Corporate Social Responsibility - Essay Example

Corporate social responsibility Reporting, GRI and sustainability Table of Contents Introduction 3 Corporate Social Responsibility 3 Corporate Sustainability Report of Coca Cola Company 4 Global Reporting Initiative (GRI) 5 Sustainability Reporting 5 Conclusion 12 Reference list 13 Introduction Corporate Social Responsibility Globalization and internationalization have transformed the operation of modern day business. It has increased the complexity in business environment and the managers encounter difficulty in monitoring the performance (Asongu, 2008; Boeger, 2010). This has forced the managers to track the changes that are taking place in the external environment. Through Corporate Social Responsibility (CSR) activities, the managers can balance the interest of many stakeholders and also deal with the complex business environment. It is observed that CSR is becoming important over the few decades and there are many rising debates regarding its success (Bacher, 2009; Benn and Bolton, 2011; Goodpaster, 2009). Nevertheless, the present business environment needs to examine the cost for implementing the activities so that it does not exceed the budget. The activities should be monitored so that appropriate data is collected for balancing the different operations of the organization. The actions of the managers have respective impact on stakeholders (Banerjee, 2011; Panwar, et. al., 2008; Schwartz, 2011). The main aims of the paper are to decipher the importance of CSR against the Global Reporting Initiative (GRI) and provide a detailed discussion regarding different stakeholder groups. The report also examines different stakeholders of Coca-Cola CSR, sustainability and GRI. Corporate Sustainability Report of Coca Cola Company Coca Cola Company is the largest beverage company in the world, whose main goal is to refresh its customers with soft drinks. The portfolio of the company consists of 16 billion dollar brands that include Fanta, Diet Coke, Coca Cola Zero, Powerade, Minute Made and Del Valle (Coca Cola Company, 2013). The company has gained recognition globally by providing sparkling beverages and ready-to-drinks and juice drinks to the customers. The sustainability framework of the company is divided into three parts: Me, We and World. It is the shared vision, which highlights that the company works together with the stakeholders to add value and create positive difference for the communities and customers that they serve. “Me” aims at improving the personal well being of company and customers (Coca Cola Company, 2013; The Coca-Cola Company, 2015a). The company offers low or even no calorie beverages in the market, which helps the individuals to stay fit and healthy. Coco Cola also organises physical activity programs for the population, where they operate. It also provides transparent information regarding the nutritional value of the products in the front side of the bottle (Coca Cola Company, 2013). Through the “WE” concept the company builds a stronger community by helping woman, charitable contribution and workforce. It expects to empower about 5 million women entrepreneurs globally by 2020. Coca Cola offers about 1% of its income to the charities annually; moreover the company also follows the rights and standards that are levied on the human resource (Coca Cola Company, 2013; The Coca-Cola Company, 2015a). Thirdly, it also protects World from external and internal disaster. For protecting the environment, the company should use 100% water for manufacturing its products; it also improves the efficiency of the water by 25% as compared to the baseline of 2010. Coca Cola has reduced carbon footprint by 25% over the years and also source the main agricultural ingredients sustainably (Coca Cola Company, 2013). Global Reporting Initiative (GRI) GRI is defined as an international network of members, who concentrates on promulgation and development of the appropriate set of indicators (Deloitte, 2015). The indicators are used by the organizations that are used for measuring and reporting the environmental, social and economic performance. There are about 3000 members, who are from non-governmental and business organizations (Deloitte, 2015). It is observed that about 70% of the reporting organizations operating worldwide use the framework for reporting the sustainability efforts (Deloitte, 2015). The GRI reporting framework is defined to ensure that the quality of the report and boundaries are efficient. Deloitte and its member organizations are involved in developing GRI and it has worked efficiently since its inception. There are several members of Deloitte who have offered sustainable training after coordinating with the GRI trainers. The trainers have developed several engagements that aim at assisting the organizations with the GRI reporting (Deloitte, 2015). Sustainability Reporting Sustainability is at heart of Coca Cola Company. The company has successfully worked towards building a healthier and stronger community apart from being the most renowned bottling company. The four stakeholders, mentioned in the sustainability report are discussed henceforth: Women: The company aims at taking initiatives, which aims at empowering 5 million women entrepreneurs globally with the help of our value chain by 2020 (Coca Cola Company, 2013). Coco Cola has assisted artisans, farmers and owners of micro distribution channels for starting new business. The company has helped women around the world to operate small neighbourhood stores and earn their living. In the small stores the women have the opportunity to sell Coco Cola products. In Philippines, about 86% of the stores are operated by the women (Coca Cola Company, 2013). In Africa, about thousand of women operate in Micro Distribution Centers (MDCs) and in the developing countries, about half of the women are farmers. Hence, it can be identified that women occupies a significant position in the business. Women will play a important role in contributing towards doubling the business by 2020 (Coca Cola Company, 2013). Women are regarded as the main pillars of a community and also of Coca Cola as their contribution is appreciated. This group of earner invests large amount of money in their child’s education and health. The company aims at exploiting the entrepreneurial potential of women and makes their business more sustainable. Figure 1: Woman economic empowerment (Source: Coca Cola Company, 2013) The above figure identifies the fact that about 66% of the world’s work are done by the women and they earns about 10% of the global income. However, they reinvest about 90% of the income in their community and families (Coca Cola Company, 2013). The crucial role played by women in the community and the economic barriers which they encounter, has encouraged them to work with the comoany as distributors or even entrepreneurs. The 5by20 initiative of the company has gained momentum over the years (Coca Cola Company, 2013). The initiative is taken with the help of non-governmental organizations (NGOs), businesses and government. The collaboration encouraged women to get access to three vital economic enablers such as loans, business skills training and financial services and assets; it also includes mentoring and peer networks. 5by20 programs actually concentrate on six segments of the value chain such as distributors, suppliers, retailers, producers, artisans and recyclers (Coca Cola Company, 2013). Community: Each bottle of Coca Cola explains the value of water to the community by preserving the quality. The company has taken several initiatives to conserve water at global level. The main goal of the company is to return water safely to the community, which they have used while preparing the beverages. Till date, Coca Cola has used about 52% of water i.e. 81.1 billion and returned about 160 billion to the community with the help of wastewater treatment (Coca Cola Company, 2013). The company has also undertaken water projects have grown out of source water vulnerability assessment (SVAs) that is conducted by the bottling plants. The main aims of the projects are given below: 1) Improve access to sanitation and water. 2) Supply water for productive uses in the community, where the company operates. 3) Educate and spread awareness regarding issues pertaining misuse of water; it also includes the water policy. Hence, the company has invested about $260 million in the community for undertaking different water projects. It is recorded that about 1.82 million people are benefitted from water sanitation and access projects that are undertaken at the global level (Coca Cola Company, 2013). Coca Cola has planned to invest in about 100 projects in collaboration with United Nations Development (UNDP) so as to replenish water sources around world. The company also aims at supporting Every Drop Matter, which is a partnership between Coca Cola Africa and Eurasia. The program aims at assisting the nations of Africa and Eurasia to achieve Millennium Development Goals. It had also met the challenges that are related to sanitation, water supply, climate changes and water resource management (Coca Cola Company, 2013). Coco-Cola has invested about $1 billion over the last few decades for adopting new initiatives for preserving water. Environment: Every bottle is the commitment of the company that considers change in climate. The concern is basically based on scientific consensus that is related to the global change in climate (Gilligan and Hird, 2008). The change in climate is occurring due to the emission of human made green house gas. The main aim of Coca Cola is to reduce carbon footprint to about 25% by 2020. In order to accomplish the objective, the company has altered the manufacturing processes, delivery fleet, packaging format, ingredients sourcing and refrigeration equipment. During 2013, the company created a long term partnership with World Wildlife Fund (WWF) and announced a number of initiatives that are related to protection of an environment (Coca Cola Company, 2013). In order to accomplish the goal, the distribution fleet and bottling plants are monitored. During 2010, the value chain of the company emitted about 59 million metric tons of greenhouse gas, within which only 5.2 million metric tons were produced from manufacturing (Coca Cola Company, 2013). The main goal is quite ambitious and is regarded as the most progressive climate related commitments from the company. For ensuring success, the company collaborates with the suppliers and partners for forming energy-efficient and climate protection initiatives across the system. The responsibilities of the system include the following: 1) For improving sustainability of packaging through optimization of design and use of renewable and recycled materials such as PlantBottle. 2) Increase the energy efficiency of cooling equipments, which are used by the company. 3) The source of key ingredients is sustainable enough to protect the environment from any challenge. 4) Fuel-efficient modes of product delivery is adopted and incorporated by the company. 5) Improve the energy efficiency within the manufacturing system. 6) The use of hydrflourocarbons is examined so it is not phased out in the cold drink equipments. 7) Increase the usage of clean energy (Coca Cola Company, 2013). Farmers: The company has also concentrated on purchasing most of the products such as fruit, sugar, tea, corn, coffee and other ingredients per annum. During 2012, the company collaborated with WWF for developing goals, which are achievable and bold. The ingredients that are outsourced include beet sugar, cane sugar, coffee, tea, soy, pulp and many more. Sustainable sourcing generally ensures continuous supply of high quality and safe raw materials and along with that delivers sustainable business value for the supply partners (Coca Cola Company, 2013). Hence, sustainable sourcing is important for improving the economic, environmental and social affects as it marks the footprint of agriculture. The activities adopted by the company are in accordance with the rules and policies that are developed by GRI. Hence, it can be stated that the company has prepared its CSR activities in accordance with the GRI reports. Shareholders: The shareholders form an important part of the company as majority of the shares have strong holdings. The capital stock of Coca Cola includes three classes of securities namely Series A Shares held by FEMSA, Series L Shares held by public and Series D Shares held by the company itself. Apart from that there are several shareholders who have significant share in the company as the amount of equity is high. Hence, the company aims at providing transparent information to the shareholders through the annual reports. The annual reports consists information pertaining to business model, strategies and operation. This will enable the shareholders to understand the business process, whether are using the appropriate ways of manufacturing the drinks. However, the message of Chairman and CEO gives emphasis on the overall performance of the company during a particular year. The financial as well as operational excellencies and weakness are depicted in the message. Hence, the shareholders also get an overview of the company performance, which help them to decide whether to invest in the shares of the company. This indicates towards the fact that from message of CEO or chairman to the financial statements all are necessary for the shareholder to take an investment decision. Government: The main aim of the company is to grow its business and not the system of carbon emissions, which are related to manufacturing system of the company. The company has helped the government to reduce manufacturing emission that is discharged from the plants. It harms the community and the environment as a whole. Hence, Coca Cola has helped the government to take initiatives against the reduction of emission in the community. The global manufacturing emissions during 2012 were 1.2 million metric tons (Coca Cola Company, 2013); it was lower than the previous year. Nevertheless, the total emission was 3% higher than that of 2011 and presently the emission was higher than the baseline of 2004. The manufacturing sites had emitted about 5.48 million metric tons of gas during 2012 and it has increased by 3% as compared to 2011; it was 15% higher than the baseline of 2004 (Coca Cola Company, 2013). However, the company is giving its full efforts to bring it down to the baseline by 2015. The upward trend is both unacceptable and disappointing and thus the company is working effortlessly to reduce the emissions with the help of a number of measures that includes expansion and use of clean energy (Coca Cola Company, 2013). During September 2012, the US has recognized Environmental Protection Agency (EPA), which aims at refreshing the customers of organisations. The plants aims at capturing methane gas from landfills and convert it to burning fuel. These plants generate about 48 million kilowatts of energy annually, which have resulted in reduction of emission by 20,000 metric tons of CO2 per annum (Coca Cola Company, 2013). The company are working efficiently for limiting the emission of CO2 from the corporate data centres. Coca Cola upgraded about 30 air handlers that are available in the data centres. The improvement is expected from reduction of CO2 that was estimated to be 650 metric tons per annum, which is equal to 90 cars on road (Coca Cola Company, 2013). Conclusion The sustainable activities undertaken by Coca Cola Company comply with the policies that are formed in the GRI report. The corporate social responsibility activities not only help the company to contribute towards its success but also serve the community and its people efficiently. Coca Cola aims at empowering the women entrepreneurs so that they can earn their livelihood. It also helps in reducing carbon emission in the society by modifying the manufacturing process. Hence, it can be stated that Coca Cola has adopted successful CSR activities, which have helped the company to gain good reputation in the society, where it operates. Reference list Asongu, J., 2008. Strategic corporate social responsibility in practice. 6th ed. Norwood: Artech House. Bacher, C., 2009. Corporate social responsibility. 6th ed. Oxford: Blackwell Publishing. Banerjee, S., 2011. Corporate social responsibility. the good, the bad and the ugly. 3rd ed. New York: Harper Collins. Benn, S. and Bolton, D., 2011. Key concepts in corporate social responsibility. 6th ed. London: McGraw-Hill Education. Boeger, N., 2010. Reframing Corporate Social Responsibility. 4th ed. Belgium: Peeters Publisher. Coca Cola Company, 2013. Coca Cola GRI Report. [online] Available at: < http://assets.coca-colacompany.com/44/d4/e4eb8b6f4682804bdf6ba2ca89b8/2012-2013-gri-report.pdf > [Accessed 2 March 2015]. Deloitte, 2015. Global Reporting Initiative. [online] Available at: < http://www2.deloitte.com/global/en/pages/about-deloitte/articles/global-reporting-initiative.html > [Accessed 3 March 2015]. Gilligan, C. and Hird, M., 2008. International marketing: Strategy and management. 4th ed. Boston: Unwin-Everyman. Goodpaster, K., 2009. Conscience and Corporate Social Responsibilities. 3rd ed. New York: John Wiley & Sons. Panwar, R., et.al., 2008. Corporate Social Responsibility. 5th ed. USA: Global Professional Publishing. Schwartz, M., 2011. Corporate Social Responsibility. An Ethical Approach. 4th ed. London: Kogan Page Limited. The Coca-Cola Company, 2015a. Sustainability. [online] Available at: < http://www.coca-colacompany.com/sustainability/ > [Accessed 2 March 2015]. Read More