THE COCA-COLA COMPANY | Report on Public Health Costs at The Coca-Cola Company

Status
11.33% votes in favour
AGM date
Proposal number
4
Resolution details
Company ticker
KO
Lead filer
The Shareholder Commons
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Public health
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Staples
Company HQ country
United States
Resolved clause
Shareholders ask the Board of The Coca-Cola Company (the “Company” or “Coke”) to commission and disclose a report on the external public health costs created by the Company’s food and beverage businesses and the manner in which such costs may affect its diversified shareholders, whose ability to meet their financial goals depends primarily on overall market returns rather than the relative performance of individual companies
Supporting statement
The Harvard University School of Public Health says sugary drinks, such as those our Company makes, are a major public health problem: Americans consume on average more than 200 calories each day from sugary drinks—four times what they consumed in 1965—and strong evidence indicates that our rising thirst for
“liquid candy” has been a major contributor to the obesity and diabetes epidemics…Research shows that sugary drinks are one of the major determinants of obesity and
diabetes, and emerging evidence indicates that high consumption of sugary drinks increases the risk for heart disease, the number one killer of men and women in the U.S.
The World Health Organization quantifies the social burdens of obesity as equivalent to nearly 3% of
global GDP.
This cost, year after year, devastates economic growth. Thus, even if sales of sugar-laden
products may benefit Coke’s short-term financial returns, they are bad for most of Coca-Cola’s long-term
shareholders – who don’t just own Coke, but rely on a growing economy to support their diversified
portfolios. As Warren Buffet, Chair of Berkshire Hathaway – our Company’s largest shareholder – has
pointed out: GDP is the greatest proxy for diversified portfolio value.
Investors in Coke are at risk from the public health costs the Company imposes on society. While Coke
itself may profit by ignoring public health costs, diversified shareholders will ultimately pay these costs
and have a right to know what they are.
Instead of being transparent about the damage it is causing, Coke works to obscure the relationship
between its products and the public health crisis to which it contributes. As one recent study that
analyzed internal company documents found:
Coca-Cola sought to obscure its relationship with researchers, minimise the public
perception of its role and use these researchers to promote industry-friendly messaging.
Indeed, Coke continues its efforts to grow the categories that deliver sugar: On a recent earning call, the
Company’s Chair and CEO celebrated the “tremendous value” created for the Company by its investment
in Monster, a clearly unhealthful drink choice.

A study involving these external public health costs would help shareholders determine whether to seek
changes that could better serve their long-term interests.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
LocalTapiola Asset Management Ltd For A vote FOR this proposal is warranted as shareholders would benefit from an increased disclosures and understanding of the use of sugar in the company's products and its role in the obesity epidemic and related health concerns
Anima Sgr For

DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.