Shareholders Ask Coke & Pepsi to Recycle

A group of socially concerned shareholders are pressing the Coca-Cola Co. and PepsiCo Inc. to live up to their 1990 announcement that they would use 25% post-consumer plastic in their bottles.

Concerned amount the enormous environmental problems posed by millions of discarded plastic bottles, Walden Asset Management, As You Sow Foundation, Domini Social Investments, Trillium Asset Management, and lifelong Coke shareholder Lewis Regenstein are also asking the companies to support or institute programs to achieve a recycling rate of 80 percent for their beverage containers sold in the United States. The shareholders hold about $50 million worth of Coke shares. Working Assets has printed action alerts on 300,000 customer phone bills and numerous local governments have passed resolutions targeting Coke’s recycling waste.

We decided to take this action because the plastic bottle waste problem is growing rapidly and overall beverage container recycling is dropping, said Conrad MacKerron, director of the Corporate Accountability Program at As You Sow. Investors have engaged Coca-Cola management in a substantive dialogue about these problems over the past year but the company has not agreed to commit publicly to recycling goals.

Technology is not the problem. Coke uses 25 percent recycled plastic in Australia, New Zealand, Switzerland and Sweden, and even offers refillable bottles in France and Latin America. This year, after pressure from advocacy groups led by the GrassRoots Recycling Network and discussions with social investors, Coca-Cola started using a small amount of recycled content – 2.5 percent – in their plastic bottles again. Pepsi uses none. According to GRRN, it costs Coke about .1 cent more per bottle to use recycled plastic.

Coke reverted back to using only virgin plastic for the U.S. market in 1994. About 800 million pounds of virgin plastic end up in land-fills or incinerators each year instead of being used as feedstock to manufacture new plastic bottles, pillow stuffing, fleece jackets, carpets, or auto parts. Manufacturers of these products complain they are in short supply of plastic material.

GRRN blames Coca-Cola for the plummeting rate of plastics recycling. Two of every three plastic soda bottles (45 million containers per day) become waste or litter. The U.S. recycling rate for plastic soft drink containers declined from 53 percent in 1994 to 35.7 percent in 1999. And Coke and Pepsi have actively lobbied against container deposit systems, which require a refundable deposit of 5 or 10 cents on beverage containers to provide an incentive to recycle. Bottle bills assure that most beverage containers get recycled – the 10 states with bottle laws have an 80 percent recycling rate as compared to 38 percent for those that don’t.

Reducing and recycling waste is directly related to climate change. The U.S. EPA estimates that by reducing waste to 1990 levels and by increasing the national recycling rate from 28% to 35%, greenhouse gas emissions would be lowered by an amount equal to taking seven million cars off the road.

http://www.grrn.org
http://www.bottlebill.org/

FROM E Magazine and Walden Asset Management.