The Coca-Cola Company's Observations, Responses and Outlook in a Changing Climate

Greg KochDirector, Global Water StewardshipOffice of Sustainability, The Coca-Cola Company

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Water is Biggest Part of Our Supply Chain and it is Under Growing Stress• Physical availability – surface

or groundwater – and the sustainability of those sources

• Infrastructure existence, pressure, service area, metering

• Pricing – too cheap or too expensive

• Droughts

• Competing use and increased demand from more people and increased GDP

• Climate change

• Regulatory limits

• Social acceptance

Water Risks in Manufacturing Locations

Water Risks in Agricultural Supply Chain

Global Water Stress

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EFFECTS1. 2/3 of world population in severe water stress

2. 1/3 of world land area in severe water stress

3. Significant water quality degradation

4. Precipitation patterns change: more droughts and floods

5. Significant increase in competition for freshwater

6. More aggressive allocation , increased prices, conflict potential

7. Two billion more urban residents by 2030

8. Variable adaptation by public sector

9. Water infrastructure needs require $1 trillion+ between now and 2025

2020: Water Megatrends and Effects

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MEGATRENDS

POPULATION GROWTHExpected to increase by

1.5 - 8 billion by 2020

CLIMATE CHANGE0.8°C temperature increase by 2020

GLOBAL DEVELOPMENTDramatic increase in

number of developed economies

2020 Water Stress: Rate of Change

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THIS IS NOT ONLY A DEVELOPING WORLD ISSUE

Classified - Internal Use OnlyLAKE MEAD, NEVADA

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Recent Events within the Coca-Cola system

•Chronic Water Stress•Drought•Community Connection•Local WRM Capacity

•Water Quality•Local WRM Capacity•Local Policy

PlantClosure

Find New Water Source

Water SupplyReduction

More StringentWastewater Treatment

Requirements

•Poor Local Water Quality•Social Reaction•Political Reaction•New Policy

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• Increased Local Development• Infrastructure Funding Policy•Economic Scarcity

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Global Risk Assessment and Analytics

2010 System-wide Water Risk Summary in Manufacturing

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Our business can only be as healthy as the local communities where we operate; access to clean water is one of the most important barometers of a community’s health.

Muhtar Kent Chairman & CEO The Coca-Cola Company

“

”

Water is: – The main ingredient in all of

our beverages and essential to our manufacturing processes

– A life-sustaining resource for the communities and ecosystems that make any endeavor possible

– A key component of many of our ingredients, including sugar and juices

– Fundamental to our markets (non-export)

Why Are We On This Journey?

© Copyright 2010 The Coca-Cola Company. Confidential

Global Water Stewardship Strategic Framework

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Supply Reliability

Decreased water availability

Local Social

Adverse social climate

Water Resource Sustainability

Water resources under stress

Human Health & Well-Being

Safe Drinking Water

Food Availability

Sanitation Economics

Ecological Health

Aquatic Ecosystems & Species

Terrestrial/Riparian Ecosystems & Species

TCCC Risk

Specific Activities

Watershed Protection

Water Access & Sanitation

Education & Awareness

Water for Productive Use

From Risk Analysis to Action

To Date, We Have 468 Community Water Programs in over 100 Countries Replenishing 52% of Product Volume

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Access to water and sanitation

Education and awareness

Water for productive use

Watershed protection

Includes Support For:

FOOD

WATERENERGY

POPULATION GROWTH• Expected to increase by 1.5 billion

to 8 billion by 2020• By 2030 the number of urban

dwellers is expected to be about 1.8 billion more than in 2005 and to constitute about 60% of the world’s population

CLIMATE CHANGE• 0.8oC temperature increase by 2020• Manifestation in water• Unabated, climate change could cost the

world at least 5% in GDP each year• If current policies are maintained, global

energy demands are expected to grow by as much as 55% through 2030 and further stress water resources

GLOBAL DEVELOPMENT• Dramatic increase in number

of developed economies• Surging middle class

Food-Water-Energy Nexus

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Water, Energy and Food:All Three are at the Heart of the Sustainability Challenge

Southeast Asia, Baseline Water Stress and Power Plants

Southeast Asia, Baseline Water Stress and Power Plants

Southeast Asia, Long Term Change in Water Stress and Power Plants (2025, IPCC Scenario A1B)

Southeast Asia, Baseline Water Stress in areas with Irrigated Agriculture

Southeast Asia, Baseline Water Stress in areas with Irrigated Agriculture

Southeast Asia, Change in Water Stress by 2025 in areas with Irrigated Agriculture (IPCC Scenario A1B)