Clarify our company’s position as part of our overall value chain
  • Position our company’s value chain within the context of society’s expectations
  • Allow us to understand the role that we and our society play with respect to environmental care and respect for planetary boundaries

As a result of this study, we identified 45 material topics and 17 priorities that will drive strategic lines of action across our value chain to ensure the sustainability of our business, our business partners, and the communities in which we operate. Using the results of our study, we generated an updated materiality matrix, mapping the 17 identified priorities across the three pilars of our sustainability strategy.

Our materiality matrix maps 17 identified priorities across the three pillars of our sustainability strategy.

Our Planet

1 Packaging Circular Economy
4 GHG Emissions Reduction
5 Sustainable Mobility
6 Climate Change Adaptation
9 Energy Management: Renewables & Efficiency
10 WASH (Water Access, Sanitation, and Hygiene)
11 Context-Based Hydrological Safety
17 Water Efficiency
26 Industrial Waste Circular Economy
43 Environmentally Responsible Dairy Farming

Our Community

13 Human and Labor Rights
15 Diversity and Inclusion
16 Safety, Health, and Wellness
20 Culture, Ethics, and Values
21 Labor Relations
23 Standards for Contractors
32 Talent Attraction
33 Compensation and Benefits
44 Training and Development

Our People

2 Nutritional Attributes of Product Portfolio
7 Product Portfolio Diversification
8 Relationship with Government
12 Consumer Engagement for Circular Economy
14 Supporting Small Businesses
18 Advertising & Commercial Practices
19 Women’s Empowerment
22 Local Community Relationships
25 Information Security & Cybersecurity
28 GMOs / Traceability of Ingredients
29 Digitalization in Customers
31 Promotion of Healthy Habits
34 Customer Engagement for Circular Economy
36 Support of Local Supply Chains
37 Road Safety
38 Information & Quality of Products
39 Customer Satisfaction Measurement
40 Quality of Service for Customers
41 Supplier Relationship T&Cs Management
42 Mechanism for Consumers to Raise Concerns
45 Opportunities for Youth

Corporate Governance

3 Global Integrity & Compliance
24 Best-in-Class Board Practices
27 Partnerships for Sustainability
30 Comprehensive Risk Management
35 Code of Conduct

Consistent with our sustainability framework, we maintained the three pillars—Our People, Our Planet, and Our Community—that have guided us since the inception of our strategy, while reinvigorating these pillars with a differentiated approach to sustainability focusing on 10 strategic priorities throughout our value chain.

Aligned with societal expectations, stakeholder engagement, and respect for environmental boundaries, our refreshed approach to sustainability aims to simultaneously create economic and social value across our value chain in collaboration with all of our stakeholders.

  Suppliers KOF Operations Customers Consumers/
Communities
Circular Economy Packaging Circular Economy
  Industrial Waste Circular Economy Customer Engagement for Circular Economy Consumer Engagement for Circular Economy
Climate Action GHG Emissions Reduction
Sustainable Mobility
Climate Change Adaptation
Energy Management: Renewables & Efficiency
Water Stewardship Context-Based Hydrological Safety Wash (Water Access, Sanitation, And Hygiene)
Water Efficiency
Product Portfolio Gmo's/ Traceability of Ingredients Nutritional Attributes of Product Portfolio Information & Quality of Products
Product Portfolio Diversification
Relationship with Government Relationship with Governments
Marketing & Advertising Advertising & Commercial Practices
Supporting Small Businesses Development of Capabilities
Fundamental Working Conditions Human & Labor Rights
Safety, Health & Wellness
Enhanced Cultural Elements Diversity & Inclusion
Corporate Governance Global Integrity & Compliance

Our Planet

Our Community

Our People

Corporate Governance

Sustainability Framework

Our sustainability framework is based on three overarching pillars: Our People, Our Community, and Our Planet. This strategic framework provides us with the direction to accomplish our mission to positively transform the communities where we operate, supported by our ethics, values, and collaboration.

Our People
Our people and the way they work together are our company’s most valuable assets. We promote their integral development and quality of life through our comprehensive wellbeing model. Through this model, we positively influence their workplace environment, enabling them to work toward shared goals, achieve our expected business results, enhance and improve our leading position, and live our core beliefs and behaviors every day.

Our Community
Our communities are key enablers of business success. We reinforce positive relationships with the communities with which we continuously interact, fostering our ability to serve the market and maintain our social license to operate. Above all, these efforts enable us to create a stronger, more flexible organization, with the agility to adapt to ever-changing environments while generating sustainable growth.

Our Planet
We ensure that we fully understand the role that we play with respect to environmental care and planetary boundaries by embedding environmental consciousness throughout our day-to-day decision-making processes and business operations. Thus, we strategically, efficiently, and responsibly address environmental challenges across our value chain—from climate action to water stewardship and a circular economy.

Our differentiated approach to sustainability focuses on 10 strategic priorities throughout our company’s value chain.

United Nations Sustainable Development Goals

We are committed to contributing to the achievement of the United Nations Sustainable Development Goals (SDGs). While many of our actions contribute to the 17 SDGs, we are convinced that we can have a larger impact on the following fourteen goals through our strategic framework and initiatives.

We are working with FEMSA Foundation on initiatives and social programs in our communities, focused on early childhood and healthy lifestyles.
Aligned with our comprehensive management framework, we continued to prioritize the safety and wellbeing of our employees, customers, consumers, and communities throughout the COVID-19 pandemic. By prioritizing their health and safety, we reinforce our company’s commitment to delivering economic value, while generating social and environmental wellbeing. In addition, we offer a total beverage portfolio, and we carry out responsible marketing strategies for our products.
Aligned with our commitment to improve gender diversity at all levels of the organization, our operations are developing and deploying initiatives to increase women’s representation within their operations, In addition, we carry out projects to foster women’s empowerment in the traditional trade.
We are committed to ensuring the efficient use of this natural resource in our bottling operations and returning to the environment more water than we take to produce our beverages, while safeguarding this resource not only for the benefit of our company, but also for the enjoyment of our communities and planet now and into the future.
In alliance with FEMSA Foundation, we also develop water access, sanitation, and hygience (WASH) programs.
We strive for energy efficiency across our value chain. We further integrate clean and renewable sources of energy and technologies to reduce our GHG emissions—thus contributing to climate change mitigation. Our operations’ energy consumption focuses on a comprehensive strategy that encompasses our value chain.
We aim to achieve sustainable economic growth through efficient resource utilization, promote a work environment that offers comprehensive professional development, create jobs in emerging markets, and apply sustainable sourcing principles. In addition, we developed initiatives in our communities focused on empowerment training to generate resilience and reactivation of local economies.
We continually work to improve our environmental performance and foster industry innovation, mainly in water stewardship, circular economy and energy efficiency, while reducing our carbon footprint across our value chain. We complement these programs with digital and innovation training to develop local suppliers.
We carry out projects designed to improve communities’ quality of life and wellbeing by helping them with digital training and economic empowerment, while working to provide them with safe water, improved sanitation, and hygiene education.
We look to provide tools that allow for the sustainable growth and development of the communities within our social and operational footprint. At the same time, we strive to protect and promote the prosperity of all of the people in these communities and to continue to build socially responsible environments throughout our whole value chain.
We communicate our sustainability results annually through our Integrated Report. We are confident that, with the support and co-responsibility of all of the actors across the value chain, we will fulfill our 2030 goal of collecting 100% of the PET bottles we place in the market through a concerted market-based approach to the circular economy.
We recognize that climate change is a real, imminent threat to the way that we are accustomed to live, and we are convinced that a science-based, multi-stakeholder effort is required to address this urgent matter that concerns us all. Aligned with the goal of the Paris Agreement to limit global warming to well below 2°C above pre-industrial levels, our Climate Action Strategy is designed to drive an absolute reduction of our carbon footprint throughout the entire value chain—from suppliers to our operations, customers, and consumers.
We currently replenish to the environment more than 100% of the water we use in the production of our beverages in Argentina, Brazil, Costa Rica, Guatemala, Panama Colombia, and Mexico through the conservation projects like “Agua para el Futuro” and protection of biodiversity.
Our corporate governance and the way we conduct our business is in full compliance with applicable regulations in all of our countries of operation, with our Code of Ethics as our compass. With our suppliers, we further apply guiding principles that focus on strategic input categories, including areas such as human rights, environmental protection, and labor rights.
We recognize that complex, ever-changing challenges require innovative solutions that can only be achieved and put into action together. We embrace this reality, and we partner with other companies, governments, NGOs, and institutions to maximize our impact.

Sustainable Financing

Our approach to sustainable financing enables us to maximize our positive impact by publicly aligning our finance strategy with the achievement of our environmental targets, while contributing to the United Nations Sustainable Development Goals.

Green Bond Progress Report

Aligned with this approach and our sustainability strategy, we issued our first-ever green bond in September 2020, valued at US$705 million, at the time the largest for a Latin American corporation and a first for the Coca-Cola System. Subsequently, in June 2021, we released our first Green Bond Report, providing an update on the allocation of the net proceeds from this bond to finance or refinance eligible green projects in three main categories—climate action, water stewardship, and circular economy—according to our Green Bond Framework. As published in that report, we allocated US$235.48 million in net proceeds from the issuance of our first green bond to eligible green projects from 2018 through 2020, representing 33.4% of the net proceeds.

As of December 31, 2021, we had allocated US$350.12 million of green bond net proceeds to eligible green projects—including a further US$114.64 million during 2021—leaving US$354.88 million of net proceeds unallocated at the end of 2021. The total investment so far represents 49.7% of the net proceeds and includes investments in all of the three main categories of climate action, water stewardship, and circular economy.

Green Bond Allocation

As of December 31, 2021, Coca-Cola FEMSA had allocated US$350.12 million of green bond net proceeds to projects supporting climate action, water stewardship, and a circular economy.

US$705 Million

Green Bond Issued September 2020 US$350.12 million allocated Between 2018-2021

Spend by Year
US$ million

78.27
2018
83.27
2019
73.95
2020
114.64
2021

Spend by Category

Circular
Economy
90.9%
US$318.29
million
Water
Stewardship
3.9%
US$13.6
million
Climate
Action
5.2%
US$18.23
million

Goal Performance

The net proceeds of our green bond help to deliver on our company’s sustainability goals, including our commitments to increase recycled content in our PET packaging, improve water efficiency, and reduce CO2 emissions. From 2018 through 2021, we made progress against these goals, as illustrated in these charts.

Sustainability-Linked Bonds

Building on our sustainability strategy, in September 2021, we issued the first-ever sustainability-linked bonds (SLB) in the Mexican market for a total of Ps. 9,400 million in accordance with our Sustainability-Linked Bonds Framework. Recognizing that water is not only an invaluable resource for our company and industry, but also an indispensable element of climate change resilience, we are focusing this first issuance on the sustainable and efficient use of water, aligned with our commitment to water stewardship. Unlike the use of green bond proceeds, our sustainability-linked bonds are committed to the achievement of a water use ratio of 1.36 by 2024 and 1.26 by 2026. Today, our water use ratio is 1.47 liters, a benchmark of water efficiency for the Coca-Cola System.

Data Reported and Forecast
KPI water use ratio (lt)

1.58
2018
 
 
1.52
2019
 
 
1.49
2020
 
 
1.47
2021
 
 
1.36
2024
SPT
2024
1.26
2026
SPT
2026

Sustainability-Linked Bonds Features
On September 21, 2021, Coca-Cola FEMSA issued the first sustainability-linked bonds in the Mexican market.

Issuer
  • Coca-Cola FEMSA SAB de CV
Format
  • Senior Fixed & Variable Rate Sustainability-Linked Bonds
Issue Date
  • September 21, 2021
Currency
  • Mexican Pesos
Total Issued Amount
  • Ps. 9,400 million
Ratings
  • HR AAA (HR Ratings de México) / Aaa.mx (Moody’s de México)
Sustainability Performance Targets
  • As part of these bonds, we commit to achieve a water use ratio of 1.36 by 2024 and 1.26 by 2026, which will be verified by an independent third party, and in the event these targets are not met, the interest rate will increase by 25 bps to remain at 7.61% and TIIE + 0.30%, respectively.
Bonds/Yields/Maturities
  • Ps. 6,965 million at fixed rate of 7.36% (MBONO + 34 bps) due in 7 years
  • Ps. 2,435 million at variable rate of TIIE + 5 bps due in 5 years

Subject to the issuance of applicable funding instruments, we will continue to annually report on the allocation of proceeds and the associated impact in the year(s) following issuance of any future funding instruments under our current Green Bond and Sustainability-Linked Bonds Frameworks.