When Coca-Cola announced plans earlier this year to recycle the equivalent of 100 percent of its packaging by 2030, the company touted the effort as building on its success with sustainable water use. In a 2016 full-page ad published in The New York Times, the company proclaimed, “For every drop we use, we give one back,” boasting on its website that it was “the first Fortune 500 company to hit such an aggressive target.” But a year of reporting into Coca-Cola’s water program shows that the company is grossly exaggerating its water record, which suggests that its new “World Without Waste” recycling plan should also be viewed with skepticism.
Coca-Cola came under fire for its water practices in the mid-2000s. (The company did not answer specific questions, but it did issue a lengthy statement for this article.) Coca-Cola keeps distribution costs low by tapping local water sources, a practice it has continued since the company’s early success at Atlanta-area soda fountains in the late 1800s. By the 2000s, however, local people in some of the world’s increasingly water-stressed regions were looking more critically at big water users, and Coca-Cola found itself a target of public ire. By 2007, US college students took up the cause, calling for a nationwide boycott in support of Indian farmers who accused the company of stealing their water and livelihoods. It was an international PR nightmare that threatened Coca-Cola’s brand image and global business strategy.
E. Neville Isdell, Coke’s CEO at the time, took heed.
“Today,” he said from a podium at a 2007 World Wildlife Fund conference in Beijing, “the Coca-Cola Company pledges to replace every drop of water we use in our beverages and their production to achieve balance in communities and in nature with the water we use.” The idea was to make Coke’s operations “water neutral.” That year, the company pledged to reach this goal by 2020.
From the start, everything hinged on how “every drop” and “water neutral” would be defined. The expression “water neutrality” first appeared at the World Summit on Sustainable Development in Johannesburg in 2002, the brainchild of South African businessman Pancho Ndebele. Like a carbon offset program, it offered delegates a way to counterbalance their water consumption by purchasing credits to be invested in water efficiency initiatives and expanded clean water access. After the summit, Ndebele set up the Water Neutral Foundation to take the concept forward, but it struggled to earn credibility with the scientific community, which criticized “water neutrality” as a misleading term that lacked a rigorous method for assessing water use and offsets and suggested the world’s water problems could be solved with a few charitable contributions.
A water-use accounting method arrived that same year when Dutch scientist Arjen Hoekstra created the Water Footprint, a method of totaling the water that goes into everything we consume. His Water Footprint counted not only the water used in the factory, but also what’s needed to grow the raw materials, create the packaging, and everything else that goes into each product. Water Footprint assessments grabbed the world’s attention by publicizing the mind-boggling amounts of water it takes to make even our humblest everyday necessities. Take a single T-shirt: it takes 712 gallons of water to produce, mostly because of the water needed to grow the cotton. A quarter-pound hamburger requires 462 gallons of water if you take into account the water required to grow the cattle feed. Whole countries and corporations can calculate their own Water Footprints. People can, too: in the United States, we have a per capita Water Footprint of 2,060 gallons a day.
The Water Footprint challenged people and companies to think more critically about water usage. Water “neutrality” expanded water ambitions beyond the environmental mantra of reduce, reuse, recycle. The two concepts seemed to go hand in hand, and Hoekstra began working on a Water Neutral Calculator for Ndebele’s foundation. By tying water neutrality to Hoekstra’s methodology for accurately measuring Water Footprints, Hoekstra and Ndebele hoped people and companies would use the calculator to invest in nature conservation projects that could, at least in theory, restore water that could not be reduced or recycled.
Coca-Cola statement /
Coca-Cola didn’t respond to specific questions, but it did offer a general statement.
Greg Koch, then a Coca-Cola executive tasked with global water stewardship, contacted Hoekstra. Two weeks after Isdell’s speech in Beijing, Koch and Hoekstra met at a cafe in Amsterdam.
“It was exciting for me,” recalled Hoekstra, who had taken a train from Enschede, a city 100 miles east of Amsterdam on Holland’s German border, where he works as a professor and researcher at the University of Twente.
Hoekstra was thrilled at the idea of helping Coca-Cola genuinely assess and reduce water usage in every part of its supply chain — not only the water used in its bottling plants, but also the amount it took to grow the sugar and other ingredients and to produce every plastic bottle and aluminum can. Today, the World Health Organization reports that half of the world’s population will be living in water-stressed areas by 2025; by 2030, the United Nations predicts water stress will give way to water shortages for nearly half the people on the planet. Back in 2007, Hoekstra and other experts were already sounding the alarm. Hoekstra thought Coca-Cola was ready to come to grips with reality. But Coke would follow a different plan.
At first, the idea seemed to be gaining momentum. In Beijing, Isdell had said the company would not start with water used in its supply chain but would address it eventually. “We recognize that becoming ‘water neutral’ in our operations does not address the issue of embedded water in our agricultural ingredients and packaging materials. Working with WWF, we will seek opportunities to reduce water use in our supply chain, beginning with sugar,” Isdell told the audience. He went on to say, “Our aim, ultimately, is to establish a truly water-sustainable business on a global scale.” The company’s next moves suggested it was considering an even more transformative overhaul of its operations, including its supply chain.
After the first meeting between Koch and Hoekstra, Coca-Cola commissioned three Water Footprint assessments at a plant in Holland from Hoekstra’s team of researchers. The meeting in Amsterdam also led to a series of gatherings called the Water Neutral Working Group. In attendance at the first meeting were Hoekstra, Ndebele, and executives from Coke, World Wildlife Fund, and several international agencies. Representatives from Nestlé, Ikea, beverage maker SABMiller, and other corporations, along with The Nature Conservancy, put in appearances at subsequent meetings in Europe and the US.
“For every drop we use, we give one back.”
“We started by reviewing the concept of water footprinting and discussing how this relates to business, on the assumption that this will provide the basis for water neutrality calculations” with the objective of seeing what “might be developed in the coming 6-12 months in a credible and open process,” according to the minutes of the first Water Neutral Working Group meeting in September 2007. Around the same time, water neutrality and the Water Footprint headlined at international businesses conferences; JPMorgan featured the Water Footprint in a 2008 report on corporate water risk; and companies began to commission Water Footprint Assessments.
“There was a real buzz,” said Derk Kuiper, a Dutch conservationist and former World Wildlife Fund staffer who chaired the Water Neutral Working Group.
But according to Ndebele and Kuiper, there was reluctance among executives in the room to face the truly enormous consumption of water in one area: corporate supply chains, which Ndebele recalled as “the elephant in the room.” From the very first conversation, Hoekstra recalled, Coca-Cola executives recognized the water needs of its agricultural ingredients; agriculture, Hoekstra said, can contribute to more than 90 percent of water consumption in some places. (The Verge asked Coca-Cola why the company excluded its supply chain from its original plan to replenish all the water it takes to make its products, but the company did not respond.)
There was reluctance among executives in the room to face the truly enormous consumption of water in one area: corporate supply chains
“Particularly in the food and beverage sectors, they understood that at the end of the day the largest user of water is agriculture. And inevitably your water footprint was going to be a lot bigger because of that particular segment,” Ndebele said. “But I think what was a challenge initially, people were happy ... not actually to attend to it.” Ndebele had previously worked as a sustainable development manager for SABMiller, the London-based multinational brewing and beverage company that was one of Coca-Cola’s largest bottling partners. (SABMiller is now part of a new company called Newbelco.)
Kuiper recalled growing misgivings among corporate executives in the group. “Many organizations started doing these initial calculations, and found out that … for supply chain Water Footprints, if you are a company with an agricultural supply chain, these are huge, these water footprints,” he said. “There’s not enough water to go around” — meaning there aren’t enough viable offset projects to actually balance corporate agricultural water footprints.
Take the Water Footprint assessments Hoekstra and his team carried out for Coca-Cola beginning in 2008. When Coca-Cola publicly released the report in September 2010, it revealed that it takes 35 liters of water to make every half-liter of Coke in Holland. Most of that water (28 liters) was used primarily to grow sugar beets to sweeten the beverage. It took another seven liters to make the PET plastic bottle, plus a total of 0.4 liters of “operational water,” which is the water used in its bottling plants to manufacture each half-liter of product. “[T]he operational water footprint associated with production was found to be a very small percentage of the total water footprint,” the report stated.
“There’s not enough water to go around.”
Coca-Cola told The Verge that the company’s “ultimate goal is to more sustainably source 100% of our key agricultural ingredients” and that it works with its suppliers to improve. “We believe we have made good progress in this area but acknowledge it is a journey,” the company wrote in its statement for this article.
As the enormity of the task the company had set for itself sunk in, Coca-Cola and other working group members pressured Hoekstra to allow them to engage in an act of water accounting sleight of hand that would shave off nearly half of the Water Footprint for every half-liter of Coke, according to people at the meetings.
With one move, adopting “net green” water use rather than fully “green” water use could have wiped out 43 percent of Dutch Coke’s water footprint. A water footprint using “net green” would subtract the amount of water natural vegetation might need if, say, a sugar plantation hadn’t replaced it. In cases where pre-existing natural vegetation absorbed more water than the crop that replaced it, “net green” held out the possibility of reducing a company’s overall water footprint despite industrial-scale farming’s links to water pollution and other water sustainability issues. The Verge asked Coca-Cola about requesting that calculations be based on “net green” for water usage, but the company did not respond.
“There was a general push from the beverage companies toward ‘net green,’ and the issue also popped up specifically when we were doing our report,” Hoekstra said, referring to the Water Footprint Assessments created for the company. “It felt like a victory when finally Coke accepted our report despite the general pressure within the [beverage] sector and Coke itself to change to net green.”
After Hoekstra refused Coca-Cola’s request to substitute the “green” for “net green” in his Water Footprint methodology, the company never moved forward with a Water Footprint of The Coca-Cola Company’s global enterprise, limiting its attention to only the water that goes into each bottle. According to Koch, speaking on behalf of the company two years ago, there was no need since Hoekstra’s work had already confirmed their “intuition” about the amount of water embedded in its supply chain.
Even as it became clear that the company would never get close to reaching “water neutrality” in its comprehensive meaning, Coca-Cola pushed on with its high-profile water-offset program in 2007, pledging to replace “every drop” of water used in its beverages. With The Nature Conservancy and other technical experts, the company devised a framework for evaluating projects and assessing how many liters each would “return” to nature in order to achieve company’s promise of returning “every drop” of water used to make its beverages.
The company invests in three main types of projects. Its water and sanitation investments are designed to expand basic services in poor communities in Africa and elsewhere through well digging, water purification projects, and water distribution and metering systems. The company also funds “productive use” projects geared toward increasing water conservation and reuse and increasing the water supply for irrigation. Finally, there are watershed protection and restoration projects, which run the gamut from tree planting and stormwater management to high-tech irrigation projects designed to reduce the number of water crops need to grow.
The company told The Verge that “The Coca-Cola Company and our bottling partners have long believed that we must conduct our business more sustainably and grow responsibly” and that it has to work with its partners to achieve that. It also said that “[u]ltimately, our goal is to help protect and conserve water resources, and bring safe drinking water and sanitation to people in the communities we serve.”
The nearly 2 billion liters of water the company offset in 2015 cover little more than its “operational water”
Since many of the projects were expected to improve water conditions over several years, the company came up with rules for documenting multiyear “credits,” and it continues to report its progress in an annual Water Replenishment Report (along with an annual Sustainability Report), complete with hundreds of pages of fact sheets and technical footnotes. Coca-Cola told The Verge that it has invested in improving wastewater treatment, water-use efficiency, and addressing “local needs and challenges.”
However, the nearly 2 billion liters of water the company offset in 2015 cover little more than its “operational water,” that “very small percentage” of its Water Footprint, according to the company’s own words a few years earlier in the Dutch report. Specifically, when it refers to returning “every drop,” it’s essentially referring only to the water that actually fits into each bottle or can of its beverages — the 0.5 liters in every half-liter bottle of Coke, which actually takes 35 liters of water to produce, according to the Water Footprint Assessment completed at that Holland factory. Coca-Cola didn’t respond to questions from The Verge about whether it considers itself water neutral today or about the distinction between operational and total water use.
Furthermore, many of Coca-Cola’s offsets projects face questions about whether they deliver the benefits Coke claims. Perhaps the most serious allegation dogging the company’s conservation spending is over whether it properly vets projects to ensure they’re supported by science. The company didn’t answer detailed questions about these criticisms, which have been raised by scientists in Mexico.
When it refers to returning “every drop,” it’s referring only to the water that actually fits into each bottle
In Mexico, Coca-Cola and one of its bottlers financed forestry work that included the digging of trenches similar to ones used in farming. These infiltration trenches were meant to ensure sufficient water to the saplings. Coca-Cola has publicly taken credit for helping finance more than an estimated 5 million trenches in national parks and other forests around Mexico. However, these projects have come under fire for causing damage to some of the country’s most iconic national parks.
The Mexican government’s forestry commission, Conafor, discontinued the use of these trenches more than three years ago in some parts of the country. Scientific studies have concluded the practice did not improve growing conditions, but it did increase erosion and forest degradation. The lead author of the studies, Dr. Helena Cotler of the National Autonomous University of Mexico (UNAM), told The Verge that she brought the problems to an executive who was in charge of community services for Coca-Cola de Mexico (a subsidiary of the Atlanta-based parent company) in 2014. The next year, a Mexican conservationist appeared in a YouTube video calling out Coca-Cola and other corporations that funded the trench work. In response, Cotler said the executive told her the company discontinued funding for trenches in 2015. (Coca-Cola did not respond to questions about whether it had discontinued trench funding.)
Nevertheless, in Coke’s most recent replenishment report, published in April 2017, the company continued to count these discredited projects each year toward its worldwide replenishment tally through 2023. It is not an insignificant quantity. Of the total 221.7 billion liters of water that Coca-Cola estimates it restored to nature worldwide in 2016, the 13 billion liters the company attributes to the Mexican trench projects equals nearly 6 percent of its worldwide replenishment claims and about 7.5 percent of its worldwide watershed protection investments.
According to the company, the 191.9 billion liters returned “to nature” in 2015 allowed the company to achieve “balance” five years ahead of schedule
Those accounting issues didn’t stop the company from announcing in 2016 that it had reached its water neutrality goal. “For every drop we use, we give one back,” heralded Coke’s press release. According to the company, the 191.9 billion liters returned “to nature” in 2015 had allowed the company to achieve “balance” — water neutrality — five years ahead of schedule.
Since then, the company has tallied every liter it says it’s saved, and it reported water offsets worth a total of 221 billion liters in 2016, or “133 percent” of its global sales volume. But looking at its broader Water Footprint, this number represents only slightly more than its “operational water,” not the water that goes into the supply chain. Going by the one full Water Footprint study the company conducted, nearly 99 percent of its water use is left unaccounted for — possibly more, considering that not all of the company’s offset projects actually “return” water to nature, by the company’s own admission.
Nearly 99 percent of its water use is left unaccounted for
“In most cases water access and improved sanitation projects result in an actual increase in local water use and it may seem counterintuitive to pursue these types of projects as a balance to industrial consumptive use,” according to a 2013 paper written by Coca-Cola executives and affiliated consultants explaining how its water offset program works. The paper goes on to say that the company nonetheless believes that such added water use is not necessarily bad, as long as it is used in an equitable and sustainable way. Despite the lack of actual “replenishment,” last year, the company said these water and sanitation projects offset a total of 12.2 billion liters per year.
Even Koch, who led the water-offset program for Coca-Cola before leaving the company last year, acknowledged that some of the projects — particularly drinking water projects —mitigate social, economic, and environmental risks but often increase water withdrawals in some places by making it easier for people to access water.
“It does not mean in this context in all cases necessarily that you are actually replenishing water,” Koch said. But, he added, “I would say that the vast majority of the volume of water reported is truly replenished.”
If the sustainability value of Coke’s offset projects is sometimes doubtful, a remarkable number of these investments further other business needs of the company in the 900 or so communities around the world where it relies on local water supplies to make its products.
One of the most efficient ways Coke ensures access to water is by partnering with the government agencies that serve as gatekeepers to the world’s best water sources. Since 2007, according to Koch, the company participated in about $1 billion in nature conservation, infrastructure, and water and sanitation projects in more than 100 countries in partnership with government and international agencies and nonprofit groups. (When asked about these investments, Coca-Cola told The Verge it had “invested approximately $2 billion” — half on wastewater upgrades to its plants and the rest on water efficiency investments and community water projects. It did not address the question of whether some of that money was provided by its partners.)
Such projects have been accused of privileging the company’s water access over that of local populations. For instance, the Houston-based nonprofit Living Water International, which received Coca-Cola money through a coalition of nonprofit groups, faced accusations of attempting to carry out backdoor privatization of public water resources that could have driven up water prices in the Mexican town of Ocotepec. (The moves sparked protests, and the organization did not complete the project. When asked about the criticism, Coca-Cola did not respond.)
A remarkable number of these investments further other business needs
Finally, the water project puts Coca-Cola in partnership with a broad array of environmental groups, resulting in large payouts to institutions whose missions are to raise alarms about unsustainable water use, among other issues. Coca-Cola has put millions of dollars into just about every independent environmental organization to help with, and do assessments of, its water replenishment program. Coke has spent tens of millions of dollars on water efficiency and access projects in partnerships with groups ranging from the UN Development Program to the US Agency for International Development, making it a darling of the organizations that track corporate citizenship.
Among the better-known nature groups the company has partnered with is the World Wildlife Fund (WWF). In Isdell’s 2007 Beijing speech, he announced that Coca-Cola was giving $20 million to WWF to carry out conservation work, and the company has continued to work with WWF since then. The WWF-US praised Coca-Cola for its forward-thinking approach and said its replenishment targets represent “a step in the right direction,” but it did not answer questions about what role it played in helping the company define water neutrality.
Neither Coca-Cola nor The Nature Conservancy (TNC) disclosed the total amount of money the company gave to the nonprofit to carry out conservation work and what TNC described as providing “counsel on a variety of issues,” including helping the company develop the methodology it uses for the production of the unwieldy “quantifying” report Coca-Cola publishes annually to share its water-related good works. But the company has made multiple donations to support the organization’s work, including a $2 million grant from The Coca-Cola Foundation to support freshwater restoration projects and nearly $7.4 million for replenishment from the company’s Latin American division and its bottlers.
The water project puts Coca-Cola in partnership with a broad array of environmental groups
The organizations’ leaders have also offered effusive and public praise of the company. “Our partnership with Coca-Cola has set the gold standard,” according to Carter Roberts, president and CEO of World Wildlife Fund-US, while TNC president and CEO Mark Tercek, was quoted in Food Processing magazine in 2015 saying: “Coca-Cola’s commitment to water underscores that investing in nature can produce very positive returns for businesses and local communities.”
In a statement from TNC, Kari Vigerstol, director of TNC’s Conservation for Water Funds, told The Verge:
“Coca-Cola has been a leader in the stewardship of water and has set an incredibly ambitious goal of reducing its water footprint, supporting watershed restoration projects, and increasing access to safe drinking water for communities. … We need to embrace collaboration and innovation with the private sector to achieve the level of change that is necessary for agriculture, energy, water security.”
WWF did not answer questions about what role it played in helping the company define water neutrality or whether Coca-Cola had achieved water neutrality. But TNC did acknowledge that “it’s nearly impossible to make a scientific case for ‘water neutrality’ in a similar sense as carbon neutrality,” even if “companies may choose to discuss ‘water neutrality’ since it is a way to communicate to consumers what they’re trying to do,” according to the statement from Vigerstol. It should be noted that Vigerstol was part of a team of authors that included Coca-Cola executives, who, in a 2013 paper, appeared to define water neutrality as achievable without including supply chain water. (The paper did, however, recommend expanding the “scope of the strategy” to “encompass the entire value chain of the enterprise.”) Such a definition would have been at odds with the Water Neutral Calculator Hoekstra and Ndebele had unveiled at World Water Week in 2008.
The scientists, however, are far less impressed.
Hoekstra parted ways with Coca-Cola in 2008. But the company has continued to tout its water achievements; earlier this year, it embarked on a new “World Without Waste” initiative to tackle packaging. Coke described its promise to use 50 percent recycled content and to recycle “the equivalent” of 100 percent of packaging by 2030, a bid, the company said, to usher in a “circular economy.”
”Together, we might be able to make it zero” waste, James Quincey, Coca-Cola’s president and CEO, said in a January op-ed launching the initiative.
Criticisms have already arisen. In an editorial about the new project, John Sauven, executive director of Greenpeace UK, derided the company’s packaging pledge as a familiar smoke screen. He also likened the company’s frequent sustainability announcements and public awareness campaigns to a covert advertising program that overlooks what he calls the company’s “meagre” environmental standards and failure to meet past sustainability goals. Sauven also accused the company of announcing splashy packaging pledges, only to abandon them later, a charge reminiscent of the company’s water neutrality work a decade ago, when Coca-Cola assessed the Water Footprint of its PET plastic bottles (part of the work conducted by Hoekstra at the Dutch plant) but never moved forward with offsetting water in its packaging.
“Coke is symptomatic of the economy that is ecologically unsound.”
The waste initiative hasn’t been completely panned. The company’s pledge to recycle the equivalent of every bottle and can of its products has been well-received by many in the environmental community. However, despite talk of a “circular economy,” the company’s new 2030 packaging targets look weak next to those of other Fortune 500 companies. McDonald’s, for instance, says 100 percent of its packaging will be made with “renewable, recycled, or certified sources” by 2025. With its own plan, Coca-Cola hopes to get halfway there by 2030.
Hoekstra, who said he was overly optimistic a decade ago, now thinks it was “a breakthrough that a big company did a first water footprint assessment and shared that publicly” in 2010. Rather than offsetting more water, he’d like Coca-Cola to get serious about reducing the water needs of its products. “My hope and expectation is that companies will sooner or later formulate water footprint reduction targets that include targets for their supply chain,” he said.
When Isdell started the company down the path to water neutrality more than a decade ago, he told the audience in Beijing: “Our aim, ultimately, is to establish a truly water-sustainable business on a global scale.” What they’ve done instead is perpetuate “Coca-Cola Capitalism,” said historian Bartow J. Elmore, author of the 2015 book, Citizen Coke. “It’s such a 19th century economic model. Perpetual growth — the endless pursuit of selling more products next year than you did last year: A fifth grader could tell you that’s not sustainable,” Elmore said. “Coke is symptomatic of the economy that is ecologically unsound.”
This article was reported in partnership with The Investigative Fund at The Nation Institute.