A Review on the Social Performance of Coca-Cola

An examination of the performance of Coca-Cola Coca-Cola is a brand that needs no introduction; being in existence since 1886, it has since grown into one of the world's most powerful brands. Over the years, as Coca- Cola grew larger, so did the number of stakeholders; thus increasing the importance of upholding the principles of corporate social responsibility (CSR).

Because 96% of Coca-Cola's market capitalization value Is "Intangible" (Interbrand 2000). there Is an urgency to protect its brand value and reputation for their stakeholders.There is no doubt that a commitment to CSR can significantly increase trust, credibility and success of business gain Oimena 2006); and Coca-Cola has realized this with its recent concentration in becoming the recognized global leader in corporate social responsibility (Ward 2006). This paper seeks to discuss how Coca-Cola has performed In regards to social responslblllty towards two maln stakeholders- the communities In which It operates in and Its respective shareholders.It examines the recent back- lashings Coke has had to endure due to its practices in Colombia, Guatemala, El Salvador, Turkey and India; and also Coke's numerous efforts in community and environmental sustainability throughout the years. You have introduce the company and the aspect well Gloria.

The case against Coca-Cola As the world's largest beverage company, Coca-Cola's global operations spans over 200 countries, making It harder to identify and tackle social and environmental risks before they became hazards (Ward 2006).An annual survey by Interbrand sees coke ahead of Microsoft in value- at a total of 67. billion; however, a series of unfortunate blows to its image has affected its brand value, causing an arise in shareholder's concern. With growing boycotts on university campuses throughout the world and numerous accusations of human rights violation (Gutierrez and Garcia 2009), Coke appears to have surpassed McDonalds as the chief corporate villain.

The most serious of all accusations being the alleged murder of nine union leaders In Colombia, followed by the indiscriminate act of water depletion and pollution in India (India Resource Centre n. d. ) Besides that, Coke has also amassed accusations of abour abuses and union repression in Turkey and Guatemala, and for supporting child labour in El Salvador (Kick Coke Campaign. n. d. ).

How has this affected society? The murders of union leaders by paramilitary forces happened since the 1989, but union activists have managed keep allegations alive till today.The lack of transparency by Coke in this matter has adversely impacted the brand; despite its claims to be CSR-oriented, it had failed to provide consistency between claim and action, and did not respond well to stakeholders interests. The problem in Colombia of course is nothing entirely new to Coke as mass strikes and boycotts were rganized in the early 1980s to stop the assassinations of union workers in Guatemala (Ascarelli 2005).Instead of taking ownership of corporate accountability, Coca-Cola denied any responsibility for the actions of its subsidiaries in Colombia against the lawsuit filed in 2001 on behalf of SINALTRAINAL(National Union of Food Industry Workers); however, Mexico-based Coca-Cola FEMSA (Coca-Cola Company's partially owned subsidiary) owns 100% of Panamco's preferred stock, proving Coca- Cola's vested interest in the success of Panamco and substantial control over its actions(Ascarelli 2005).

This demonstrates Coke's lack of focus in upholding the principles of CSR, upon which Coke failed to engage and communicate with its stakeholders. In India, Coca-Cola has caused multitudes of lives to suffer due to its unethical practices of massive water extortion, groundwater and soil pollution, distribution of toxic waste and selling pesticide-laced products with disregards to the local communities (Hills and Welford 2005). A significant case would be in Plachimada, Kerala where the Panchayat (local village council) refused to reissue Coca-Cola's license to operate in its area (India Resource Centre, n. ).Litigation efforts started in 003 and has ensued enormous attention to Coca-Cola's unscrupulous deeds in India, which by no means has diminished since and has evidently affected Coke's market shares (Blanding, 2006).

Although Plachimada was declared "water- impoverished" in 2005(Aiyer 2007), Coca-Cola remains till this day and it seems here that Coke places more importance on commercial interests than community welfare. The stakeholders affected here are the landless agricultural workers, marginalized communities, low-income communities, and women (India Resource Centre, n. d. ).As far as profits go, anthropologist Ananthakrishnan Aiyer points out that in the late 990s, the average cost of industrial water in the U.

S. was about five dollars per 10,000 litres, while it was only a mere three cents in India. But one wonders why a huge multinational company like Coke would need to get its hands dirty to take advantage of the cheap groundwater in India. The fact that Coke has yet to reimburse the lives of the many it inflicted, despite having totaled a profit of IJS$22 billion in 2004 (Hills and Welford 2005) has raised the eyebrows of activists and unions alike.

A recent press release from the India Resource Centre estimates the amount of liable damages to be around IJS$48 million or the drought crisis caused in Plachimada, surely not a hefty sum (as compared to its annual profits) to clean up its acts and more importantly, its image. Coke instead has gone on the defensive, fighting back with numerous ads that grew to a staggering $2. 4 billion within two years since 2004(Blanding 2006). More of your own voice and interpretations of the information would have been helpful.

The case for Coca-Cola In contrast to their unlawful misdeeds, Coca-Cola has been involved in the sustainability of the community, health and environment in India. Their CSR nitiatives involve setting up education projects to benefit the poverty-stricken, educating local communities about water, cleaning up the Dashaswamedh ghat(a cremation site) and providing employment opportunities for the deaf(Hills and Welford 2005). Even in the midst of the water controversy, Coca-Cola has been proactive in sustaining the environment and building the communities around them.Ray Rogers who heads the Campaign against Killer Coke is however of the opinion that Coke's acts are due to political and economic pressure rather than rightful duty. In other developing countries, thousands are benefiting from access to clean water upply and improved sanitation services through The Water and Development Alliance (WADA) - a $20. 4 million effort by Coca-Cola in collaboration with U.

S. Agency for International Development and USAID: A Global Partnership on Water, 2008).Recent initiatives by Coca-Cola include a Haiti Hope Project to boost the incomes of 25,000 mango farmers, Replenish Africa Initiative (RAIN) to benefit 2 million Africans, the planting of one million trees in Beijing, building of schools and libraries, and providing education on AIDS among others. This demonstrates Coke's efforts and level of commitment in building sustainable communities and caring for he environment; though cynics will no doubt be difficult in giving Coca-Cola credibility for their good intentions.Besides that, Coke also initiated a partnership with WWF, which aims to conserve critical freshwater river basins in some 20 countries; an investment in which Jeremy Moon, a professor who specialises in CSR upholds as a sensible strategic move.

Critics however claim that the company is merely paying lip-service to the hardened issues against them and that it's 'CSR commitment is airy rhetoric' (Analysis: Coke's CSR focus: better late than never 2007). What affect have these actions had of the environment? Communities?Being a company with large global presence and over 700 operations, many are concerned with the direct environmental implications it could impose upon the surroundings in which it operates in. As such, Coca-Cola has implemented the 2007 Corporate Responsibility and Sustainability Report, which includes new CRS objectives that focuses on water stewardship, sustainable packaging/recycling, energy conservation/ climate change, product portfolio/ well-being, and setting a diverse and inclusive culture(Straight 2009).Coca-Cola has gone to the extent of pledging to replace every drop of water used in our beverages', investing $1 5 million n new technologies to reduce water usage.

The company also invested millions in hybrid vehicles, fuel-saving technologies and recyclable packaging. As it is, Coca-Cola Enterprises are one of the few companies that place a long-term commitment in being a green company. Their green status is affirmed by numerous awards and their partnership with several environmental groups (Straight 2009); Coke is also working with third parties like Greenpeace in order to understand the issues affecting stakeholders.This goes to show that Coca-Cola goes a long way in upholding environmental sustainability, adapting a green concept for them is a serious andate. Despite its green initiatives, Coke has received much flak from victims of obesity, becoming the next anti-globalization target after McDonalds.

Indeed the biggest threat yet to Coke's image is the growing concern of consumers around the world regarding the contribution of sugary fizzy drinks in obesity. However, Giles Gibbons of Good Business argues that Coke is aware of the rising health concern among consumers and is shifting to demands from the health sector.Evidence of Coke's health focus can be seen clearly in its partnership with the Food and Nutrition Research Institute of the Department of Science and Technology, to help combat iron deficiency anemia in the Philippines (Bernardette 2009). The project will see at least 30,000 school children in various provinces benefiting from its product- Nutri Juice (which is fortified with iron, zinc and vitamins A and C) for 120 feeding days. (The Coca-Cola Company Plays Leading Role to Promote Sustaining CSR in Difficult Times 2009).But as for its sugary drinks, it will be difficult for Coke to pull out of task to the alarming obesity epidemic.

Concluding Remarks All in all, while Coca-Cola's social performance in regards to corporate social esponsibility has been rather slow in certain matters, it has definitely improved throughout the latter years. CEO Neville Isdell has taken to the severity of Coke's negative image by plotting a new course, one which champions CSR principles; and this has helped immensely in upholding their social contract.Although Coca-Cola has clearly been in the fabric of the communities of which it operates in, the company failed to protect its ethical business standards in countries like Colombia and India, causing harm and misfortune to various community stakeholders and impacting the environment. Instead of taking corporate accountability to resolve matters, Coke focused on minimizing their obligations and regarded the issues as a public relations problem that can be "spun" away.

In the context of human rights, although Coke has won several previous legal challenges and had been cleared in a report by the UN's International Labor Organization (Warner 2010), the company's efforts failed to win the hearts of its opposition; and Coke remains the sole target of human rights activists. From an environmentally sound perspective, many credited Coke for the amount of commitment it brings forth into environmental sustainability.But advocacy groups point to the fact that Coke has violated environmental laws by continuing operations in severely draught areas in India. Although the company has been attentive to the broader community, stakeholders whose lives were irrevocably affected are adamant that the company has been negligent.

This is a summary rather than an on-balance conclusion. This section should identify whether or not you think Coca-Cola is performing well socially and support your position.