Coke, Nike Call Climate Change ‘Commercial Threat’

by | Jan 27, 2014

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CokeCoca-Cola and Nike are among the global companies that have acknowledged that climate change is a major threat to commerce and adapted their business practices as a result, the New York Times reports.

Coke’s turning point came in 2004 when the beverage giant lost an operating contract in India due to water scarcity. After a decade of “increasing damage” to its balance sheet, in the form of shortages of water, sugar cabe, sugar beet and citrus needed to produce its soda, the company has fully embraced the idea of climate change as an economically disruptive force, the paper reports.

The company is now part of an increasing number of companies that see climate change as a force that contributes to lower gross domestic product, higher food and commodity costs and a problem that can also disrupt supply chains and lead to financial instability.

At the World Economic Forum in Davos, Switzerland, all of Friday was set aside to talk about climate change and its commercial implications.

Nike is speaking at the conference about the threat flooding — a result of climate change — to its operations and supply chain based in low-lying areas. The company last year had to shut four factories in Thailand due to flooding and is growing more concerned about the threat posed to cotton harvests and, as a result, cotton prices, the paper reports.

Both Nike and Coke have policies in place to mitigate the effects on their end product. Coke has implemented water conservation measures and Nike has increased the amount of synthetic materials it uses. The apparel company has also opened a waterless dye factory.

Air France, BMW, Hewlett-Packard and Microsoft are among 79 companies leading in climate change performance, according to an evaluation and benchmarking tool created for CDP supply chain members and suppliers and launched this month.

The Supplier Climate Performance Leadership Index  was compiled by environmental consulting and software firm FirstCarbon Solutions on behalf of CDP. The index is based on supply chain program data from 2,868 suppliers that are disclosing climate change data at the request of CDP’s 64 supply chain members.

Photo Credit: Old rust condition vintage of Coca Cola logo, Thailand, via Shutterstock

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