Environment

Social Capital

Human Capital

  • Labor Practices
  • Employee Health & Safety
  • Employee Engagement, Diversity & Inclusion

Business Model & Innovation

Leadership & Governance

  • Business Ethics
  • Competitive Behavior
  • Management of the Legal & Regulatory Environment
  • Critical Incident Risk Management
  • Systemic Risk Management
General Issue Category
(industry agnostic)

Disclosure Topics (industry specific) for:
Non-Alcoholic Beverages

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GHG Emissions

Fleet Fuel Management

Non-alcoholic beverages companies generate direct Scope 1 greenhouse gas (GHG) emissions from large vehicle fleets for distribution and from manufacturing facilities. Specifically, refrigeration used in manufacturing facilities and in transport vehicles contributes to a large portion of overall emissions for the industry. Efficiencies gained in fuel use can reduce costs, mitigate exposure to fossil fuel price volatility, and limit emissions from production, storage, and transportation of products. Short-term capital expenditures in fuel efficient fleets and more energy-efficient technologies may be outweighed by long-term operational savings and mitigation of regulatory risk.

Energy Management

Energy Management

Companies in the Non-Alcoholic Beverages industry use significant energy to operate manufacturing facilities, distribution centers, and warehouses. Companies in the industry generally purchase electricity from the grid. Energy generation contributes to environmental impacts, including climate change and pollution, which have the potential to indirectly, yet materially, impact the operations of non-alcoholic beverages companies. Companies can reduce energy consumption and associated greenhouse gas (GHG) emissions from their operations by implementing more efficient technologies and processes. Decisions regarding the use of alternative fuels, renewable energy, and on-site generation of electricity versus purchasing from the grid, can play an important role in influencing both the costs and reliability of the energy supply.

Water & Wastewater Management

Water Management

Water management relates to a company’s direct water usage, the exposure of its operations to water-stressed regions, and its management of wastewater. Companies in the Non-Alcoholic Beverages industry use a large amount of water in their operations, as water is a key input to finished products. Given non-alcoholic beverage companies’ heavy reliance on large volumes of clean water and the fact that water stress is increasing in different regions globally, companies may be exposed to supply disruptions that could significantly impact operations and add to costs. Companies operating in water-stressed regions that fail to address local water concerns may face further risk of losing their social license to operate. Additionally, proper wastewater treatment is an important element of managing water issues in operations, because bottling plants release large quantities of effluents. Improving water management through increased efficiency, recycling, and proper disposal, particularly in regions with baseline water stress, can lead to lower operating costs, reduced risks, and higher intangible asset value.

Customer Welfare

Health & Nutrition

Key nutritional and health concerns such as obesity, ingredient safety, nutritional content, and acute health impacts resulting from the consumption of non-alcoholic beverages are shaping the industry’s competitive landscape. Studies indicate that consuming high-calorie, sugar-sweetened beverages can have adverse health consequences including higher levels of cholesterol, increased risk for heart disease, and obesity. Findings such as these may alter consumer perceptions of the industry’s products, leading to long-term shifts in purchasing decisions. Furthermore, efforts to reduce obesity, in the form of new regulations or taxes on sugar-sweetened beverages, have the ability to influence industry profitability and future demand. The potential for adverse health effects from other commonly used ingredients—such as artificial sweeteners—may pose additional concerns, and companies may face related litigation and/or regulation. Opportunities exist in new segments of the beverage market to address consumer demand for improved nutritional value. Companies that adapt to changing consumer preferences and an evolving regulatory environment by offering more healthful alternatives can capture additional market share and limit their exposure to regulation and litigation.

Selling Practices & Product Labeling

Product Labeling & Marketing

Communication with consumers through product labeling and marketing is an important facet of non-alcoholic beverages companies. The accuracy and depth of information presented on product labels is of importance to regulators and consumers. Labeling regulations require specific and detailed product information to ensure food safety and inform consumers of the nutritional content. Additionally, to help inform purchasing decisions, consumers are increasingly interested in further information about product ingredients, such as genetically modified organism (GMO) content, or other health and nutritional impacts. Another area of public concern is the market practices of non-alcoholic beverages companies, especially those targeted to children or on nutritional claims, and whether they present potentially untruthful or misleading information. Product labeling and marketing issues can affect the competitive landscape of the industry, as companies may be subject to litigation or criticism resulting from making misleading statements or failing to adapt to consumer demand for increased labeling transparency. These factors can have an impact on companies’ brand value and revenue growth. Additionally, regulations on product labeling and marketing present the risk of penalties or litigation.

Product Design & Lifecycle Management

Packaging Lifecycle Management

Packaging materials represent a significant cost to companies in the Non-Alcoholic Beverages industry. Although many non-alcoholic beverage companies do not manufacture their own bottles and packaging, they face reputational risks associated with the negative externalities that their products’ containers can create over their lifecycle. Companies are also directly impacted by legislation regarding end-of-life management of beverage containers. Non-alcoholic beverage companies can work with packaging manufacturers on packaging design to generate cost savings, improve brand reputation, and reduce the environmental impact. Efforts to reduce the amount of materials used in packaging can reduce transportation costs, exposure to supply and price volatility of key materials, and the amount of virgin materials extracted. In the end-of-life phase, take-back and recycling programs and partnerships can preempt regulation, help achieve cost savings, and reduce environmental impact. Companies that effectively manage this issue can improve profitability and reduce cost of capital.

Supply Chain Management

Environmental & Social Impacts of Ingredient Supply Chain

Companies in the Non-Alcoholic Beverages industry manage global supply chains to source a wide range of ingredient inputs. How companies screen, monitor, and engage with suppliers on environmental and social topics affects the ability of companies to secure supply and manage price fluctuations. Supply chain interruption can cause loss of revenue and negatively impact market share if companies are not able to find alternatives for key suppliers or have to source ingredients at higher cost. Supply chain management issues related to labor practices, environmental responsibility, ethics, or corruption may also result in regulatory fines and/or increased long-term operational costs for companies. The consumer-facing nature of the industry increases the reputational risks associated with supplier actions Managing a company’s exposure to environmental and social risks can lead to improved supply chain resiliency and enhanced reputation, which provide value to shareholders. Companies can engage with key suppliers to manage environmental and social risks to improve supply chain resiliency, mitigate reputational risks, and potentially increase consumer demand or capture new market opportunities.

Materials Sourcing & Efficiency

Ingredient Sourcing

Companies in the Non-Alcoholic Beverages industry source a wide range of ingredients from suppliers worldwide. The industry’s ability to source ingredients and at certain price points fluctuates with supply availability, which may be affected by climate change, water scarcity, land management, and other resource scarcity considerations. This exposure can lead to price volatility which may affect company profitability. Ultimately, climate change, water scarcity, and land-use restrictions present risks to a company’s long-term ability to source key materials and ingredients. Companies that source ingredients which are more productive and less resource-intensive, or work closely with suppliers to increase their adaptability to climate change and other resource scarcity risks will be better protected from price volatility and/or supply disruptions.

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