coca cola csr report

Coca cola CSR report

Each corporation in this world is here for something great. Something beyond dollar signs and mass profits. They are here to make the world a better place. Some of these businesses have taken the concept of making the world a better place, used their wealth and power, and have thus created a road map to sustainable business practices and ultimately a better world. We see these practices in action through CSR reports that businesses will publish if they are acting upon what is known as the triple bottom line. The triple bottom line encompasses the environmental, societal, and economic impacts that a company partakes in, and then reports on what they are doing to improve and increase their impact in all three aspects of the triple bottom line. This reporting is laid out in a CSR report, where the shareholders and the general public can see if the company is hitting their goals or missing the mark for sustainability. Not all companies issue a CSR report; Coca-Cola though is one of the many companies that does do CSR reports. Before diving into their CSR report analysis and how their triple bottom line has impacted the world, knowing where the company has come from is a helpful tool to further understand and paint a picture for the future of Coca-Cola.

Coca-Cola as we know it today is a beverage company that you can see literally everywhere in the world, with the exception of Cuba and North Korea. Starting back in 1886 by a pharmacist named John Pemberton he sold his first soda for just 9 cents in Atlanta, where the company is still headquartered today. Shortly after his creation, in 1888 Pemberton died from health complications. In the early days of creating the drink, Pemberton had sold portions of the company to other individuals that would carry on the legacy of the company after Pemberton’s passing. The company boomed shortly after, “Under Mr. Candler’s leadership, distribution of Coca-Cola expanded to soda fountains beyond Atlanta

(6)”. As the company progressed, that the drink did contain a small amount of cocaine. This was put in the new beverage to cure opium addiction. After the discovery the company was quick to remove the 9 milligrams per glass of cocaine that was in their drinks in 1903(4). Coca-Cola today has grown into a world empire where they now produce over 3500 different drinks under 500 different brand names. As of 2015 the overall company has had a revenue of $44 billion, a net income of $7.351 billion, employs around 129,000 people worldwide, and has a mission to, “refresh the world in mind, body and spirit. To inspire moments of optimism and happiness through our brands and actions. (1)”. Coca-Cola is committed to being seen and known as a brand that inspires and changes the lives of many instead of the few, through programs outlined in their CSR report known as “Me, We, and the World. Being a brand that is so known worldwide, there comes an immense amount of pressure to be socially, environmentally, and economically responsible with their actions as a company, because of their size and outreach to literally all corners of the world. As a company with such large profits, Coca-Cola has created their CSR report to highlight the key aspects they focus on as a company. The goals set forth by them in the social, economic, and environmental aspects of sustainability are laid out and will be defined and analyzed in deeper context to truly understand how Coca-Cola has had such an impact on the environment the operate in.

In Coca-Cola’s CSR report, they have decided to split it into 3 different parts, “Me, We and the World”. Me, is the involvement of well-being within the communities (social) in which Coca-Cola is involved. The goal of the company for this aspect is to create healthier options to choose from in their product line. In doing so they have created low to no calorie drinks along with sponsoring and/or supporting hundreds of nutrition programs in over 100 of the markets they are in. Through this outreach and participation in the communities, it shows that the company as a whole is very conscious and aware

Intellectual property rights of this paper, owned by Ty Winther.

that as a beverage company, they have that social responsibility to offer healthier options and support communities to learn about the different nutritional aspects of what they put in their bodies. Further, Coca-Cola is also wanting to raise awareness about nutrition information. In order to achieve this, they have also vowed to supply all nutritional information on their packaging.

“We” is the portion of the report where they address the economic and human rights aspects in their company. For Coca-Cola, they are highly focused and driven to support women empowerment around the world. In their mission, they have started a program called “5by20” which simply means that they want to empower 5 million women entrepreneurs globally by 2020. Coca-Cola believes that, “the entrepreneurial potential of women is one of the most powerful and enduring ways to help families and communities prosper (2)”. This aspect of CSR is independently validated by the DNV GL, which is an international firm that assesses risk management with the actions that companies do. By Coca-Cola having DNV GL validate their “We” portion of the CSR report, this validates further that Coca-Cola is striving to meet that goal for themselves. This though should not cloud judgement for whether or not the company is meeting their goals. Just because there is outside validation that the action and programs are taking place, doesn’t mean the goal is being met, as I will discuss and make my point for later. When it comes to human rights in the company, they have implemented policies that now line up with the UN guiding principles for businesses. Coca-Cola adopted these principles in 2011 and since then 89 % of their suppliers and distributors have achieved the standard and compliance set forth by the guiding principles (2). Again though there is speculation on the remaining human/employee rights that Coca-Cola does not talk about in their report which will also be discussed later.

The last section of Coca-Cola’s CSR report is the “world”. In this section they address their concern and solutions for how to make their products more environmentally friendly and ultimately cut down on waste while at the same time increasing recycle efforts. One of their main focuses is water stewardship. Coca-Cola uses billions of gallons of water in the creation of their products. Since operating in all of the 3rd world countries, water is a scarce or unusable resource thus they have to use ground water that is hard to replenish. In their “world” section they have outlined their goals and progress by 2020 to replenish 100% the water they use, back to the supply for which they extracted it from. According to Coca-Colas report, they are well ahead of their goal to replenish 100% of the water they use back to the source. Along with water stewardship they are very aware of their packaging. In efforts to reduce material use and increase on recycled and renewable materials, they have moved to having 57.2% of their packaging made from PET, which is a renewable and reusable plastic, that is not oil based, and most commonly found in the European markets(4).

Assuming that Coca-Cola is ethical in all of their actions when it comes to CSR, we would also assume that their claims are backed up by many sources, both government and individual. This fact holds true in validating the claims Coca-Cola makes in their report, but these validations only state that they are doing the action they said they would do… not necessarily validating that they are on track to meeting their goal. The UN validates the claim that they fight for women equality, which plays directly into Coca-Cola woman entrepreneur empowerment plan. Coca-Cola is working with the group “UN women” to make this goal a reality. Coca-Cola’s strategy to empower women was so powerful that, “Unilever, which has set for itself the goal of empowering five million women across the world by 2020(3)” has now set the same goal for themselves. As mentioned earlier, the speculation lies in the numbers for Coca-Cola. Since 2010 when this project began, Coca-Cola reports empowering 865,000 women as of 2014 and want to empower 5 million by 2020; which the report then states that the


company is on track to accomplish this goal. Simple calculations would lead you to believe otherwise because within 1 year they would have to empower 1.635 million women to reach the half way point by 2015. If you go off the numbers purely, Coca-Cola is green washing in this sense that their report goes against Kantian ethics stating “Ethics is not about happiness, but about doing the right thing (5)”, which if the company is indeed green washing, this action goes against the last part of the Kantian statement to do the right thing.

Green washing is when a company states they are doing something to benefit the environmental, social, or economic part of the triple bottom line but are not fulfilling what they say they are doing. Whether they are doing those actions or not, where green washing comes into play is when certain aspects of their claim are not being met yet the company says that are being met. Another example of this in Coca-Cola is dealing with their human rights portion of the report. There have been claims made online that unfair employment practices have taken place and have continued to as recent as 2013. In the CSR report, Coca-Cola wants to be socially responsible, but one of the driving forces of being socially responsible is not having “discrimination [at] 19%, retaliation 19% and work hour/wage discrepancy at 24% (2)” as your top 3 workplace rights cases reported in 2014. On an ethical level, the CSR report does a good coverage of being an ethical company and fulfilling their social, economic and environmental duties, but in the back ground the company is dealing with other issues that aren’t reported in the report for obvious reasons. It goes against Kant ethics, as well as utilitarianism by not allowing all to seek and be happy. This ultimately plays into the deeper analysis of stakeholder analysis.

When your workforce is being mistreated this takes into direct account that stakeholders will notice as a decrease in distribution arises or a statistical abnormality arise in profits (firing/laying off employees in mass quantities). By noting that green washing is happening, through the stakeholder analysis, the CSR report does not even begin to touch on those worker discrimination cases. If Coca-Cola were to address these types of issues in their report to cover a portion of the “we” section, they would ultimately have a higher employee retention rate, especially in the 3rd world countries, where most of these cases stem from. Overall there has been no credibility taken by the company for these work standards, and thus why the ethical criteria is only partially met. It is met in the sense that they are doing well for the company by attempting to reduce workplace rights cases. Where they fail is on the part they don’t cover in the report which is their approach to how to ultimately fix the overall issue in the company for worker equality.

Stepping back from the ethical standpoint, the economic coverage of a CSR report is also very important to a company’s success. In Coca-Cola’s case, the economic part is covered by the “We” part of their report. In this, it holds strong evidence that suggests their actions actually benefit the company in the long run. By instituting their 5by20 plan, their impact through that is able to generate more jobs and small businesses that would in turn create potential customers that now have the money to buy Coca-Cola products. Through their water stewardship program as well, they are impacting both the communities that they take the water from and their future business by returning water back to the ecosystem for later use. With Coca-Cola’s water stewardship program, their ability to operate long term is impacted in a positive manner. Outside of their economic impact with communities, the company is impacted by generating a stronger, more stable relationship with their shareholders who see the company’s investment into the world, thus creating demand to invest more into Coca-Cola on the shareholder side. It also feels amazing working for a company that helps the greater good, and thus leads to a higher employee retention rate. All of these outcomes are a domino effect into the next. From


retaining highly skilled workers, those workers are more willing to generate and innovate alongside the company to make programs more effective and successful. Coca-Cola takes this innovation and applies it directly to their competitive strategy to stay on top. The 5by20 is just one program that causes all of these dominos to start falling and cause a ripple effect to the next greater outcome, but without the integration and follow through of the other programs, such as the water stewardship and nutrition awareness, those dominos wouldn’t fall over as quickly or make as great of an impact.

Analysis of CSR has one last component in order for it to be considered a complete analysis; Formality. For formal criteria, the numbers do not lie, and although Coca-Cola has impressive looking numbers in their CSR report, it would be easy to speculate that these numbers are actually improvements in some areas as their reduction in some areas has disrupted ethical standards and sometimes created job loss to achieve such numbers. Coca-Cola releases their report every year and within it offers a year to year description and explanation as to where they are headed. The UN, DNV-GL (a risk management analyst firm) and FIRA BV approve of and provide external assurance to Coca-Cola’s actions and progress to achieve the best triple bottom line result possible with these endorsements, they do not excuse the vague goals set by Coca-Cola in their report. An example for vagueness in Coca-Cola CSR report is involving their water stewardship in the “world” section, “By 2020, safely return to communities and nature an amount of water equivalent to what we use in our finished beverages and their production,(4)” which outlines their goal of course, but it doesn’t state how or with any continuation. The vague goal setting that Coca-Cola does can be seen as a work around if that goal is not met. If Coca-Cola were to replicate their goal outlines as they did in the “We” section, by stating numbers and continuation of sustaining those numbers, it gives them less wiggle room when the deadline comes up and they are to be held accountable for meeting or missing their goal. Their goals could be more refined to specify their intentions of that goal.

Bringing it full circle, the CSR report is supposed to outline a company’s intentions for sustainability and their strides towards a more complete triple bottom line. As seen in Coca-Cola’s report, they meet the criteria for having a report and applying their intentions into the real world, but their report seems to be too heavily positive, as there is no backwards trend marks or negative statements for progress and achieving their goals. In order for their report to be 100% ethical and formalized, Coca-Cola must re-evaluate their efforts and take out the misleading progress statements for a few of their goals (the 5by20 outreach numbers are a perfect example of this misleading information and progress). Coca-Cola has everything it needs to be successful in achieving the triple bottom line and having a valid CSR report, they have the external auditors, the outside risk management checks done by DNV GL, and their efforts are widely supported by the UN. There is no reason to mislead information, as it is okay to miss goals, just restructure and continue the effort until that goal is met.


Works Cited

1. Becker, Chris. "Kantian Ethics." CSU College of Business, Fort Collins. 27 Jan. 2016. Lecture.

2. Coca-Cola. 2014/2015 Sustainability Report. Rep. Coca-Cola, 22 July 2015. Web. 21 Apr. 2016.

3. Coca-Cola. "Coca-Cola History │ World of Coca-Cola." World of Coca-Cola. N.p., n.d. Web. 21

Apr. 2016.

4. O'Reilly, Lara. "15 Mind-blowing Facts about Coca-Cola." Business Insider. Business Insider, Inc, 25

Sept. 2015. Web. 21 Apr. 2016.

5. Staff, Journey. "Our Mission Statement & Company Values | Coca-Cola GB." Our Mission Statement

& Company Values | Coca-Cola GB. Coca-Cola, n.d. Web. 23 Apr. 2016.

6. UN News Centre. "Business Leaders Pledge Investments worth Millions to Boost Gender Equality –

UN." UN News Center. UN, 26 Sept. 2015. Web. 23 Apr. 2016.


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