Corporate social responsibility (CSR) refers to the duty of enterprises to positively impact society. CSR involves incorporating community and environmental concerns into an organization’s planning. This program is based on the idea that companies have a mandate of making the world a better place by mitigating negative ecological impacts (Wang & Sarkis, 2017). For instance, some businesses are working towards reducing carbon dioxide footprint by reducing pollution and planting trees. In the USA, no laws are regulating CSR, however, codes of conducts are used to fulfill it. This paper expounds the effects of CSR policies and reporting in the Coca-Cola Company.
The CSR concepts consist of four linked aspects, which are legal, economic, philanthropic, and ethical responsibilities. The economic facet deals with creating services and goods for the community while making profits. The ethical duty of an organization is to act in a fair and right way (Austin & Gaither, 2019). The philanthropic obligation requires business organizations to improve people’s life quality. Coca-Cola Corporation is one of the largest multinational establishments manufacturing and distributing nonalcoholic drinks globally.
Coca-Cola’s CSR Policies and Reporting
The company’s CSR policy launched in 2007 was Live Positively, this program aimed to improve seven core aspects, which are energy and climate, community, active healthy living, beverage benefits, water stewardship, workplace, and sustainable packaging. Measurable goals and guidelines to direct employees were established in the business code of conduct. In addition, the firm adopted international CSR guidelines such as Ruggie’s Protect, Global Compact17, and Respect and Remedy Framework (Ruggie’s Framework) (Torres et al., 2012). Coca-Cola publishes the company’s activities annually to show the progress done under the initiatives.
Coca Cola’s Conflicts
A conflict arose when an Indian non-governmental organization for Science and Environment (CSE) found high pesticide residues, which exceeded the stipulated European standard for consumption in beverages. In addition, it was alleged that the company over-extracted groundwater and caused water shortages in India. In Kerala, water sources had been polluted by waste products from the firm. The Indian public health authorities declared the water in the surrounding unfit for human consumption.
Conflicts ensued when Coca Cola denied the claims of polluting and overexploiting water resources as well as manufacturing harmful products. In 2006, the state government began a proceeding against the company, and thereafter its operation was banned. The legal procedures faced by the company spoiled the brand’s reputation and consumer’s trust. In addition, the annual sales sharply declined thereafter in all parts of the world including America.
Resultant Changes in the CSR Policies and Reporting
To solve the conflict, the company executed a water stewardship program through local projects, which resulted in offsetting excessive water usage. This initiative improved water efficiency by 20% from 2004 to 2012 (Torres et al., 2012). It also enhanced recycling of water by treating wastewater and returning them to be used in the manufacturing processes, about 96% of this target had been achieved by 2011. Water used was also replenished through local projects such as harvesting rainwater and protecting watershed areas. Moreover, the company partnered with WWF to improve watershed understanding. Furthermore, every year a report on the water and sustainability project is published to track progress and redeem consumers trust.
India portrayed Coca Cola as a corporate enemy whose aim was to make profit at the expense of public health. This made the company discover that its biggest mistake was denying the issues raised to protect integrity instead of showing concern. In addition, it realized that Belgium and USA issues had been handled in a better way due to the presence of stakeholders. Changing the strategy used in mitigating damages by addressing complains from the community was the best decision made. This was because reduction of water pollution and overexploitation were achieved (Austin & Gaither, 2019). Additionally, developing a framework to preserve water and incorporating other stakeholders, such as the community and WWF, enabled the company to regain consumers and community trust.
Austin, L., & Gaither, B. M. (2019). Redefining fit: Examining CSR company-issue fit in stigmatized industries. Journal of Brand Management, 26(1), 9-20.
Torres, C. A. C., Garcia-French, M., Hordijk, R., & Nguyen, K. (2012). Four case studies on corporate social responsibility: Do conflict affect a company’s corporate social responsibility policy. Utrecht Law Review, 8, 51.
Wang, Z., & Sarkis, J. (2017). Corporate social responsibility governance, outcomes, and financial performance. Journal of Cleaner Production, 162, 1607-1616.