Business Leadership Beyond 2009 Keynote Address

Muhtar Kent, Chairman and Chief Executive Officer, The Coca-Cola Company
Copenhagen Climate Council/UN Global Compact Event
Copenhagen, Denmark
December 12, 2009

As prepared for delivery

Thank you, Your Royal Highness, and thank you Tim (Flannery), and good afternoon, everyone. What a distinct privilege it is to be with you today and participate in this important dialogue. And what a distinct disadvantage it is to have to follow Dr. Pauchauri on the program! If there's anything that will humble you faster than having to follow one of the world's leading minds at the podium, then I have yet to experience it.

Dr. Pachauri is a good friend and someone whose insights and counsel we greatly value at Coca-Cola. And as Dr. Pachauri has rightly noted, the urgency of climate change means that we cannot just address actions to mitigate emissions -- critical as that is. We must also take steps to manage and adapt to climate impacts.

Tackling the climate challenge will require that we "avoid the unmanageable and manage the unavoidable," as President Obama's Science Advisor, John Holdren, has put it. And water is where climate impacts will be most acutely felt.

That is why we at Coca-Cola joined with TERI and Yale University to help sponsor the report that Dr. Pachauri has just noted on the "climate-water nexus." We need to focus on water-resource management as a key element of climate adaptation strategy -- with good governance, smart polcies and real leadership.

Today, I was specifically asked to speak about "Business Leadership Beyond 2009" -- and ALSO, what we in the private sector can do to help keep the green movement alive and healthy in the months and years ahead.

Let me just preface this discussion by saying that no industry sector, I believe, has a more critical role to play in the green movement than Consumer Goods. Our activities touch almost everyone on the planet, and our supply chains extend into virtually every eco-system. Indeed, our products and brands are in front of billions of consumers every day and often multiple times a day. With this pervasive presence comes enormous opportunities and some very real risks.

As we gather here in Copenhagen and begin to look to the future, we feel it is absolutely imperative that our voices be heard and that our commitments to low-carbon growth be understood. This gathering tonight is an important step in that dialogue. Forging real progress towards a low-carbon and green future is going to require more than just technology innovations and progressive government policies. It is going to require behavioral changes from consumers and the businesses that supply them. That's how I think about green leadership beyond 2009 and the role business can play.

• It's about leading with our consumers...
• leading with our suppliers...
• and of course, leading with our own people.

Let me explain each in a little more detail, starting with leading with our consumers.

1) When we at Coca-Cola look at the consumers who reach for our brands 1.6 billion times each day in 206 markets around the world, we are clearly seeing a reset. A reset of priorities, values and expectations. Consumers today increasingly are judging us as much on the content of our character as the content and quality of the products and services we produce. And it's not just a Western European, or Japanese, or North American trend. We're also seeing greater sensitivity for the planet among consumers in developing and emerging markets around the world. Brazil, India and China, for example, now have among the most environmentally aware consumers in the world. In fact, according to the 2009 National Geographic Greendex Survey, over 70 percent of consumers in these three nations support additional spending on low-carbon products and plan to spend more for them in the coming year.

In recent months, I've traveled to Mexico, Vietnam and Thailand and have heard similar attitudes from retailers and consumers in each of those markets. Mexico, for instance, now ranks among the top six nations in the world in terms of consumers who exhibit environmentally sustainable behavior, behind only India, Brazil, China, Argentina and South Korea, according to the National Geographic study.

Our retail customers have been equally engaged in sustainability issues. In fact, prior to the last convening of the Coca-Cola Retail Research Council, which was held in Beijing during the 2008 Summer Olympic Games, we surveyed 180 of our top retail partners around the world who make up the council. We asked them what single issue was most important to them today. The overwhelming response from them was "sustainability."

At that last meeting in Beijing we were fortunate to hear keynote speeches on these issues from both Sir Terry Leahy of Tesco and from Dr. Pachauri. Both of these gentlemen expressed the same themes -- consumers are at the heart of a low-carbon world.

We at Coca-Cola couldn't agree more and it's why we have a number of consumer-facing initiatives that focus not only on what we are doing to become a more sustainable business, but what consumers can do as well. Part of our rationale for our participation in the public awareness campaign set in motion by the U.N. Secretary General last year -- aptly named Hopenhagen -- is to help citizens become active participants in the climate change dialogue and make their voices heard.

In today's inter-connected and information-flooded world, consumers now have visibility into our supply chains and suppliers. And they demand accountability in how we govern and manage these relationships.

2) This leads to the second area of leadership focus -- leading with our suppliers. We talked about this just a couple of months ago when we brought together our system's top global suppliers for a sustainability summit in Atlanta. One of the main themes that came from that discussion was that our supply chain can be a massive force for competitive advantage in this reset world.

We strongly believe that the greatest area of business innovation over the next decade will be at the intersections of supply chains and sustainability. This is exactly where our focus is in managing our water, packaging and energy footprints.

Working with our bottling partners and suppliers, we have put global goals in place to become water neutral by 2020. We have a goal to grow our business but not our system-wide carbon emissions from our manufacturing operations through 2015.

Just last week, in collaboration with Greenpeace, we announced our efforts to commercialize a new refrigeration technology that will allow us to eliminate HFCs in all of our new vending machines and coolers by 2015. By 2012, at least half of our new vending machines and coolers with be HFC-free. This is significant because green house gases that are emitted from our 10 million coolers will be reduced by a factor of 1400!!!!!!

And we have commercialized our plantbottle?. The first plastic packaging that is made from up to 30% plant material. Turning waste into resource.

None of this would have been possible without strong collaboration up and down our supply chain. And obviously, none of this could be accomplished without the leadership of our people -- the 700,000 Coca-Cola system associates who serve the 206 nations we operate in every day.

3) This is the third area of our leadership focus -- leading with our people. We know that building a culture of social responsibility begins at home, within the four walls of our company. In order to be real and beneficial, corporate social responsibility has to be a movement. A way of life. A way of thinking about the world.

We believe so much in this idea at The Coca-Cola Company that we introduced a concept called Live Positively last year. Live Positively is a way for us to think holistically and globally about all of the sustainability efforts we're working on system-wide. It includes goals and metrics and several agreed upon principles. It's about creating a culture of sustainability -- and continuing to challenge ourselves about how we can improve and do more towards this necessary goal.

All of this, of course, is just a start. We know there is so much more we can do -- and do together with our partners in business, government and the NGO community to truly take the lead in driving innovation and helping move the planet toward a lower carbon and greener future.

I look forward to that journey with each of you and I look forward to a great discussion today.

Thank you.