Responsible and Sustainable Sourcing
Our focus on sustainable and responsible sourcing is all about delivering excellent results.
Sustainable and responsible sourcing is a priority for our business. For us, it’s about delivering excellent results.
For third consecutive year we have received the maximum industry score against Dow Jones Sustainability Indices in the beverage sector. Sustainable sugar sourcing and expanded risk assessment played a vital role in this achievement.
At Coca‑Cola HBC, we work together as a system with The Coca‑Cola Company to meet the expectations of our consumers, customers, other stakeholders and enable the continued growth of the Coca‑Cola System. To do so, it is imperative we maintain a secure, sustainable supply of the agricultural ingredients that are essential to our brands. To this end, The Coca‑Cola Company has developed a set of Sustainable Agriculture Guiding Principles (SAGP), which set expectations of our suppliers of key agricultural ingredients (sugar, stevia and key fruits), to sustainably address challenges specific to agriculture. We believe the SAGP provide a mutually beneficial foundation for the Coca‑Cola System and its partners in the agricultural supply chain. Currently, suppliers to the Coca‑Cola System, are required to meet our Supplier Guiding Principles (SGP), which communicate our values and expectations of compliance with all applicable laws and emphasize the importance of responsible workplace practices that respect human rights. The Sustainable Agriculture Guiding Principles expand on the SGPs and provide guidance to our suppliers of key agricultural ingredients. These Principles establish the framework for defining our commitment to sustainable sourcing and are integrated into internal governance routines and procurement processes.
Coca‑Cola HBC have recently set out seven new 2020 sustainability targets that cover our range of activities across the value chain and support our purpose to inspire a better future. Among those, we commit by 2020 to certify over 95% of key agricultural ingredients against the Coca‑Cola System’s Sustainable Agricultural Guiding Principles.
To do so, we will continue working very closely with The Coca‑Cola Company and our key ingredients suppliers through established routines and targeted workshops, while we will continue leveraging our participation in international sustainable agriculture organizations (SAI, Bonsucro etc.) together with The Coca‑Cola Company.
Through collaboration with our suppliers we sourced c.170,000 tons of sustainable sugar in 2016. This achievement will position Coca‑Cola HBC at an estimated 20% toward our target to sustainably source more than 95% percent of sweeteners by 2020.
To stress importance of Country Critical and Tactical ingredients (sweeteners, key juices) suppliers’ commitment to our SAGPs and discipline in execution of their roadmaps we hosted first Sustainable Agriculture workshop in Athens.
Coca‑Cola HBC anticipates to increase percentage of sustainably sourced sweeteners to estimated 40% by end of 2017. We continue working with our suppliers on sustainability effort and plan to conduct individual supplier’s sessions as a follow up of 2016 Sustainable Agriculture workshop with the focus on juice suppliers. The objective of these session is to monitor progress on SAGPs implementation.
Enhancing local sourcing across our territories
Local sourcing is the cornerstone of our Joint Value Creation programs with ingredient suppliers. For example, through joint work with sugar suppliers we sourced 100% of our sugar requirements in Russia, Poland and Lithuania locally. Another example is our work with Russian fruit suppliers to increase local sourcing of key fruits such as tomatoes and apples.
Our sugar and juice suppliers increasingly launch strong internal CSR and sustainability programs on which we collaborate. Majority of our Critical ingredient suppliers are SAI members, have own internal CSR programs, recognized by 3rd party certification bodies, or follow other certifications such as The Red Tractor Assurance scheme, Bonsucro, the Sustainable Agricultural Network (SAN) etc. In 2016, three additional suppliers joined SAI platform.
Localization trend is also an import focus in our work with packaging suppliers. In 2016, we have made significant progress in sourcing packaging from local markets, for example:
- Cans - 100% of metal cans for our Nigerian operation needs are sourced from local manufacturers;
- Glass Bottles - our glass bottle requirements for Nigeria and Russia are sourced locally;
- PET resin and preforms - all our volumes in Russia, Italy, Nigeria, Greece and Austria are locally sourced.
Sustainability Key Performance Indicators (KPIs) and Targets
Key Performance Indicator 1: Certify over 95% of our key agricultural ingredients against the Coca‑Cola System’s Sustainable Agricultural Guiding Principles by 2020.
Target: The sourcing of our raw materials accounts for a large portion of our economic, operational and environmental footprint and our spend with suppliers. We depend on sustainable supplies of sugar and juice bases made of fruits and vegetables to produce a number of our products. As an integral part of our business model, the performance of our suppliers directly impacts the sustainability performance and commitments of Coca‑Cola HBC, encompassing a wide range of economic, environmental and social impacts. We are committed to working with The Coca‑Cola Company and our suppliers to ensure that we source our key agricultural ingredients sustainably.
Key Performance Indicator 2: 100% of our suppliers to comply with the Supplier Guiding Principles (SGP).
Target: We require all suppliers to adhere to the ethical standards, employment and human rights practices, environmental and work safety requirements prescribed in our Supplier Guiding Principles (SGP). We aim to achieve 100% of our suppliers to adopt our SGP utilizing our "SGP Coverage Triangle" with three checkpoints throughout the procure-to-pay process, available on our website at http://coca-colahellenic.com/en/operations/supply-chain/our-suppliers/. We maintain transparency throughout our critical supply base through our membership of SEDEX, The Coca‑Cola Company Supplier Guiding Principles compliance audits and in EcoVadis from 2017 onwards.
Key Performance Indicator 3: Proportion of spending on local suppliers at significant locations of operation.
Target: CCHBC spend with suppliers is more than 4.5 billion euro. Our practice is to source locally, provided that goods and services are available to meet our requirements and quality standards in an economically viable way. We target over 90% of our spending to be with local suppliers in our countries of operation.