Reference no: EM132231852
OPENING CASE: Corporate Social Responsibility at Coca-Cola
As one of the largest beverage companies, Coca-Cola (Coke) has a major impact on human and natural environments. Coke has 125,000 employees and more than 900 bottling and manufacturing facilities worldwide. The firm generates about 80 percent of its more than $46 billion in sales from international markets.
Coke has been criticized for endangering scarce water supplies, marketing soft drinks to teenagers, and tolerating inferior workplace conditions of its bottlers in developing economies. In response, the firm has initiated a proactive approach to enhancing its image as a socially responsible corporate player in the markets where it does business. Management has adopted responsible and sustainable approaches in global operations. For example, it has invested millions to develop superior wastewater treatment facilities; in arid areas, it implemented programs to replace all the water it extracts from local aquifers. Coke also offers no-calorie or low-calorie beverage alternatives.
Management makes continual efforts to reduce energy consumption throughout its bottling and manufacturing facilities. In Uruguay, Coke uses hybrid electric trucks to deliver product in congested areas to reduce pollution. In North America, Coke operates hundreds of hybrid delivery trucks. Coke management is expanding the hybrid program to Europe. The firm switched to 100 percent renewable energy in numerous operating facilities. One plant in Belgium uses 100 percent geothermal energy.
Coke manages the entire life cycle of product packaging such as cans and bottles. For example, used bottles are converted into plastic chips, which are then made into new bottles. Many bottles are made from plant-based materials, making them biodegradable. One facility recycles 100 million pounds of plastic bottles annually, equivalent to nearly two billion Coca-Cola bottles a year. Management’s goal is to recycle 100 percent of Coke’s bottles and cans. Coke’s “Live Positively” pledge is a code of conduct for the firm’s sustainability goals. For example, the firm is committed to responsible marketing practices and avoids advertising aimed at children. Coke’s Workplace Rights Policy commits the firm to banning child labor and discrimination, offering fair wages and work hours, and ensuring occupational health and safety. Coke’s Anti-Bribery Policy provides guidance on how to conduct business in an ethical and legal manner.
The firm’s Manual Distribution Center (MDC) program helps advance economic development in poor countries. Many micro-distribution centers in Africa employ entrepreneurs who distribute products to local retailers in hard-to-reach areas. The MDCs account for more than 80 percent of company sales in East Africa while providing small-business ownership and jobs to more than 12,000 people. The MDCs meet customer needs while supporting the sustainability of countless African communities. Coke aims for similar models in India, China, and Latin America.
Give examples of unethical or unsustainable behavior that firms in the food and beverage industry might undertake.
What types of sustainable practices has Coca-Cola adopted over time?
In what ways does Coca-Cola help improve the lives of those who live in developing economies and emerging markets?