New finance scheme is "first of its kind in the global beverage industry" © Photo by Christopher Furlong/Getty Images
New finance scheme is "first of its kind in the global beverage industry" © Photo by Christopher Furlong/Getty Images

How Coca-Cola is helping its suppliers improve sustainability

25 August 2022

Coca-Cola is pledging to improve the credentials of its suppliers by granting them access to a sustainability-linked finance programme which yields rewards the more eco-friendly they become.

The scheme – described as “one of the first of its kind in the global beverage industry” – is open to suppliers of Coca-Cola Europacific Partners (CCEP) and will be rolled out to those in Europe, Australia and New Zealand following a successful initial run in Germany.

It will provide suppliers with green finance managed by Dutch banking and financial services company, Rabobank, and will further incentivise suppliers by offering additional incremental discounts against the initial funding rate as their sustainability KPIs are met.

The programme looks to tackle the fact that 90% of CCEP’s emissions can be attributed to its supply chain.

The scheme builds upon existing supplier KPIs set out in the firm's science-based targets initiative, which include requiring suppliers to use 100% renewable electricity and to share their carbon footprint data by 2023.

Hannah Rizo, head of sustainability communications at Coca-Cola Europacific told Supply Management: “This supply chain finance programme offers suppliers the ability to access their funds earlier than agreed payment terms, via a facility offered by the bank.

“CCEP and Rabobank will offer discounts on this funding rate, linked to the supplier’s sustainability performance against three criteria: their EcoVadis score (the qualifying baseline for ESG Enhanced discounts); delivery of 100% of energy purchased from renewable sources and published and validated science based targets to reduce carbon emissions,” she added.

Rizo confirmed there are four levels of funding rates (all undisclosed), which "impact the supplier’s performance against the KPIs”. She said: “Suppliers can update their ESG performance twice per year and, once verified, the lower marginal funding rates will be applied to that supplier by Rabobank.”

The programme was first launched in Germany in June, and since then most of CCEP’s supplier base there has joined the programme.

The programme is currently going live in all of CCEP’s other European markets, and will be launched in Australia and New Zealand later this year.

The sustainable finance announcement comes in the same week the CCEP also announced a scheme to cut supply chain emissions of CO2 by developing methods to capture and convert CO2 into sugar.

CCEP Ventures has collaborated with the University of California, Berkeley to research how CO2 capture and conversion can be developed on an industrial scale. 

Craig Twyford, head of CCEP Ventures said: “We're excited to be involved in this project that could lead the industry in the development of transformational technology capable of converting CO2 into more complex, usable goods.”

Coca-Cola has committed to reach net zero emissions by 2040 – 10 years ahead of the Paris Climate agreement – and to reduce absolute greenhouse gas emissions across its value chain by 30% by 2030, compared to 2019 levels.

CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates