By Bea Perez, Chief Sustainability Officer, The Coca-Cola Company
AACSB Staff spoke with Bea Perez, chief sustainability officer (CSO) of The Coca-Cola Company, on a number of topics regarding Cola-Cola, sustainability, corporate social responsibility, and what businesses should be focusing on.
As CSO for The Coca-Cola Company, Perez is accountable for generating and driving a global sustainability strategy that's focused on enhancing personal well-being, building strong communities, and protecting the environment. Prior to becoming the Company's first CSO, Bea served as the chief marketing officer for the Company's North American Division.
Bea Perez will be a plenary speaker at the upcoming AACSB Sustainability Conference on June 22-24, 2014 in Atlanta, Georgia, USA.
AACSB Staff: Although sustainability and social responsibility has long been upheld at The Coca-Cola Company, your position as CSO with a department dedicated solely to sustainability is relatively new. What is driving the need among stakeholders and the community for closer, more systematic dedication to sustainability?
Perez: There are two important demands that many companies must address if they're to thrive. One is the need to generate consistent short—and long-term business growth; and the other is meeting consumers' demand that businesses act responsibly and help address social issues. Sustainability helps to achieve both.
As you indicated, Sustainability isn't new to Coca-Cola—it's been a part of our heritage for more than a century. What has evolved is our understanding that to drive even greater impact and ensure sustainability endures long-term, it must be embedded deeply in our business. We're in the process of doing that, and we're already seeing solid evidence that sustainability is contributing to both topline growth and bottom line productivity while helping to protect our social license to operate.
Our sustainability commitment is fueled by our consumers, who increasingly are making Sustainability an imperative for them. In fact, 87% of respondents to an Edelman "Good Purpose Global Study" indicated that they expect businesses to weigh social issues at least as importantly as business issues. And 50% of respondents to a 2013 Nielsen study said they would be willing to reward companies that give to society by paying more for their goods and services (up from 45% in 2011). That's especially true of millennials, the demographic most passionate about companies acting responsibility and more willing to support their passion with action.
AACSB Staff: How do you find a balance between introducing (and following) socially responsible practices and generating profits?
Perez: When sustainability is done well, it creates shared value by driving business results AND making an overwhelmingly positive difference for people, communities and the environment.
Our 5by20 initiative is a good example. One of our sustainability commitments is to economically empower 5 million women by 2020. Through 5by20, we're providing access to business skills, financial services, assets and support networks to help women succeed as entrepreneurs. As of December 31, we've reached 552,000 women, many of whom sell Coca-Cola beverages and help drive volume for us. So while 5by20 is empowering women and helping to create sustainable communities, it's also generating business results.
Similarly, we're making progress in becoming more efficient in our water and energy use. While this enables us to be responsible environmental stewards, it also creates operational savings that we can reinvest to help drive our business.
These are just a few examples, and we're working hard to ensure sustainability continues to generate these types of win-win, shared-value results across our business.
AACSB Staff: Coca-Cola's range of brands and products predominantly focus on food and beverage—a rather straightforward concept. Yet, the sustainability framework is built around a much larger, profound vision [Me (enhancing personal well-being); We (building stronger communities); and World (protecting the environment)]. Why did Coca-Cola decide to make sustainability such a priority in its operations and company culture?
Perez: As one of the world's most visible companies, we know it's our responsibility—and privilege—to help address the challenges facing society. Working to help improve people's lives and build strong communities has been part of our how we do business for more than a century.
In fact, as we reviewed our global sustainability efforts, we found there were thousands of programs taking place in our markets and communities around the world. We also found that we had the opportunity to take sustainability to the next level by embedding it deeper into our business and harnessing the collective power of our Coca-Cola System.
So three years ago, our chairman and CEO, Muhtar Kent, created the Office of Sustainability and asked me to become chief sustainability officer. Working together across our business, we created a Sustainability strategy that aligned our collective resources and resolve behind enhancing people's well-being, building strong communities and protecting the environment.
That strategy includes ambitious but achievable commitments in a number of areas. I mentioned our women's empowerment commitment earlier. By 2020, we aim to replenish 100% of the water we use to produce our beverages and to reduce the carbon of the drink in your hand by 25%. We're also helping consumers achieve the energy balance that's right for them by working to support physical activity programs in every country where we do business and offering low-or no-calorie beverage options in every market.
To see all of our commitments and the progress we're making, you can read our Sustainability Report at: www.thecoca-colacompany.com/sustainability.
AACSB Staff: How do you think the conversation regarding sustainability, social responsibility, and impact will shift in the next decade or so? What areas should businesses start paying more attention to?
Perez: Job creation and inequality. We believe the surest path to rekindling the global economy is by empowering women and entrepreneurs, engaging youth with clear paths to economic and personal success and expanding our sustainability footprint through innovation.
Women's entrepreneurship has the ability to dramatically enrich the quality of life for billions of people if markets evolve to become more egalitarian, expedite the business start-up process, and reduce barriers to entry. Today, nearly one in three businesses globally are owned or partially owned by women. In East Asia, the majority of firms are now owned by women, and this will likely be the case in Latin America and Sub-Saharan Africa within the next 10 years at current growth rates.
Related to youth employment, the global unemployment rate among 15- to 24-year-olds was estimated at 12.6% in 2013, with 73 million people jobless worldwide, according to the International Labour Organization.
A lack of opportunity for a viable future can foster social unrest and threaten to undermine the global economy now and in the future. This social unrest—including the recent government overthrow in Ukraine and unrest in Venezuela—all point to a rising intolerance of inequality around the world. Inequality comes in many forms, including economic, opportunity, resources (water, energy), etc. As one of the most visible global companies, we know we have the responsibility—and privilege—to help address inequality.
Creating jobs and addressing inequality are going to require strategic partnerships among business, government and civil society that are framed by a shared vision, a bias for action, and a high degree of mutual accountability.