ESG Review: The Coca-Cola Company

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Here at the Decent Investor, we believe that everyone deserves to know what good or bad investments are. We aren’t just talking about how companies perform financially. We’re also referring to how they strive to do good with the influence that they have on the world.

As such, we’ve found it more than the right to review some of the top brands with regard to how they stand on the ESG scorecard. Our simple but honest methodology will help you find the best companies to support.

We’re going to start with one of the biggest brands in the world today as we believe that they have more influence and responsibilities than most. 

Here’s the company scorecard for The Coca-Cola Company (NYSE:KO).

Company Background

The Coca-Cola Company is a multinational beverage corporation that was founded in 1892. The brand is best known as the producer of Coca-Cola, which is arguably the most popular carbonated drink in the world. Other than that, the company also manufactures, sells, and markets other products through its subsidiaries.

The company features many brands and it competes in various industries. Some of the biggest names under Coca-Cola include Body Armor, Dasani, Fresca, Jack Daniel’s, Lemondou, Minute Maid, and many more. It’s very likely that you yourself have consumed a Coca-Cola Company product other than Coke.

The Coca-Cola Company’s net operating revenues worldwide is reported to be around $38.66 billion. It keeps a steady stream of income and investors of the company are relaxed knowing just how stable the company’s stock is.

Through its smart marketing campaigns and constant expansion into growing fields, The Coca-Cola Company is able to deliver great numbers for its investors. That’s why it’s remains to be a good long-term choice for investors in the stock market.

Financially speaking, Coca-Cola is an excellent brand that delivers great annual revenues. How does it fair when it comes to ESG rating?

Environmental Concerns

The Coca-Cola Company is pretty open about how it fares when it comes to its impact on the environment. 

For starters, the company has ramped up its efforts to lessen the impact that its manufacturing process and products have on the environment. In 2021, 167% of the water that Coca-Cola uses to create its products was returned to nature and communities. Their 2030 Water Security Strategy hopes to implement smarter water use strategies across its supply chain.

In 2021, The Coca-Cola Company partnered with NGOs and innovators like The Ocean Cleanup to ensure that it can significantly boost its reusable packaging by 2030. This helps the company drive its collection rates while reducing its carbon footprint at the same time.

As billions of Coca-Cola products ship worldwide, there’s no doubt that the company is one of the top producers of waste out there. However, it has long taken notice of this problem and Coca-Cola has ensured us that they have a solid plan for waste and packaging management.

The company aims on collecting and recycling a bottle or a can for each one they sell by 2030. This guarantees that each of the packaging that the brand uses and introduces to the market will be given more than one life, thus drastically reducing the waste it produces.

As of last year, 61% of the bottles and cans they released into the market were collected, refilled, and collected for recycling.

As for its carbon emissions, the company has the plan to reduce theirs by 25% in 2030. Then by 2050, it’s planning on achieving net-zero carbon emissions. All of their plans and targets are dubbed “Science-Based Targets” which means the company has taken a meticulous approach to control its carbon footprint.

Coca-Cola’s efforts to preserve and maintain the environment are amazing, to say the least. Considering that it is one of the top producers of waste in the world, it’s great to see that The Coca-Cola Company has taken the right steps to fully ensure us they’ve minimized the waste and carbon they produce globally.

Social Concerns

The Coca-Cola Company opens its Social goals with the following statement:

“We believe each one of us has the power to make a difference, and our company and The Coca-Cola Foundation have a long history of investing in programs and activities that improve lives.”

With such a large name, Coca-Cola has ensured that the impact they make in communities and in social groups is nothing but good. Unfortunately, the company has had its fair share of human rights concerns over the last few years.

The International Union of Food Workers (IUF) has accused The Coca-Cola Company of being a “serial human rights” offender, citing that it has harassed union group leaders over the years. Coca-Cola has denied the allegations but the controversy shook up management, leading the brand to ramp up its social efforts significantly.

The company’s current Human Rights Policy, introduced in 2017, involves 12 key components:

  • Respect for Human Rights
  • Community and Stakeholder Engagement
  • Diversity and Inclusion
  • Freedom of Association and Collective Bargaining
  • Safe and Healthy Workplace
  • Workplace Security
  • Forced Labor and Human Trafficking
  • Child Labor
  • Work Hours, Wages, and Benefits
  • Land Rights and Water Resources
  • Healthy Lifestyles
  • Guidance and Reporting for Employees

That said, many ESG reviewers have noted that The Coca-Cola Company does well to ensure that it treats its workers and the communities it affects rather well.

The demographics that the company caters to are well satisfied with what the brand offers, especially through the message of happiness it delivers with its marketing campaigns. The only key areas of concern are its impact on the world’s overall waste but that is continuously being addressed as mentioned.

Let’s talk about the company’s employees next. With over 700,000 people, employed worldwide, Coca-Cola has taken a strict approach to workplace inclusivity and proper treatment of its employees. Diversity is a must and the company doesn’t leave a lot of opportunities for discrimination.

As per its ESG report, the company’s main focus on employee satisfaction includes improving key areas such as Gender Balance,  Culture & Heritage, Ability & Wellness, Generations & Life Experiences, and LGBTIQ+.

Comparably gives Coca-Cola a good four stars out of five, based on how well the company keeps engaged with its employees which is definitely a good rating. As per the report, employees put the company’s transparency and integrity values in high regard.

While it has had its fair share of employee concerns before, the overall outlook on how the company takes care of its employees is good. Based on its ESG report, the Coca-Cola Company will pursue better plans for its employees in the future.

Governance Concerns

When it comes to governance, The Coca-Cola Company is very transparent on its board of directors, as well as with how they treat shareholder opinions.

Let’s look at its leadership first.

Coca-Cola is the first major corporation to have a woman a part of its board when it elected Lettie Pate Evans in 1934. Since then, the company has continued to treat women equally and has consistently given leadership opportunities to them as well. The company’s current goal is to have 50% of its leaders be women by at least 2030.

The current board of the company is diversified as well. Aside from having half of the directors be a woman, the board also includes people from other ethnicities including Helene D. Gayle, Alexis M. Herman, and Caroline Tsay.

Unfortunately, Coca-Cola’s wage gap between executive positions and employees is big. In 2020, CEO James Quincey’s base salary was $1.6 million, which was 14,007% greater than the median employee salary of $11,342. Sadly, the trend proceeded with the following year and Coca-Cola has yet to address the issue.

The Coca-Cola Company states that they don’t condone the use of corporate funds to support state or local politicians which is a good thing.

As for charitable work, The Coca-Cola Company has a great reputation for supporting charitable causes. In 1984, the company set up the Coca-Cola Foundation which has provided over $1.4 billion in grants to support charitable foundations. The company has also been very charitable during the height of the Covid-19 foundation wherein it donated over $55 million to support local foundations.

Even before Covid-19, the company has been very active in responding to calamities and disasters around the world.

The Coca-Cola Company has made it a goal to invest 2.0% of its operating income into local communities which is above the annual 1% goal that was established in 1984.


Overall, our rating of Coca-Cola will be 85 out of 100. The brand does very well when it comes to Environmental and Social concerns. The current and future endeavors of the company to address related issues are solid. Some would even go as far as saying that the brand has set the standards for these two pillars.

Sadly, Coca-Cola’s ESG rating is dragged down by its Governance concerns. Particularly, how big the pay gap is between executives and employees. The good news is that despite this problem, Coca-Cola is able to maintain a good standing when it comes to diversity and equality.