Coca-Cola shareholders fail to pass recycling resolution, but hope is on the horizon

At Coca-Cola’s annual general meeting in Atlanta, shareholders concerned about the lack of recycling within the company’s US operations have failed to pass a resolution significantly increasing both plastic and can recycling over the next four years, but remain enthusiastic that the result was better than expected.


The campaign to encourage greater recycling by Coca-Cola in the US sets two specific targets to be achieved by the beginning of 2005. The shareholders are demanding that the company makes its plastic bottles with 25% recycled plastic, and takes steps to achieve an 80% recycling rate for Coke bottles and cans. “Recycling rates for beverages sold by Coca-Cola and its competitors dropped dramatically in recent years, as plastic bottles and other throwaway beverage containers proliferate,” said Pat Franklin, a Coke shareholder, and Executive Director of the Container Recycling Institute, based in Virginia.

Despite the failure in the shareholder vote, however, Coca-Cola Chairman and CEO Douglas Daft announced that the company plans to use 10% recycled plastic in its bottles by 2005, and that Coca-Cola is now working with a newly-formed alliance called Businesses and Environmentalists Allied for Recycling (BEAR).

Outside the US, such as in Australia, Coca-Cola uses 25% recycled plastic in its bottles. The failure in the vote also comes despite a commitment in the company’s statement on climate change that two key areas on which it needs to focus are decreasing the generation of solid waste, and maximising recycling. “Unless a financial incentive is established, like the refundable deposits in 10 states with bottle bill laws, Coke will find it difficult or impossible to meet the goal of making plastic bottles with 10% recycled plastic,” said Bob Woodall, a Coca-Cola shareholder, and Executive Director of recycling group Waste Not Georgia.

Coca-Cola is against deposit-refund programmes to encourage the return of bottles for recycling, as the company claims that to establish a duplicate recycling system alongside existing community recycling programmes would be an economic and strategic mistake, removing the most valuable materials, such as aluminium, glass, and plastics from the community system, and that deposit systems cost three times as much to run as standard curb-side collections. Deposit systems also divert attention away from mainstream recycling by subdividing the recyclable stream and focusing disproportionate attention onto containers that account for less than 3% of the waste stream.

“In our view, a firm’s commitment to responsible management of its waste stream is an essential component of sound corporate management, and a strong contributor to shareholder value,” said Adam Kanzer, General Counsel for Domini Social Investments, a co-sponsor of the resolution. “As the industry leader, we believe Coke has a responsibility to develop a more comprehensive recycling policy with clear goals that raise the bar for the beverage industry.” Domini holds over 700,000 shares in Coca-Cola as part of its socially and environmentally screened portfolio.

“We did better than expected,” said Lance King, one of the supporters of the shareholders’ recycling proposal. “When you combine the yes votes and those who abstained, roughly 10% of the votes went against the Coca-Cola management’s recommendation opposing the recycling resolution. That is an excellent result for a first vote on any shareholder resolution.”

In contrast, according to campaign group GrassRoots Recycling Network, Pepsi is doing nothing to address recycling, and the organisation is campaigning influence the company’s shareholder vote due on 2 May in Dallas, Texas.

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