In 2008, we broadened our external engagement in CRS related issues, conducting our first structured CRS Engagement Roundtable during the U.S. Democratic National Convention in Denver, Colorado. At a time of major change — politically, economically, and with environmental issues coming to the forefront — we wanted to inform some of our key stakeholders about how we are contributing to the challenges facing our local communities and to listen to their feedback.

More than 60 representatives from federal, state, and local governments, including Atlanta, Georgia, Mayor Shirley Franklin and U.S. House of Representatives Majority Leader Steny Hoyer, as well as NGOs, academics, and the media, discussed growing environmental challenges and the role of the private sector in developing solutions. Delegates agreed that businesses like ours can do more to help policymakers to address issues such as climate change, water scarcity, and recycling. We shared our approach to these issues and were able to showcase a few of our initiatives, such as Coca-Cola Recycling, hybrid electric trucks, and energy-efficient sales and marketing equipment. In 2009, we plan to continue our more strategic approach to engaging our stakeholders, and to hold three engagement sessions — one each in the United States, Canada, and Europe.

We continued to meet with NGOs, government agencies, key customers, and academics to discuss how we can work together to maximize our sustainability efforts. In addition, our senior management continues to tell our CRS story and promote dialogue with key stakeholders. For example, our Chairman and CEO John Brock was a joint keynote speaker at the Net Impact annual conference, a global non-profit student organization focused on environmental sustainability, along with Carter Roberts, CEO of the World Wildlife Fund (WWF), and Marc Gunther of Fortune Magazine, speaking on the importance of businesses and NGOs working together.

Our Stakeholders

As our stakeholders grow increasingly concerned about issues such as climate change and water, CRS is becoming a new way for us to collaborate with them.

Employees

We engage in dialogue with our employees in a number of ways. We publish regular employee newsletters and have an intranet that allows us to inform and elicit feedback from our employees on a variety of subjects, including our five CRS strategic focus areas. In some cases, particularly in regard to business restructuring, we are engaging with employees through unions – over one-third of our employees are covered by local labor agreements, and we respect and protect their right to freedom of association. We have a policy of ongoing and open dialogue to allow their input to be considered before major organizational changes are made.

We have learned through our employee engagement survey and recent data from Towers Perrin, a global firm specializing in human capital and risk management, that CRS is among the biggest drivers of employee engagement at CCE. We engage our employees on CRS-related issues in a variety of ways. During 2008, we launched a companywide internal engagement program called CRS in Action. In Europe, we conducted a week of activities including seminars, daily bulletins themed around our five CRS strategic focus areas, and community engagement projects. We also developed an internal CRS website that provides a forum for ideas and discussions, as well as a variety of CRS-related resources. We plan to execute CRS in Action throughout our territory in 2009, encouraging our employees to become a part of CRS — at home and at work.

Customers

More than 1.2 million customers help us sell our beverages to consumers. Whether they are small independent retailers or large international chains, we aim to be their most valued supplier by offering high-quality beverages and superior customer service.

As our customers respond to growing consumer interest in sustainability issues, we are making CRS another way in which we work collaboratively with them. We are working together on environmental issues, including energy-efficient/HFC-free refrigeration equipment, sustainable packaging and recycling, and transportation efficiencies. We are piloting on-the-go recycling programs with customers in the United States and Europe to help increase recycling rates, and are helping our customers raise awareness among their employees with programs such as the Sam’s Club Sustainability Tour (see case study below). We are also beginning to build CRS into our annual business planning process with our customers.

Suppliers

The impacts of our supply chain stretch well beyond those of our own operations; we have approximately 70,000 suppliers, with whom we spent more than US$11 billion in 2008, 93 percent of which was spent in our countries of operation. As a result, a large proportion of our environmental impacts are embedded in our supply chain. We are beginning to work closely with suppliers on environmental issues such as the introduction of hybrid electric tractors, lightweighting projects, and product carbon footprinting work. In 2009, we will pilot a water footprint methodology to study the use of water in our supply chain.

To ensure that environmental impacts are considered throughout the supply chain, we have implemented Supplier Guiding Principles (SGP), which detail standards for environmental practices as well as labor, workplace health and safety, and business integrity; they also prohibit child forced and compulsory labor, bribery, and corruption. In 2008, 82 percent of our spending with suppliers included SGP in the contract. We worked on a consultative basis with suppliers, conducting joint training workshops with The Coca-Cola Company for procurement teams and suppliers, as well as independent performance assessments. In 2008, we expanded our program and assessed suppliers of all major indirect material commodities. Violations so far have largely been minor health and safety issues, which have been addressed with a follow-up audit when necessary.

Consumers

Although The Coca-Cola Company is primarily responsible for consumer engagement, we work with them to respond to changing consumer expectations. More than 910,170 consumers contacted our consumer response centers by phone, email, or mail during 2008. General inquiries accounted for 87 percent of these contacts, while quality-related contacts represented 13 percent. We aim to continually reduce complaints, though we averaged 2.65 complaints per million units sold during 2008, six percent more than the previous year.

We also help to raise consumer awareness of sustainability issues through a variety of outlets. Coca-Cola Recycling’s marketplace recycling programs give us a new platform to engage consumers directly through recycling activation at special events like NASCAR races and the NCAA Final Four. We are partnering with the WWF-Canada to inspire and engage Canadians to live more sustainably. As a first step, the 2008 Coca-Cola holiday advertising campaign raised awareness about climate change and polar bear conservation, encouraging people to get involved.

Communities

We believe we benefit every community that we serve. Through our core business activities, we bring jobs, and other economic benefits, including the support of community investment programs.

We generate direct economic benefits to the communities in which we operate:

• Generating employment – We paid salaries and benefits of US$4.8 billion in 2008.
• Taxes – We paid more than US$1.4 billion in taxes to national, provincial, state, and local governments. Additional taxes were generated by employee income, sales, customs duties, municipal charges, packaging recovery fees, rates, and levies.

We operate most successfully when we are a valued, contributing member of our local communities. We work hard to establish relationships with local community leaders and organizations, keeping them informed about our business, consulting them on new developments, and responding to their needs and concerns. Through our Operation Grass Roots Enterprise program, we are placing a new emphasis on local relationships that correlate to our five CRS strategic focus areas, specifically encouraging our employees to become more familiar with their local environmental organizations.

In 2008, we contributed US$43.6 million to communities through charitable, in-kind, and monetary contributions, programs, and sponsorships. To make meaningful and long-term contributions, we work in partnership with civic groups, non-profit organizations, and government agencies to identify local needs and opportunities for us to contribute, particularly in our five CRS strategic focus areas.

NGOs and Public-Private Partnerships

We work in cooperation with a growing number of NGOs and other expert organizations on our CRS efforts. Issues such as climate change are complex and fast-changing, and we rely on these partners to guide us, as well as challenge us, as we venture into new areas. In return, we bring our business expertise, resources, and commitment.

Key stakeholders include the World Resources Institute, World Wildlife Fund, Carbon Trust, Carbon Disclosure Project, U.S. Environmental Protection Agency Climate Leaders, Waste and Resources Action Programme, Water Footprint Network, International Business Leaders Forum, and Georgetown University, to name just a few. For the second year, our CRS Report has been reviewed in draft form by MBA students at Georgetown University’s McDonough School of Business, who have provided feedback that has been incorporated into our reporting (see case study below). In addition, we work collaboratively in industry forums, such as the Beverage Industry Environmental Roundtable, to promote benchmarking and best practices.

We continue to support the United Nations Global Compact (UNGC) and are committed to implementing its 10 principles in the areas of human rights, labor, the environment, and anti-corruption.

Public Policymakers

There is a growing role for the private sector in helping policymakers address issues of shared concern, such as climate change, water stewardship, recycling, and other sustainability issues.

We support solutions that are not only environmentally sustainable, but also economically sustainable. We oppose proposals that single out individual products or industries, such as bans on bottled water or sparkling beverage taxes. When these types of issues potentially affect us, we work hard to find constructive, equitable, and sustainable alternatives. We meet directly with officials and policymakers by working through industry associations such as the American Beverage Associations, Refreshments Canada, and the Union of European Beverages Associations . All such activity is subject to our Code of Business Conduct and is closely monitored.

Political Contributions

In the United States, political contributions may be made by our company and our Political Action Committee. This separate legal entity is funded by voluntary employee contributions. During 2008, approximately 53 percent of eligible U.S. employees chose to make contributions totaling US$435,813. Contributions are distributed in a non-partisan manner and disclosed to the Federal Election Commission and relevant state agencies. In addition, our company provided US$40,000 in corporate contributions to political entities. In Canada, such contributions are made through our industry association, Refreshments Canada; in Europe, we do not make contributions to public officials.