Revised packaging and net-zero targets are ‘realistic’, brands argue, but will they result in short-term complacency? By David Burrows.
The Coca‑Cola Company has announced updated voluntary environmental goals “with the aim of delivering on the company’s purpose to Refresh the World and Make a Difference”. Who writes this stuff?
If you read the press statement, what the soft drinks giant has done is watered down its voluntary ambitions. A much-hyped shift from single-use packaging to reusable has gone, while recycling targets have been relaxed. The target for greenhouse gas emissions reduction has vanished and when it is revealed will be five years further into the future. On water, the company has stuck to its guns, at least.
Always Coca-Cola (missing targets)
Coca-Cola has form when it comes to broken ESG commitments. In fact, it’s made a habit of making plastic promises that are not worth the paper they’re written on. There was the target to include 10% recycled content in every plastic bottle sold in the US by 2005 (missed) and another to achieve 25% recycled content by 2015 (also missed).
The latter was extended to 2025 under the Ellen MacArthur Foundation (EMF) global commitment on plastic. In an update published in November, Coca-Cola had reached 17% recycled content, up from 9% in 2018. The Sprite and Costa Coffee owner also pledged to cut virgin plastic use by 20% by the end of this year, but tonnages are actually up 6% on the baseline year.
As I wrote in a piece for Just Drinks last month, Coca-Cola isn’t the only one that has struggled on plastic. PepsiCo, Nestlé, Danone and Mars have too. The EMF 2024 report admits, as other regional pacts have done of late, that the 2025 targets are unlikely to be met. However, “signatories continue to significantly outperform their peers and demonstrate the roadblocks and challenges on the path ahead”, said Aisha Stenning, lead – business action for EMF’s plastics initiative. She has to say that: if the 20% of the global plastic packaging market that have signed up to the initiative start pulling out, then hope is lost.
Indeed, in criticising the 20% it is easy to forget the 80%. The reality is that a relatively small number of brands have set meaningful, science-based targets like those aligned with SBTi (Science Based Targets initiative) or initiatives in areas such as sustainable packaging, water usage, nature conservation, and regenerative agriculture, explains Aidan Charron, associate director of Global Earth Day. “Far more companies are […] either failing to set clear targets at all or making little progress in actually implementing them, let alone investing the resources needed to meet those targets,” he adds.
AbInBev is one mega-FMCG missing from EMF’s cohort. It does have a packaging target: by 2025, 100% of its product will be in packaging that is returnable or made from majority recycled content. So far it has managed 77%, with 40.3% of packaging volume available in returnable formats. However, it is struggling in certain materials, according to its last ESG report (published in March 2023).
“Our recycled content in cans continues to exceed 50%. However, compared to our 2017 baseline, the recycled content has decreased,” the company said. “This is due to the significant growth of our volume in cans since 2020, driving increased imports of can sheet in multiple markets with lower availability of recycled content. We are working closely with our can sheet suppliers to increase recycled content.”
Environment or economics?
‘The market’ is something many brands point to when struggling to meet their sustainable packaging ambitions. There is also a fear of being undercut by those doing very little: justifying further investment and premium prices for sustainable materials following a year in which price elasticity was stretched to the max is hard, even for the most capable chief sustainability officers. As Unilever’s annual report in 2023 noted in relation to packaging: “There is a risk around finding appropriate replacement materials, but also due to high demand, the cost of recycled plastic or other alternative packaging materials could significantly increase in the foreseeable future and this could impact our business performance.”
Battles will need to be picked carefully. Some NGOs are therefore hesitant to criticise the committed. Perhaps Coca-Cola’s move is simply recognition of the reality? As Packaging Europe noted in its assessment of the company’s announcement: “While bold targets can inspire innovation and drive momentum, when they are not aligned with existing infrastructure, market conditions, and technological capabilities, they risk becoming counterproductive.” The piece continued: “Coca-Cola’s experience exemplifies a growing disconnect between policy ambitions and practical realities. Many countries and regions are enacting policies that mandate the use of recycled materials, yet these regulations often fail to account for systemic bottlenecks.”
The problems faced by companies in meeting voluntary targets, and their stated desire for more regulations to “level the playing field” cropped up during a December Innovation Forum webinar to help digest what’s going on with a Global Plastics Treaty. (There was no deal at what had been billed as the final talks in South Korea, so negotiations will continue this year.) Nestlé’s global public affairs lead for packaging and sustainability Jodie Rousell was at pains to highlight the collaborative effort needed by governments, companies and consumers.
“[…] the challenge is really not about pointing the finger and criticising but about identifying, where are the solutions and how do you bring the public sector and the private sector together to trigger the changes necessary?” she explained. Whether a global plastics treaty can do that is moot but make no mistake, corporates continue to deflect responsibility for taking action whenever and wherever they can. “The treaty is addressing a lot of really practical systems issues that need to be addressed, because the system that we face today with the level of plastic pollution that’s present in the environment,” Rousell continued. “No one wanted this, but it’s a system that’s a result of the laws that have been written and the laws that have never been written.”
Until there are robust, ambitious laws in place for single-use packaging, companies will continue to re-write their targets. Richard Wielechowski, lead analyst on petrochemicals and plastics at Planet Tracker, is hesitant to be hyper-critical given there are a “number of reasons” why corporates step back from certain targets. “I would say we should be disappointed,” he explained during IF’s webinar. “We should interrogate the reasoning: is it all just profit-driven or greenwashing? Or is it that they’re ambitious and the ambitions have just not been fulfilled?”
Planet Tracker published a comparison of Unilever’s targets old and new after the Marmite-maker shifted its ESG goals in April. The NGO was disappointed but not despondent after three targets were dropped and four were reduced, but five new ones arrived. Planet Tracker wants transparency – something Footprint has long advocated (covering the bad, the good and the ugly).
“What should not be accepted is when targets are manipulated,” reads a Planet Tracker blog on Unilever’s changes. “This is evident when companies adopt a ‘greenrinsing’ strategy, whereby targets are changed before they are achieved, often re-stated at a higher level at a more distant date in the future. [We] identified this tactic being previously used by both Coca-Cola and PepsiCo.”
Evolve, emit, extend
Whether Coca-Cola has been using targets as a marketing ploy rather than to really (in its own words) “make a difference”, we know not. ‘Evolve’ is the word Coca-Cola used to describe the changes it has made. The company now aims to use 35% to 40% recycled material in primary packaging (plastic, glass and aluminium), including increasing recycled plastic use to 30%-35% globally (the previous target was 50% by 2030), and also to “help ensure the collection of 70% to 75% of the equivalent number of bottles and cans introduced into the market annually”.
The latter target brings to mind an ill-fated one made by Costa Coffee – a promise to recycle the equivalent of all its take-away cups. The company, now owned by Coca-Cola, said that “up to 100 million cups will be recycled” in 2018, rising to 500 million in 2020. Try as it might, it got nowhere near.
On single-use paper cup collections companies have (publicly) bemoaned the lack of regulatory intervention to help them out. They have a point. Consider for example all the UK regulations on packaging, like deposit return schemes and extended producer responsibility, that were planned in 2018 but have failed to materialise (though we are getting somewhere with EPR, finally). Companies will have planned for these policies coming into play and now they are having to adapt. Leaders can be left exposed.
Susan Thomas, former sustainability director at UK supermarket chain Asda and now a sustainability consultant with Snowstorm Consulting, says there is “something really odd about how fast we all are to criticise the multinational brands (who in reality are doing some of the most progressive work); just because they make a profit they must be somehow baddies. But then, if you’re going to try to win points by shouting about your virtues you must be ready to lose them again if you fail,” she adds.
In 2023 Coca-Cola reached 27% and 17% in its two recycled content targets respectively. The company also used 137 billion plastic bottles in 2023, up from 125 billion in 2021. Use of aluminium and steel cans and bottles also jumped in the same period from 68 billion to 74 billion. The number of refillable glass and plastic bottles has remained static at 25 billion and 4 billion respectively. The shift away from reusable and refillable systems – widely seen to be the most sustainable approach with the fewest greenhouse gas emissions – is concerning. Around 14% of Coca-Cola’s packaging was reusable at the last count in 2023, but the 25% by 2030 target has now been canned.
More worrying, perhaps, is the disappearance of that emissions reduction target. Coca-Cola had previously set a science-based target to reduce absolute emissions (scopes 1, 2 and 3) by 25% by 2030 against a 2015 baseline. The company’s latest report to CDP, the sustainability disclosure platform, showed emissions needed to be cut from 69.9MtCO2e in 2015 to around 52.4MtCO2e in 2030. By 2022 its total emissions stood at 64.9MtCO2e, so just over a quarter of the reductions necessary had been achieved. Now the aim is “to reduce the company’s scope 1, 2 and 3 emissions in line with a 1.5°C trajectory by 2035, from a 2019 baseline”. So, all of a sudden, that big hairy deadline of 2030 (by which time global emissions must be cut by 43%) is not so big or hairy.
From hype to ‘hang on’
The rush to make net-zero commitments at COP26 in Glasgow and the flood of plastic promises after that Blue Planet series is giving way to a period of what corporates like Coca-Cola and Unilever have argued are more plausible, realistic plans. Realism here cultivates credibility, especially when supported by a thorough and actionable sustainability strategy, suggests a spokesperson for the $70trn-backed FAIRR investor network.
There is however a catch: less ambition might impact the public’s perception of a company and, without sufficient communication around updating targets, a draw back in ambition could signal to other companies that addressing climate risk is not as urgent. The result? Wide-spread complacency along with delays and missed opportunities for innovation.
