José Ramón Martínez, our Corporate Affairs Officer, discusses our integrated sustainability strategy. Among other topics, he talks about our main sustainability achievements, sustainable procurement, environmental stewardship, promotion of healthy habits, and strengthening our local communities.
Q) What would you say were Coca-Cola FEMSA’s main sustainability achievements during 2017?
A) During the year, we invested US$82.3 million, and we achieved great progress in each of our action areas. Among our results, during 2017 we generated 307,034 volunteering hours with 57,000 participants—including our employees and their families; more than 1.6 million people participated in our healthy habits initiatives, reaching 3.1 million over the past three years; replenished 100% of the water used to produce our beverages in our Mexico, Brazil, Central America, and Colombia operations; and covered 38% of our global power needs with clean energy, reaching 57% in Mexico and 100% in Brazil.
For the fifth consecutive year, Coca-Cola FEMSA was one of eleven corporations in the beverage industry at global level selected for the Dow Jones Sustainability Emerging Markets Index. We can proudly say that we are the only beverage company in Latin America chosen for this group of regional sustainability leaders.
Q) Can you describe how Coca-Cola FEMSA promotes healthy habits across its communities?
A) As leaders in the beverage industry, we are aware of consumer trends and purchasing habits, and we are proactively building a winning product portfolio, covering 12 different categories with a diverse array of presentations to satisfy our consumers’ diverse lifestyles. Notably, 41% of our multi-category portfolio is comprised of low- to zero-calorie brands. Moreover, our product labels include easy-to-access nutritional information, so our consumers can make responsible choices regarding their nutrition and hydration needs—consistent with their lifestyles.
Additionally, we foster healthy habits in our communities through regional initiatives such as the Latin American Commitment for a Healthy Future. Through this multi-sector coalition with the Healthy Weight Commitment Foundation, we are collaborating with Discovery Education to promote nutrition and physical activity in schools across Mexico, Colombia, and Brazil.
We further promote healthy habits in our communities through a wide range of local initiatives. In alliance with FEMSA Foundation, The Coca-Cola Company, The Coca-Cola Foundation, and local partners, we conduct a number of programs and initiatives, including Ponte al 100 in Mexico, Un Plato, Una Sonrisa in Nicaragua, Praça da Cidadania in Brazil, Ludonutrición in Colombia, Sustainable Gardening in Argentina, Campaña de Colores and Hora de Moverse in Central America, and Red de Entrenadores Comunitarios in Venezuela, among others.
Q) How is Coca-Cola FEMSA integrating its sustainability strategy throughout its value chain?
A) Through our comprehensive sustainable sourcing strategy, we integrated our commitment to economic, social, and environmental value generation across our value chain. For strategic categories, we work to implement The Coca-Cola Company’s Supplier Guiding Principles. For the rest of the categories, we ensure adherence to FEMSA’s Supplier Guiding Principles, aligning our suppliers’ practices and processes with our core values—from environmental care to respect for human rights in the workplace.
We also encourage our suppliers’ sustainable development, providing them with tools to build solid relationships founded on shared value creation. Over the past 4 years, we have helped 1,281 suppliers through our Sustainable Sourcing Program in Mexico, Central America, and Brazil, achieving positive results and stories of value creation.
Q) Can you describe your strategy to promote the responsible use of water?
A) Our comprehensive sustainable water strategy is founded on efficient water management, water access and sanitation, and replenishment in our communities. We have made significant progress towards our targeted water efficiency ratio of 1.5 liters of water per liter of beverage produced by 2020, achieving 1.65 liters of water per liter of beverage produced—a 16% increase in our water use ratio from our 2010 baseline.
Consistent with our long-term water conservation strategy, through FEMSA Foundation, we are part of the Latin America Water Funds Alliance, comprised of the Inter-American Development Bank, the Nature Conservancy, and the Global Environment Facility. Thus far, we’ve made great progress. By year-end 2017, we had 21 water funds in operation in Brazil, Colombia, Costa Rica, and Guatemala, and we will soon launch a water fund in Mexico that will positively impact our operations. We are also part of The Coca-Cola Company’s commitment to return to the environment the same amount of water we use to produce our beverages. Aligned with this commitment, we replenished 100% of the water used to produce our beverages in Brazil, Central America, Colombia, and Mexico—achieving a 100% water-neutral portfolio in these operations.
Q) Can you describe Coca-Cola FEMSA´s approach to climate change adaptation and mitigation?
A) At Coca-Cola FEMSA, we are aware of the challenges that climate change presents in the communities we serve, and we want to ensure we’re part of the solution. By 2020, our goal is to reduce by 20% the carbon footprint of our value chain, focusing our efforts on three action areas: 1) Identifying and measuring our carbon footprint; 2) Efficiently using energy; and 3) Integrating our use of clean energy sources.
We proactively participate in initiatives to measure and reduce our carbon footprint. For five years, we’ve voluntarily reported our carbon emissions to CDP (formerly the Carbon Disclosure Project). We are also part of the United Nations’ Business Alliance for Water and Climate Change, a platform through which we communicate our initiatives and contribute our efforts with other stakeholders.
Energy efficiency is a top priority. In 2017, we increased our energy efficiency in our bottling facilities’ by 22% from our 2010 baseline, achieving an average of 4.49 liters of beverage produced per megajoule of energy consumed. Simultaneously, we reduce our greenhouse gas emission, reaching 13.63 grams of CO2(eq) per liter of beverage produced in 2017, achieving an improvement of 35% considering our base year of 2010.
We further integrate clean and renewable sources of energy and technology to reduce our carbon emissions—contributing to climate change mitigation. In the markets where clean energy sources are available, we are capitalizing on synergies with strategic suppliers, reducing the carbon footprint of our manufacturing operations. Globally, our bottling plants’ utilization of clean energy grew to 38% of our total electricity consumption, with clean energy covering 57% and 100% of our power needs in Mexico and Brazil.
Q) Can you let us know more about your PET recycling projects?
A) Recently, The Coca-Cola Company announced its “World without Waste” initiative, with a global goal to help collect and recycle the equivalent of 100% of its packaging by 2030. As the largest bottler within the Coca-Cola system, we fully support and embrace this program, which is aligned with our commitment to economic, social, and environmental value generation.
For more than 15 years, we have played an instrumental strategic role in collecting and recycling PET bottles, especially in Mexico—where we installed the first food grade PET recycling facility in Latin America, IMER. Since 2002, in collaboration with Mexico’s Coca-Cola bottling system, we joined the country’s plastics industry and leaders from other industries to create Ecology and Corporate Commitment (ECOCE), a nonprofit organization dedicated to encouraging a culture of recycling.
Today, these investments are paying off. In 2017, Mexico collected 57% percent of the PET plastic—making it the leading country globally.
Additionally, in collaboration with The Coca-Cola Company, we continuously design and develop innovative packaging, ensuring high quality while caring for the environment. Over the past seven years, we’ve used lighter weight components to save more than 18,000 tons of plastic, including more than 21% of the recycled PET we use globally in our packaging.
Q) Can you please offer more details about Coca-Cola FEMSA´s approach to community development?
A) In coordination with FEMSA, we are currently implementing a methodology to guide our relationships with the communities we enjoy the privilege to serve. Our MARRCO methodology was developed internally to approach our communities in an open and responsible way, listening to their needs and addressing them proactively, comprehensively, and collaboratively. Under this approach, we are developing programs and initiatives for the benefit of each community according to their needs—thereby building positive relationships to maintain our social license to operate. At the close of this report, we had implemented MARRCO in 37 of our work centers, including plants and distribution centers. This represents 45% of our manufacturing facilities throughout our operations, and we will continue until we achieve 100% completion in our relevant facilities.
Q) What can you tell us about upcoming sustainability challenges and the steps Coca-Cola FEMSA will take to meet them?
A) For our company, sustainability is a continuous process of simultaneous economic, social, and environmental value generation. Accordingly, we will continue to further integrate sustainability into our business strategy. Indeed, this year’s integrated report underscores the synergies we are creating and the progress we are achieving.
Over the short term, we will focus our efforts on reaching or exceeding our 2020 sustainability goals. We will focus our main investments and initiatives to achieving these goals—which make material contributions to our business sustainability.
Over the long term, as we announced for the first time in 2016, we will continue to align our strategy with the United Nations Sustainable Development Goals (UN SDGs). Specifically, we have identified seven out of the 17 goals, where—given the nature of our business—we can make a significant contribution. Through our integrated annual reports, we will carry on communicating our progress and contribution to these UN SDGs: zero hunger; good health and wellbeing; clean water and sanitation; affordable and clean energy; industry innovation and infrastructure; decent work and economic growth; and responsible consumption and production.
