-31% Environmental policy. Growing responsibly

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Geoffrey Johnson
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1 Environmental policy Growing responsibly Coca-Cola HBC Italia considers the respect for the environment in which it operates a key pillar for sustainable growth. In fact, it constantly works to minimize its environmental impact during the entire production life cycle, where technically possible and consistently with its high quality standards. The environmental management policy, integrated with Quality and Safety, was revised during 2015 in order to ensure the full integration of the latest environmental regulations and revisions to international standards of reference, in addition to taking into account the Company s considerable growth. Fully consistent with the commitment to take action to mitigate its environmental impact, formalized in an increasingly firm path of responsibility, in 2015 Coca-Cola HBC Italia set up the position of Environmental Manager within the HS&E department (Health, Safety & Environment) to ensure a complete focus on environmental issues, guaranteeing the effective management of its operations aimed at fostering innovation, risk reduction and safety of its processes and products. Moreover, a measurement model of the socio-economic and environmental impact on sustainability of investments was prepared in 2015 (pending approval for entry into force in 2016), to be used during tender processes in order to raise awareness among suppliers on sustainability issues. Coca-Cola Company, there was a significant decline, i.e. 31%, in CO2 emissions per liter of beverage produced from 2013 to 2015; also, a reduction of 3% in waste produced in 2015 over the previous year should be noted. BEVERAGES PRODUCED BY COCA-COLA HBC ITALIA Environmental performance ENERGY CONSUMPTION (MJ/lpb) 0,379 0,391 0,407 CO2 EMISSIONS (g/lpb) 7,92 5,45 5,48 WASTE (g/lpb) 7,41 10,30 9,95 lpb = liter per beverage With regard to the production of mineral water, compared with an increase of 3.4% in bottling operations over the previous year, CO2 emissions also reported a downward trend of 13% between 2013 and 2015, a substantial achievement that had already been obtained in 2013, when emissions were reduced by 30% compared to Moreover, the use of water (either withdrawn or utilized) decreased both in the long term over the four years subject to reporting (- 4% and -1%) and in 2015 in comparison to 2014 (-4% and -3%). Environmental policy The life cycle of products Resource management Water management Energy management Use of raw materials The sustainability of packaging Waste management and recycling Emissions CO2 emissions Logistics efficiency The life cycle of products With the goal of increasing the efficiency of the environmental performance of the Company s production activities, the performance indicators can be read and compared in terms of inputs (energy consumption, water, materials), and in terms of environmental outputs (emissions and waste) that the plants of Coca-Cola HBC Italia produce both per liter of beverage under The Coca-Cola Company brand and per liter of mineral water. This analysis allows the Company to identify any significant deviations that are studied in greater depth and followed by dedicated corrective actions. The Company has developed a plan to reduce CO2 emissions per liter of beverage by over 25% by 2020, compared to the 2014 values, and the use of water per liter of beverage by 18% compared to the figure for the same year. It should be noted that in 2015, compared with a 1.7% increase in the production of soft drinks compared to 2014, in reference to the production of drinks under the brand The MINERAL WATER FONTI THE VULTURE Environmental performance ENERGY CONSUMPTION (MJ/lpb) 0,146 0,152 0,156 CO2 EMISSIONS (g/lpb) 0,38 0,35 0,33 WASTE (g/lpb) 1,15 1,26 1,58 REDUCTION CO2-31% CO2 emissions (g/ipb) between 2013 and

2 Resource management The sustainable management from the environmental standpoint of its business activities translates for Coca-Cola HBC Italia into concrete targets aimed at protecting the most frequently used resources: ensuring the water resources by reducing withdrawals and wastewater treatment, and limiting energy consumption and emissions of refrigerants. This success confirms a commitment to improving and reducing the use of water as a result of the process optimization measures introduced. WATER CONSUMPTION l/lpb Water management Water is the primary ingredient for the production process of Coca-Cola HBC Italia and a necessary source for production activities. Coca-Cola HBC Italia is aware of the importance of the responsible use of water resources and has undertaken to limit its impact on river basins respecting the communities in which it operates. To that end, the company collaborates with suppliers and involves local communities to raise awareness as to the protection of water resources. The Company has set up an improvement plan on the use of water for the five-year period , introducing a new approach to valuation of the environmental impact, which estimates the real cost of water (including treatment, maintenance, etc.) in the estimation of investments. EWS CERTIFICATION In 2015, Coca-Cola HBC Italia completed the certification process for the two plants in Nogara and Rionero in Vulture according to the EWS guidelines (European Water Stewardship), which set criteria for the evaluation of water sources and quality, monitoring and mitigation of potential impacts determined by withdrawals and discharges and protection of HCVs (High Conservation Value Area). The performance level was fully compliant with all the main requirements and 90% of those considered minor, such as to allow the award of the Gold level certification. COCA-COLA HBC ITALIA water withdrawn 1,83 1,86 1,84 FONTI DEL VULTURE water used 1,57 1,60 1,56 water withdrawn 2,15 2,15 2,07 In 2015, water discharges linked to production activities of Coca-Cola HBC Italia amounted to 1,011,826 cubic meters, including 80% caused by the soft drink manufacturing plants. In line with the commitment made in 2014, in June 2015 a specific action was initiated at the plant in Nogara in order to reuse 14,400 cubic meters of process water (80 cubic meters / day of wastewater) for washing dehydrators from sludge, thereby reducing the overall consumption of water. Energy management WATER DISCHARGES (m 3 ) Company 2015 COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL WATER CONSUMPTION (m 3 ) COCA-COLA HBC ITALIA water used FONTI DEL VULTURE water used water not used TOTAL WITHDRAWN WATER (used and not used) COMPANY TOTAL - WATER USED COMPANY TOTAL - WATER WITHDRAWN The efforts made in recent years have led Coca-Cola HBC Italia to values of excellence with regard to water consumption. During 2015 the company withdrew 2,814,969 cubic meters of water, which includes 5% (equivalent to 103,545 cubic meters of water) of recycled water at the three soft drink manufacturing plants, i.e. recycled water is water from a production process that is reused in another cycle before being sent to final treatment and/or discharged into the environment. The performance indicator of water consumption in 2015 was equal to 1.84 liters per liter of beverage produced under The Coca-Cola Company brand and 1.56 liters per liter of mineral water produced. The latter value however stood at 2.07 liters per liter of mineral water produced if one also considers water not used, that is to say water extracted solely for purposes of quality monitoring of the microbiological parameters and subsequently returned to the aquifer without undergoing any treatment. Coca-Cola HBC Italia has entered into a commitment to minimize energy consumption and the total impact of its emissions. The fight against climate change results in an open dialogue with suppliers in order to minimize CO2 emissions of the entire production chain, from production of raw materials to management of cooling equipment on the market. As a result of the strong commitment to development and implementation of renewable energy sources and the like, photovoltaic systems were introduced at the plants in Nogara, Oricola and Marcianise. Moreover, the choice of the industrial cogeneration service at the three soft drink manufacturing plants (the opening of the first cogeneration plant in Marcianise is expected in June 2016), resulted in the reduction of the supply costs and emissions into the atmosphere, increasing energy efficiency and saving primary energy. Water supplies in 2015 were ensured by withdrawing 94% of the groundwater from wells and 6% from municipal aqueducts

3 The sustainability of packaging ENERGY CONSUMPTION (MJ) ELECTRIC ENERGY COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL THERMAL ENERGY* COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL FUEL OIL** COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL * The consumption of thermal energy specifically takes account of methane, refrigeration, steam, hot water and heavy oil. ** The consumption of fuel oil only includes light oil. In 2015, the total energy consumption amounted to 514,875,483 MegaJoule, in addition to 1,366,056 MegaJoule from solar energy. Energy consumption can also be given in terms of quantity of used energy equivalent to 0.4 MegaJoule per liter of beverage under The Coca-Cola Company brand and 0.15 MegaJoule per liter of mineral water produced. Use of raw materials Coca-Cola HBC Italia controls its processes to constantly monitor the use of raw and auxiliary materials in detail within each production facility. As a result of the increase in production volumes, in 2015 the amount of raw materials used for the production of beverages under The Coca-Cola Company brand and for the bottling of mineral water grew slightly compared to In 2015, food grade CO2 produced by recycling processes at the plant in Nogara amounted to 9,667 tons (i.e. 100% of CO2 used at the site). INGREDIENTS USED FOR THE PRODUCTION OF BEVERAGES (t) In 2015, work continued on the optimization of energy consumption with specific projects at the various sites and, similarly to what was done for water, an improvement plan was launched for the period , which will be engaging the Engineering & Sustainability team in the search for innovative technical solutions Sugar and other sweeteners Concentrate Food grade CO2 Ingredient SUGAR AND OTHER SWEETENERS CONCENTRATE FOOD GRADE CO Coca-Cola HBC Italia continuously works for the promotion of sustainable packaging and in its search for sizes and materials capable of optimizing and reducing the environmental impact of the packaging of its products, both during the production process and after use by consumers. This is why the company works to improve five areas of action: Reducing and optimizing the weight and volume of packaging; Optimizing pallets; Using, ecycled materials, where technically possible, for its packaging and recyclable beverage containers; Encouraging consumers to properly dispose of the packs after consumption of its products, raising awareness as to the separate collection of packaging materials and advising against the practice of leaving behind litter; Supporting fair initiatives and stimulating innovative packaging solutions in a closed cycle. Coca-Cola HBC Italia used about 80,000 tons of various materials for product packaging in MAIN MATERIALS USED (t) Material company GLASS COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL PET COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL ALUMINUM COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL PE FILM COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL CARDBOARD COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL PLASTIC LABELS COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL CARDBOARD LABELS COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL PLASTIC CAPS COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL TOTAL MATERIALS USED COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL

Continuing to increase the recycled content of beverage packaging is a goal for Coca-Cola HBC Italia; in fact, in 2015 it used 55% of aluminum and 15% of glass for the production of beverages under

4 Continuing to increase the recycled content of beverage packaging is a goal for Coca-Cola HBC Italia; in fact, in 2015 it used 55% of aluminum and 15% of glass for the production of beverages under The Coca-Cola Company brand and 31% (1,977,019 kg) of Bio PET for the production of mineral water. In a context where the issue of waste and its disposal tends to become more and more critical, attention to how packaging is designed, manufactured and handled after being used has a significant impact both on the Company, which must balance food security, marketing and economic needs, and on the environment. CONAI AWARD In 2015, Fonti del Vulture was among the winners of the CONAI Award on prevention - enhancing the environmental sustainability of packaging, which rewards the most innovative and environmentally-friendly packaging solutions. The award was given to three projects for the light-weighting of packaging, which led to a reduced use of PET plastic bottles. In particular, these actions involved the PET bottleneck area and the high density polyethylene (HDPE) cap resulting in the following percentage reductions in the weight of the bottle: 6% for the 2-liter PlantBottle of Lilia mineral water; 18% for the 0.5-liter bottle of Sveva mineral water and 7% for the 1.5-liter bottle of Toka mineral water. The award ceremony was held at the Triennale di Milano on December 1 in collaboration with Corriere della Sera, which was followed by a communication campaign in regard of the winners promoted in the insert of Corriere della Sera, Corriere Innovazione. Waste management and recycling Another indicator monitored by Coca-Cola HBC Italia is the production of solid waste, the management of which is crucial for sustainable development. The total in 2015 stood at 11,832 tons, and the amount of hazardous waste generated further decreased, from 42 to 34 tons. In 2015, nearly all of the waste produced (over 99%) was classified as non hazardous waste (this was, in particular, WASTE PRODUCED (t) packaging waste such as paper, cardboard, plastic and glass that are sent for recycling at most of the plants). Although Coca-Cola HBC Italia invests in waste recycling, in 2015 the percentage of recycled materials was 89.30% of the total output, a slight decrease compared to The delays in the renewal of the operating license by a recycler, certain compliance issues of the forms and the limited capacity of the plants at destination did not allow the Company to report a higher percentage of waste to be sent for recycling. Classification company HAZARDOUS WASTE PRODUCED COCA-COLA HBC ITALIA FONTI DEL VULTURE 1 4 0,63 COMPANY TOTAL NON-HAZARDOUS WASTE PRODUCED COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL TOTAL WASTE PRODUCED COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL WASTE RECYCLED (%) PLANTBOTTLE: The PET plastic bottle, up to 30% of vegetable origin COCA-COLA HBC ITALIA 98,40% 97,81% 88,82% FONTI DEL VULTURE 98,75% 99,38% 99% COMPANY TOTAL 98% 98% 89,30% e e T i di An example of innovative packaging was provided by The Coca-Cola Company and used for the first time by Fonti del Vulture in Italy in 2014: the PlantBottle, whose use continued in 2015 for 1.5-liter Lilia bottles. The extraordinary revolution of the fully recyclable PET plastic bottle, made up of a combination of traditional materials and a percentage of up to 30% of organic origin, consists in the plastic material from vegetable sources that, unlike the existing ones, can be processed in the recycling installations for traditional PET. The material of the new bottles enables a considerable reduction of carbon dioxide emissions and is fully responsive to the waste reduction, reuse and recycling policy. WASTE RECYCLED by Fonti del Vulture 44 45

5 Emissions Coca-Cola HBC Italia is aware of the effects caused by greenhouse gas emissions and that an energy policy geared to the search for efficiency could mitigate them. CO2 emissions A new approach to the subject is evidenced by the improvement targets set for 2016, in view of the Europe 2020 strategy, which provides for the use of cogeneration sources and renewable energy sources for corporate fleets. In fact, making refrigeration more sustainable, one of the largest sources of global carbon emissions due to the high global-warming potential of hydro fluorocarbons (HFCs), is the greatest commitment of Coca-Cola HBC Italia in this field. Significant investments were made during the course of 2015 to meet the commitment undertaken by Coca-Cola Hellenic Bottling Company not to introduce equipment with hydro fluorocarbons on the market as from 1 January The purchase of new equipment without hydro fluorocarbons as CO2refrigerants, which avoid 99% of direct emissions, and hydrocarbon refrigerants (HC) is a first step to achieving that goal. Another area of action concerns the selection of suppliers and their awareness. The Specifications for the provision of primary transport is a document, an integral part of the contract of carriage, which each supplier has the obligation to respect. It includes the request to use vehicles that at least meet the EURO IV standard (a set of standards on emissions, which apply to new road vehicles sold in the European Union as of 2006, as part of the air pollution reduction policy). The company s attention to this issue is also reflected in assessments instrumental to the selection of suppliers with regard to the energy sources used and energy consumption plans adopted kg of CO2 avoided thanks to the transport of goods by rail CO2 EMISSIONS (t) COCA-COLA HBC ITALIA FONTI DEL VULTURE COMPANY TOTAL For 2015, the value should not be referred to general carbon emissions, which take account both of scope 1 and scope 2 (direct and indirect emissions of greenhouse gases) in the Dow Jones Sustainability Index. The latter, in fact, also includes the impacts of fleet management and the CO2 associated with the consumption of electric energy, while the figure reported here only refers to CO2 associated with the consumption of natural gas only at the bottling sites. Logistics efficiency Storage and distribution are an essential part of the activities of Coca-Cola HBC Italia: the efforts in the field of logistics innovation, optimization of distribution networks and routes are significant and long-lasting, while still guaranteeing high quality standards in product delivery to customers. The production and distribution network was redesigned in recent years to cope with the changes occurring in the target market, both in terms of the location of customers and for the purpose of following the sales department s strategies. Investments were made in the distribution network with tangible benefits on the reduction of kilometers traveled by the means of transport. In recent years a reassessment of the supply base was undertaken to favor partners capable of offering the storage of products and delivery of orders by optimizing distances traveled and consolidating cargo. With a view to reducing its environmental impact, the Company also implemented a strategy favoring rail transport against road transport, particularly for mineral water due to the location of the production sites. During the course of 2015, the shipments handled by rail along intermodal routes were 1,902, covering a distance of 1,305,487 km from the beginning of the year, with a total savings of 234, and 1,037,435 kilograms of CO2 avoided. ZED - ZERO EMISSIONS DISTRIBUTION Zero Emissions Distribution is a virtuous system that offers a green logistics model, effective and truly sustainable to serve city centers and Limited Traffic Zones. The project, undertaken by Coca-Cola HBC Italia and Mancinelli Due, respectively lead sponsor and main investor in ZED, was developed by Università La Sapienza in Rome (DIET and DIAE), CNR (Italian national research council), POMOS (Polo della Mobilita Sostenibile, center for sustainable mobility) and the Scientific Association BIP - Best Ideas & Projects. An electric vehicle with a 140-km range, lithium and ferrite ions batteries, gradeability of 21% and maximum payload of 2.5 tons was developed and built. In October 2014, the first electric vehicle began operating in the historic center of Rome. When fully operational, the project will distribute about 300 shipments a day in the Limited Traffic Zone of the Italian Capital from a warehouse located 15 km from the city center with 6 electric vehicles powered by renewable sources. The main benefit of ZED in the medium term will be a significant reduction in CO2 emissions (i.e. 1,517,811 kg/year), the effect of which will be equivalent to the reforestation of about 205 hectares. ZED wants to stand as a reference model to be replicated in other Italian cities. ZERO WASTE LOGISTICS 6 veicoli elettrici alimentati da fonti rinnovabili In 2015, Coca-Cola HBC Italia earned the award Logistics of the year, organized by Assologistica and Euromerci, thanks to the project Zero Waste Logistics, in collaboration with CHEP and Carrefour Italia. This project is another example of the Company s attention to sustainability of its logistics activities, involving the abandonment of the 80x60 disposable wooden pallets to adopt the pallet pooling solution offered by CHEP Italy, with the aim to reduce food waste, costs and environmental impact. Robust pallets are shipped to the outlets without handling along the supply chain: this one-touch solution enabled Coca-Cola HBC Italia to decrease the damage to the product by 65% and by 83% with reference to cans alone. Moreover, the 80x60 pallets allow a better visibility of the product at the point of sale thereby improving rotations and reducing the likelihood that products may expire. The CHEP solution is sustainable from the outset since the wooden pallet comes from managed forests and is certified by FSC (Forest Stewardship Council) and PEFC (Program for the Endorsement of Forest Certification schemes). Through the LCA model, Life Cycle Assessment, CHEP has quantified the environmental benefits achieved by Coca-Cola HBC Italia in 2015 by using rented pallets: 31% reduction of CO2 emissions equal to 53 tons; wood savings of 93%, equal to 364 cubic meters; 92% less waste in dumpsites equal to 56 tons. The model used is the first LCA on pallet pooling in Italy that was attributed the logo of the environmental footprint assessment program by the Italian Ministry of the Environment

3. ENVIRONMENTAL INDICATORS

3. ENVIRONMENTAL INDICATORS This chapter includes Inditex s system of environmental indicators and the results obtained during the year 2016. These quantitative indicators allow us to take stock of the