Coca-Cola and Corporate Social Responsibility

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Table of Contents

Introduction
Coca-Cola – History and Present
Coca-Cola’s Ethical Issues and Controversies
What Needs to Change
Potential Impact of Change
Conclusion
References

Introduction

Companies increasingly recognize their responsibilities before the public and the planet alike. Organizations with overarching international influence and access to vast resources especially focus their efforts on having a positive influence on the world around them. This philosophy is called corporate social responsibility. The exacerbation of many current pressing issues, including the effects of climate change and population inequality have made it a necessity for corporations to engage in socially-beneficial activities. This trend if further supported by the disillusionment with unrestrained capitalism and the rising recognition of the power many companies hold over regular individuals. In this effort, organizations attempt various types of campaigns or public actions, including those that benefit both the company in question or its local community.

A change in a company’s sourcing, transportation, staffing, or collaboration partners can also be considered a reflection of CSR. However, there are also cases where companies fail to properly implement principles of corporate social responsibility, for a variety of possible reasons. In such cases, it may be necessary to examine where the organization failed, and how its decisions can be changed to achieve better outcomes. For the purposes of this overview, a look at the Coca-Cola Company will be attempted. With its storied legacy, the Coca-Cola firm has had a fair share of attempts to implement effective corporate social responsibility measures, which still remain lacking. Despite its massive influence and an abundance of capital, the company finds itself in controversy regularly. Most of the attempts to improve Coca-Cola’s public standing were not successful, showing a capacity for improvement. The work will discuss the past failings of the organization, and propose a course of action that will better reflect the needs of today.

Coca-Cola – History and Present

The roots of Coca-Cola can be traced all the way back to Atlanta, Georgia, where it was sold as a medical drink at a pharmacy. Both the taste and the ingredients of the drink were a lot different from how Coca-Cola is made today, but its roots undeniably lie in being a health-conscious soft drink. With this humble beginning, the Coca-Cola Company slowly started changing, improving their flavor and expanding outward. Soon after, their influence could be felt all around the United States, and even beyond (Butler, 2019). Nowadays, the organization works in a wide range of nations all across the world, producing a number of different drinks and products. Their influence is undeniable, as the trademarked name remains among the most well-known and recognized brands of soda. Furthermore, the company is well-regarded for their Christmas-themed advertisements, which effectively incorporated the idea of holidays into the Coca-Cola brand. The international popularity and influence of the company can be seen as an overwhelming success story and a testament to the importance of effective advertising, production, and business making. According to the Coca-Cola website, concerns of sustainability and social justice have been ingrained into the organization’s culture for many decades (“Coca-Cola history,” n.d.). While this claim is difficult to demonstrate reliably, it displays a current commitment to social and environmental causes, an important starting step to CSR.

Coca-Cola’s Ethical Issues and Controversies

As with many other large and influential companies, Coca-Cola has a fair share of controversy to accompany its long history. Some of the issues that follow the brand were caused by deceptive advertising, while others concern unsavory business practices (Center for Ethical Organizational Cultures, n.d.). When remembering some of the controversial management stunts the company has employed, a failed attempt at combatting racism and acknowledging the issues of people of color is notable. In 2021, a Coca-Cola training sessions have become available to the public, sparking debates over their anti-white sentiments. Allegedly, the organization asked its employees to be “less white” in a presentation used to train workers (Desk, 2021). While the controversy was largely mocked by a more conservative audience, other critics also came forward to criticize the company’s practices.

The other, far more important controversy comes from Coca-Cola’s sustainability practices and water usage. In order to make their products, Coca-Cola needs large quantities of water. In order to fulfill this need cheaply and quickly, the company uses local sources to get the water. This practice often affects poor and struggling communities, where access to water is scarce (How Pepsi and Coke make millions bottling tap water, as residents face shutoffs 2020). Therefore, the industrial use of water by a large company presents a big issue for many communities. This water-related problem has persisted for more than a decade, forcing Coca-Cola to accept accountability and issue public statements.

However, critics eagerly point out that the response of the company was vague, and the measures to prevent widespread water use were grossly exaggerated. One of the key components to Coca-Cola’s sustainability and corporate social responsibility action was the initiative of “For every drop we use, we give one back”, which was widely advertised as an accomplishment of the organization. Later reports, however, clearly shown that the organization was unable to meet this goal. The claims of returning water in equal measure were untrue, and the Coca-Cola Company made a false impression upon the public (MacDonald, 2018). Since that point, widespread doubt has been cast on most of the company’s actions, and activists have been demanding it do a more comprehensive job of addressing its harm to the environment.

What Needs to Change

There are many potential points of change for the Coca-Cola company, most of which stem from the need to reduce harm to the environment and local communities. Firstly, it is necessary to cease all acts of taking water from communities where it is scarce, instead choosing other regions to transport water from. While increasing potential costs, this measure will no longer put people in danger of not having an essential component of living available close to them. Alternatively, the company can attempt to properly fulfill its promises of fully returning water back to the community, but building trust for the claim that has been proven false in the past will be difficult. Furthermore, Coca-Cola needs to enhance its production and transportation channels in order to reduce carbon emissions.

The percentage of pollution attributed to transportation costs is often overlooked in public debates, and the organization can set a good example by engaging in sustainable transportation practices. Those can include using alternative fuel sources, changing logistical approaches and sourcing locations (Curoe, 2019). In terms of recycling and reusability, it is best if the company actively works toward its goal of recycling all of its plastic, or invests in other types of packaging materials instead (Kiygi-Calli, 2019). Corporate social responsibility also involves considerations of social justice, diversity and community development. According to reports, Coca-Cola engages in efforts of fighting hunger and malnutrition by giving struggling communities access to energy and vitamin drinks (Our priority sustainability issues; Wojcicki & Heyman, 2010). This action, however, does not work to address the root causes of malnutrition and poverty, many of which stem from corporate use of resources, unequal distribution of food, and income inequality. It would do the company better to actively challenge the inherent framework issues like malnutrition are based on, and do their part in reducing corporate impact on communities. It should be acknowledged that other ways for the company to assist communities have been proposed, such as building infrastructure, which the company has done (Carmichael & Moriarty, 2021). However, such actions are not enough to change the brand’s public image and influence.

Potential Impact of Change

After the change in the company’s CSR strategy will be implemented, many changes can be expected. The majority of them will be positive, although some drawbacks are also expected. As mentioned previously, improved corporate social responsibility leads to better sustainability. Through ensuring that no severe damage to the environment and the surrounding community is done, an organization can also guarantee itself a long-lasting local market, and the stability of the economy. Together with other socially-responsible organizations, the contribution to everyone’s wellbeing is a necessary part of a functioning market.

When Coca-Cola ceases to take water from struggling communities, those communities will be more capable of buying its products, and spending less of their income on other necessities. In addition, supplementary activities, such as changing company logistics and manufacturing processes can increase production efficiency, reduce the level of tensions between environmental agencies and the company. When abiding by the laws of manageable corporate development, the organization will be able to exist more harmoniously with its surroundings. Furthermore, it is important to recognize how monumental this change will be for the company’s publicity. As of now, Coca-Cola is struggling to maintain the image of a “good brand” amidst mounting controversy and pressure. A good brand image is able to support a company in many ways, including its CSR efforts (Ramesh et al., 2018). In order to successfully attract new audiences and retain existing ones, it is vital the Coca-Cola improves its reputation (Latif et al., 2020). By enacting positive change, it will show its capacity to recognize mistakes and emphasize the commitment to strive for excellence in the future. Additionally, many stories of corporate responsibility make great publicity material and advertisement (Importance of PR in corporate social responsibility). The only considerable downside to introducing CSR-related change is the financial burden of implementing it, which can be shouldered by an internationally famous and largely successful company. In addition, many of these costs will be offset by the organization’s future success. As research has shown, organizations attempting successful CSR strategies derive financial benefit from them (Shabbir & Wisdom, 2020). Therefore, there is an abundance of reasons to focus on corporate social responsibility.

Conclusion

In conclusion, it can be said that Coca-Cola has not been entirely successful in bringing forth its vision of sustainable corporate action. Despite many efforts and public claims, the actual effects of the organization’s work are much less impressive than they appear – an issue that must be addressed. In order to help the organization to properly combat social issues, and change its own approaches toward sustainability, it is necessary to more thoroughly challenge the intrinsic practices of the organization. Reforming the transportation and logistics considerations, more carefully choosing where the water and other resources are sourced. Truthfully and accurately reporting on sustainability issues, as well as promoting social equity are all necessary actions for the organization. As a result of these actions and changes to the company’s operating structure, it will be possible to derive many benefits – both for the economy and the organization itself.

References

Butler, D. (2019, December 18). History of Coca-Cola: Timeline and facts. TheStreet. Retrieved July 20, 2022.

Carmichael, B., & Moriarty, B. (2021, October 23). Analysis | how coca-cola came to terms with its own water crisis. The Washington Post. Retrieved July 20, 2022.

Center for Ethical Organizational Cultures. (n.d.). The Coca-Cola Company Struggles with Ethical Crises. Harbert College of Business.

Coca-Cola history. (n.d.). The Coca-Cola Company.

Curoe, M. (2019, April 29). Corporate Social Responsibility efforts in the logistics industry. Redwood Logistics. Retrieved July 20, 2022.

Desk, E. (2021, April 20). Explained: Why Coca-Cola is under fire for promoting ‘reverse racism’ and ‘anti-white’ rhetoric. The Indian Express.

Guardian News and Media. (2020, April 23). How Pepsi and Coke make millions bottling tap water, as residents face shutoffs. The Guardian. Retrieved July 20, 2022.

Importance of PR in corporate social responsibility. nibusinessinfo. (n.d.). Retrieved July 20, 2022.

Kiygi-Calli, M. (2019). Corporate Social Responsibility in packaging: Environmental and social issues. Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, 129–144.

Latif, K. F., Pérez, A., & Sahibzada, U. F. (2020). Corporate Social Responsibility (CSR) and customer loyalty in the hotel industry: A cross-country study. International Journal of Hospitality Management, 89, 102565.

MacDonald, C. (2018, May 31). How Coke spun the public on its water use. The Verge.

Our priority sustainability issues. The Coca-Cola Company. (n.d.). Retrieved July 20, 2022.

Ramesh, K., Saha, R., Goswami, S., Sekar, & Dahiya, R. (2018). Consumer’s response to CSR activities: Mediating role of Brand Image and brand attitude. Corporate Social Responsibility and Environmental Management, 26(2), 377–387.

Shabbir, M. S., & Wisdom, O. (2020). The relationship between Corporate Social Responsibility, environmental investments and financial performance: Evidence from manufacturing companies. Environmental Science and Pollution Research, 27(32), 39946–39957.

Wojcicki, J. M., & Heyman, M. B. (2010). Malnutrition and the role of the soft drink industry in improving child health in Sub-Saharan africa. Pediatrics, 126(6).

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