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Coke says green strategy will win business
Having an integrated clean technology strategy will be a big part of winning business in the 21st century, a Coca-Cola executive told Reuters.com on Monday, and its investments in refrigeration will likely have the biggest impact on that strategy long-term.
The world’s biggest soft drinks maker has hooked up with Greenpeace on an initiative to eliminate hydrofluorocarbons (HFCs) — greenhouse gases with a high warming effect — from its refrigeration and cooling equipment by 2015, said Jeff Seabright, Coke’s vice president for Environment & Water Resources.
“We have about 10 million pieces of equipment that run in 200 countries around the world every day, and although we’re only 1 percent of the commercial refrigeration market we have an opportunity to really lead on this,” he said.
Coke is also investing indirectly to keep ahead of the curve on new frontier technologies.
Seabright said Coke has around $70 million in two clean tech venture capital funds, DJF Element and Rockport Capital and that, in addition to expecting better than market rate returns, such investments give it a front-row seat for the latest technologies.
“We’ve clearly identified sustainable not as a fad or as sort of a nice to-do; this is going to define what it means to win in the world of business in the 21st century,” he said. “Understanding things like sustainable agriculture, understanding what’s happening with water stress around the world in part as a product of climate-induced stress, understanding how to manage energy inputs and impacts on your business. These things are today big parts of our cost structure, a big part of our footprint and increasingly are going to a big part of what it’s going to take to win as a business.”
Water, packaging and energy and climate change are the three critical components of Coke’s environmental sustainability, Seabright said. One area it is now actively exploring is sustainable agriculture.
“We buy a lot of suger, a lot of citrus, a lot of vanilla, a lot of other agricultural commodities. As climate change continues to stress water resources, it’s going to have an impact on weather patterns, it’s going to have an impact on agriculture. So, preparing and adapting and understanding what’s going on in the agricultural sector and using our power in the marketplace to make sure we’re helping to support more sustainable outcome rather than a less sustainable outcome is a very important part of the future,” he said.
With the emphasis on clean technology comes the question of cost and whether to pass those costs on to consumers. But Seabright said consumers already pay a higher price for products like organics and premium brands.
“For the mass market, people are not interested in paying more but it is a point of differentiation,” he said. “So if I can offer you a product that has authentic value in terms of the commitment behind it of the company that made it for environmental values or social values, that can make a difference for these consumers.”
Hear Seabright’s comments below: