The Social Performance of Coca-Cola - Treatment of the Natural Environment - Essay Example

A review of the social performance of Coca-Cola: Treatment of the Natural Environment Introduction Large Corporation’s duty of being interested in the environment and the community constitutes the concept of corporate social responsibility (CSR) (Porter and Kramer, 2006). The CRS is a voluntary action aimed at improving the living standards of the community by the companies (Asongu, 2007b). The social performance of a company often offers the company some competitive edge. This is illustrated by Asongu (2007a) argument that the role of CSR should be to increase company’s dividends and not altruism. There are several components of corporate social performance. They include diversity, community relations, employee relations and the environment. The way a company structures the provision of these components determines its competitive edge. The way a company evaluates, hires, trains and promotes its policies in relation to minority and women determines the diversity component of a company. Philanthropic spirit and the support of the community by a company determine its community relations component. In employee relations component, there is examination of social responsibility. Taming of pollution by a company addresses the environmental dimension of the firm. The ability of a company to provide these components, dictates its competitive advantage over related companies. Coca-Cola company’s contribution to the environment, marketplace and the communities is tremendous in their daily actions (Asongu, 2007b).This paper tries to analytically examine the Coca-Cola’s contribution to the environment as an aspect of social performance. Coca-Cola Company produces markets and distributes a wide range of non-alcoholic beverages world wide. The headquarters of the company are found in the United States of America. The first product of the company, coca cola, was invented by Pemberton John Smith in 1889. The company has about 400 brands which are manufactured and sold in many countries currently (Arnold, 2005). The company’s role in the corporate social responsibility has been seen in the support of affirmative action (Sakuma, 2010), addressing HIV/AIDs pandemic (Asongu, 2007b) and many other charity services. Coca-Cola Company and the Environment Coca-Cola Company has made tremendous contribution toward the environmental conservation. This is reflected in the many awards the company has won in response to their role in environmental conservation. Some of the awards include highest environmental eco-efficient award received in 2007 in Russia, best environment based CRS award received in 2006 in Ireland and in Bulgaria for the Green Danube Initiative (Sakuma, 2010). According to the company’s website, the company has been involved in waste water treatment in Nigeria, use of recycled polyethylene terephthalate (PET), training in Safe and Eco-Driving in all countries (Jennifer, 2006). This demonstrates the Coca-Cola Company’s commitment toward conservation of the environment. The company is also committed to reducing carbon (IV) oxide emission through construction of the 15 CHP units (Sakuma, 2010). The Coca-Cola Company has been involved in the protection of the climate, soil, and water in order to make life to be sustainable on earth. The company has recognized that their major impact on society and the environment occurs in their agricultural supply chain (Sakuma, 2010). The company realizes that many lives are dependent on Agriculture for human survival, industry and employment. The involvement of coca cola in farming is indirect through commitment to the economic progress and health of the communities involved in farming. The commitment of coca-cola company is in provision of water, packaging which is sustainable, climate protection and proper management of energy. Water provision programs of Coca-Cola Company are designed to provide support for healthy watersheds and to ensure there is balance in the water supply throughout their process of production. They do this through expansion of drinking water for the community, protecting watershed. They also offer education programs on sanitation access and efficient use of agricultural water. The company collaborates with the Global Water Challenge, United Nations Development Program, CARE, PlayPumps International, and Ocean Conservancy in the protection of watersheds and supporting initiatives aims at providing clean water and sanitation to underserved areas (Sakuma, 2010). The company has established over 250 water projects in about 70 countries through partnerships with the communities (Jennifer, 2006). The company formed a Water and Development Alliance in 2005 with their bottling partners and United States Agency for International Development. The alliance is involved in the protection, the improvement and the sustainability watersheds. This also increases sanitation and accessibility to water supply which in turn has revolutionized the use of water in many countries in Asia, Africa, the Middle East and Latin America (Sakuma, 2010). For instance, the alliance’s project in Angola resulted in the construction of community water tap stands which serves a population of about 41,200 (Jennifer, 2006). The company is also collaborating with The Nature Conservancy in reviewing their community water initiatives and development of methodologies aimed at quantification of their impact (Jennifer, 2006). In addition to this, the Coca-Cola Company is aiming at establishing standards and guidelines for defining water neutrality concept and water foot printing accounting through collaboration with the Footprint Working Group (Sakuma, 2010). This collaboration is also aimed at complimenting the Coca-Cola’s engagement with the CEO Water Mandate which is a collaboration of the government of Sweden and the United Nations Global Compact (Sakuma, 2010). The CEO Water Mandate aims at establishing a movement comprising companies which are committed to development of solutions and strategies for addressing water challenges (Jennifer, 2006).Coca-Cola reduces the use of external water through the use of treated water for controlling dust and irrigating landscapes. The Coca-Cola Company is collaborating with WWF in the conservation of seven river basins worldwide (Sakuma, 2010). The company is also involved in the improvement of its manufacturing with the sole aim of reducing carbon emission that is one key causes of global warming. They are also working on the recycling of PET which reduces the emission of greenhouse gas and therefore reducing global warming (Sakuma, 2010). Due to global warming the supply of quality and quantity of freshwater is threatened. Among the 2010 company’s goal is to replenish back all the water it will be using (Sakuma, 2010). They aim at recycling and treating the water before releasing it back to the environment. The treatment is aimed at exceeding the standards set by the authorities. The company is also working on increasing the materials that are recyclable in the bottles they use for packaging (Sakuma, 2010). The company is determined to reduce or even eliminate the loss of energy, water and raw material during production. Criticism of Coca-Cola Company on environment India has been the major country at the center stage of criticism of Coca-Cola Company and the environment. In India, there is concern that the water which is used in the production of Coke may contain harmful chemicals and pesticides (Jennifer, 2006). A non-governmental organization in India called the Centre for Science and Environment (CSE) said that the aerated water used by companies such as Coca-Cola to produce soft drinks contains toxic substances such as malathion, lindane, DDT which are pesticides that can result in cancer development and breakdown of the immune system (Jennifer, 2006). These allegations resulted in drop in sales by 11 percent (India, 2006). The production and sale of Coca-Cola and other soft drinks was burned in Kerale state of India in 2006 (India, 2006) a decision which was overruled in the same year by the high court (Thomas, 2006). There is a threat of depletion of natural water resources by the company due to its utilization. Kerala’s local officials shut down Coke bottling plant in 2004 alleging that the plant had caused decline in quality and quantity of water for farming and domestic use (Coca-Cola, 2006). There are allegation that in Plachimada, Coca-Cola is responsible for polluting the groundwater and destruction of farms. A local water official in Varanasi in northeastern India blames a Coke plant for pollution of groundwater through wastewater release into the land (Jennifer, 2006). The disposal of waste water sludge as fertilizer on the land by Coca-Cola Company was analyzed at Exeter University in the south-west of England by scientists and was found to be composed of toxins such as lead and cadmium which are carcinogenic to humans and that it had no or very little benefit as fertilizer (Jennifer, 2006). This confirmed the fear of the community and the environmentalist concern on pollution of the environment by the company. Packaging of Coca-Cola's products has been of concern and environmentalists have continuously fought for introduction of container deposit legislation but the company has strongly opposed the move (Jennifer, 2006). Conclusion It is apparent from the discussion that the coca-cola company is playing a vital role in the conservation of the environment. This ranges from water conservation, use of environment friendly packaging materials and reduction of energy loss and carbon emission. Of particular importance is the reduction of carbon emission initiative which addresses the major concern of the environmentalist. This will place them in good terms with the environmentalist fighting for reduction in carbon emissions that is associated with global warming whose effects are adverse. The collaborations embraced by the company toward conservation of the environment needs to be encouraged since this is advantageous to both the company in terms of its image and to the society at large. This is commendable in the view that the environment is threatened by pollution of all forms. However, the concerns raised on its operation in India are weighty. As seen this has had negative effect on the sales of the company. Thus the Coca-Cola activities in India needs urgent address since it has impacted negatively on the stakeholders income. References Asongu, J.J. 2007b. The Legitimacy of Strategic Corporate Social Responsibility as a Marketing Tool.” Journal of Business and Public Policy. Retrieved from http://www.jbpponline.com/article/view/1023 Asongu, J.J., (2007a) Coca-Cola’s Response to HIV/AIDS in Africa: A Case Study on Strategic Corporate Social Responsibility. Journal of Business and Public Policy. Retrieved from http://www.jbpponline.com/article/view/1023 Coca-Cola 2006. The coca-cola company addresses allegations made about our business in India. From http://www.cocacolaindia.com India: soft drinks, hard cases. From http://www.environmenttimes.net Jennifer K. (2006) "Coca Cola In India". Tuck School of Business at Dartmouth. Retrieved from http://mba.tuck.dartmouth.edu Sakuma, P. (2010) Coca-Cola and the environment. From http://www.mnn.com Thomas, V.M. (2006) Indian Court Overturns Coke, Pepsi Ban. From http://www.washingtonpost.com Read More