The Coca-Cola Company and Corporate Social Responsibility

THE COCA-COLA COMPANY: A BRIEF INTRODUCTION

The Coca-Cola Company, founded in 1892 is a multi-international beverage corporation headquartered in Atlanta, GA.[1] With over 200 beverage brands under its belt[2], Coca-Cola has a diverse range of customers, employees, and stakeholders it needs to please with business practices. A globally large international organization, Coca-Cola operations in the four main geographic areas of North America and Latin America, Europe, the Middle East and Africa and the Asian Pacific, but its products are sold internationally all over the globe. As corporate social responsibility becomes intertwined with organizational reputation, a driving factor of consumerism and a necessary tool for corporations looking to increase sales in the coming decades, Coca-Cola has worked hard to market itself as a leader at the forefront of environmentally friendly business practices.

Coca-Cola claims that sustainability and responsible business practices are at the heart of what they do today, despite being the world’s largest producer of plastic waste and named the worst company for plastic pollution.[3] With employees that “create a culture of inclusion, curiosity and diversity” and business actions that are more sustainable to the planet and communities across the world, Coca-Cola has centered its corporate social responsibility around implementing green practices and clean-up of their products, prioritizing the company’s sustainability goals within their business management practices-- especially following the COVID-19 pandemic.[4] Just recently, the beverage corporation announced that it was working towards an industry-first goal to collect and recycle the equivalent of every bottle or can it sells globally by 2030[5]; this is just one part of the larger, holistic plan Coke calls “World Without Waste,” which focuses on how bottles and cans are designed and made to how they’re recycled and repurposed so as to cut down on the plastic pollution the company outputs each year.[6] However, claiming one thing is different from actually implementing it into practice. This report analyzes how effective Coca-Cola’s approach towards corporate social responsibility is and explains how well the company’s strategies work in communicating these initiatives to consumers and key publics.

THE COCA-COLA COMPANY AND CORPORATE SOCIAL RESPONSIBILITY

Under the umbrella of its corporate social responsibility practices, Coca-Cola places a heavy emphasis on sustainability. The company claims that sustainability has been a part of its business practices for over 100 years, but real sustainability practices began in 1984 with the formation of the Coca-Cola Foundation.[7] Entering into the 21 Century, Coca-Cola began several sustainable initiatives like PlantBottle Packaging, the 5by20 Initiative and the EKOCENTER, programs that form the foundation of the sustainable practices the company reports today.[8] The company has created a corporate social responsibility policy surrounding the concept of “Live Positively,” dividing its sustainability business into seven major topics: Sustainable Packaging, Water Stewardship, In Our Products, Sustainable Agriculture, Climate, and Product Quality & Safety; within each of these categories are various different initiatives and programs that Coca-Cola incorporates into their company culture throughout the business year. The company lists reducing added sugar, the World Without Waste program, Water Leadership, people and communities, and the climate as its major sustainable business priorities.

The Coca-Cola Company’s CSR Approach and Philosophy

The Coca-Cola system is humongous. The company boasts over 225 bottling partners worldwide, over 900 bottling plants worldwide, and produces and distributes over 2.0 billion servings a day, according to the company’s 2020 Sustainability Report.[9] Combined with nearly 4,000 retail operators that distribute Coke syrup in international markets means that whatever sustainable business practices the Coca-Cola company puts in place needs to be effective and large enough to outweigh their substantial waste pollution in order to make a significant impact on the environment and consumers and effectively realize the value of company reputation. The Coca-Cola approach to corporate social responsibility and sustainability is claimed to be a holistic one, with the company boasting a safe, supportive environment for employees that translates into external business practices-- i.e. organizational communications practices that work towards aligning employees all over the world with the organization’s reputational interests in sustainability .[10] Coke “pursue[s] its sustainability goals through concerted efforts” from all of its partners in more than 200 countries and territories and “aims to achieve [its] ambitious goals” through “robust internal processes and an effective internal control environment that facilitate[s] the identification and management of risks and regular communication with the Board, including the Enterprise Risk Management team and Risk Steering Committee.”[11]

Coca-Cola’s philosophy surrounding its corporate social responsibilities and how it communicates initiatives with consumers and stakeholders is said to be one of transparency and disclosure. The company reported in 2019 that it “aims to provide stakeholders with complete, transparent and candid information in all public communications” and have “combined the 2018 annual review and sustainability reports to publish [Coca-Cola’s] first Business and Sustainability Report.”[12] The report recently published in 2019 was the second report using that integrated approach. Coca-Cola also claims that its commitment to CSR is shown through the company’s actions that help “create a more sustainable and better shared future” and it’s prioritization of sustainability goals in its business practices.[13]

However, Coca-Cola’s approach and proclaimed commitment to CSR and sustainable business practices is contradicted by the company’s inherent nature as one of the world’s largest beverage organizations in a case of Pushmi-Pullyu Syndrome. The tool of corporate social responsibility holds organizations accountable for their claims and business practices and has become a growing concern for consumers in recent years, feeding into the “authenticity factor” that many consumers desire in a company before buying products. As Coca-Cola headlines its CSR practices through its approach to sustainability, it continues to churn out profits at the expense of taxing environments world-wide and being the single largest plastic polluter in the world. In 2004, Coca-Cola came under intense scrutiny when one of its plants in India was accused of “putting thousands of farmers out of work by draining the water that feeds their wells, and poisoning the land with waste sludge that the company claims is fertilizer.”[14] This was not the only incident of this nature to occur: Coca-Cola has been accused of unethical behavior in a number of areas, including “product safety, anti-competitiveness, racial discrimination, channel stuffing, distributor conflicts, intimidation of union workers, pollution, depletion of natural resources, and health concerns.”[15] Most of these incidents and issues were settled through private settlements and some minor court appearances, but the end result is a history of unethical and unsustainable business practices that Coca-Cola is trying to shake.

The Coca-Cola Company’s CSR Strategies

When one does a Google search into the history of the Coca-Cola company and upends the organization’s past behavior it is trying to bury, it can seem like the company’s approach to CSR is artificial and purely there for customer appeasement. However, the Coca-Cola Company’s strategy towards implementing sustainable business practices is cohesive and complete in its approach. Following the incident in India and other smaller private settlements in the years following, Coca-Cola began to truly prioritize CSR and sustainability, adopting a number of initiatives in each of its seven core areas identified in its CSR plan and webpage; initiatives included setting a target goal of reducing carbon emissions by 25% by 2030, implementing new sustainable packaging on all Coke products, returning 100 percent of the water used in their drinks, and sourcing ingredients sustainably from plants around the world.[16]

Recognizing that it was a part of many problems its consumers and stakeholders cared about, Coca-Cola established and implemented a comprehensive reputation management plan through reputational capital goals and a corporate social responsibility strategy that addressed these arising issues in alignment with its organization statement. This strategy included adopting “health and wellness” as the company’s mission statement, altering the company’s product portfolio as a commitment to consumer needs, creating the Sustainable Business initiative with its seven subcomponent areas of initiatives, and implementing the Better Shared Future project that focuses on improving the lives of employees and the communities Coca-Cola serves and impacts. Coca-Cola has also endeavored to bring greater transparency of its global operations to consumers and interested third party organizations through its annual Business and Sustainability Reports. Coca-Cola has implemented all of these strategies throughout their global network, leading many other organizations within the beverage industry to do the same.

With the outbreak of the COVID-19 pandemic, it is hard to see how the implementation of these strategies have affected Coca-Cola’s sales and reputation with consumers in the year of 2020. However, it is seen that Coca-Cola is taking its dedication to sustainability and CSR seriously, recognizing that its reputation and brand value depends on social responsibility. Simply communicating and implementing different sustainability initiatives and meeting goals is not enough; another strategy needs to be implemented. No matter what Coca-Cola does, its work in CSR and sustainability is going to be scrutinized. The Coca-Cola Company is a global giant and its dominance and status as one of the biggest organizations in the consumer industry puts the company in a difficult position. The sheer enormity of the company along with the inherent nature of the products it is selling-- unhealthy soda that requires an immense number of resources to produce and results in an immense number of waste-- casts doubt on everything the organization does as compared to a smaller or lesser-known competitor. In implementing its CSR strategies and sustainability initiatives, Coca-Cola needs to be aware at all times of how an action is going to be perceived based on the organization’s troubled history with socially responsible business practices, its reputation as a polluter, and the enormity of being an international brand. The Coca-Cola Company will always struggle with convincing consumers and stakeholders that it is an ethical business due to the fact that “Coke has a symbolic significance. It is the world’s most powerful brand, and it is above the parapet. It is the best and worst of globalization.”[17]

The Coca-Cola Company’s Communication of CSR Practices

The Coca-Cola Company does a better job at communicating its CSR initiatives and dedication to sustainability. As part of a larger rebranding effort following several lawsuits and private settlements that negatively impacted the organization’s reputation with consumers and stakeholders, Coke has worked hard to ensure that it executes integrated communications of all its CSR initiatives and actions, so all interested parties have a clear picture of what the future of the company looks like. To increase transparent communications, the company recently began decentralizing some of its global activities to more local locations within the United States. This was followed by the combining of the company’s annual business reports with its annual CSR reports into one single document to show how the company’s business growth is affected and intertwined with its social responsibility. Coke also conducts annual stakeholder analyses in order to further understand stakeholder needs and wants to ensure that future business practices meet these expectations. All of this is communicated through the company’s website and through recent campaigns in conjunction with PepsiCola and other beverage companies that claim they are working together to reduce plastic waste.

The Coca-Cola Company has also begun utilizing the tool of community relations to help further communicate its dedication to CSR by partnering with organizations like the World Wildlife Fund and various local charities and communities in projects and initiatives like the Per Cent Club, allowing them to maintain and rebuild a positive image in the eyes of stakeholders and consumers. Mainly, Coca-Cola communicates its CSR initiative and strategies through its goals and target plans; in 2019, the company announced that it aims to Reduce absolute Scope 1, 2 and 3 GHG emissions 25% by 2030, collect and recycle a bottle or can for each one sold by 2030, and make 100% of all packaging recyclable globally by 2025—and use at least 50% recycled material in all packaging by 2030.[18] Based on its 2019 Business and Sustainability report, the company is steadily making its way towards reaching these goals and others mentioned in the report while increasing sales and maintaining and improving reputation.

CONCLUSION

Coca-Cola’s CSR initiatives and programs address seven core categories among its overall main focus topics of environmental sustainability operations, community development, and employee benefits among other philanthropic initiatives. All of these are communicated throughout their brand, their mission statement, and their internal corporate communications programs like their annual reports. The Coca- Cola Company has successfully created a program that develops and communicates its CSR ethics, standards, and programs and initiatives to its stakeholders, its employees, and its consumers/ publics, but still lags behind in balancing these initiatives with its global standing, previous history of unethical business practices, and title of largest plastic polluter in the world. As Coke attempts to simultaneously contribute to the satisfaction of the Company’s corporate mission and vision statements while promoting and marketing the organization and its various bands to a larger global consumer population, it needs to maintain a balance between its large corporate reputation, its need to build profits and the desires and wants of stakeholders and consumers. Coke still has some ways to go in changing the minds of consumers following its previous lawsuits and actions and it will be easier for the company to fall back into unethical habits if it is not careful.

REFERENCES

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C. (2018, January 19). Coke announces Ambitious sustainability goal - News & articles. Retrieved April 13, 2021, from https://www.coca-colacompany.com/news/coke-announces-ambitious-sustainability-goal

C. (2019). 2019 Business and Sustainability Report. Retrieved 2021, from https://www.coca-colacompany.com/content/dam/journey/us/en/reports/coca-cola-business-and-sustainability-report-2019.pdf

C. (2019). The Coca-Cola Company Struggles with Ethical Crises. Retrieved 2021, from https://harbert.auburn.edu/binaries/documents/center-for-ethical-organizational-cultures/cases/coca-cola.pdf

C. (2021). Sustainable business: The coca-cola company. Retrieved April 13, 2021, from https://www.coca-colacompany.com/sustainable-business

C. (2021). The Coca-Cola company - more than a beverage company. Retrieved April 13, 2021, from https://www.coca-colacompany.com/company

G. (2003, July 25). Coca-Cola in India Accused of Leaving Farms parched and land poisoned. Retrieved April 13, 2021, from https://www.theguardian.com/environment/2003/jul/25/water.india

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