Finan Shares Sustainability Commitments with Indian CEOs

Irial Finan, Executive Vice President and President, Bottling Investments and Supply Chain, The Coca-Cola Company
Confederation of Indian Industry (CII)
New Delhi, India
August 17, 2011

On behalf of everyone at Coca-Cola, I want to thank the Confederation of Indian Industry for this opportunity to spend some time with you today. All of us at Coca-Cola in India appreciate the great work CII is doing to help make business a positive force in meeting India's most pressing needs.

As I begin, I can tell you that I've always loved my visits to India. The culture. The history. The people.

And now, of course, there is the incredible opportunity to see an enterprising nation take its place alongside the world's economic leaders.

Every time I come back, I see more change, more confidence, and a greater sense of destiny.

In my time with you today, I want to give you a sense of how Coca-Cola sees our place in your nation's bright and near limitless future.

I'll keep my remarks fairly short... so we have ample time for a conversation.

There are two perspectives to how we view our fit in your future. One is our aggressive plans for a growing business. The other is our clear sense of direction and purpose in bringing together the value we create for the business... and the value we create for the communities at the heart of this business.

The modern history of Coca-Cola in India begins with our re-entry in 1993, following the opening of foreign investment in 1991. India has been prominent in our past. And it is absolutely critical to our future.

Our investment, plans and hopes here play a major role in what we call our 2020 Vision and Roadmap. It's a public commitment and step by step plan to double the system wide revenues between 2010 and 2020.

In other words... we are going to take the results of 125 years of growth, and double them in ten. Both the vision and roadmap are built on the realities and the opportunities of a changing world... ...from the growth of a global middle class... to stresses on the environment... to the growth of urban centers... to the rising competition for commodities.

We see the world changing in ways unique to history. We see much of that change, of course, in India. We know that even the most successful company can't grow with incremental ambitions based on past assumptions. Success demands new aspirations... new approaches... new thinking about how we relate to the world and how the world relates to us.

A few numbers provide a picture of how important India is to our business and, I believe, how important we are to India. We have invested $1.1 billion (U.S.) in our operations here. We employ 25,000 people system wide... including 15,000 directly. And for every job we create directly, there's a multiplier effect that can add ten more positions with suppliers, retailers, and others related to our business.

We have 56 owned and franchised bottling plants... which is my particular leadership focus. We hold the number one position in sparkling beverages, juice and juice drinks and retail package water. Our brands include Coca-Cola... Diet Coke... Thums Up... Fanta... Limca... Maaza... Kinley... 16 in all... providing refreshment, hydration and nutrition.

Those numbers indicate a tremendous commercial impact. But they also indicate a tremendous social impact.

That is something we take personally... pursue aggressively... and measure carefully -- as an employer... marketer... and plant operator.

To explain what that means to us locally, I have to start with what it means to us globally.

At the very center of that meaning is the fact that we're both a global system and a local business. We're not an exporter. We make, sell and live in the markets we serve. It's true here. It's true in over 200 countries and territories around the world.

Because of that, everything we do in a market rests on a simple, powerful philosophical foundation. We can't be a successful company... unless we have successful communities.

More than ever, that success centers on the word "sustainability." It's powerful word, but not a particularly precise one.

Our definition of sustainability lives where the strengths of our business and the needs of society come together. We believe that engaging business with society is the defining business issue of our time.

It's as powerful as the Internet... or globalization... or any other force that has changed our world and altered our future.

Treating sustainability like a mere check list or corporate slogan will exact a stiff penalty. Instead, it's a business fundamental. It's how we create a sustainable future for our company and our brands. It's how we help strengthen the communities that support us. And it's how we live up to the expectations of consumers who increasingly base their love for a product on their respect for the company that produces it.

There's a return on sustainable business practices that's every bit as important as return on investment. Like every other part of our business, progress, change and growth in sustainability comes from that critical merger of global reach and local base. Globally and locally, our sustainability efforts center on those areas where we have the greatest impact and... as a result... where we can make the greatest difference.

For Coca-Cola, we believe we can make the greatest difference in four broad areas: Water stewardship... sustainable packaging... climate protection... and stronger communities. We've set stretch goals in each. We announced them widely. We track them publicly. And they are at the heart of our 2020 Vision and Roadmap.

To give them necessary visibility and direction, we have combined all the actives in these four areas under a global effort we call Live Positively. It's how we give global efforts both dimension and direction... in our impact on the environment... the kind of workplace we create... the value of our products... the impact we can make on active healthy living. Or as our Chairman and CEO Muhtar Kent puts it simply and accurately... "Live Positively is a set of promises we make to our communities."

In water, our vision is water neutrality in our direct operations... through reduction, recycling, and working with partners to replenish watersheds.

As populations grow and climate conditions change, our goals are up against moving targets. As you know, water has been an area of some tough criticism for us in India... especially in rural areas around our plants.

While we've answered the critics, we've also worked very hard to improve our operations. Our investment centers in communities where our plants are located. Our recharge program includes support of rainwater harvesting, drip irrigation and other initiatives, such as helping restore traditional water storage systems that local communities use. By the end of 2010, we achieved a recharge rate of 93 percent of the groundwater that we use throughout India.

Water is very much a work in progress. But the progress is real. And it will accelerate.

In packaging, our goal is to remove all waste from the system. At the center of that goal is the belief that we'll see a world where packaging is transformed from troublesome waste to valuable resource.

It starts with creating lighter weights, expanding recycling and using more recycled content. It looks ahead to a new era of technological improvements... like our PlantBottle™, which uses 30 percent plant-based material. By 2020, we expect to transition all of our plastic use to PlantBottle packaging.

In climate, our goal is to grow the business, but not the carbon in our manufacturing. It's been a very active area in India.

• We're now converting traditional furnace oil based boilers into briquette or biomass based equipment.
  
• We're exploring green fuel options like compressed natural gas. In fact, all of our product distribution vehicles in Delhi now run on CNG.
  
• We've unveiled what I think is an excellent recent example of business and community value coming together - our new generations of coolers.
  
• Here in India, we've achieved 100 percent conversion to HFC-free insulation.
  
• We introduced solar powered coolers that offer maximum energy efficiency, giving us the ability to provide cold drinks to areas with still-developing electric supply.
  
• And our new Energy Management System keeps drinks cooler in active times of day, and slightly warmer after hours.

In community development, we not only want to be a source of economic growth, but also a factor in improving quality of life. I talked earlier about our impact on economies. But our attention also extends to impact on health, learning, disaster relief and quality of life.

Again, the focus of that attention is our plant communities. Through our Support My School program, we began a partnership to improve basic amenities like water, sanitation, and sports and recreation facilities.

We believe education is fundamental to social improvement. Our goal is to promote "healthy, active, happy schools" - places where the most productive and effective education can take place.

I've been talking a lot about Coca-Cola. And I've laid out a lot of commitments. But there is an important qualifier. We're confident enough to be very public in our intentions to build our business and improve our communities. But we're humble enough to know that we can't do it alone. Nobody can. Not companies. Not governments. Not philanthropists. Not NGOs.

Real change can only happen when all interests - commercial and societal - converge in the cause of mutual interest. It's when business, government and civil society - what we call the Golden Triangle - come together, put aside differences, focus on common aspirations, and create lasting, sustainable change.

We are seeing exactly that convergence in India. We are very early in the journey. But the journey has clearly begun. There are certainly obstacles and challenges ahead. But we will overcome them.

Speaking for all of us at Coca-Cola... we look forward to working with you to make sure the journey takes us to a stronger business... and a stronger India.

Thank you.