Coca-Cola and Corporate Social Responsibility - Free Essay Sample

Introduction

Coca-Cola is a multinational beverage corporation that has dominated the soft-drink market with its products being sold in over 200 countries worldwide. Besides its enormous size, the corporation has been recognized as one of the leading socially responsible global enterprises due to its corporate social responsibility practices. However, the article "How Coca-Cola Came to Terms with its Own Water Crisis" highlights the environmental challenges that Coca-Cola faces. Thus, this paper aims to discuss the CSR concerns highlighted in the article and discuss Coca-Cola's strategies to tackle the issues. The essay will also discuss the effectiveness of Coca-Cola strategies and explore alternative approaches to address CSR issues.

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Corporate Social Responsibility Issues

Companies operate in a socially conscious environment, and therefore, public perceptions can influence the success or failure of the organizations. Corporate social responsibility (CSR) refers to the voluntary participation of business enterprises to help address the community's economic, social, and environmental challenges (Schooley, 2020). One key focus of CSR is to address environmental challenges such as carbon footprint and water usage. Water is a fundamental ingredient in Coca-Cola's beverage products, and thus the brand's production operations contribute to the massive consumption of local water resources. The company was criticized for depleting the local supply of water in Kerala, India, and the public outcry spurred criticism of the brand both locally and globally (Carmichael & Moriarty, 2018). The criticism was an alarm for the corporation to address its environmental responsibility for water. The accusations against Coca-Cola were an international public relations nightmare that threatened the company’s brand image and its global business strategy.

The Resolution

Following local and global criticism regarding its water stewardship, Coca-Cola undertook a risk assessment that underscored the necessity to initiate action on the state of water. The risk assessment evaluated all the factors associated with water within and outside the factory footprint. Besides, the risk assessment was not only a technical evaluation but also a social analysis to help franchise management understand the water concerns of the local communities. Coca-Cola pledged to replace every drop of water used in its products to achieve balance in nature and the communities. The company adopted a water replenishment program that was aimed at offsetting its operational water footprint. Besides, the replenishment plan was meant to enable the company to become a fully-fledged water-sustainable enterprise on a global scale (McDonald, 2018). The company incorporated a corporate water strategy that aimed to reduce, recycle, and replenish its water uses. The strategy is targeted at reducing the company's water use ratio through a sustainability standard.

Efficacy of the Solution

Coca-Cola’s strategies to resolve the issue should be viewed with skepticism. According to McDonald (2018), the company has grossly exaggerated its water record, thereby reducing the effectiveness of its water replenishment plans. The problem with the company's replenishment strategy lies in how to measure the water-neutral target. The concept of water neutrality is a misleading term that lacks a clear approach to evaluating water uses and offsets. Furthermore, Coca-Cola’s strategy offers little solution to address the problem of water use in its supply chain as it does not tackle the challenges embedded in packaging materials and agricultural ingredients. The biggest concern for local communities is that the water needs of the company’s agricultural ingredients contribute heavily to water consumption. Essentially, for global food and beverage organizations, the agricultural supply chain constitutes a huge water footprint, which can cause rapid depletion of local water resources. The water use associated with operational productions is only a small fraction of the total water footprint.

Alternative Solution

Since the water-neutral target seems a distant target, Coca-Cola needs to initiate alternative solutions to address the CSR issues. Investing in water and sanitation initiatives through well digging, water metering systems, and water purification projects is a viable alternative solution to expand basic services in water-stressed communities. The company should prioritize water conservation and reuse efforts as this will help to increase the water supply for irrigation in poor communities. To address the public rage, Coca-Cola should invest more in improving water use efficacy and wastewater treatment. The drinking water projects are essential in mitigating economic, social, and environmental risks, thus helping to address the company’s total water footprint, which has been its main CSR challenge.

Conclusion

A robust CSR program is important as it allows businesses to demonstrate their social consciousness and protect the organization from outsized risk by addressing environmental issues without government regulation. The paper has identified the water problem as a significant CSR issue that Coca-Cola faces. The company has been criticized for its water practices in water-stressed regions, criticisms that have threatened its global brand image. However, Coca-Cola has heeded the complaints and initiated several CSR programs to address the issues of its broader water footprint. In summary, undertaking CSR initiatives is necessary for companies to create a socially conscious brand that addresses the economic, social, and environmental challenges in the community.

References

Carmichael, B. & Moriarty, B. (2018). How Coca-Cola came to terms with its own water crisis. Retrieved from https://www.washingtonpost.com/news/business/wp/2018/05/31/how-coca-cola-came-to-terms-with-its-own-water-crisis/

McDonald, C. (2018). Coke claims to give back as much water as it uses. An investigation shows it isn’t even close. Retrieved from https://www.theverge.com/2018/5/31/17377964/coca-cola-water-sustainability-recycling-controversy-investigation

Schooley, S. (2020). What Is Corporate Social Responsibility? Retrieved from https://www.businessnewsdaily.com/4679-corporate-social-responsibility.html