Greenwashing: The Coca-Cola Case
Updated: 4 days ago
Author: Sara Diamante
Date of Publication: 05/04/2023
What impact do environmental risks have on the Financial System?
Climate and environmental risks, in addition to modifying the planet and our value system, undoubtedly have negative impacts on the economy. For this reason, they play a fundamental role in the process of development and regulation of the current financial system. The latter is a tool through which it is possible to implement a circular economy model.
To achieve the ambitious goals set at the international level, European states and major international organisations have made various agreements. Among these is the introduction of new European climate benchmarks. In particular, these allow investors to correctly evaluate an investment and increase market transparency.
Another goal of the benchmarks is to discourage greenwashing. That is, the misleading practice that companies often adopt as a marketing strategy. These promote and declare their activities and products as eco-friendly, trying to conceal the true negative environmental impact.
A Greenwashing Example: Coca-Cola
The world is therefore increasingly attentive to environmental issues. However, many large companies seem to have seen greenwashing as a big opportunity. Many companies are improving their public image without taking concrete actions to reduce the environmental impact of their products.
An example is Coca-Cola, the world's leading plastic polluter.
Some Data support for the case
Coca-Cola has admitted to being responsible for 3 million tons of plastic packaging in 2019. The company has also lobbied for decades against policies aimed at making companies responsible for the plastic waste they create. Coca-Cola also emitted the equivalent of 5.18 million tons of carbon dioxide into the atmosphere in 2021, according to the company's latest report.
COP27: What happened?
His sponsorship of COP27, the conference of the United Nations, has sparked much controversy.
Environmental activists have asked the United Nations to remove Coca-Cola as a sponsor of the COP27 climate summit. In a letter signed by more than 240 environmental organizations, the groups demand that Coca-Cola be removed from the list of sponsors. Activists justified this action by showing that the soft drink giant is the world's largest plastic polluter. Apart from that, it’s the world's largest oil and gas technology partner.
Also Break Free From Plastic has named the company as the "world's top plastic polluter" for four consecutive years.
More Accusations against the company
The company has also been accused of human rights violations in some of its facilities outside the United States. One example is a 2001 incident in Colombia. Coca-Cola was accused of hiring a right-wing group to intimidate and even kill workers who were trying to unionise.
Other Financial Data
Other data support the idea that the strategy applied by Coca-Cola can be classified as greenwashing. Therefore, we can compare two types of investments made by the company. The first one for marketing and advertising amounts to $4.24 billion. The second one invested in a program to clean up rivers polluted by plastic waste amounts to $11 million.
Coca-Cola Life Case
The Coca-Cola Life case is a product launched by the company in 2013 as a healthier alternative to classic Coca-Cola. That was thanks to a 30% reduction in sugar and the replacement of natural sweeteners. An analysis conducted on this product shows that it represents another example of greenwashing. So, the amount of sugar reduced in Coca-Cola Life is compensated by an increase in the use of artificial sweeteners.
How to encounter this Phenomenon
To counter the phenomenon of greenwashing and sanction the practice, many governments and regulatory authorities are developing guidelines.
The SEC, the US stock market watchdog, has issued draft guidelines. It's about information that investment funds must provide when qualifying their offerings as "ESG," "sustainable," or "low carbon."
European Union (EU)
The EU, within the Green Deal framework, is committed to apply measures to protect consumers against false environmental claims. Other directives provide rules for producers so as not to mislead citizens about the sustainability and transparency of products.
The European Securities and Markets Authority (ESMA) has decided to circumscribe the phenomenon by providing a more accurate definition. It also ensures that a given company, fund, or financial instrument is a sustainable finance instrument in support of green initiatives.
Coke Sponsoring COP27 Is the Definition of ‘Greenwashing,’ Activists Say By Kristoffer Tigue.
“Controversy: Coca-Cola, the world’s main plastic polluter, will sponsor COP27.” By Joan Luis Ferrer.
"Greenwashing, this is how large companies, from Adidas to Coca-Cola, promise a green breakthrough that isn't there." By Lorenzo Misuraca.