The Coca-Cola Company’s Sustainability and Corporate Social Responsibility

Executive Summary

The work carried out concerned the analysis of the aspects of corporate social responsibility and their impacts on various business factors, including sustainability. The comparison of social and environmental initiatives to provide appropriate assistance allowed highlighting specific benefits and identifying relevant reasons that encouraged enterprises to invest in these activities. The Dannon case was used as an example of the organization that implemented relevant initiatives successfully and emphasized a culture that valued employees. Environmental sustainability was assessed in terms of analyzing green markets, their advantages, and opportunities to enter. Relevant strategic opportunities were considered, and based on the Clorox case, the principles for developing green operating approaches were reviewed, including their impacts on various aspects of business activities.

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The Coca-Cola report was taken as the target document to evaluate to highlight the salient features of corporate social responsibility promoted by the corporation. Based on the analysis of the report, a wide range of initiatives was highlighted, including both environmental and social, although the organization itself paid more attention to acute environmental problems. Some weaknesses were identified, in particular, the lack of transparency and an emphasis on individual benefits because most of the initiatives concerned the organization itself, as well as an insufficient focus on simple issues, for instance, pay equity. However, strengths were also identified, including a wide range of tasks addressed and large funds spent on corporate social responsibility. As a result, a focus on simpler social problems and more open evidence of challenges and constraints were seen as potential measures to make the report more valid.

Introduction

Following the strategic principles of managing modern enterprises requires utilizing relevant approaches and methods of control over the current resource bases. Moreover, in addition to some operational steps designed to optimize specific aspects of the workflow, relevant initiatives can be taken as part of organizations’ strategic development. One of these initiatives is the introduction of corporate social responsibility (CSR) practices that aim to address the current global issues through financial, technical, labor, and other resources. As a criterion for a successful business, sustainability is formed through the implementation of effective management mechanisms, when not only organizations themselves but also other stakeholders can benefit from the work performed. As a result, implementing CSR programs is a mechanism that helps enhance companies’ internal sustainability.

This work aims to describe the relevance of the application of sustainability and CSR programs in the context of a particular enterprise. The Coca-Cola Company will be used as a target brand to analyze, and relevant social and environmental sustainability implications will be considered. In addition, the latest CSR report of the corporation will be analyzed from the perspective of its strengths and weaknesses. The specific CSR and sustainability initiatives promoted by the Coca-Cola Company are meaningful and effective solutions that address pressing global issues and, at the same time, generate financial benefits. In general, social and environmental sustainability solutions realized in different companies contribute to gaining essential benefits that can accrue to employees, stakeholders, as well as companies themselves.

Social Sustainability

By implementing CSR-compliant initiatives, companies can achieve meaningful internal benefits that influence organizations’ staff and companies themselves. According to Arevalo and Aravind (2017), moving in this direction allows realizing valuable prospects for the development of intangible resources, thereby creating a background for further optimization of relevant CSR initiatives. Despite the costs that companies spend on these activities, reputation benefits are acquired, which may be no less important than capitalizing on profits in dynamic markets and high competition. In Table 1, common benefits of social sustainability and CSR initiatives are presented, which helps determine the merits of following specific strategies.

Table 1. The internal benefits of CSR and social sustainability initiatives.

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CSR and social sustainability initiatives Internal benefits
The modernization of production facilities and implementation of innovations in the workflow. Improving corporate governance methods. As Arevalo and Aravind (2017) argue, relevant initiatives contribute to creating a sustainable working regime with effective resource allocation approaches and strategic focuses. In addition, safe working conditions are created, which has a positive impact on employee productivity and loyalty.
The implementation of educational programs and courses for subordinates. The staff has an opportunity to develop professionally and hone individual skills. Employee qualifications are enhanced, thereby improving productivity and delivering high operating outcomes. Koch et al. (2019) note that educating young and talented helps create a sustainable background for achieving high-performance outcomes in the long run.
Employee health insurance. Due to free access to health insurance packages as valuable bonuses to work in companies, employees feel the interest of management in the value of their work. Moreover, meaningful engagement prospects are achieved since more attention is paid to the welfare of subordinates. Employee retaining rates are increased, which is another valuable implication.
Charitable donations for the development of certain areas of activity that are socially significant, for instance, healthcare. Tax deductions achieved through the involvement of companies in charitable activities have a positive effect on its resource base. Consumers who are aware of these social initiatives show great loyalty and respect for such companies. The reputation of organizations is enhanced, which allows them to improve their competitive positions. Benlemlih and Bitar (2018) pay attention to primary stakeholders who can benefit from these donations, in particular, employees, customers, and suppliers. All these interested parties feel the relevance of charitable activities, which, in addition, has a positive effect on the financial aspect of companies’ operations due to more lenient tax requirements.
Improving the culture of relationships in the company, in particular, non-discrimination, cross-cultural management, and other relevant initiatives. Creating conditions for effective team interaction through appropriate management initiatives allows employees to be involved in productive activities and, at the same time, increase leaders’ authority. Human capital management in modern organizations requires adhering to ethical, cultural, and other aspects to prevent the violation of professional instructions (Arevalo & Aravind, 2017). As a result, by promoting appropriate management initiatives to maintain cultural interaction, leaders can gain subordinate loyalty and avoid internal conflicts among the staff.

The Dannon case can be cited as an example of relevant initiatives aimed to achieve internal benefits through CSR activities. The organization is a subsidiary of Danone, and in its pursuit of sustainable development, the corporation aims to maintain a high level of interaction with employees (The Dannon Company, 2010). The company provides services in the food sector, but in addition to direct business activities, its management controls internal processes that address CSR priorities. In particular, Dannon provides educational opportunities for employees’ children and helps families in difficult social situations (The Dannon Company, 2010). Open communication with subordinates is achieved through the introduction of wellness programs, training classes, and other initiatives developed to maintain employees’ health. Accordingly, this is not a priority for the company to advertise its CSR activities because they concern, first of all, the internal aspects of work and address the needs of the staff. As a result, employee loyalty is achieved, which, in turn, contributes to productive work.

A management culture in which leaders value ​​employees is conducive to the implementation of CSR initiatives. The Dannon Company case demonstrates how managers create a comfortable working environment for subordinates, thereby realizing performance objectives and achieving internal benefits. According to the company’s development program, employee satisfaction is a significant aspect that influences not only work efficiency but also related factors, for instance, engagement and loyalty (The Dannon Company, 2010). Such a management culture aims to address internal social sustainability values, thereby maintaining a consistently high level of performance in the organization. Moreover, leaders promoting intangible incentives provide the company with a positive image, which influences the professionalism of subordinates. Many talented and young workers are hired, and a low level of turnover confirms the success of the current course. Therefore, this direction of CSR activities is consistent with a productive management culture aimed at internal interventions to enhance team productivity.

Environmental Sustainability

Green Markets’ Opportunities

Green markets are sectors in which environmentally friendly initiatives are promoted to reduce impacts on ecology and, at the same time, not to lose profits. As Vilkaite-Vaitone and Skackauskiene (2019) note, more and more business organizations are paying attention to this area of ​​work for a number of reasons. First, customer preferences are often based on the principle of avoiding harm to the environment. To meet this condition, organizations adapt production facilities, implement special programs, and perform other activities to minimize harmful impacts, thereby retaining the target audience. Second, green markets may contribute to enhancing firms’ competitive advantage because, according to Vilkaite-Vaitone and Skackauskiene (2019), due to the prevailing trends, those companies that follow appropriate strategies often outperform competitive firms without such initiatives. Third, despite the potential expenses due to the need to streamline production processes, green markets are venues for lowering costs. Vilkaite-Vaitone and Skackauskiene (2019) provide an example of waste disposal and remark that organizations with prudent practices can minimize losses in the long term. As a result, brand reputation is enhanced, thereby creating a favorable environment for profitable market activities.

To adapt to green markets, relevant strategic opportunities need to be taken into account. In particular, one of the initial tasks to realize is to assess the growth of a particular market from the perspective of profit capitalization prospects. In case the proposed site cannot provide stable capital growth, this is pointless to invest in the optimization of production facilities. Further, attention should be paid to the requirements for a specific work environment to meet the needs of the planned green market and avoid extra or, conversely, insufficient costs. The efficient allocation of resources, innovations in the material and technical base, and other changes can help reach the desired site. Finally, this is crucial to assess consumer behavior in a specific market to get an idea of ​​the interests of the target audience. Marketing solutions, for instance, launching advertising campaigns in the media, are strategic tools to determine the interest of buyers, thereby obtaining an objective picture of the upcoming work in the green market.

Developing Green Brands: The Clorox Case

In the case of the Clorox Company, the organization is an example of how green brands can be developed by expanding their assets. In particular, the acquisition of two brands, Burt’s Bees and Brita, was one of the most effective solutions, which allowed the Clorox Company to complement its products with appropriate goods from the wellness and health categories (Ofek & Barley, 2012). In addition, the organization was one of the first to introduce green principles into its operations, which was a valuable success factor. As a result, by promoting its environmentally friendly manufacturing, the company became a major market participant.

The acquisition of new assets was an important marketing step for the Clorox Company. The organization popularized the idea of distributing wellness and health products that did not contain harmful substances and were safe for consumers. As a result, by following this principle of environmental sustainability, the corporation managed to establish an effective marketing policy and earn the recognition of consumers who appreciated such a solution.

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From a branding perspective, a green manufacturing strategy was also a valuable factor in enabling the Clorox Company to gain a strong position in its market segment. At the time of its business reorganization and optimization of certain aspects of production, the green market was not sufficiently popular to create visible competitive advantages. However, the organization implemented appropriate environmental sustainability initiatives to create a unique image, and this step proved to be effective. As a result, the company’s brand grew, which allowed it to strengthen its position and acquire even more loyal customers.

As a result of the appropriate measures taken, the Clorox Company increased its reputation and managed to win a wide audience. A commitment to green manufacturing that is consistent with environmental sustainability strengthened customer confidence in the relevance of the organization’s decisions. Since achieving a high reputation is an important business objective, the Clorox Company became a model for many other organizations working in the wellness and health spheres.

Thus, based on the assessment of the organization’s solution to implement actionable operating principles consistent with green production, the Clorox Company was on the right track. In the absence of significant competition and due to high production capacities, the organization managed to strengthen its brand, win a large client audience, and become one of the world leaders in its segment. Therefore, the strategic decisions made by the management of the company in question proved the productivity of environmental sustainability as a significant CSR aspect.

CSR Report Critique: Coca-Cola

Coca-Cola is one of the most famous and strongest brands, having held this position for many years. Due to its long-term market activity and global business, the corporation is an important market participant and largely dictates modern marketing trends. The use of CSR approaches in its work has become part of Coca-Cola’s development program, and in the company’s latest report, the most critical areas of target activities are given (The Coca-Cola Company, 2021). Its comprehensive assessment can help identify the strengths and weaknesses of Coca-Cola’s work in this area and highlight those CSR steps that deserve attention as unique solutions to strengthen both internal and external sustainability.

When analyzing this report, one can note that Cola-Cola focuses more on external than internal issues related to CSR. That being said, for each of the areas that they refer to as being targeted, they start with the fact that they gave a responsibility (The Coca-Cola Company, 2021). The reasons for these responsibilities are not specified, but the management of the corporation probably counts on the fact that their company is known worldwide for its CSR initiatives. Therefore, they do not see the need to explain the organization’s involvement in social and environmental activities.

Coca-Cola’s list of priorities is wide and covers many different areas. Among the fields the company promotes as external CSR initiatives, one can highlight waste disposal, climate regulation, agricultural innovations, as well as health issues related to reducing added sugar (The Coca-Cola Company, 2021). Such a wide range of solutions to provide support is a testament to the corporation spending substantial funds on crucial issues. At the same time, most of these initiatives are directly related to the organization itself, and effective work to create sustainable production principles has value for it. The problems related to the harm of the company’s beverages have been raised more than once, and the resolution of the issues related to added sugar is relevant to the maintenance of the corporation’s business. Waste disposal caused by the large-scale activities of Coca-Cola plants around the world is another urgent task that also concerns the company. Therefore, the range of external CSR initiatives is driven not only by the desire to contribute to pressing social and environmental issues but also to address individual tasks effectively. Nevertheless, from the standpoint of coverage, the range of activities is large.

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At the same time, in relation to internal CSR initiatives, Coca-Cola pays less attention to these issues. According to the official report, the key areas of social sustainability decisions concern the labor and cultural aspects of employees’ work, for instance, the promotion of diversity and inclusion (The Coca-Cola Company, 2021). However, according to Johnson (2019), as with external initiatives, internal sustainability measures also play into the hands of the company itself. The author gives an example of the work of Coca-Cola factories in Kenya, where the problems of social discrimination and gender inequality are acute (Johnson, 2019). She notes that recruiting women as cheap labor is beneficial for both parties (Johnson, 2019). This fact is not mentioned in the report, which suggests that the corporation’s CSR program is not transparent enough, and this is more convenient to avoid certain controversial nuances than to solve them publicly. In addition, in light of the current COVID-19 pandemic, Coca-Cola, like many other companies, is suffering losses, and the solutions they mention as CSR initiatives, in particular, safety measures, are standard. Thus, one cannot argue that the corporation is absolutely effective in this sector.

With regard to the financial aspects of CSR initiatives, Coca-Cola constantly mentions the funds spent. This way of drawing public attention to the importance of the corporation’s social and environmental work may raise doubts about the sincerity of its leadership. However, from a consumer perspective, the practice is successful, and the $1.2 billion spent by the Coca-Cola Foundation since 1984 is impressive (The Coca-Cola Company, 2021, p. 53). In addition, the report includes detailed financial indicators achieved during the period under review, and all investments are reflected to show the results of the work done visually (The Coca-Cola Company, 2021). If the company mentioned failed projects and controversial programs, this would make the report even more valid and trustworthy.

To be fully sustainable, the company needs to pay more attention to internal issues in its CSR spectrum and take into account not only pressing social problems like gender or racial inequality but also simpler labor aspects. For instance, the report does not pay much attention to pay equity, which, in turn, is a critical factor of sustainable performance that influences subordinates’ loyalty directly. Addressing environmental issues is an important part of CSR initiatives, but in the current pandemic, allocating more funds to vulnerable communities would be a more logical and relevant decision. Therefore, Coca-Cola needs to make its program more transparent to show not only ambitions but also challenges, which will further increase the brand’s credibility, thereby enhancing its sustainability.

Conclusion

CSR initiatives and sustainability programs are common principles for achieving value-added benefits that influence not only different stakeholders but also companies themselves promoting specific solutions. The examples of individual organizations, considered from the perspective of social and environmental sustainability measures, prove the relevance of activities in this direction. The analysis of Coca-Cola’s report reveals the characteristic features of the policy promoted by the corporation in relation to CSR and sustainability. The factors influencing decisions on the implementation of specific initiatives depend on various criteria, for instance, competitiveness, the availability of resources, costs, and other parameters. Transparent and relevant work aimed to address significant issues and gaps in social and environmental fields is a crucial practice in which different stakeholders are involved.

References

Arevalo, J. A., & Aravind, D. (2017). Strategic outcomes in voluntary CSR: Reporting economic and reputational benefits in principles-based initiatives. Journal of Business Ethics, 144(1), 201-217. Web.

Benlemlih, M., & Bitar, M. (2018). Corporate social responsibility and investment efficiency. Journal of Business Ethics, 148(3), 647-671. Web.

The Coca-Cola Company. (2021). 2020 business & environmental, social and governance report. Web.

The Dannon Company. (2010). Dannon reports 2009 corporate social responsibility activities. CSR Wire. Web.

Johnson, R. M. (2019). Coca-Cola and corporate social responsibility: A case study of sustainable development in education in Kenya [Unpublished doctoral dissertation]. Drexel University.

Koch, C., Bekmeier-Feuerhahn, S., Bögel, P. M., & Adam, U. (2019). Employees’ perceived benefits from participating in CSR activities and implications for increasing employees engagement in CSR. Corporate Communications: An International Journal, 24(2), 303-317. Web.

Ofek, E., & Barley, L. (2012). The Clorox Company: Leveraging green for growth. Harvard Business School. Web.

Vilkaite-Vaitone, N., & Skackauskiene, I. (2019). Green marketing orientation: Evolution, conceptualization and potential benefits. Open Economics, 2(1), 53-62. Web.

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NerdyRoo. (2022, July 21). The Coca-Cola Company’s Sustainability and Corporate Social Responsibility. Retrieved from https://nerdyroo.com/the-coca-cola-companys-sustainability-and-corporate-social-responsibility/

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"The Coca-Cola Company’s Sustainability and Corporate Social Responsibility." NerdyRoo, 21 July 2022, nerdyroo.com/the-coca-cola-companys-sustainability-and-corporate-social-responsibility/.

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NerdyRoo. "The Coca-Cola Company’s Sustainability and Corporate Social Responsibility." July 21, 2022. https://nerdyroo.com/the-coca-cola-companys-sustainability-and-corporate-social-responsibility/.

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NerdyRoo. 2022. "The Coca-Cola Company’s Sustainability and Corporate Social Responsibility." July 21, 2022. https://nerdyroo.com/the-coca-cola-companys-sustainability-and-corporate-social-responsibility/.

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NerdyRoo. (2022) 'The Coca-Cola Company’s Sustainability and Corporate Social Responsibility'. 21 July.

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