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October 24, 2006
PepsiCo and Coca-Cola Get Cs on Report Card for Ten Percent Recycled Content in Bottles
    by Bill Baue

The report, conducted by the As You Sow (AYS) Foundation and the Container Recycling Institute, graded the ten other beverage companies D- and F on recycling.

Ironically, the Patagonia fleece jacket on your back has a much higher percentage of recycled plastic soda bottles in it than, well, the plastic soda bottle filled with Coke or Pepsi in your hand. In 1993, the outdoor outfitter turned heads by making polyester out of used plastic bottles. Three years earlier, PepsiCo (ticker: PEP) and Coca-Cola (KO) announced--then promptly abandoned--commitments to include 25 percent recycled content in their plastic bottles, according to a recent report from the As You Sow (AYS) Foundation and the Container Recycling Institute (CRI). Now, more than a decade later, the two companies lead the US beverage industry in practices and policies on container recycling for meeting their target of using a mere ten percent recycled content in plastic bottles by the end of 2005, according to the report's scorecard.

Pepsi and Coke were among the five companies out of 12 to respond to the recycling survey on which the scorecard is based (scores for non-responding companies are based on public data.) Pepsi and Coke both receive letter grades of "C," while four companies--including Coors (TAP) and Anheuser-Busch (BUD)--earn a "D-." The remaining six companies--including Cadbury Schweppes (CBRY.L) and Starbucks (SBUX)--receive a failing grade. The scorecard assesses policies and performance in three areas: use of recycled content in beverage containers (30 percent of score), beverage container recovery and recycling (40 percent), and reducing the amount of packaging material (30 percent.)

"Let's hope this report is a wake up call and encourages the beverage industry players to do much more," said Carl Pope, executive director of the Sierra Club, which endorsed the study along with the Environmental Working Group (EWG) and Friends of the Earth (FoE). "We join As You Sow and the Container Recycling Institute in calling for beverage companies to step up and improve their recycling efforts as well as to support public policies and programs to boost collection and recycling rates."

Looking closer at grade point average (GPA) on a scale from zero (worst) to four (best), Pepsi slightly outperformed Coke with a 2.3 GPA compared to 2.1 for Coke. The main distinguishing factor is that Coke is dropping its commitment to include ten percent recycled content in its PET (Polyethylene Terephthalate) plastic bottles in 2006 despite the fact it reached this goal in 2005, while Pepsi is keeping its commitment, according to the report.

"We are not pulling back from any commitment, rather directing resources toward putting in place the infrastructure needed to sustainably increase our use of recycled content PET," said Scott Vitters, director of the sustainable packaging platform at Coke. "This includes increasing the current capacity of effective technologies for processing food grade PET material and advancing sustainable collection systems for increasing the supply of bottles collected."

"To increase collection we have been focused on designing packages with high recycling value and working with other stakeholders to promote effective community collection programs such as pay as you throw or recyclebank models--models achieving recycling rates of all materials above 50 percent," Mr. Vitters told

While Coke says it is focusing attention on increasing capacity to recycle plastic bottles, it opposes so-called bottle bills whereby consumers pay a nominal deposit (usually five cents) on bottles and cans that encourages them to recycle them.

"Container deposit programs have resulted in recycling rates of 70 percent and above in the 11 states with 'bottle bills,'" writes report author Nishita Bakshi, research director of the corporate social responsibility program at AYS. In contrast, the overall container recycling rate dropped from 53.5 percent in 1992 to 33.5 percent in 2004, she points out elsewhere. "In addition to the higher recycling rates achieved by bottle bills and the resultant energy and resource savings, advocates also highlight other benefits such as litter reduction and providing a guaranteed supply of high quality recyclables to recycling businesses."

"These laws also shift the costs of recycling from taxpayers and local governments to producers and consumers, a policy that employs Extended Producer Responsibility (EPR)," she adds.

Coke contends that the deposit and refund system leads to high operating costs, increased labor and investments in capital equipment, and runs counter to established community programs such as curbside recycling, according to the report.

"It is important to note here that curbside recycling programs are publicly funded programs while deposit refund systems are funded by producers and consumers of the beverages," states Ms. Bakshi.

As well, curbside recycling addresses all forms of recyclable content, whereas bottle bills only address beverage containers.

"We do not support policies that unjustifiably single out beverage containers from other packaging through taxes or legislative mandates which typically distort the market and undermine the economics of effective multi-material collection systems," said Mr. Vitters of Coke. "We remain active proponents of any responsible strategies that focus on addressing all materials in the municipal solid waste stream."

In conclusion, the report makes five recommendations.

"All beverage companies need to strive to match and exceed the standards set by Coca-Cola and PepsiCo in order to increase recycling rates, increase demand for recovered containers and to reduce consumption and pollution of natural resources," states the report.

Recommendations include committing to using the highest possible levels of post consumer recycled content in beverage containers; committing to a measurable, sustainable national recovery goal for beverage containers; and publicly reporting on their progress each year.


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