Temperature Increase

Coca cola

Coca cola and its business model face a variety of challenges as the effects of climate change become
more prevalent.

Recently, atmospheric carbon dioxide passed the 400 parts per million (PPM) threshold which indicates a
potentially dangerous (and irreversible) trend that continues to fuel rising global temperature. Should we
pass 450 PPM, it is projected that average global temperature will increase by 2 oC and cause a “rapidly
escalating risk of crossing climate ‘tipping points’ that would lead to intolerable impacts on human well-
being.”3 However, even without reaching this threshold, we have already begun to experience the adverse
effects of GHG emissions and the future operating environment for the beverage industry has irrevocably
changed.

Impact on Coca-Cola
In Coca-Cola’s 2015 10-K, they list a variety of factors that have the potential to materially
affect their business in future periods and specifically identify climate change, adverse weather
conditions, and water scarcity as key risks. They also mention a concern that increased GHG
levels will cause shifts in global weather patterns that will increase the “frequency and severity
of natural disasters.” Such weather changes have the potential to limit access to or increase the
cost of many key ingredients required to create products (e.g., sugarcane, sugar beets, and
coffee). They also have the potential to degrade production and supply chain capabilities as well
as decrease product demand. Furthermore, with a world population expected to reach 9.2 billion
people by 2050, the global need for water will continue to grow in tandem with natural disasters
that reduce availability as well as quality. As a result, climate change has the potential to
significantly impact Coca-Cola’s bottom line if its effects are not properly mitigated.

Company Response
At a company level, Coca-Cola has recognized the implications of climate change and created a
“Climate Protection Strategy” focused on mitigating environmental effects of their operations
and products. In practice, this effort has taken the form of programs and policies targeting water
stewardship and GHG emission reduction focused on their manufacturing plants, distribution
fleet, and cold drink equipment.8 A prime example of their commitment to combating climate
change came in the form of a multi-year partnership with the World Wildlife Fund. Here Coca-
Cola pledged to facilitate the conservation of global freshwater river basins, improve operational
water management in their global supply chain, and reduce its carbon footprint.9 Furthermore,
Coca-Cola, along with McDonald’s and Unilever, created and started employing HFC-free
refrigeration units that made such an impact on reducing global warming that the Environmental
Protection Agency awarded them their Climate Protection Award.10 Through these and similar
efforts (e.g., green power), Coca-Cola has made a clear impact throughout the value chain that
not only establishes it as a business leader in the area of sustainable practices but also helps curb
further climatic instability.

Sea Level Increase

This for-profit association of pilots has been guiding commercial ships in and out of New York
and New Jersey Harbors for nearly 300 years. The association's 75 pilots, who are co-owners of
the business, provide a critical service to the local and national economy by guiding all ships--
including the Queen Mary and the thousands of cargo ships annually that dock in New Jersey
chock full of consumer and industrial goods--through the local waterways. But Sandy decimated
its headquarters, which were on a pier in Staten Island, severing its vital communication link to
ships at sea for days after the storm, and costing the pilots an estimated $8 million in damages. It
has been operating out of a temporary headquarters further inland on Staten Island ever since the
storm.
Though the association recouped less than $1 million from flood and property insurance policies,
the pilots are spending about $6 million on a new flood-proof headquarters, which will be
financed through SBA loans and state economic development association loans. The pilots will
build a 15,000 square foot structure on 180 15-foot stilts, with hurricane-proof windows, a water-
impermeable foundation, and a triple-redundant communication link, among other things

Company Response

The Sandy Hook Pilots Association has a rich and storied tradition of piloting larger vessels in
New York Harbor, Hudson River, Hell Gate, and Long Island Sound since the 17th century. A
critical maritime institution, they pilot more than 10,000 ships annually—all foreign-flag and
U.S.-regulated vessels—and have responded to numerous emergencies throughout the region
over the years. Their former Staten Island headquarters was destroyed by Superstorm Sandy in
2012, and they decided to build back better and stronger, ensuring they passed on a more
resilient facility to future generations. The new state-of-art facility, built from the ground up,
overlays resiliency in all aspects of it design, while also being a good neighbor to the local
community