Lasting refreshment

We're just at the beginning stages of what I believe will be an era of unprecedented sustainability innovations. Over the course of 123 years, the men and women of the Coca-Cola system have built one of the world's most recognized and valued brands. In fact, today, Coca-Cola is the second-most universally recognized term on the planet. Only the term ‘okay’ is recognised by more people around the world.

“Break a promise and you destroy a relationship. If a good brand is a promise, then a great brand is a promise kept”
-Muhtar Kent, Coca-Cola Company

The strength, the resolve and the sustainability of our brand is directly related to the social license that we have earned from billions of consumers around the world over all these years. It's an honour and a responsibility we don't take lightly and which we will never take for granted.

In today's connected global economy and interwoven social networks, a brand with 123 years of credibility can be discredited – and even destroyed – in a matter of 123 seconds.

I would contend that as business leaders there is absolutely no responsibility that is more important for us to manage and uphold than our social license to operate. Without it, we are lost.

History has proven this time and again. In fact, while 'social responsibility' and 'sustainability' have gained great attention in recent years, these are by no means contemporary 21st century concepts. The values of business social responsibility are as old as written history.

A sustainable brand – an enduring brand – must also be a socially responsible brand. A brand, of course, is more than a logo, a design, or a slogan. Much more. It has a heartbeat, a soul and a psyche. It is the very core, the very essence, of an organisation.

A brand is a promise made to your consumers and customers, your employees, your investors, communities, vendors and suppliers. And trust is the glue that holds all those relationships together. Break a promise and you destroy a relationship. If a good brand is a promise, then a great brand is a promise kept.

As we endure a global financial crisis brought on largely by a series of broken promises, the virtues of trust and socially responsible brands have never been more relevant.

Consider just a few alarming statistics. According to the most recent Edelman Trust Barometer, nearly two-thirds of informed citizens trust corporations less than they did a year ago. When respondents were asked about trust in business in general, only 38 percent said they trust business to do what is right – a 20 percent drop over last year. According to the same survey, less than one in five people today say they trust information from a company's CEO. These are among the lowest levels of trust ever recorded.

The Edelman survey also points out that a company's values towards social responsibility and sustainability are of paramount importance to consumers today. Similar studies across the world draw the same conclusions. About 60 percent of global consumers, for instance, now say they would be willing to pay more for a product that helped reduce carbon emissions. The majority of global consumers claim that a company's social responsibility efforts carry nearly equal weight to price and brand quality when making a purchasing decision. Most consumers today feel that companies spend too much money on advertising and marketing and should put more resources behind social responsibility. The vast majority of consumers say that during a recession, they are more loyal to brands that are perceived as socially responsible.

Clearly, now is not the time to cut back on our sustainability efforts. In fact, I believe that businesses that effectively invest in sustainability innovations today will not only be in a better position when we come out of this crisis but that many will also make leapfrog gains in the marketplace.

Historically, times of recession and economic decline have spurred some of the world's greatest business models and innovations. To borrow from the words of President Obama's Chief of Staff, Rahm Emanuel, "We must not waste this crisis."

We are truly entering a new era of resetting priorities and values and expectations. This is being driven not only by the financial crisis but even more so by a host of massive global forces that will reshape the world over the next decade.

For instance, between now and the year 2020, we're going to see a billion new consumers ascending to the middle class. Even despite the current economic difficulties, our estimates on this number are lower than projections from World Bank and the WTO, among others. This rising middle class underscores a broader global economic development. By 2020, the world's economic power will radiate from many nations and not just a few.

Of course, we're already seeing this shift as China and Asia seem to be on the verge of leading the world out of the current economic crisis.

With middle class growth, we're also seeing a huge influx of urban migration. Today, the world's cities are growing by 65 million people each year, and that will continue for at least the next decade. That's the equivalent of adding a metro Tel Aviv to the planet every 18 days for the next 10 years.

And as population and wealth grow, we will also see a constant scarcity of energy, food and other natural resources. Longer life spans will be the new norm as advances in medicine and biotechnology come to fruition. Average life expectancy will likely increase by five years by 2020.

At the same time, many parts of the world – including the Middle East – will experience a surge in youth populations. And almost everywhere we will no doubt see greater government intervention into commercial and economic affairs.

Collectively, these economic, demographic and political shifts are creating what I call the New Equilibrium, or the 'new normal.' What we have here is a world of incredible dichotomy. A world of both extraordinary opportunity and promise on the one hand, and a world of incredible challenge on the other.

In this world where headwinds and tailwinds are in constant collision, we're most definitely going to see an even more heightened 'global sustainability consciousness.' Brands that can navigate this environment and appeal to consumers' expectations of social responsibility will thrive. Those that fail to navigate this New Equilibrium will fail.

I would like to briefly outline three key lessons we have learned at Coca-Cola in our journey towards enhancing the social responsibility of our corporate brand.

The first is to integrate sustainability into your business model. Sustainability and social responsibility are not public relations initiatives, or compliance check-offs, or nice to-dos. In a world where populations are growing, where natural resources are stressed, where communities are forced to do more with less, and where consumers' expectations are expanding, sustainability and social responsibility are core to our business continuity and survival.

Our vision of sustainability at Coca-Cola is a world where all people have access to safe water, where our packaging is a valuable resource for the future, and where our communities and our neighbours are prosperous. We have seen through our own experiences - time and again - that our business in any market is only as healthy and sustainable as the community in which we operate.

For instance, in Israel, our bottling partner, Central Bottling Company (CBC), has placed a great deal of innovation focus on water use. These initiatives have resulted in the highest rates of water efficiency among the 200 countries we serve. And they carry a clear environmental message in a country – and a planet – where water preservation is of utmost importance.

Last summer I had the privilege of being in Israel to celebrate the fourth anniversary of CBC. CBC has become one of the first Israeli food and beverage companies to earn the prestigious ISO awards for quality and environment. No question, they are truly committed to business social responsibility.

This leads directly to the second lesson we have learned – socially responsible brands can only be managed by socially responsible leaders. Critical to this is finding leaders who possess a worldview and who embrace diversity. Multi-national businesses need people who can move seamlessly across borders and cultures and feel as comfortable working in Tokyo as they do in Tel Aviv.

At Coca-Cola, we make a point to find young managers who want to be stretched -who relish the challenge of working outside their comfort zones and can develop deep relationships outside their own culture. The next generation of leadership will need to be able to recognise and harness the power of diversity.

At Coca-Cola, diversity is an absolute business imperative as we conduct business in literally every corner of the planet. One of the most fulfilling diversity programs I am personally involved in is serving as the chair of our company's Women's Leadership Council. In this role, I work with senior women executives throughout our company to identify strategies to attract and develop more women into leadership positions. The insights women bring to our business are profound, to say the least. Today, women account for the majority of purchase decisions for our beverages. Globally, women make up 70 percent of all grocery shoppers.

The good news for us as employers is that the next generation really wants and expects to step up to this role of socially responsible leadership.

A recent survey of young global professionals in their 20s shows that the ideal employer reflects "a down-to-earth blend of idealism and pragmatism, of concern for self and others." As a group, these young professionals share the belief that business should benefit both the individual and the broader society.

I know from talking to my own children, that they have much higher expectations of what they want out of an employer than I certainly did when I entered the workforce over 30 years ago. I also hear the same sentiments when we interview young job candidates and when I go speak on college campuses. People want to work for companies that share their values.

The third lesson we've learned is that building a culture of social responsibility begins at home, within the four walls of your company. In order to be real and beneficial, corporate social responsibility has to be a movement. A way of life. A way of thinking about the world.

We believe so much in this idea at The Coca-Cola Company that we introduced a concept called Live Positively last year. Live Positively is a way for us to think holistically and globally about all of the sustainability efforts we're working on system-wide. It includes goals and metrics and several agreed upon principles. We've set goals for our community work, for our active healthy living programs, for our environmental work and for our workforce and employee engagement efforts.

Ultimately, Live Positively is about making the right decisions – the smart decisions – to run our business better and to satisfy the needs of our customers and consumers. It's about creating a culture of sustainability and continuing to challenge ourselves about how we can improve and do more towards this necessary goal.

This article is based on a presentation at the 2009 Globes Conference on Social in Tel Aviv, Israel.

Positive action

The concepts behind Coca-Cola's Live Positively campaign

In a world where populations are growing, where natural resources are stressed, and where consumer's expectations are expanding, sustainability is absolutely critical to our business survival and to our growth. Even in this time of economic uncertainty, consumers are looking at more and more of their purchases through a sustainability lens. In every market, from the wealthiest to the poorest, we're seeing a massive resetting of priorities, of values, and of expectations. This is actually a very positive development for us, and for our world.

At Coca Cola, our vision of sustainability is a world where all people have access to safe water, where our packaging is treated as a valuable resource for the future, and where our customers and employees and communities are prosperous, and where our beverages provide simple moments of refreshment and pleasure billions of times each day. In essence this is our brand promise, and if a good brand is a promise, then a great brand is a promise kept.  The men and women of the Coca Cola Company and our bottling partners certainly recognize this.  In the course of 123 years we have built the worlds most recognized and the world's most valued brand. We also know that sustainability has to be a movement, a way of life, a way of thinking about the world. We believe so much in this idea that we introduced a concept called Live Positively last year.

Live Positively provides a framework for us to think holistically and think globally about all of the sustainability efforts we're working on in our entire system. It includes goals and metrics, and several agreed upon principles, including among many others returning back to nature an amount of water equal to what we use in our beverages by 2020, encouraging and supporting active, healthy lifestyles in every market that we serve, providing energy labeling on the front of nearly all our beverage packaging by 2011, and developing an additional up to 2,000 manual distribution centers for entrepreneurs in Africa by 2010. Ultimately, Live Positively is about making the right decisions, the smart choices, to run our business better, and to satisfy the needs of all our stakeholders, starting with our consumers and our customers. It's about creating a culture of sustainability; one we think will spread well beyond the Coca Cola system.

Of course, Live Positively is a work in progress; we have much work ahead of us. The journey, in fact, is just beginning, but it's a journey we look forward to and one that will help create an even better Coca Cola in the years ahead.