Coca-Cola's Water Sustainability Initiatives

Case Details:
Case Code

: BECG090

Case Length

: 23 Pages

Period

: 2004-2008

Pub Date

: 2009

Teaching Note

: Not Available

Organization

: The Coca-Cola Company

Industry

: FMCG

Countries

: Global

Abstract:
This case is about the global water sustainability initiatives undertaken by The Coca-Cola Company
(Coca-Cola). It details the activities undertaken by Coca-Cola's management and employees to contribute
to the benefit of the society and community in which the company operated by pledging to return all the
water it used in its operations back to the environment. On June 5, 2007, Coca-Cola and the World
Wildlife Fund (WWF) launched a global project that focused on water conservation.
Coca-Cola being one of the largest beverage companies in the world had water sustainability initiatives
as an integral part of its corporate agenda since water was an important element for the company to run
its business.
According to the company, it was aware of the environmental impact caused by a business of its scale
and therefore it had decided to implement a wide range of initiatives to improve the quality of life of its
customers, the workforce, and the society at large.
While Coca-Cola's water sustainability initiatives earned accolades from its collaboration partners, it came
in for severe criticism from activists and environmental experts for allegedly depleting groundwater
resources in India. The company was also accused of dumping toxic and hazardous waste materials near
its bottling facilities, and discharging wastewater into the agricultural lands of farmers. Moreover, CocaCola was one of the most boycotted companies in the world for its alleged unethical business practices in
developing countries.
Notwithstanding the criticisms, the company championed various water sustainability initiatives such as
rainwater harvesting, restoring groundwater resources, efficient water resource management, watershed
protection, community water initiatives, and global awareness and action initiatives for educating the

underserved communities the significance of water. The company was also criticized for spending millions
of dollars to project a 'green' and 'environment-friendly' image, while failing to take care of the basics to
operate its business in an ethical manner. The critics felt that this was an attempt at greenwashing as
Coca-Cola's business practices in India had tarnished its brand image while its sales had taken a beating.
However, the company intended to become a water neutral company by 2010.
Issues:
Understand the issues and challenges faced by Coca-Cola with regard to its global environmental
responsibility initiatives.
Understand the concept of sustainability and its relevance in today's businesses.
Understand the need for a vision, policy, and governance structure in order to achieve the goals of
sustainability management.
Understand how environmentally and socially responsible behavior leads to sustainable business
performance.
Develop a framework to measure sustainability initiatives.
Determine how a company's stand on social and environmental issues can contribute to enhancing its
corporate image.
Understand the reactions of consumers, environmental experts, and critics to Coca-Cola's water
sustainability initiatives.
Contents:
Page No.
Introduction

Background Note

Coca-Cola's Environmental Issues

Coca-Cola & Water

Coca-Cola's Water Stewardship Strategy

Criticisms

10

Coca-Cola's Response

12

Looking Ahead

14

Exhibits

16

Keywords:
Corporate social responsibility, Environmental Protection, Environmental responsibility, Water
sustainability, Water stewardship strategy, Water resource management, Wastewater treatment,
Sustainable development, Rainwater harvesting, Public relations, Brand image, Greenwashing, Product
mix, Competitive advantage, Advertising, Franchise, The Coca-Cola Company, Coca-Cola India , The
Energy and Resource Institute, Water and Development Alliance, Center for Science and Environment
Introduction
On March 26, 2008, US-based leading beverage company, The Coca-Cola Company (Coca-Cola),
4
received the US Agency for International Development's (USAID) '2007 Alliance of the Year' award for its
water sustainability initiatives in developing countries worldwide. The award recognizes public-private
partnerships for their outstanding contribution to global challenges.
Since 2004, Coca-Cola had been accused by several governmental organizations and activists of
creating environmental problems in several countries by depleting groundwater tables. In 2005, the
company used 290 billion liters of water to produce its beverages.
Around 40 percent of the water was consumed in making beverages and the remaining 60 percent was
5
used in the supply chain and in the production of ingredients like sugar and corn.
In 2005, Coca-Cola entered into an alliance with USAID to address global water management problems.
6

These initiatives were funded by Coca-Cola and the Water and Development Alliance (WADA).
Coca-Cola in association with USAID and WADA addressed critical water issues across the world.
However, the beverage company was criticized for depleting groundwater that was an important resource
to the local communities in developing countries.
Coca-Cola was also criticized for distributing what was alleged to be improperly treated sludge containing
toxic carcinogens and heavy metals like cadmium and lead, as fertilizer to farmers in India.
7

On June 5, 2007, Coca-Cola and the World Wildlife Fund (WWF) launched a global project that focused
on water conservation.
Coca-Cola aimed to return to the environment all the water that it consumed in beverage production and
become water neutral by 2010.
This it proposed to do by focusing on three core areas - reduction, recycling, and replenishment...

Excerpts
Background Note

The Coca-Cola drink, popularly referred to as 'Coke', is a kind of cola, a sweet carbonated drink
containing caramel and other flavoring agents. It was invented by Dr. John Smith Pemberton (Pemberton)

on May 8, 1886, at Atlanta, Georgia, in USA. The beverage was named Coca-Cola because at that time it
contained extracts of Coca leaves and Kola nuts . Frank M. Robinson (Robinson), Pemberton's bookkeeper and partner, who came up with the name for the drink, suggested that it be spelt Coca-Cola rather
than Coca-Kola because he thought the two C's would look better while advertising. Robinson designed
the now world famous Coca-Cola trademark as well...
Coca-Cola's Environmental Issues
Coca-Cola was accused of draining the underground water table and of releasing improperly treated
industrial effluents in less developed countries. The company was hit hardest in India. The focal point of
the environmental accusations in India was the Coca-Cola plant located in the southern state of Kerala.
Coca-Cola & Water
In 2002, Coca-Cola initiated its water sustainability initiatives to provide local communities residing in the
areas near its bottling plants with access to potable water. Since the company was facing several issues
related to its environmental sustainability in India, it launched several rainwater harvesting projects in
India in June 2002.
The company received support from several non-governmental organizations (NGOs), central
groundwater authorities, state groundwater boards, and welfare associations...
Coca-Cola & Water
In 2002, Coca-Cola initiated its water sustainability initiatives to provide local communities residing in the
areas near its bottling plants with access to potable water. Since the company was facing several issues
related to its environmental sustainability in India, it launched several rainwater harvesting projects in
India in June 2002.
The company received support from several non-governmental organizations (NGOs), central
groundwater authorities, state groundwater boards, and welfare associations...
Criticisms
Some analysts felt that the initiatives adopted by Coca-Cola were the need of the hour and such private
sector expertise and interests could make real contributions to sustainable development. They felt that
the company had set an example for other organizations to follow.
While its water sustainability initiatives earned Coca-Cola accolades from its collaboration partners and
certain quarters, it failed largely to impress its critics. Despite several efforts by the company, it continued
to face criticisms from several quarters...

Coca-Cola's Response
Coca-Cola opened an exclusive website, www.cokefacts.org, which addressed the allegations related to
India and other countries. Also, the company issued an official statement rebutting the charges against its
bottling plant at Plachimada...
Coca-Cola's Response
Coca-Cola opened an exclusive website, www.cokefacts.org, which addressed the allegations related to
India and other countries. Also, the company issued an official statement rebutting the charges against its
bottling plant at Plachimada.
Exhibits
Exhibit I: Importance of Water to Coca-Cola
Exhibit II: Selected Financials of Coca-Cola: 2003-2007
Exhibit III: Coca-Cola's Initiatives in Other Countries
Exhibit IV: Coca-Cola's Global Water Sustainability Goals
Exhibit V: Rainwater Harvesting Projects in India
Exhibit VI: List of Awards and Recognition