Soda wars: Is Coke or Pepsi more sustainable?

Which is better, Coca Cola or Pepsi?

Since leaving the Plastics Industry Association because of so-called philosophical disagreements with that organization’s strategies, both Coca-Cola and PepsiCo have launched new efforts to solve the problems that the plastics industry apparently has created for them. 

In a release sent on September 13, PepsiCo announced accelerated efforts to reduce plastic waste. The two primary means of doing this will be the company’s target to reduce by 35% the use of virgin plastic across its beverage brands by 2025, “driven by increased use of recycled content and alternative packaging. As for Coca-Cola,  it just unveiled its first-ever sample bottles made using recovered and recycled marine plastics, demonstrating that, one day, even ocean debris could be used in recycled packaging for drinks. 

Deciding between a coke or a pepsi can be difficult so we’ve tried to break down these two known beverage companies and what your purchase will support.

. source 

Why you should trust us

At Ethically, we compile scores from over 700 verified sources to create a granular profile of more than 10,000 companies and brands, evaluating their impact on the environment, society at large, and good business. You can learn more about Ethically’s process in our Methodology and you can see the scores yourself by downloading the Ethically browser extension.

The companies

Coca Cola

The Coca-Cola Company is an American multinational beverage corporation incorporated under Delaware’s General Corporation Law and headquartered in Atlanta, Georgia. The Coca-Cola Company has interests in the manufacturing, retailing, and marketing of nonalcoholic beverage concentrates and syrups. The company produces Coca-Cola, invented in 1886 by pharmacist John Stith Pemberton. In 1889, the formula and brand were sold for $2,300 to Asa Griggs Candler, who incorporated The Coca-Cola Company in Atlanta in 1892.

Pepsi

PepsiCo, Inc. is an American multinational food, snack, and beverage corporation headquartered in Harrison, New York, in the hamlet of Purchase. PepsiCo has interests in the manufacturing, marketing, and distribution of grain-based snack foods, beverages, and other products. PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay, Inc. PepsiCo has since expanded from its namesake product Pepsi to a broader range of food and beverage brands, the largest of which included an acquisition of Tropicana Products in 1998 and the Quaker Oats Company in 2001, which added the Gatorade brand to its portfolio.

Scores Overview

These two companies, while often compared side by side, have a distinct gap when it comes to their ESG measurements. There are some major differences that put one above the other.

Overall, Coca Cola scored a 63/100 and PepsiCo scored a 61/100. This difference is highlighted in all three score categories but is especially seen in their environment score.

Let’s dive in (Reminder, check out our Methodology for definitions on each of these subtopic scores)

Impact on the environment

Impact on the environment relates to how a company or brand impacts the natural world around us. This could be related to the products they create, their manufacturing policies, or even their corporate response to climate change. Coca Cola and Pepsi both impact the environment in a number of ways, from their manufacturing policies to the products they produce. Below are more details comparing these two companies. 

Coca Cola

Score: 71

PepsiCo

Score: 64

Comparison

Coca Cola takes the lead ahead of PepsiCo in this category, with the scores being 71 to 64. This category has to do with the companies’ compliance with environmental regulations, energy efficient operations and development of renewable energy and alternative environmental technologies. 

Double clicking on that score difference, Coca Cola scored a 77/100 in Energy & Climate Change, a 71/100 in Environment Policy & Reporting and a 65/100 in Resource Management. On the other hand, PepsiCo scored a 70/100 in Energy & Climate Change, a 63/100 in Environment Policy & Reporting and a 59/100 in Resource Management.

Impact on social responsibility

Social responsibility includes all the things that make a company “good”. Whether that’s giving back to the community, standing up for equal rights, treating workers fairly. Coca Cola and Pepsi both have a number of policies around LGBTQ+ rights, community outreach, and equal pay and rights for all.

Coca Cola

Score: 64

PepsiCo

Score: 61

Comparison

Another score distinction can be observed within the Social Responsibility category, where Coca Cola scores a 64/100 and PepsiCo scores a 61/100. This category includes all programs, policies and performance in diversity, labor relations and labor rights. It also focuses on compensation and benefits as well as employee safety.

The major differences were the respective companies’ Diversity and Labor rights rankings Coca Cola: 65 vs. PepsiCo: 60, Training, Health & Safety rankings Coca Cola: 65 vs. PepsiCo: 64 and Compensation with Coca Cola: 61 vs. PepsiCo: 58 score.

Quality of corporate governance

Corporate governance is much like social responsibility, but for how the company operates internally. Do they have a diverse board? Is there transparency in accounting? Are they doing what they need to do to survive and operate in an ethical and correct manner? Coca Cola and Pepsi both are large public companies with shareholders and boards they answer to.

Coca Cola

Score: 58

PepsiCo

Score: 58

Comparison

Both companies’ share the exact score in the Governance ranking, 58/100 .The Governance  score refers to leadership structure and the values that determine corporate direction, ethics and performance.

Upon further analysis, Coca Cola beats PepsiCo in the rankings of Leadership & Ethics (59 vs 57) and PepsiCo scores higher than Coca Cola in Transparency & Reporting (59 vs 58). 

Summary

Ethically partners with CSRHub as a primary data source, which in turn, aggregates over 700 data sources, compiling them into simple, easy to digest grades. 

Coca Cola and PepsiCo are one of the biggest beverage corporations in the world. As consumers, it is important we hold these major companies responsible for their decisions and actions. Coca Cola’s scores are slightly higher than PepsiCo’s. Coca-Cola’s efforts appear to be the most advanced when it comes to making environment friendly decisions and the company showcases decent social responsibility. 

If you want to stay up to date on how these companies are progressing with their scores, make sure you download Ethically. We pull data regularly to make sure our scores reflect how companies are doing today, not years ago.

As always, please check out our Methodology page for more details on how we get our ratings data.

Leave a Reply

%d bloggers like this: