Ethics and corporate governance

Coca-Cola India's Corporate Social
Responsibility Strategy
Presented By
JUNAID HASSAN
FIZAH
NADIYAANJUM

Corporate Social Responsibility
Corporate social responsibility, often abbreviated "CSR," is
a corporation’s initiatives to assess and take responsibility for
the company's effects on environmental and social wellbeing.
The term generally applies to efforts that go beyond what
may be required by regulators or environmental protection
groups.
CSR may also be referred to as "corporate citizenship" and can
involve incurring short-term costs that do not provide an
immediate financial benefit to the company, but instead
promote positive social and environmental change.

Background Note
Coca-Cola started its business in 1886 as a local soda producer in
Atlanta, Georgia (US) selling about nine beverages per day. It was
invented by Dr. John Smith Pemberton on May 8, 1886, at Atlanta,
Georgia, in USA.
By the 1920s, the company had begun expanding internationally,
selling its products first in the Caribbean and Canadian markets and
then moving in consecutive decades to Asia, Europe, South America
and the Soviet Union.
By the end of the 20th century, the company was selling its
products in almost every country in the world. In 2005 it became the
largest manufacturer, distributor and marketer of non-alcoholic
beverages and syrups in the world.
Coca-Cola is a publicly-held company listed on the New York Stock
Exchange (NYSE).

The Coca-Cola drink, popularly referred to as 'Coke', is a kind of
cola, a sweet carbonated drink containing caramel and other flavoring
agents. The beverage was named Coca-Cola because at that time it
contained extracts of Coca leaves and Kola nuts.
Pemberton later sold the business to a group of businessmen, one of
whom was Griggs Candler (Candler).
By 1888, several cola brands were in the market competing against
each other. Candler acquired these businesses from the other
businessmen and established Coca-Cola in 1892.

This case is about Coca-Cola's corporate social responsibility
(CSR) initiatives in India. It details the activities taken up by Coca-
Cola India's management and employees to contribute to the
society and community in which the company operates.
Coca-Cola India being one of the largest beverage companies in
India, realized that CSR had to be an integral part of its corporate
agenda. According to the company, it was aware of the
environmental, social, and economic 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 society at large. However, the company came
in for severe criticism from activists and environmental experts
who charged it with depleting groundwater resources in the
areas in which its bottling plants were located,
thereby affecting the livelihood of poor farmers, dumping toxic
and hazardous waste materials near its bottling facilities, and
discharging waste water into the agricultural lands of farmers.
Moreover, its allegedly unethical business practices in
developing countries led to its becoming one of the most

boycotted companies in the world.
Not with standing the criticisms, the company continued
to champion various initiatives such as rainwater
harvesting, restoring groundwater resources, going in
for sustainable packaging and recycling, and serving the
communities where it operated. Coca-Cola planned to
become water neutral in India by 2009 as part of its
global strategy of achieving water neutrality.

However, criticism against the company refused to die down. Critics
felt that Coca-Cola was spending millions of dollars to project a
'green' and 'environment-friendly' image of itself, while failing to
make any change in its operations. implement its new CSR strategy
in the country.
They said this was an attempt at green washing as Coca-Cola's
business practices in India had tarnished its brand image not only in
India but also globally. The case discusses the likely challenges for
Coca-Cola India .

Introduction
On February 18, 2008, leading beverage company in India,
The Hindustan Coca-Cola Beverages Pvt. Ltd (Coca-Cola
India), was awarded the Golden Peacock award for
Corporate Social Responsibility (CSR) for the several
community initiatives it had taken and its efforts toward
conservation of water. The award recognizes companies for
their commitment toward business, their employees, local
communities, and the society. Atul Singh (Singh), CEO,
Coca-Cola India, said, "Coca-Cola India has always placed
high value on good citizenship and has undertaken several
initiatives for community development and inclusive growth.

We are gratified to receive this global award and are humbled at
being recognized for the little contributions that we have been able
to make to preserve and protect the environment and toward
community development."
Coca-Cola India was established as the Indian subsidiary of the
US-based Coca-Cola Company (Coca-Cola) in 1993. As of 2008,
Coca-Cola India had 24 bottling operations of its own and 25
bottling operations owned by its franchisees. In addition to
beverage brands like Coke, Fanta, Sprite, etc., Coca-Cola India
had a strong local cola brand Thums Up, the Kinley brand of
mineral water, energy drinks, and powdered concentrates. Keeping
in mind the fact that it was one of the largest beverage companies
in India, Coca-Cola India said it had made CSR an integral part of
its corporate agenda.

According to the company, it was aware of the environmental, social, and
economic impact caused by a business of its scale and therefore it had
taken up a wide range of initiatives to improve the quality of life of its
customers, the workforce, and society at large.
Since the company used large amounts of water and energy in its
beverage production and tons of packaging material for its products, it
had taken up several initiatives to act as a responsible company and
reduce its environmental impact, it said. In addition to water, energy, and
sustainable packaging, Coca-Cola India also focused on several
community initiatives in India as part of its social responsibility
initiatives...

Corporate Social Responsibility Initiatives in India
Environmental Responsibility Initiatives
Environmental responsibility was a key aspect of Coca-Cola
India's CSR initiatives. Since Coca-Cola India was involved in
beverage production, its operations affected the environment in
many ways such as through excessive levels of water
consumption, wastewater discharge, high energy consumption,
discharge of effluents, and greenhouse gas (GHG) emissions due
to the use of refrigeration, vending machines, air conditioning
equipment, etc.

criticisms
Though Coca-Cola India claimed that it had taken several such
efforts, it continued to attract criticism from several quarters.
The company was censured for depleting groundwater tables,
leaving the local communities with no access to drinking water
and water for farming which was their primary source of
income...

Coca-Cola India's Response
Coca-Cola opened an exclusive website,
www.cokefacts.org, which addressed the allegations
related to India and other countries. In another official
statement, Coca-Cola rebutted the charges against its
bottling plant at Plachimada, Kerala.
The company said the plant was not responsible for the
depletion of the underground water table. It quoted a study
conducted in October 2002 by Dr. R.N. Athvale, emeritus
scientist at the National Geophysical Research Institute
(NGRI), which had concluded that there was no field
evidence of overexploitation of the groundwater reserves
in the area surrounding the plant...

As of February 2008, Coca-Cola India had carried out its CSR
activities across 45 bottling plants at an annual spend of Rs. 40
to 50 million on activities such as water conservation
management, health, and education. By February 2008, the
company had installed around 350 rainwater harvesting
projects in several states of India...

COCA-COLA CSR MODEL
PEOPLE : To commit to the fair and dignified treatment of all
people who work for The Coca-Cola Company. 90 percent of more
production by local people with local resources.
PARTNERS: The Company strives to engage effectively and
cooperatively with our partners and stakeholders.
PORTFOLIO: Offer the highest quality beverages starting
with, Coca cola and more than 2,600 beverage products.
PROFIT: Seek to maximize value for shareowners while being
mindful of our overall responsibilities.

PLANET: Working to be leaders in responsible water
use, growing our business but not our carbon
footprint.
CSR INITIATIVES
WATER:
• Conserve Water
• Watershed protection, rainwater harvesting projects
• 110 recharge shafts that collected rainwater. Reverse
filter system.
• The company initiated drinking water projects in
Maharashtra and Gujarat to provide potable water to
the local communities

ENERGY:
• Reducing energy consumption and emission of GHGs by
such as refrigeration
• freshment cooler that used technologies devoid of
hydrofluorocarbons
• Green house Gass emission reduced by three-fourths
• increase the energy efficiency of its equipment by 40
to 50%
ECONOMIC RESPONSIBILITIES:
• Played an active role in providing employment and giving
the community opportunities to expand and grow
• For every job in the Coca-Cola system, 10 more jobs were
created indirectly
• In 2007, launched an initiative called Parivartan (Change)
for training small retailers in India.

COMMUNITIES:
• A commitment to the community was part of Coca-Cola
India’s CSR
• In 2003,launched Jagriti Learning Centers to provide
education to more than 1,800 children residing near its
bottling facilities in Pune
• The initiative aimed to curb waterborne diseases
• It set up around 2,000 schools for children

Rank (2014) Company Rank (2013) Company
1 Mahindra &
Mahindra Ltd.
1 Tata Steel Ltd
2 Tata Power
Company Ltd.
2 Tata Chemicals
Ltd.
3 Tata Steel Ltd. 3 Mahindra &
Mahindra Ltd
4 Larsen & Toubro
Ltd.
4 Maruti Suzuki
India Ltd
5 Tata Chemicals
Ltd.
5 Tata Motors Ltd
6 Tata Motors Ltd. 6 Siemens Ltd.
7 GAIL (India) Ltd. 7 Larsen & Toubro
Ltd
8 Bharat Petroleum
Corporation Ltd.
8 Coca-Cola India
Pvt. Ltd
9 Infosys Ltd. 9 Steel Authority of
India Ltd
10 Jubilant Life
Sciences Ltd.
10 Infosys Ltd.
2013 vs. 2014 Rankings

Coca-Cola India Bags the Prestigious Golden Peacock Award for
CSR, Third year in a Row
Coca-Cola India made a hat-trick by bagging the coveted Golden
Peacock Award third year in a row for CSR. Of the four Golden Peacock
Global Awards for Corporate Social Responsibility given at Lisbon in
Portugal, Coca-Cola India once again bagged a special commendation
for its contribution in India towards its efforts in community
development. Some of the other recipients of the awards were The TATA
Power Company Ltd, Mahindra and Mahindra Ltd, IBM India Private
Ltd, Hindalco Industries Limited etc.

Mr. Ola Ullsten Former Prime Minister of Sweden , gave away the
award in the presence of Dr Madhav Mehra, President World
Council for Corporate Governance at the 5th Global Conference on
Social Responsibility held in Portugal. This year the Conference
was based on the theme - "Profiting from your business by turning
it into a cause. The prime objective of the conference was to
demonstrate how social and environmental agenda have
increasingly become the biggest competitive differentiators and
help companies to generate profits by focusing on social
and environmental causes.

The award's citation recognized Coca-Cola's contribution as "Coca-Cola India
has supported community programmes with a focus on education, health and
water conservation. The Company has commissioned 400 rainwater harvesting
systems, provided clean drinking water to more than 100 schools, supported
school projects and driven reform in sustainable packaging, disaster relief and
rehabilitation"
As a responsible corporate, Coca-Cola India has always placed high value on
good citizenship. The company provides extensive support for community
programs across the country, with a focus on education, health and water
conservation. In the area of Water Conservation, Coca-Cola India has
commissioned over 500 RWH structures with a recharge capacity of 500 crore
litres in 20 states, touching over 1 million people. The Company also organized
Health Camps in urban slum and rural areas in several parts of country, which
benefited over 40000 women and children.

In the field of education, over 500 merit cum scholarships have been
awarded to over 135,000 students from 116 Army Schools spread
across the country. These scholarships catered to the educational
needs of child for a year which included Fees, Books, Stationary and
Uniforms. These scholarships were given to wards of non
commissioned (85%) Army personnel (Jawans). Additionally, Coca-
Cola India also established Rain Water Harvesting systems in all of 39
villages of SOS Children's villages to provide for water security to
over 6000 children. The Company regularly supports several
education and health initiatives in addition to Disaster Relief and
Rehabilitation programs as and when required. Coca-Cola India
awarded the Bombay Stock Exchange Award for Social and Corporate
Governance 2009

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