Coca-Cola has defended itself against criticism of its COP27 sponsorship. Its spokesperson told MARKETING-INTERACTIVE that it shares the goal of eliminating waste from the ocean and appreciates efforts to raise awareness about this challenge.
"Our support for COP27 is in line with our science-based target to reduce absolute carbon emissions 25% by 2030, and our ambition for net zero carbon emissions by 2050. Packaging represents around 30% of our carbon footprint, so our World Without Waste strategy and carbon reduction efforts go hand in hand," the spokesperson explained.
As part of its World Without Waste strategy, the company has a global ambition to help collect and recycle the equivalent of every bottle and can it sells by 2030. That said, Coca-Cola acknowledge that it is not just about collecting bottles but also about using less new plastic, by increasing the recycled content in its bottles. Globally, the spokesperson said Coca-Cola supports the development of a circular economy, an economic system aimed at reducing waste through the continual use of packaging— as an impactful way to address waste and climate issues created by packaging.
"While we have made progress against our World Without Waste goals, we’re also committed to do more, faster so that we grow our business the right way," its spokesperson said. As such, it will continue to partner with other businesses, NGO and environmental organisations, and governments to support collaborative action on this issue.
The beverage manufacturer recently copped flak from environmental groups, Break Free From Plastic and Greenpeace USA calling the brand the "world's top polluter" and "the biggest plastic polluter" respectively. Greenpeace USA CEO, John Hocevar, even said that it is "baffling" that Coca-Cola will sponsor COP27. One of the COP26 delegates even launched a petition to remove Coca-Cola as the sponsor. The COP27 sponsorship is expected to cost millions of dollars, as The Guardian recently reported that sponsorship for COP26 was worth approximately US$285 million.
Conversations on social media recorded a spike in volume of negative chatter as a result of this incident, Andrew Nicholls, MD at CARMA Asia, told MARKETING-INTERACTIVE. Of the volume of conversations in the last 30 days around "Coca-Cola and sustainability", 30% was concentrated over the last three days between 4 to 6 October, of which sentiment was overwhelmingly negative (79%). Trending keywords include "pollution", "plastic" and "fuels".
Greenwashing is certainly an issue for brands these days, especially when consumers and NGOs are scrutinising every move, ready to call out any company that seems insincere in its pursuit of sustainability. In August, Mercedes-Benz, for example, got called out by Wherefrom's, a sustainability review platform, for greenwashing. This came after the Mercedes-Benz associated its brand with the beauty of nature in a slew of its ads. The automotive maker later distanced itself from the ads, explaining that they weren't part of a global brand campaign but rather were localised social media content by Mercedes-Benz Mexico for Earth Day in April this year.
While Coca-Cola may have taken a calculated risk with this sponsorship, Marta Sousa Bigio, senior director, sustainability at Redhill, said it may have underestimated the level of negative backlash that it would receive and that the world is currently witnessing. Importantly, and arguably more relevant, is the reputational impact on COP and its mission to drive the most important climate discussions of the year. She said:
For COP, this experience is food for thought. It is likely that a potential review of its sponsorship criteria is needed, as well as a thorough discussion on whether corporate sponsorships are ultimately really worth it.
On Coca-Cola's front, it is too late for the company to turn back. Instead, it can only carry on with its sponsorship plans. In an ideal scenario, Bigio said Coca-Cola will be using this sponsorship to announce more ambitious sustainability targets and programmes which would, in part, help to address the criticism and greenwashing accusations.
Similarly, Winnie Pua, MD, antics@play told MARKETING-INTERACTIVE that to fend off severe criticism, Coca-Cola will have few other options than to take action and double up on sustainability efforts as the public withdraws even more trust in and love for the brand.
That said, unless Coca-Cola has committed to firm action plans to do their part to fight climate change, this news can too easily be perceived as greenwashing. "With this move, it opened not happiness but a can of hypocrisy, coming up top in non-profit organisation Break Free From Plastic’s 2021 brand audit report as the worst corporate plastic polluter for the fourth consecutive year," she said.
Coca-Cola's global VP of public policy and sustainability, Michael Goltzman, previously said that the COP27 sponsorship will offer the company an opportunity to continue engaging with experts, nonprofits, industry, and governments to support actions toward sustainable change across its value chain. In this case, Pua said the beverage manufacturer had better live up to its word.
However, all is not lost for Coca-Cola. According to Pua, some steps it can take to manage the backlash include publishing an interim sustainability report to track progress towards 25% reduction of plastic use by 2030, as well as publishing an article that notes learnings from COP27 and corresponding actions it’ll take to further boost efforts. Pua also advised Coca-Cola to make public the entitlements received from COP27 sponsorship as part of an effort to be transparent about the company's intent, which is to support and learn about climate change solutions, and engage with industry experts. According to her, this also helps to dispel speculation that sponsors are able to influence the agenda or lobby again.
Interestingly, CARMA found that the total volume of "Coca-Cola and sustainability" only forms 3% of all the social chatter around Coca-Cola. This may signal that while sustainability is a growing corporate pillar for many companies, the story is not broadly impactful to Coca-Cola’s overall reputation.
Majority of social conversations around the brand revolve around themes such as product innovations, new flavours, and commercial partnerships. "When faced with incidents like these, companies should continue monitoring to see how the story further develops," Nicholls said.
"Legacy organisations such as Coca-Cola would have an established brand equity in the minds of consumers that is determined by their largely positive experiences consuming the product. There is value in companies identifying the top reputation pillars that matter most to their target audiences, and concentrating their efforts on those," Nicholls added.
Not greenwashing but greentrolling
Although the phenomenon of greenwashing is not new, what is catching on is "greentrolling", Safina Samian, partner and head of integrated marketing communications at Finn Partners Singapore, said. This essentially means that environmentalists and climate-conscious people are fighting back by trolling companies perceived to have a greenwashing propaganda.
According to her, this is unsurprising as consumers get more discerning about greenwashing and environmental sustainability becomes a top "burning platform" issue. However, she is of the view that sustainability isn’t a state that can be achieved overnight.
"Like many big brands, Coca-Cola has continued to relook at its business and build in positive changes towards achieving its sustainability goals. It will take some time to innovate and unravel years of processes and networks that have supported the business. Time will tell if Coca-Cola delivers on its promise—to achieve net-zero carbon emissions by 2050—and manages to win back the trust of the public," she explained.
Aside from achieving net-zero carbon emissions, Coca-Cola also plans to reduce its absolute greenhouse gas emissions by 25% by 2030. Meanwhile, the company said it met its 2020 goal to cut its carbon footprint by 25% by the end of that year, against a 2010 baseline.
Safina explained that all companies have to start somewhere and the fact that Coca-Cola is spending millions of dollars for a very public event like COP27 puts it in the spotlight. While she does not foresee the backlash to have an immediate impact on Coca-Cola's reputation, she said this will place the company's actions under greater scrutiny to see if it delivers on its commitments by 2025, which is a good thing.
As to how to manage the backlash, sustainability is a journey and actions speak louder than words. Those against the brand will be convinced only after they've seen real progress and commitment. Coca-Cola will have to continue sharing and communicating its intentions and initiatives in honest dialogue with the public, as well as educate its stakeholders on how the brand is moving towards being a more sustainable company.
On a similar thread, Mary Devereux, senior advisor at SEC Newgate Greater China, said it is "easier and more fun to point the finger" than it is to welcome and help a company in its efforts to re-engineer itself as a sustainable organisation. While Coca-Cola and other companies in the beverage industry are major polluters, Devereux said the world is witnessing a sea change, citing Coca-Cola's climate change commitments as an example.
"That said, Coca-Cola clearly has a lot more work to do, and what better place to ensure it and other companies keep its promises than at COP 27?" she said.
Other beverage manufacturers such as PepsiCo and Nestlé have also set their sustainability goals. PepsiCo, for example, aims to cut virgin plastic from non-renewable sources per serving across its global beverages and convenient foods portfolio by 50% by 2030. It also plans to reduce absolute greenhouse gas emissions across its value chain by more than 40% by 2030. This includes a 75% reduction in emissions from its direct operations.
Meanwhile, Nestlé's 2030 ambition is to strive for zero environmental impact in its operations and to achieve net zero greenhouse gas emissions by 2050. It is also developing new, more environmentally friendly packaging materials.
How can companies show their sincerity?
The road to being sustainable might be a long one and for FMCG companies that might have a history of contributing to plastic pollution but are now pursuing the sustainability agenda, they will certainly encounter detractors. Aside from ensuring their targets are ambitious and externally verified, Redhill's Bigio said one of the best ways for MNCs to drive meaningful change is to welcome the participation of civil society, including NGOs, when defining sustainability commitments. "Being brave enough to invite your biggest critics to the table is a powerful sign of sincerity, openness and an honest commitment to change," she added.
Meanwhile, Bloomberg's Next Gen Leaders Study released earlier this year showed that business growth and ESG impact were the top two crucial factors in decision-making among the next-generation leaders.
In a separate interview with MARKETING-INTERACTIVE previously, Bloomberg Media's MD, media sales, APAC, Sunita Rajan explained that it is important for companies to set clear objectives and a strong framework to support the execution of these initiatives. This goes hand in hand with clear metrics to determine the success of any programmes. Thus far, companies such as Coca-Cola, PepsiCo and even Nestlé have made efforts to map out their goals and even documented them in sustainability reports.
"Nothing in a company gets done without the right human resources on the job – walking the talk in ESG terms means making sure a business has the resources, capacity and will to execute its plans. And finally, share the success - communicating milestones and measures of success will go a long way in ensuring that internal stakeholders remain true to the cause," she added.
That said, while consumers now know more about climate issues and carbon emissions, and have changing attitudes towards plastic waste, there are still a few key barriers when it comes to reducing plastic waste. According to a Singapore Environment Council (SEC) position paper published in August this year, the 1,015 respondents are inclined to purchase a product that has eco-friendly packaging only if it did not cost more.
While existing commercial studies have indicated that product price is not a significant concern for consumers, SEC's position paper said consumers' willingness to pay more for sustainable packaging and eco-friendly products is not readily translated. As the concept of eco-packaging is closely related to increasing cost, SEC said it is undeniable that consumers regard price as a key buying criterion despite a change in attitudes toward sustainable packaging.
Finn Partners' Safina said: "This is an important insight for FMCG companies and MNCs. For instance, incentivising recycling and innovating packaging to remove the use of plastic upstream can help close the gap between consumer intention and action."
She added that it is also important to remember that sustainability is a much more complex challenge. According to her, organisations that are serious about moving the needle in their climate action must also consider their carbon footprint across their entire operations and that of their business networks.
Aside from incentivising recycling, companies, in general, can push for company-wide education to achieve a deep understanding of the difference between “carbon neutral” and “net zero” and strive towards the latter while mitigating any inevitable carbon footprint-heavy business activities with the former.
"Only through education can the value of best practices be inculcated and put front and centre of corporations and their employees. In this long battle for ever more effective solutions to save the earth, both hearts and minds need to be won," antics@play's Pua said.
She also advised companies to have long-term partnerships with independent organisations focused on sustainability audit and consultancy, as this helps quantify sincerity by translating recommendations over time to actions and resulting data.
At the same time, companies should continue to co-innovate through on-ground innovation with end-consumers as part of R&D to learn their behaviours, preferences, and concerns, and allow consumer insights to directly inform product design, and brand values and policies. "This will help companies crowd-source from those directly impacted by their business to formulate more sustainable solutions and arrive at win-win outcomes," Pua explained.
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