In this workout we've been asked to use the information below and on the following tab, to benchmark Coca-Cola against PepsiCo and Keurig Dr. Pepper in relation to GHG emissions. That's greenhouse gas emissions. And we've been asked to identify which of the companies appears most exposed to carbon risk on these metrics. Now, we've been given four metrics here to use in our benchmarking analysis. Starting off with emissions intensity, and that's emissions compared with leaders of product produced. Next, we've got emissions intensity in terms of emissions relative to sales. And next we've got the reduction in emissions intensity over the last three years. Our final metric is the strategic goal of the companies in relation to GHG emissions. Now, you can see that some of the tables already populated for us, rather helpfully, and for Coca-Cola, that involves the reduction in emissions intensity and also their strategic goal. Whereas for PepsiCo and Keurig Dr. Pepper, all of the information has been populated in the table. Although you'll see that there's no data available for some of these metrics. And in particular for PepsiCo, the emissions intensity per liter of product is not available and that's likely to be because PepsiCo produces food as well as beverage products. So this metric isn't so relevant for them. But let's see what data we have for Coca-Cola, and we've got their sustainability report on the next tab for this.

Now, the first thing you'll see is that for GHG emissions data, right at the bottom hand right of the disclosures, we've got the emissions ratio. And that's the emissions intensity using the liters of product produced. And that's 34.83, so we can pop that straight into our benchmarking analysis.

However, this metric isn't particularly useful because we've got no comparable data for the other companies. So let's see what we can do in terms of emissions intensity using sales. So back to the sustainability report. And you'll see in their emissions disclosures, they've given two metrics for the total emissions from manufacturing sites. That's the scope one and two emissions for the company. Now, the difference between these metrics is that the second of these, which I'm highlighting here, is using the GHG protocol market-based method. And that's the method that most companies use when they're disclosing their emissions. And so that's the one that's gonna be most comparable for our benchmarking analysis. So we'll take that 5.14 and use that in our analysis. The one thing we need to note, is that this disclosure is given in millions of tons, and we want it in tons. So we're just gonna need to adjust the units when we're putting it into our analysis. So we're gonna take the 5.14, make that into millions. And we're gonna need to adjust that for the amount of sales in the year. But that's fine because we've also got that in our tab, also. So we'll take the revenues.

And now we've calculated the emissions intensity for Coca-Cola. And that is a metric that we can use to compare with the other companies, and you'll immediately see that Coca-Cola's emissions intensity is much higher than its competitors. Now, let's have a look at the other metrics. And actually, let's go straight to the strategic goal there. And you'll see that Coca-Cola's strategic goal is to reduce scope one, two and three emissions by 25% by 2030. And actually that's very comparable to PepsiCo's ambitions on this. Although the baseline dates are slightly different. Now, when we compare that to what's happening to their reduction in emissions you'll see that actually Coca-Cola's reduction in emissions, and that scope one and two emissions, is actually less impressive than PepsiCo's. And bearing in mind that these are the most controllable emissions, actually it makes us question Coca-Cola's ability to meet its strategic goal. So stepping back from all of this, you'll see that Coca-Cola's activities are already more intensive in terms of carbon emissions, and maybe it's more questionable how much they can reduce that emission's intensity in the future. So we are likely to conclude that Coca-Cola is the most exposed to carbon risk compared with Pepsi Co and Keurig Dr. Pepper.