Advancing sustainability in Coca-Cola Europacific Partners Indonesia (CCEP Indonesia) supply chain through innovative financing
Published: Feb 2025
Best Sustainable Treasury Solution
Highly Commended Winner
Coca-Cola Europacific Partners Indonesia
Photo of Kristina Juni Haniastuti and Hasder Nasution, Coca-Cola Europacific Partners Indonesia.
Kristina Juni Haniastuti
Treasury Manager
Hasderyanto Nasution
Head of Procurement
Coca-Cola Europacific Partners Indonesia (PT Coca-Cola Distribution Indonesia and PT Coca-Cola Bottling Indonesia)
Coca-Cola Europacific Partners (CCEP) Indonesia is a consumer goods company that produces and distributes beverages in Indonesia.
The challenge
As part of its sustainability ambitions, CCEP Indonesia has set ambitious sustainability targets, with its supply chain estimated to be responsible for ~80% of its emissions. These include aiming for 50% recycled plastic (rPET) in its PET bottles by 2025 in Australia, Pacific and South-East Asia (APS), 100% of packaging collection by 2030, ensuring that 50% of packaging comes from rPET by 2025, and stopping use of oil-based virgin plastic in bottles by 2030, collecting and recycling a bottle or can for each one sold by 2030, and targeting net-zero greenhouse gas (GHG) emissions by 2040.
CCEP Indonesia and its bank partner, Citi, set out to find ways to structure a sustainable supply chain finance (SSCF) programme that would incentivise sustainable practices to make impactful reductions in suppliers’ businesses. They also sought to align Citi’s ESG standards with CCEP’s sustainability objectives.
The solution
Citi and CCEP Indonesia jointly set ESG evaluation criteria and sustainability-linked incentives to develop a model for continuously tracking suppliers against predefined sustainability targets. Under this model, qualifying suppliers who met sustainability targets would be rewarded with preferential discount rates. These rates would be automatically applied to suppliers who achieved a specific ESG score or improved their score over time as they progressed on their sustainability journey.
Leveraging an independent third-party reviewer, eligible suppliers would have the opportunity to improve liquidity and accelerate cash flow by discounting receivables at preferential rates. Suppliers participating in the SSCF programme would be assessed based on sustainability criteria encompassing the 17 UN Sustainable Goals, utilisation of renewable electricity across their operations and sharing of their carbon footprint data.
This solution taps into Citi’s digital capabilities to flag ESG qualified suppliers and automatically apply preferential rates. The financing has been allocated to support 60% of ESG qualified suppliers in obtaining low-cost working capital throughout 2024.
Supplier testimonial
“Samator Group respects the SSCF initiative. This is very different from the existing SCF, where the SSCF programme has helped us to get liquidity at preferential rates based on our sustainability performance. SSCF from Citi is expected to support Samator in re-deploying some cash to increase engagement for sustainability programmes based on our sustainability score provided by a third- reviewer.”
Budi Susanto, Director, Samator Group
Best practice and innovation
Through this SSCF solution, Citi’s and CCEP Indonesia’s sustainability objectives are aligned. A firm partnership was fostered to determine ESG evaluation criteria and sustainability-linked incentives develop a robust model.
Citi and CCEP have actively arranged programme socialisation (both off and online) to encourage more suppliers to participate in sustainability. Suppliers are incentivised through preferential rates tied to ESG milestones, enabling them to benefit from lower cost of funds to support their working capital and liquidity management. The rates are embedded in Citi’s digital platform.
Moreover, this digital platform flags qualified suppliers to streamline semi-annual monitoring updated in the system. This collaboration and integrated solution offers a significant contribution to advancing sustainability efforts and promoting the adoption of sustainable practices across the supply chain.
Key benefits
Process efficiencies.
Return on investment (ROI).
Increased automation.
Improved visibility.
Errors reduced.
Manual intervention reduced.
Improved key performance indicator (KPI) metrics.
The Adam Smith Awards Asia are the industry benchmark for best practice and innovation in corporate treasury. The 2024 awards attracted 406 nominations. To find out more please visit treasurytoday.com/adam-smith-awards-asia
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