Disclaimer: This post is for informational and educational purposes only, not financial or investment advice. The opinions are solely those of the author, not any organization. Consult a professional before making investment decisions, as all investments carry risk. The author is not liable for losses or damages resulting from the use of this information. Past performance does not predict future results.
Key Points
After examining Coca-Cola’s source of revenue, the ratio of interest expense to total operating expense, and ESG impact we are uncomfortable investing in Coca-Cola from a Halal perspective.
Company Overview
The Coca-Cola Company is a US-based multinational beverage corporation, best known as the producer of Coca-Cola.
The sugary drink was invented in 1886 by pharmacist John Stith Pemberton.
Coca-Cola divides its source of revenue into two segments. Concentrate Operations and Finished Product Operations. While coca-cola primarily identifies itself as a non-alcoholic beverage company, it has entered into the alcohol beverage segment in numerous markets outside the United States. In the United States, the Company has authorized alcohol-licensed third parties to use certain of its brands on alcoholic beverages.
Even though the revenue from the alcoholic beverage segment could be very small, there is no way of determining the exact number since Coca-Cola does not publish details of the revenue from each product line.
It’s unclear how much of Coca-Cola’s revenue comes from alcoholic beverages although we would not be surprised if this portion grew with time since Coca-Cola is relatively new in this space. This recent disposition of Coca-Cola with regards to alcoholic beverages, while not conclusively material, is cause for concern.
There appears to be a persistent reliance on the use of Riba in Coca-Cola’s operations.
What is Coca-Cola's Environmental, Social, and Governance (ESG) impact?
Environment
The Coca-Cola Company produces over 3 million tonnes of plastic packaging each year including 110 billion plastic bottles. The company's global chief executive stated that Coca-Cola has no plans to reduce its use of plastic bottles and opposes bottle bill legislation.
Coca-Cola has set goals to make 100% of its packaging recyclable globally by 2025 and aims to have at least 25% of its beverages worldwide by volume sold in refillable/returnable glass or plastic bottles or in fountain dispensers with reusable packaging.
Coca-Cola has a Glassdoor rating of 4.0 out of 5.0. Glassdoor is a trusted website where current and former employees can review and rate their companies.
Governance
The Coca-Cola Company funded the creation of the front organization the Global Energy Balance Network (GEBN) which is accused of designing its own studies to arrive at conclusions set in advance and cherry-picked data to support Coca-Cola’spublic relations agenda. After an August 2015 investigative report exposed GEBN as a Coca-Cola Company front organization, GEBN was shut down.
Practical Islamic finance concludes:
Coca-Cola has a net negative ESG impact.
Comfort Rating
From Coca-Cola’s business, financial, and ESG reviews, Practical Islamic Finance rates Coca-Cola stock as
Uncomfortable to invest in from a Halal perspective.
Justification
There is a persistent reliance on riba in Coca-Cola’s operations. Their product line includes alcohol-based beverages which are haram in Islam. Additionally, it appears likely that Coca-Cola was involved in funding front organizations to create propaganda.
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So, based on the data mentioned above, we can say that Coca-Cola stock is an excellent option for Muslim investors because it passes all the criteria to be found halal and not haram. However, some other platforms run extra screening analysis to check the stock's compliance status.
Is co*ke Halal certified? - Quora. co*ke is not halal certified but it's kosher certified, but co*ke don't have any haram ingredients including alcohol, so co*ke is halal and kosher.
Buying stocks is not haram in general. As long as the company's shares are per Shariah principles, Muslims can invest in that stock. When you are a stock owner, you own a small percentage of the business. However, it is essential that you need to make sure the company in question is aligned with Shariah rules.
The company's primary business must be halal (according to Islamic law – Shariah). Under Shariah law, companies engaged in gambling, alcohol, tobacco, etc., are excluded.
Business activity screen: How the company makes money.
Financial activity screen: How much interest a company has to pay or is making from its debts and investments, as well as how much cash it is currently holding.
The SFDA previously clarified on its official website that soft drinks such as Pepsi-Cola and Coca-Cola, available in the Saudi markets, are free of pork ingredients.
Produce at McDonald's is farm-fresh and we use regional suppliers to ensure that freshness is delivered to you in all our salads. All food consumed at McDonald's comply with Halal requirements.
Is cryptocurrency halal? For many Islamic scholars, the answer quite simply is yes. Shariah principles can be applied to modern crypto analysis and digital currencies as they are based on social justice, accountability and ethics which transcend all forms of financial transactions.
It has committed to using renewable energy sources for the business activities. Based on these instances, we consider that the business model that Amazon follows Amazon is in compliance to Halal investment guidelines.
While Islam does not typically ban investment, many practising community members cannot invest in companies that produce or sell religiously restricted products, which means it can be difficult to invest in accounts or financial products that may touch various sectors of the economy.
None of the business's revenue comes from Haram. Interest is used but is not relied on to run the company. The company has a net positive impact on the environment, society and governance.
Hi Taha, In the USA, our products are non-intoxicating (no alcohol) and do not contain meat ingredients. Even if our soft drink products are not formally certified as halal, they are officially recognized and registered as nonalcoholic beverages.
The ownership structure of Coca-Cola Bottling Co Consolidated (co*kE) stock is a mix of institutional, retail and individual investors. Approximately 32.25% of the company's stock is owned by Institutional Investors, 37.60% is owned by Insiders and 30.15% is owned by Public Companies and Individual Investors.
None of the business's revenue comes from Haram. It is questionable whether interest is relied on to run the company. The company has a net positive impact on the environment, society and governance.
Is investing in stocks Halal? Yes, trading in equity stock of companies listed on stock exchanges are absolutely permissible with conditions that such companies qualify the Shariah screening standards set up by the Shariah Scholars.
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