coca cola casestudy

5
Coca-Cola's Water Sustainability Initiatives Case Details: Case Code : BECG090 Case Length : 23 Pages Period : 2004-2008 Pub Date : 2009 Teaching Note : Not Available Organization : The Coca-Cola Company Industry : FMCG Countries : Global Abstract: This case is about the global water sustainability initiatives undertaken by The Coca-Cola Company (Coca-Cola). It details the activities undertaken by Coca-Cola's management and employees to contribute to the benefit of the society and community in which the company operated by pledging to return all the water it used in its operations back to the environment. On June 5, 2007, Coca-Cola and the World Wildlife Fund (WWF) launched a global project that focused on water conservation. Coca-Cola being one of the largest beverage companies in the world had water sustainability initiatives as an integral part of its corporate agenda since water was an important element for the company to run its business. According to the company, it was aware of the environmental impact caused by a business of its scale and therefore it had decided to implement a wide range of initiatives to improve the quality of life of its customers, the workforce, and the society at large. While Coca-Cola's water sustainability initiatives earned accolades from its collaboration partners, it came in for severe criticism from activists and environmental experts for allegedly depleting groundwater resources in India. The company was also accused of dumping toxic and hazardous waste materials near its bottling facilities, and discharging wastewater into the agricultural lands of farmers. Moreover, Coca- Cola was one of the most boycotted companies in the world for its alleged unethical business practices in developing countries. Notwithstanding the criticisms, the company championed various water sustainability initiatives such as rainwater harvesting, restoring groundwater resources, efficient water resource management, watershed protection, community water initiatives, and global awareness and action initiatives for educating the

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Page 1: Coca Cola Casestudy

Coca-Colas Water Sustainability Initiatives

Case Details

Case Code BECG090

Case Length 23 Pages

Period 2004-2008

Pub Date 2009

Teaching Note Not Available

Organization The Coca-Cola Company

Industry FMCG

Countries Global

Abstract

This case is about the global water sustainability initiatives undertaken by The Coca-Cola Company

(Coca-Cola) It details the activities undertaken by Coca-Colas management and employees to contribute

to the benefit of the society and community in which the company operated by pledging to return all the

water it used in its operations back to the environment On June 5 2007 Coca-Cola and the World

Wildlife Fund (WWF) launched a global project that focused on water conservation

Coca-Cola being one of the largest beverage companies in the world had water sustainability initiatives

as an integral part of its corporate agenda since water was an important element for the company to run

its business

According to the company it was aware of the environmental impact caused by a business of its scale

and therefore it had decided to implement a wide range of initiatives to improve the quality of life of its

customers the workforce and the society at large

While Coca-Colas water sustainability initiatives earned accolades from its collaboration partners it came

in for severe criticism from activists and environmental experts for allegedly depleting groundwater

resources in India The company was also accused of dumping toxic and hazardous waste materials near

its bottling facilities and discharging wastewater into the agricultural lands of farmers Moreover Coca-

Cola was one of the most boycotted companies in the world for its alleged unethical business practices in

developing countries

Notwithstanding the criticisms the company championed various water sustainability initiatives such as

rainwater harvesting restoring groundwater resources efficient water resource management watershed

protection community water initiatives and global awareness and action initiatives for educating the

underserved communities the significance of water The company was also criticized for spending millions

of dollars to project a green and environment-friendly image while failing to take care of the basics to

operate its business in an ethical manner The critics felt that this was an attempt at greenwashing as

Coca-Colas business practices in India had tarnished its brand image while its sales had taken a beating

However the company intended to become a water neutral company by 2010

Issues

raquo Understand the issues and challenges faced by Coca-Cola with regard to its global environmental

responsibility initiatives

raquo Understand the concept of sustainability and its relevance in todays businesses

raquo Understand the need for a vision policy and governance structure in order to achieve the goals of

sustainability management

raquo Understand how environmentally and socially responsible behavior leads to sustainable business

performance

raquo Develop a framework to measure sustainability initiatives

raquo Determine how a companys stand on social and environmental issues can contribute to enhancing its

corporate image

raquo Understand the reactions of consumers environmental experts and critics to Coca-Colas water

sustainability initiatives

Contents

Page No

Introduction 1

Background Note 2

Coca-Colas Environmental Issues 4

Coca-Cola amp Water 5

Coca-Colas Water Stewardship Strategy 7

Criticisms 10

Coca-Colas Response 12

Looking Ahead 14

Exhibits 16

Keywords

Corporate social responsibility Environmental Protection Environmental responsibility Water

sustainability Water stewardship strategy Water resource management Wastewater treatment

Sustainable development Rainwater harvesting Public relations Brand image Greenwashing Product

mix Competitive advantage Advertising Franchise The Coca-Cola Company Coca-Cola India The

Energy and Resource Institute Water and Development Alliance Center for Science and Environment

Introduction

On March 26 2008 US-based leading beverage company The Coca-Cola Company (Coca-Cola)

received the US Agency for International Developments4 (USAID) 2007 Alliance of the Year award for its

water sustainability initiatives in developing countries worldwide The award recognizes public-private

partnerships for their outstanding contribution to global challenges

Since 2004 Coca-Cola had been accused by several governmental organizations and activists of

creating environmental problems in several countries by depleting groundwater tables In 2005 the

company used 290 billion liters of water to produce its beverages

Around 40 percent of the water was consumed in making beverages and the remaining 60 percent was

used in the supply chain and in the production of ingredients like sugar and corn5

In 2005 Coca-Cola entered into an alliance with USAID to address global water management problems

These initiatives were funded by Coca-Cola and the Water and Development Alliance6(WADA)

Coca-Cola in association with USAID and WADA addressed critical water issues across the world

However the beverage company was criticized for depleting groundwater that was an important resource

to the local communities in developing countries

Coca-Cola was also criticized for distributing what was alleged to be improperly treated sludge containing

toxic carcinogens and heavy metals like cadmium and lead as fertilizer to farmers in India

On June 5 2007 Coca-Cola and the World Wildlife Fund7 (WWF) launched a global project that focused

on water conservation

Coca-Cola aimed to return to the environment all the water that it consumed in beverage production and

become water neutral by 2010

This it proposed to do by focusing on three core areas - reduction recycling and replenishment

Excerpts

Background Note

The Coca-Cola drink popularly referred to as Coke is a kind of cola a sweet carbonated drink

containing caramel and other flavoring agents It was invented by Dr John Smith Pemberton (Pemberton)

on May 8 1886 at Atlanta Georgia in USA The beverage was named Coca-Cola because at that time it

contained extracts of Coca leaves and Kola nuts Frank M Robinson (Robinson) Pembertons book-

keeper and partner who came up with the name for the drink suggested that it be spelt Coca-Cola rather

than Coca-Kola because he thought the two Cs would look better while advertising Robinson designed

the now world famous Coca-Cola trademark as well

Coca-Colas Environmental Issues

Coca-Cola was accused of draining the underground water table and of releasing improperly treated

industrial effluents in less developed countries The company was hit hardest in India The focal point of

the environmental accusations in India was the Coca-Cola plant located in the southern state of Kerala

Coca-Cola amp Water

In 2002 Coca-Cola initiated its water sustainability initiatives to provide local communities residing in the

areas near its bottling plants with access to potable water Since the company was facing several issues

related to its environmental sustainability in India it launched several rainwater harvesting projects in

India in June 2002

The company received support from several non-governmental organizations (NGOs) central

groundwater authorities state groundwater boards and welfare associations

Coca-Cola amp Water

In 2002 Coca-Cola initiated its water sustainability initiatives to provide local communities residing in the

areas near its bottling plants with access to potable water Since the company was facing several issues

related to its environmental sustainability in India it launched several rainwater harvesting projects in

India in June 2002

The company received support from several non-governmental organizations (NGOs) central

groundwater authorities state groundwater boards and welfare associations

Criticisms

Some analysts felt that the initiatives adopted by Coca-Cola were the need of the hour and such private

sector expertise and interests could make real contributions to sustainable development They felt that

the company had set an example for other organizations to follow

While its water sustainability initiatives earned Coca-Cola accolades from its collaboration partners and

certain quarters it failed largely to impress its critics Despite several efforts by the company it continued

to face criticisms from several quarters

Coca-Colas Response

Coca-Cola opened an exclusive website wwwcokefactsorg which addressed the allegations related to

India and other countries Also the company issued an official statement rebutting the charges against its

bottling plant at Plachimada

Coca-Colas Response

Coca-Cola opened an exclusive website wwwcokefactsorg which addressed the allegations related to

India and other countries Also the company issued an official statement rebutting the charges against its

bottling plant at Plachimada

Exhibits

Exhibit I Importance of Water to Coca-Cola

Exhibit II Selected Financials of Coca-Cola 2003-2007

Exhibit III Coca-Colas Initiatives in Other Countries

Exhibit IV Coca-Colas Global Water Sustainability Goals

Exhibit V Rainwater Harvesting Projects in India

Exhibit VI List of Awards and Recognition

Page 2: Coca Cola Casestudy

underserved communities the significance of water The company was also criticized for spending millions

of dollars to project a green and environment-friendly image while failing to take care of the basics to

operate its business in an ethical manner The critics felt that this was an attempt at greenwashing as

Coca-Colas business practices in India had tarnished its brand image while its sales had taken a beating

However the company intended to become a water neutral company by 2010

Issues

raquo Understand the issues and challenges faced by Coca-Cola with regard to its global environmental

responsibility initiatives

raquo Understand the concept of sustainability and its relevance in todays businesses

raquo Understand the need for a vision policy and governance structure in order to achieve the goals of

sustainability management

raquo Understand how environmentally and socially responsible behavior leads to sustainable business

performance

raquo Develop a framework to measure sustainability initiatives

raquo Determine how a companys stand on social and environmental issues can contribute to enhancing its

corporate image

raquo Understand the reactions of consumers environmental experts and critics to Coca-Colas water

sustainability initiatives

Contents

Page No

Introduction 1

Background Note 2

Coca-Colas Environmental Issues 4

Coca-Cola amp Water 5

Coca-Colas Water Stewardship Strategy 7

Criticisms 10

Coca-Colas Response 12

Looking Ahead 14

Exhibits 16

Keywords

Corporate social responsibility Environmental Protection Environmental responsibility Water

sustainability Water stewardship strategy Water resource management Wastewater treatment

Sustainable development Rainwater harvesting Public relations Brand image Greenwashing Product

mix Competitive advantage Advertising Franchise The Coca-Cola Company Coca-Cola India The

Energy and Resource Institute Water and Development Alliance Center for Science and Environment

Introduction

On March 26 2008 US-based leading beverage company The Coca-Cola Company (Coca-Cola)

received the US Agency for International Developments4 (USAID) 2007 Alliance of the Year award for its

water sustainability initiatives in developing countries worldwide The award recognizes public-private

partnerships for their outstanding contribution to global challenges

Since 2004 Coca-Cola had been accused by several governmental organizations and activists of

creating environmental problems in several countries by depleting groundwater tables In 2005 the

company used 290 billion liters of water to produce its beverages

Around 40 percent of the water was consumed in making beverages and the remaining 60 percent was

used in the supply chain and in the production of ingredients like sugar and corn5

In 2005 Coca-Cola entered into an alliance with USAID to address global water management problems

These initiatives were funded by Coca-Cola and the Water and Development Alliance6(WADA)

Coca-Cola in association with USAID and WADA addressed critical water issues across the world

However the beverage company was criticized for depleting groundwater that was an important resource

to the local communities in developing countries

Coca-Cola was also criticized for distributing what was alleged to be improperly treated sludge containing

toxic carcinogens and heavy metals like cadmium and lead as fertilizer to farmers in India

On June 5 2007 Coca-Cola and the World Wildlife Fund7 (WWF) launched a global project that focused

on water conservation

Coca-Cola aimed to return to the environment all the water that it consumed in beverage production and

become water neutral by 2010

This it proposed to do by focusing on three core areas - reduction recycling and replenishment

Excerpts

Background Note

The Coca-Cola drink popularly referred to as Coke is a kind of cola a sweet carbonated drink

containing caramel and other flavoring agents It was invented by Dr John Smith Pemberton (Pemberton)

on May 8 1886 at Atlanta Georgia in USA The beverage was named Coca-Cola because at that time it

contained extracts of Coca leaves and Kola nuts Frank M Robinson (Robinson) Pembertons book-

keeper and partner who came up with the name for the drink suggested that it be spelt Coca-Cola rather

than Coca-Kola because he thought the two Cs would look better while advertising Robinson designed

the now world famous Coca-Cola trademark as well

Coca-Colas Environmental Issues

Coca-Cola was accused of draining the underground water table and of releasing improperly treated

industrial effluents in less developed countries The company was hit hardest in India The focal point of

the environmental accusations in India was the Coca-Cola plant located in the southern state of Kerala

Coca-Cola amp Water

In 2002 Coca-Cola initiated its water sustainability initiatives to provide local communities residing in the

areas near its bottling plants with access to potable water Since the company was facing several issues

related to its environmental sustainability in India it launched several rainwater harvesting projects in

India in June 2002

The company received support from several non-governmental organizations (NGOs) central

groundwater authorities state groundwater boards and welfare associations

Coca-Cola amp Water

In 2002 Coca-Cola initiated its water sustainability initiatives to provide local communities residing in the

areas near its bottling plants with access to potable water Since the company was facing several issues

related to its environmental sustainability in India it launched several rainwater harvesting projects in

India in June 2002

The company received support from several non-governmental organizations (NGOs) central

groundwater authorities state groundwater boards and welfare associations

Criticisms

Some analysts felt that the initiatives adopted by Coca-Cola were the need of the hour and such private

sector expertise and interests could make real contributions to sustainable development They felt that

the company had set an example for other organizations to follow

While its water sustainability initiatives earned Coca-Cola accolades from its collaboration partners and

certain quarters it failed largely to impress its critics Despite several efforts by the company it continued

to face criticisms from several quarters

Coca-Colas Response

Coca-Cola opened an exclusive website wwwcokefactsorg which addressed the allegations related to

India and other countries Also the company issued an official statement rebutting the charges against its

bottling plant at Plachimada

Coca-Colas Response

Coca-Cola opened an exclusive website wwwcokefactsorg which addressed the allegations related to

India and other countries Also the company issued an official statement rebutting the charges against its

bottling plant at Plachimada

Exhibits

Exhibit I Importance of Water to Coca-Cola

Exhibit II Selected Financials of Coca-Cola 2003-2007

Exhibit III Coca-Colas Initiatives in Other Countries

Exhibit IV Coca-Colas Global Water Sustainability Goals

Exhibit V Rainwater Harvesting Projects in India

Exhibit VI List of Awards and Recognition

Page 3: Coca Cola Casestudy

Keywords

Corporate social responsibility Environmental Protection Environmental responsibility Water

sustainability Water stewardship strategy Water resource management Wastewater treatment

Sustainable development Rainwater harvesting Public relations Brand image Greenwashing Product

mix Competitive advantage Advertising Franchise The Coca-Cola Company Coca-Cola India The

Energy and Resource Institute Water and Development Alliance Center for Science and Environment

Introduction

On March 26 2008 US-based leading beverage company The Coca-Cola Company (Coca-Cola)

received the US Agency for International Developments4 (USAID) 2007 Alliance of the Year award for its

water sustainability initiatives in developing countries worldwide The award recognizes public-private

partnerships for their outstanding contribution to global challenges

Since 2004 Coca-Cola had been accused by several governmental organizations and activists of

creating environmental problems in several countries by depleting groundwater tables In 2005 the

company used 290 billion liters of water to produce its beverages

Around 40 percent of the water was consumed in making beverages and the remaining 60 percent was

used in the supply chain and in the production of ingredients like sugar and corn5

In 2005 Coca-Cola entered into an alliance with USAID to address global water management problems

These initiatives were funded by Coca-Cola and the Water and Development Alliance6(WADA)

Coca-Cola in association with USAID and WADA addressed critical water issues across the world

However the beverage company was criticized for depleting groundwater that was an important resource

to the local communities in developing countries

Coca-Cola was also criticized for distributing what was alleged to be improperly treated sludge containing

toxic carcinogens and heavy metals like cadmium and lead as fertilizer to farmers in India

On June 5 2007 Coca-Cola and the World Wildlife Fund7 (WWF) launched a global project that focused

on water conservation

Coca-Cola aimed to return to the environment all the water that it consumed in beverage production and

become water neutral by 2010

This it proposed to do by focusing on three core areas - reduction recycling and replenishment

Excerpts

Background Note

The Coca-Cola drink popularly referred to as Coke is a kind of cola a sweet carbonated drink

containing caramel and other flavoring agents It was invented by Dr John Smith Pemberton (Pemberton)

on May 8 1886 at Atlanta Georgia in USA The beverage was named Coca-Cola because at that time it

contained extracts of Coca leaves and Kola nuts Frank M Robinson (Robinson) Pembertons book-

keeper and partner who came up with the name for the drink suggested that it be spelt Coca-Cola rather

than Coca-Kola because he thought the two Cs would look better while advertising Robinson designed

the now world famous Coca-Cola trademark as well

Coca-Colas Environmental Issues

Coca-Cola was accused of draining the underground water table and of releasing improperly treated

industrial effluents in less developed countries The company was hit hardest in India The focal point of

the environmental accusations in India was the Coca-Cola plant located in the southern state of Kerala

Coca-Cola amp Water

In 2002 Coca-Cola initiated its water sustainability initiatives to provide local communities residing in the

areas near its bottling plants with access to potable water Since the company was facing several issues

related to its environmental sustainability in India it launched several rainwater harvesting projects in

India in June 2002

The company received support from several non-governmental organizations (NGOs) central

groundwater authorities state groundwater boards and welfare associations

Coca-Cola amp Water

In 2002 Coca-Cola initiated its water sustainability initiatives to provide local communities residing in the

areas near its bottling plants with access to potable water Since the company was facing several issues

related to its environmental sustainability in India it launched several rainwater harvesting projects in

India in June 2002

The company received support from several non-governmental organizations (NGOs) central

groundwater authorities state groundwater boards and welfare associations

Criticisms

Some analysts felt that the initiatives adopted by Coca-Cola were the need of the hour and such private

sector expertise and interests could make real contributions to sustainable development They felt that

the company had set an example for other organizations to follow

While its water sustainability initiatives earned Coca-Cola accolades from its collaboration partners and

certain quarters it failed largely to impress its critics Despite several efforts by the company it continued

to face criticisms from several quarters

Coca-Colas Response

Coca-Cola opened an exclusive website wwwcokefactsorg which addressed the allegations related to

India and other countries Also the company issued an official statement rebutting the charges against its

bottling plant at Plachimada

Coca-Colas Response

Coca-Cola opened an exclusive website wwwcokefactsorg which addressed the allegations related to

India and other countries Also the company issued an official statement rebutting the charges against its

bottling plant at Plachimada

Exhibits

Exhibit I Importance of Water to Coca-Cola

Exhibit II Selected Financials of Coca-Cola 2003-2007

Exhibit III Coca-Colas Initiatives in Other Countries

Exhibit IV Coca-Colas Global Water Sustainability Goals

Exhibit V Rainwater Harvesting Projects in India

Exhibit VI List of Awards and Recognition

Page 4: Coca Cola Casestudy

on May 8 1886 at Atlanta Georgia in USA The beverage was named Coca-Cola because at that time it

contained extracts of Coca leaves and Kola nuts Frank M Robinson (Robinson) Pembertons book-

keeper and partner who came up with the name for the drink suggested that it be spelt Coca-Cola rather

than Coca-Kola because he thought the two Cs would look better while advertising Robinson designed

the now world famous Coca-Cola trademark as well

Coca-Colas Environmental Issues

Coca-Cola was accused of draining the underground water table and of releasing improperly treated

industrial effluents in less developed countries The company was hit hardest in India The focal point of

the environmental accusations in India was the Coca-Cola plant located in the southern state of Kerala

Coca-Cola amp Water

In 2002 Coca-Cola initiated its water sustainability initiatives to provide local communities residing in the

areas near its bottling plants with access to potable water Since the company was facing several issues

related to its environmental sustainability in India it launched several rainwater harvesting projects in

India in June 2002

The company received support from several non-governmental organizations (NGOs) central

groundwater authorities state groundwater boards and welfare associations

Coca-Cola amp Water

In 2002 Coca-Cola initiated its water sustainability initiatives to provide local communities residing in the

areas near its bottling plants with access to potable water Since the company was facing several issues

related to its environmental sustainability in India it launched several rainwater harvesting projects in

India in June 2002

The company received support from several non-governmental organizations (NGOs) central

groundwater authorities state groundwater boards and welfare associations

Criticisms

Some analysts felt that the initiatives adopted by Coca-Cola were the need of the hour and such private

sector expertise and interests could make real contributions to sustainable development They felt that

the company had set an example for other organizations to follow

While its water sustainability initiatives earned Coca-Cola accolades from its collaboration partners and

certain quarters it failed largely to impress its critics Despite several efforts by the company it continued

to face criticisms from several quarters

Coca-Colas Response

Coca-Cola opened an exclusive website wwwcokefactsorg which addressed the allegations related to

India and other countries Also the company issued an official statement rebutting the charges against its

bottling plant at Plachimada

Coca-Colas Response

Coca-Cola opened an exclusive website wwwcokefactsorg which addressed the allegations related to

India and other countries Also the company issued an official statement rebutting the charges against its

bottling plant at Plachimada

Exhibits

Exhibit I Importance of Water to Coca-Cola

Exhibit II Selected Financials of Coca-Cola 2003-2007

Exhibit III Coca-Colas Initiatives in Other Countries

Exhibit IV Coca-Colas Global Water Sustainability Goals

Exhibit V Rainwater Harvesting Projects in India

Exhibit VI List of Awards and Recognition

Page 5: Coca Cola Casestudy

Coca-Colas Response

Coca-Cola opened an exclusive website wwwcokefactsorg which addressed the allegations related to

India and other countries Also the company issued an official statement rebutting the charges against its

bottling plant at Plachimada

Coca-Colas Response

Coca-Cola opened an exclusive website wwwcokefactsorg which addressed the allegations related to

India and other countries Also the company issued an official statement rebutting the charges against its

bottling plant at Plachimada

Exhibits

Exhibit I Importance of Water to Coca-Cola

Exhibit II Selected Financials of Coca-Cola 2003-2007

Exhibit III Coca-Colas Initiatives in Other Countries

Exhibit IV Coca-Colas Global Water Sustainability Goals

Exhibit V Rainwater Harvesting Projects in India

Exhibit VI List of Awards and Recognition