The company's subsidiary Swire Coca-Cola is one of the world's largest bottlers, with the license to bottle Coke's (KO) 58 beverage brands in much of the western United States, 11 Chinese provinces, Hong Kong and Taiwan. It's now testing a much-needed plastic-waste program in Hong Kong, one of the world's most-wasteful cities.
Swire Coca-Cola this week announced 10 bottle-recycling machines that will work as "reverse vending machines." Accepting all PET plastic bottles, whether Swire made them or not, the machines will top up your Octopus subway card with HK$0.20 (US$0.03).
The Octopus "doot" card is what we use not only for the MTR subway but also for quick transactions in 7-Eleven, Circle K or the grocery store. Parent Octopus Holdings is 57.4% owned by the MTR Corp. (MTCPY) , which has itself been a target both of Beijing and the Hong Kong protestors.
So all involved need a little good p.r. This initiative, which will be vetted by the World Green Organisation, is a great way of going about it.
It's not that new of a concept. But it's new thinking in Asia. The PET bottles, which are rejected if they contain liquid, will go to a new PET recycling plant that Swire is due to open next year with a subsidiary of Hong Kong-listed cleaning-and-waste company Baguio Green (HK:1397) and the German recycling company Alba.
To say that Asia does not have the best environmental credentials is an understatement. Just venture to a Hong Kong supermarket, and you'll find bananas, avocados, apples all wrapped up in plastic film, sitting on plastic trays, that at checkout they'll offer to put into a plastic produce bag for you to take home.
If only those fruits came in some kind of organic "skin" or "peel" protector that can biodegrade!
So kudos to Swire for taking this first step. The company admits it isn't sure if 20 cents is sufficient monetary reward to change consumer behavior. "Today, the behavior is not towards recycling, and we are trying to change that," Swire Coca-Cola Executive Director Neil Waters says, according to the South China Morning Post.
I can assure you it will be. Visitors to Hong Kong are often shocked by the little old ladies who push heavy carts around the city laden with cardboard. That's actually worth something with private recycling companies, who pay by weight. The craftiest among the little old ladies (and occasionally, men) will douse the ex-boxes with water to add to their heft.
A HK$0.50 (US$0.06) charge on conventional shopping bags has also succeeded in encouraging most shoppers to bring their own bag to the checkout. Unfortunately, you can still get a free thin plastic bag for your produce or refrigerated goods, hence the double-bagged apples you may find in that trendy cloth grocery tote.
China as of the start of 2018 stopped accepting plastic waste, which companies had been getting paid to accept. That's left Hong Kong, which imports virtually all its food, drowning in a sea of its own plastic.
Swire's step this week is a first and small one that I hope is a success. If it helps change consumer behavior here, it'll be groundbreaking.
Swire is a conglomerate that dates to the earliest days of Hong Kong. Besides Cathay, it's a major property developer, known for high-end real estate that recently has been burnishing its environmental credentials.
Swire Properties (SWROY) has developed the site of the former docks and sugar factory in the Taikoo neighborhood of Hong Kong. It also has a billion-dollar development in Miami around the 3.5 million square foot Brickell City Centre.
Cathay did not initially take action against employees participating in this summer's pro-democracy demonstrations in Hong Kong, which infuriated Beijing. China's air authority then instructed Cathay not to allow any employees who had taken part in "illegal protests," "violent actions" or "overly radical activities" to participate in flights into or out of China. The majority of Cathay flights do that.
What exactly constitutes an "illegal protest" is a matter of law, and an "overly radical" activity a matter of opinion. So China was effectively promoting a policy of "white terror," in which corporations face ill-defined pressure they, unsurprisingly, exert vaguely over employees. "We'll leave it up to you to decide if you could get in trouble for that," is the open-ended message.
Cathay has told employees that their social-media posts, in and outside of work, could fall afoul of the official Chinese air authority's policy. It has also reminded staff about a whistleblower policy requesting employees to notify management of legal violations.
I was skeptical that China would really use its corporate power to push its political agenda internationally. My view on that has changed.
The commission in charge of China's state-owned enterprises recently held an event in Shenzhen, just across the border from Hong Kong, in which it urged the companies to expand their operations in the city. The commission also directed them to buy into Hong Kong private companies in a bid to appoint board members and influence their decision making.
"The business elites in Hong Kong are certainly not doing enough. Most of them are just not one of us," one of the mainland Chinese executives who attended the meeting told Reuters.
Swire began life as a Liverpool shipping business, and opened in China when the U.S. Civil War disrupted cotton imports from the South. Its Shanghai hong conglomerate took the name "Taikoo," which means "Great and Ancient," when it launched in 1866, and expanded to Hong Kong in 1870.
So it's with some symbolism that Swire Properties has garnered further good news. There was pressure on the brokerage CLSA, now owned by the state-run Chinese parent Citic Securities (CIIHY) , to quit its offices in Swire's swishest building in the Taikoo district, according to the Financial Times. After that story appeared, CLSA renewed the lease.