The Coca-Cola Company is the global leader specialized in the manufacture, retailing and marketing of its nonalcoholic beverages and syrups. This company has its headquarters in Atlanta, Georgia. A pharmacist known by the name John Pemberton invented the Coca-Cola brand in 1886. Before his death, he sold his interest to Asa Griggs Candler, who went ahead and bought the remaining rights to gain complete control. The company now offers over 500 brands in more than 200 countries of the world. One of the countries that are being served by the Coca-Cola Company in India where the Hindustan Coca-Coca Beverages Pvt. Ltd (also known as Coca-Cola India) has taken root.
Coca-Cola India was founded in the early 1990s as a subsidiary of the Coca-Cola Company based in the U.S. Several years later. It had established 49 bottling operations. Apart from the usual brands, this subsidiary consisted of local brands such as ‘Thums Up’ and Kinley. The company’s business steadily grew as it strived to target some of the untapped areas such as the rural areas. When this was achieved, the company had made sales of over 91% from these areas. However, criticisms also arose concerning the company’s operations in the country. It was argued that the company increased pollution due to its productions. It was also argued that the company caused the reduction of the underground water, which was a source of drinking water and water for irrigation for the surrounding communities. Despite the efforts of the company to ensure corporate social responsibility, it continued to receive criticisms and opposition from the communities. This paper will analyze the CSR strategy adopted by Coca-Cola India and examine the issues and challenges it faces with regards to its sustainability initiatives. It will also analyze the underlying reasons for the growing criticism and discuss whether it is serious about its water sustainability initiatives.
Analysis of the CSR Strategy adopted by Coca-Cola India
Coca-Cola India has taken several steps to engage in activities that go beyond the interests of the firm and the requirements of law. This has shown the way the Coca-Cola Company is giving back to the surrounding community. These activities were meant to further the company’s social good. The several ways in which corporate social responsibility was ensured was through initiatives such as water conservation management, education and health. Apart from that, the company ensured that its activities did not affect the locals. This was seen in the way it was involved in waste management and reduction of greenhouse gas emissions.
Coca-Cola India collaborated with the government and other non-governmental organizations in order to educate various communities in the country on the importance of preserving watersheds. This was in an attempt to ensure the sustainability of the water sources. In addition to this, it initiated a Community Watershed Partnership (CWP) program. This program mainly focused on the protection of the existing watersheds and ensured access to safe water for domestic and productive use by the communities. It also focused on education and the raising of awareness. The water management initiatives were meant to help reduce water consumption to reduce the effects of water over-use by its operations. Since the company was aware that it was using a significant volume of the groundwater, it strived to achieve zero water balance. Some of the ways this was ensured were through reducing the underground water used during production, recycling water, and restoring the water used back to the environment.
In terms of reducing the effects of greenhouse gases on the environment, Coca-Cola India focused on reducing its energy consumptions. It also concentrated on machines that emitted greenhouse gases and these included the refrigerants and other coolers. One of how it did this is by launching a cooler that did not require the use of hydrofluorocarbons. This initiative went global for Coca-Cola since it saw over a thousand of its refrigeration equipment converted. To further curb the effects on the environment, the company ensured that the materials used for packaging were 100% recyclable. The used bottles and cans that had been disposed of were then collected and recycled. This waste management initiative ensured that the environment was safeguarded. Despite these efforts, the problem of littering of waterways, roadsides and beaches persisted. Therefore, this called for the need for raising awareness and educating the community members on the ways of preventing litter.
Another community development initiative was education facilities. The company launched Learning Centers that ensured that children living around gained education. The company also helped to curb waterborne diseases among the children. This was done by providing them with clean potable water. Several projects were also initiated to ensure improved sanitation services within the community.
Issues and challenges faced by Coca-Cola
Despite the efforts of Coca-Cola India to enhance sustainability initiatives in India, the company continued to attract criticisms and opposition. One of the criticisms was that the company was depleting the groundwater tables. This left the locals with no access to drinking water and water for irrigation. The locals were involved in demonstrations to protest against the company’s activities. Another criticism against the company’s efforts has to do with pollution. It was alleged that the company’s products contained dangerous levels of pesticides, which are harmful to human health. When the Coca-Cola Company attempted to initiate water sustainability initiatives worldwide, people argued that it was an attempt to cover for their mistakes. They also argued that the water harvested from rainwater was too little to offset the water used by the company during operation. Other critics pointed out that the funds allocated for the conservation projects were not even a fraction of the amount spent by the company for advertising.
Underlying reasons for the growing criticism
The locals of the community seem to only look at the negative effects of the company’s activities and are not looking at the benefits that include the availability of jobs, education and health services initiated by the company. The complaint about the depletion of groundwater may have been brought about by individuals who intend to bring down the company. The Coca-Cola India company was a source of great competition, and this must have caused competitors to look for ways to negatively affect its business. The company has done a lot to address some of the issues. However, one other way in which the company can do to address the issue of depleting water is to dig deep boreholes for domestic use and irrigation. Since the locals argue that the groundwater level has gone down, the company could finance the digging of deeper boreholes to reach the deep underground water.
Concept of greenwashing
Coca-Cola India was accused of using conservation bodies such as the World Wildlife Fund to create an image that implies that it has gone green in its operations. Critics argue that the company does not employ green solutions in its operations. This was mainly when it came to the use of groundwater. However, studies show otherwise. A research study indicated that there was no evidence to show that the company’s plants were depleting the groundwater reserves. Further research showed that the general decrease in the rainfall in the area was responsible for the decreased levels.
Concerning the issue of pollution, the company denied that it released untreated effluents. It argued that the wastewater treatment procedures employed were among the most advanced in the world. The procedures for treating the discharge were also in compliance with the standards of the Kerala State Pollution Control Board. Therefore, it is evident that the projects started by the company were meant to project the company as a responsible corporate citizen. They were meant to bring joy to the people and improve their livelihoods. The company also strived to ensure that the water is used for its operations were replenished and returned to the environment. Therefore, Coca-Cola was serious about its water sustainability initiatives and its strategy was good.
The Coca-Cola Company has grown its business globally to include its operations in India. Since the inception of the company in India, criticisms against its operations have been levelled on the company. The company, on the other hand, has attempted to become a responsible corporate citizen by addressing some of the issues addressed by the locals and other critics. Despite its great efforts, the company continues to attract criticisms. This may be the case because the company is the leading beverage company in the country. Therefore, it may be concluded that Coca-Cola India is a responsible corporate citizen with a good strategy.