We’re taking part in Accounting for Sustainability (A4S), a project that works with the finance and accounting community to embed sustainability into decision-making and everyday practice.

Accounting for Sustainability, a project sponsored by His Royal Highness, The Prince of Wales, aims to:

  • Demonstrate the business case, increase engagement and build capacity to drive behaviour change that results in sustainable business practices
  • Develop practical tools, guidance and approaches that enable environmental, social and economic risks and opportunities to be reflected in decision-making
  • Facilitate the creation of an enabling environment for change through a shift to sustainable capital markets, and supportive regulatory and reporting regimes

How we got involved

Michalis Imellos, Chief Financial Officer became involved in Accounting for Sustainability at the end of 2014. As a result, the Coca‑Cola HBC Group Finance team decided to work on three project initiatives during 2015:

  • Improving transparency of capital expenditure appraisal and embedding sustainability into our decision-making processes
  • Demonstrating sustainability leadership in the CFO community across selected countries in Central and South-East Europe
  • Promoting our sustainability performance to investors
Improving transparency in appraising capital expenditure and embedding sustainability into our decision-making processes

Coca‑Cola HBC spends close to €400 million on capital expenditure (CAPEX) a year. Traditional financial evaluation criteria do not always support the need to advance our sustainability agenda. 

Funds are limited and different business opportunities across our 28 markets inevitably leads to fierce competition between projects and countries.

Decisions are normally driven by evaluating the time it takes to achieve financial payback, with strategic preference given to revenue-generating investments that create shareholder value. This may mean that sustainability projects with longer-term payback might not get considered, be postponed or be considered of secondary priority.

Addressing sustainability in decision-making

Our key environmental challenges are to reduce carbon emissions, water use and waste connected to producing and distributing our soft drinks. To help ensure that these factors are effectively considered in our decision-making, we have introduced:

  • An internal price per ton of carbon, which increases the economic benefit of investing in initiatives that reduce carbon 
  • A ‘true cost of water’ concept, which measures the total cost of receiving water in our plants and disposing of the used water, after it has been cleaned in our waste water treatment plants, back to the environment 

We’ve also measured the sustainability of our water supply per plant and introduced a water scarcity rating, reflecting the different environments in which our plants operate. 

These steps result in a much more realistic view of the real cost of providing water to our plants and, ultimately, for our soft drinks. It helps us make the case for investment in long-term sustainable measures to ensure our water supply and to make sure we are using water economically in our plants. 

Assessing our indirect impacts

Our policy to assess sustainability factors during CAPEX financial evaluation was introduced during 2015 and has been effective from January 2016.

This new financial policy builds on the existing processes developed by our engineering and sustainability experts to identify energy and water savings projects and will help to accelerate and support such efforts.

It also covers, for the first time, a structured assessment of the indirect impact of our large-scale investment projects on our external environment. We will measure impact on jobs and taxes, health & safety, capability building, environmental externalities, cultural heritage and stakeholder perceptions. Should any of these factors show negative impact, we may reconsider our plans or take measures to adapt and mitigate impacts.


Demonstrating sustainability leadership in the CFO community across selected countries in Central and South-East Europe

Our second initiative is to act as sustainability leaders, engaging the wider CFO community in selected countries across Central and South-East Europe.

We want to share insights, challenges and opportunities to accelerate progress towards accounting for sustainability, as well as to collaborate with others to increase the reach and impact of our activities.

Communicating sustainability performance to investors

Basak Kotler, Coca‑Cola HBC Investor Relations Director, is leading an initiative to promote our sustainability performance to the investor community.

Update: February 2017

Our efforts to embed sustainability into decision-making and everyday practice at Coca‑Cola HBC have been recognised by 2016’s Finance for the Future awards.

Read the update to this story