ETHICS AND VALUES

Our ethics and values permeate our corporate culture—encompassing all of the activities that we carry out within and outside of our company.

Ethics

We continually look to enhance our reputation as a responsible, sustainable company to help attract and retain employees, consumers, suppliers, and investors, while fostering positive relationships with our communities.

With that in mind, we respect the human rights of every one of the stakeholders with whom we interact. We adhere to and comply with The Coca-Cola Company’s Human Rights Policy throughout all of our operations, ensuring our suppliers’ adherence as well. In 2017, we assessed 30% of our plants’ impact on human rights, as part of our continuous process to review the compliance of a certain percentage of our work centers year in and year out.¹

¹ 19 of our working centers were assessed.

Aligned with the Universal Declaration on Human Rights and the United Nations Guiding Principles on Business and Human Rights, this policy centers on 12 main components with which we aim to comply: respect for human rights; community and stakeholder engagement; diversity and inclusion; freedom of association and collective bargaining; workplace health and safety; workplace security; forced labor and human trafficking; child labor; work hours, wages, and benefits; land rights and water resources; healthy habits; and guidance and reporting for employees.

Additionally, we provide guidelines for the way in which we operate and act in our operations, which are included in the Coca-Cola FEMSA Business Code of Ethics. This Code addresses our company’s position in terms of our relationship with our clients, suppliers, competitors, authorities, and communities. It also addresses corruption, advertising and marketing, workplace health and safety, conflicts of interest, and information security. Every year, all of our employees affirm their commitment to abide by our Code of Ethics.

To promote a culture of legality among our employees—while striving to ensure our company plays an exemplary role in creating a better society—we developed and deployed a sensitivity campaign on integrity and legality to which we are encouraged to adhere as Coca-Cola FEMSA employees and citizens.

In the case of non-compliance with our policies and to avoid practices that go against our respect for human rights, including child labor, forced labor or free association, our employees and suppliers can make confidential and anonymous reports through our DILO System by telephone, email or instant messaging. Our Human Resources division handles, follows up, and resolves all of these reports. Managed by our Global Compliance division, we also offer The Coca-Cola Company’s EthicsLine, a global online and telephone information reporting service that is available throughout the Coca-Cola System.

Our DILO System classifies reports into three areas:

• Human Resources: Abuse of authority, sexual harassment, discrimination, work environment, health and safety, and environmental stewardship, among others.
• Operations: Non-compliance with policies, contracts, laws, and regulations, fraud, complaints from clients or suppliers, and conflicts of interest, among other issues affecting our operations’ efficiency.
• Financial Information: Fictitious operations, distortion of accounting books, unfulfilled revelations, and use of confidential information, among others.

In 2017, we received a total of 1,106 reports of which 82% were closed within the year. Of these reports, none were related to child labor, forced labor or freedom of association. Additionally, we reduced our average attention days for addressing reports from 190 to 50 days—within the international benchmark.

Reports

ORGANIZATIONAL HEALTH

As a growing multicultural corporation with 101,682 employees across 10 countries, it is critical for us to understand what matters most to them.

Aligned with our three main aspirations, in 2017, we launched our fourth annual Organizational Health (OHI) survey to measure our progress across nine strategic dimensions and 37 key practices. Based on feedback from over 21,000 employees, representing 87% of participation rate, we registered a five-point increase in our overall organizational health from our baseline survey in 2014, coupled with a one-point gain year over year.

To further ensure our employees’ growth in a positive, respectful, and equal workplace environment, we also conducted a “Organizational Climate Survey” every two years at our work centers. In 2017, we assessed all of our company; with a 90.4% employee participation rate, we maintained our employee satisfaction score compared to the prior survey.

INSPIRATIONAL LEADERSHIP

We encourage inspiring leaders—who reward and recognize our people while fostering collaboration across all levels of our company.

To foster our vision of inspirational leadership, while addressing the challenges we face every day, we aim to develop 10 key attitudes or attributes among our organization’s current and future leaders:

In 2017, we designed and built “KOF Accelerated Leaders Program (ALP)”; an integral leadership development model intended to accelerate our leadership pipeline in light of our organization’s global and local needs. At this point, the School will comprise two accelerated 10-month leadership programs for our managers and directors:

• KOF ALP for managers enables our managers to develop and practice core leadership competencies that focus on effectively leading and managing people in their daily operations; fully understand our business strategy and translate it into tangible results; and drive innovation, diversity, and inclusion, while empowering themselves and others to act like an owner.
• KOF ALP for directors program enables our directors to develop high-performance teams; drive innovation, diversity, and inclusion; operate as adaptive leaders within our organization, equipped to lead and manage positive, impactful change; and fully understand our business strategy and translate it into tangible results.

Furthermore, we promote an open and innovative mindset throughout our organization by deploying current and future leaders into stretch roles to accelerate their and our company’s growth. To date, we have approximately 45 executives employed in countries other than their country of birth, allowing them to assume new roles, responsibilities, and capabilities as part of our effort to drive innovation across our corporation.

18,649
New hires

TALENT MANAGEMENT AND DEVELOPMENT

We continue to strengthen our talent management culture—rooted in transparent performance evaluation and reinforced growth paths.

With this in mind, all of our employees enjoy individual Development Plans that strengthen their leadership, functional, and technical capabilities. To identify what training is best suited for our employees, we analyze their needs through regular performance and career development reviews. Afterwards, we design a personalized learning approach that includes critical work experiences, collaborative feedback, mentoring, and coaching, as well as synchronous and asynchronous training. In 2017, 20,466 of our employees received a regular Performance Evaluation and personal feedback, 88% of this process is managed with our official Critical Factors Methodology process done through online platform as well as manually.

We are further developing future leaders by designing and communicating clear career paths, providing our executives with the tools, guidelines, and information to discuss them in their two-way Vertical Reviews, along with new self-development tools to enable them to work on their priorities. Among our integrated initiatives, we are opening up the results of our 9-Box Performance-Potential Matrix for directors and managers and strategic and tactical leaders to promote transparency and to enable our people to manage their own career development through a career map and plan designed for each and every one of them.

Additionally, FEMSA University offers an array of online courses and functional materials that focus on strengthening our people’s key business capabilities. With an investment of approximately US$476 thousand in FEMSA University, where we have more than 5,000 different resources such as: events, courses, videos and diverse online materials.

Training hours

In 2017, we invested US$12.7 million in employee training initiatives, accounting for 3.4 million of total training hours or 44 average hours per person

ORGANIZATIONAL EFFECTIVENESS, COMPENSATION AND BENEFITS

To create a positive workplace environment, we recognize the direct relationship between our organizational effectiveness and our employees’ access to the necessary resources to live healthy, fulfilling lives.

Compensation & Benefits

Our people have a compensation and benefits scheme that recognizes their effort commitment to their jobs and their contribution to creating value for our company—resulting from their effort and commitment to their jobs.

At all levels of our organization, we ensure that our employees’ remuneration is competitive and that their conditions are equal for both men and women. To this end, we make sure that the salaries of direct employees in entry-level positions are on average 5.9 times higher than the corresponding minimum wage in each country. Additionally, based on studies performed by international consulting firms that enable us to make comparisons between countries, we can determine that 17.5% of our employees are receiving an integrated salary that is greater than or equal to the market median.

We also carry out performance evaluations through our Goal Management program, which helps us to monitor employees’ contribution to the goals and objectives of our business. At the same time, it allows us to identify candidates for certain types of compensation, as well as to recognize team achievement, detect areas for improvement, and boost teamwork.

At Coca-Cola FEMSA, we offer benefits that are above what is stipulated by law in the countries in which we operate. Among others, these benefits include life insurance for our administrative staff, health insurance, and short- and long-term management incentives.

We offer those employees who are about to become parents maternity or paternity leave based on local legislation. Last year, we began the first stage of a program to monitor the percentage of our employees who return to their job after having asked for a leave of absence—with positive results.

We comply with all the rights and obligations stipulated by law, exceeding the conditions and benefits required in each of the countries where we operate, which cover more than a half of our workers. These contracts are reviewed and agreed with all our union representatives, respecting the established validity times, as well as complying with all the notice periods and established notifications. As of December 31, 2017, approximately 63.9% of our employees, most of whom were employed in Mexico, were members of labor unions. We had 298 separate collective bargaining agreements with 164 labor unions. In general, we have a good relationship with the labor unions throughout our operations; nonetheless we operate in complex environments, such as Venezuela, Argentina and Philippines.

Personnel per gender

Personnel per age range

Inclusion & Diversity

At Coca-Cola FEMSA, we are committed to fostering a culture of inclusion and diversity—promoting respect and equal opportunities across our organization. By recognizing that our differences make us stronger, we positively impact our business, our community, and our overall work environment.

Our overall strategy is founded on the conviction that we can leverage our diversity to drive innovation and business success. To this end, we defined a three-year strategic plan to become a more inclusive and diverse organization, beginning with building and developing inclusive behavior among our leaders; focusing on gender diversity to enable us to drive different perspectives in our processes and capabilities; and a multi-generation strategy that will prepare our organization for the next generation of employees. Through inclusion and diversity, we connect and foster our organizational growth and transformation.

From when we first develop a position through the talent attraction process, we consider the inclusion of people with different profiles, capabilities, interests, and aptitudes essential to forming whole, comprehensive teams—where our diversity offers an opportunity to stimulate innovation, enrich our work environment, and understand the needs of our consumers from different points of view.

Consistent with our Code of Ethics, we promote equal opportunities, do not tolerate discrimination, and respect the human rights of all of the people at all of our work centers and across all of our interactions inside and outside of our company.

SOCIAL DEVELOPMENT

We value our talent, and we know that our business’ sustainability begins with the comprehensive social development of our employees and their families. Accordingly, we offer them the tools and opportunities required for their personal and professional growth.

Aligned with the FEMSA Social Development System, we foster our employees’ social development, focusing on seven dimensions:

• Labor: We strive for our employees to achieve excellent performance in their work and personal environments.
• Education: We promote the continuous development of our intellectual and cultural heritage.
• Health: We value and encourage physical and emotional health, as well as preventive habits.
• Values: We understand those human values that turn individuals into better people, and we internalize them.
• Economy: We promote the protection and development of our employees and their families’ wealth based on their present and future needs.
• Family: We encourage an affectionate, formative, and strongly integrated family nucleus.
• Social and Environment: We are committed to the common good, respect the law, and care for the environment.

Promoting A Proper Work/Life Balance

In 2017, we invested US$8.5 million in programs promoting the proper balance between work and family, improving our employees’ wellbeing and quality of life.

We offer differentiated workday frameworks—from home office to flex time for our employees. This benefit is granted according to the inherent requirements of the job and the program’s global deployment.

• to generate 1 million hours of volunteer work.

Ultimately, our aim is to provide our employees and their families with the opportunity to offer their time and talent for the benefit of our society. To this end, we offer the KOF Volunteers program. In 2017, 57,000 participants, including our employees and their families, devoted 307,034 hours to approximately 1,400 volunteer initiatives, supported by an investment of more than US$187,000. By 2020, our goal is to achieve 1 million hours of volunteer work, and through 2016, we made 68.1% of accumulated progress toward our objective.

To improve our employees and their families’ quality of life, we carry out programs across seven dimensions of the FEMSA Social Development System. One of our most noteworthy activities is Family Day, in which 38,818 people participated in Brazil, Colombia, and Mexico.

Through our KOF Vacations program, more than 2,108 of our employees’ children in Argentina, Central America, Mexico, and Venezuela participated in recreational, cultural, and education activities aimed at strengthening their values, environmental stewardship, and social commitment.

Furthermore, our comprehensive Healthy Life program encourages healthy habits in our Mexico operation. Through this program, we benefit our employees and their families with doctor’s visits, healthy menus, activity pauses, and other initiatives to encourage and celebrate physical activity.

OCCUPATIONAL HEALTH

At Coca-Cola FEMSA, the health and wellbeing of our employees is a priority and an organizational policy. We know that healthy workers with a quality of work life make for productive employees, who are committed to our organization.

Through our Occupational Health Management System, we work to ensure that our employees enjoy optimal biopsychosocial health, with primary health care services in their workplace; all framed in a culture of prevention and self-care health promotion, which positively impacts their families.

In 2017, we invested a total of US$7 million in our health and hygiene programs in the workplace throughout the 10 countries where we operate. The objective of these programs is to avoid the incidence of occupational diseases or work-related injuries, foster the best conditions in our work environments, and ensure compliance with health standards in our workplace. We also guarantee alignment with the World Health Organization (WHO) and the International Labor Organization’s (ILO) guidelines and recommended international standards.

• Zero fatalities from work-related diseases.
• Reduce by 20% the general illness absentee rate vs 2010.

Moreover, we have strengthened our health structure. To this end, we have expanded our medical department—increasing the number of doctors, nurses, and other health professionals in our operations—and we have increased our investment in the construction of medical services, the purchase of equipment, and the budget for supplies and medicines. Similarly, we have carried out frequent days of health and integral welfare promotion in our offices, distribution centers, and plants, as well as days of early disease detection and care programs for diabetes, hypertension, and cardiovascular risk.

One of our fundamental objectives is the prevention of common diseases and injuries, together with a reduction in the number of employees with disabilities due to various types of pathologies and a reduction in absenteeism due to general illnesses (lost days). Compared to 2016, we managed to reduce our cases of illness by 7% across the 10 countries where we operate—thanks to our medical approach and our health personnel’s treatment of ill employees.

General illness index
per 100 associates

Lost days due to general illness index
per 100 associates