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Commitment 2020About This CRS ReportA Message from Our Chairman and CEOOur Business at a GlanceCorporate Responsibility and Sustainability at CCECRS GovernanceCRS in Action |
CRS GovernanceGood governance and ethical business practices are more important now than ever. We are continuing to embed CRS into our everyday decision-making processes. From Board discussions to leadership decisions, CRS is an integral part of how we operate. Our CRS strategy is guided by the CRS Committee of the Board of Directors, which meets regularly to review the progress toward our goal of being the CRS leader in the beverage industry. The Committee is chaired by Board member Cal Darden, Former Senior Vice President, U.S. Operations, United Parcel Service, Inc. Other members include John Brock, our Chairman and CEO; Curt Welling, President and Chief Executive, AmeriCares Foundation; and Irial Finan, Executive Vice President and President of Bottling Investments and Supply Chain, The Coca-Cola Company. In 2010, newly appointed director Veronique Morali, Vice Chairman, Fitch Group, joined the Committee, bringing in-depth knowledge of gender diversity and European issues coupled with extensive business experience.
Our Global CRS Advisory Council reports to the Board of Directors and is composed of senior managers from key functions and geographies. These individuals chair our focus area workstream groups and steering committees. The Council meets three times a year to review progress, discuss challenges, evaluate shortcomings, and identify future priorities. The CRS Advisory Council is chaired by John Downs, Senior Vice President of Public Affairs and Communications. To drive CRS throughout our business, CRS is now part of the performance objectives of our Executive Leadership Team (ELT) and one of the criteria that determine the variable compensation of all ELT members. We are also working to train our leaders on CRS issues in partnership with the University of Cambridge Sustainability Leadership Program in Europe. During 2010, we will enroll more than 60 members of CCE’s senior management, including but not limited to those directly responsible for CRS, in a tailored sustainability leadership course. We continue to search for ways to support CRS at every level of our operations and in all our territories. In 2009, we began rolling out regional CRS Advisory Councils in our business units in the United States. We also significantly increased our personnel resources dedicated to CRS in North America and now have a designated team of CRS managers who help drive our CRS progress and oversee governance processes. In Europe, a network of CRS managers meets quarterly to discuss improvements and collaborate on joint initiatives. We also have an Environmental Stewardship team that manages Quality, Environment, Safety, and Health across our EU operations. At each of our facilities, CRS Champions implement CRS initiatives at the grassroots level. In the coming year, we will develop a sustainability plan with specific targets for each facility. Facility goals are already in place in Europe, and systems are in place in North America to allow us to generate these goals in 2010. We are also involving our sales teams in CRS, as we know that working with our customers on CRS issues adds value to our relationships with them. In Europe, CRS work is embedded into our country and customer-specific sales plans. In North America, we established a Customer CRS Committee in 2009 to develop tailored CRS training for our customer teams in 2010, and embed CRS further into our sales plans. As part of the broader global Coca-Cola business system, we participate in the global Coca-Cola Environment and Safety Council and the European CRS Board, thereby ensuring that our Commitment 2020 goals are aligned with the strategy and targets of The Coca-Cola Company. This alignment will be beneficial to the integration of our North American operations with The Coca-Cola Company in 2010 as part of the recent transaction. Risk Management and Business Planning Social and environmental risks are considered strategic business risks and are explicitly assessed as part of our Enterprise Risk Management program. This globally consistent approach to risk management informs our business planning and guides our internal audit plans. Members of our ELT are accountable for the risk category associated with their business function. As the ELT member responsible for CRS, John Downs is accountable for CRS risks. We disclose any material risks that could adversely affect our business and financial results in the Form 10-K found in our company’s Annual Report. This year, our ELT held an in-depth review of risks focusing on those most relevant to our business. Social and environmental risks discussed in our 2009 Form 10-K relate to perceptions of our product portfolio, health and wellness trends, cost or limitation of raw material supplies, adverse weather, and, for the first time, global climate change impacts and legislation. More detail on the climate change risks we face can be found in our submission to the Carbon Disclosure Project. In 2009, we adopted the discipline of value management to complement our risk management approach. As part of a new vetting process, any major project or new investment must be assessed for its impact on our five Commitment 2020 goals. We are also incorporating CRS into other decision-making processes, such as business-case development for new products. The ELT now looks at calorie content, nutritional or functional benefits, packaging recyclability, material use, and carbon footprint impact before approving a new beverage. We have found that all CRS business decisions involve trade-offs, usually between environmental and financial criteria. While the capital approved by the Board for CRS projects allows us to invest in technologies that might not meet our standards for internal rate of return, we have developed a three-tiered prioritization approach to ensure that we use this capital most efficiently to meet our goals. We assess the environmental benefit, financial costs, and reputational benefits of each project systematically and provide this information to our senior leadership, who then make fully informed CRS capital allocations.
Ethics and Compliance As a signatory of the UN Global Compact since 2007, we are committed to implementing its 10 universal principles in support of human rights, labor rights, the environment, and anti-corruption. We endeavor to comply with all applicable laws, regulations, and company policies related to these issues and have a Code of Business Conduct to which our employees and directors are expected to adhere (see “Code of Business Conduct”). Following the appointment of our first Chief Ethics and Compliance Officer in 2009, we established a global Ethics and Compliance office and launched a three-year plan to enhance existing programs. Progress is continually reviewed by a cross-functional Ethics and Compliance Council and the Audit Committee of our Board of Directors. Code of Business Conduct Our Code of Business Conduct outlines the behavior we expect of every employee of our company. It demands honesty and integrity in all matters, from workplace behavior to dealings with customers, suppliers, competitors, and regulators, and prohibits all forms of corruption, including bribery. In 2009, we began updating and enhancing our Code of Business Conduct, along with our employee communication, training, and Code certification programs, to ensure that employees understand its day-to-day business implications. After regulatory approval has been received in all territories, we will launch our updated Code and training program. Until then we will continue our existing Code implementation and training programs to educate employees. For our Code to be effective, employees must feel confident in raising concerns or questions without fear of retaliation; therefore, we have reviewed our reporting and monitoring mechanisms, including, where appropriate, our toll-free, 24-hour Ethics and Compliance hotline and website. All reported incidents are investigated appropriately and material issues, if any, are reported to the Audit Committee of the Board of Directors. To ensure that we comply with applicable laws, regulations, and policies, we completed an extensive assessment of compliance practices and risks across our business. As a result, we have mapped the top 20 compliance-related areas for the company, identifying processes and creating a baseline for ongoing risk assessments at the corporate level. We also completed a global fraud risk assessment in 2009 and will publish a risk disclosure in 2010. Management Systems, Policies, and Standards We are participating in the Coca-Cola system’s transition to ISO standards for quality, food safety, environment, and occupational safety from their previous integrated management system, The Coca-Cola Management System (TCCMS), aligned to these standards. Our progress to date is shown below. We periodically review and update our internal policies. During 2009, we revised our Environmental Policy, making it more comprehensive and aligning it with the expectations of our stakeholders. In addition, we updated our Supplier Diversity Policy to broaden the diversity of suppliers covered, as well as make the policy global in scope (see CCE Supplier Diversity Policy). CCE Management Systems 2009: Transition to ISO Standards
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