Corporate Social Responsibility

Corporate Social Responsibility (CSR) is an alternative mechanism adopted by organizations to

solve public problems. The principal of it is that companies take responsibility considering
themselves accountable for the economic, social and ecological consequences of their
operations.
Some of the reasons that make companies adopt CSR principles are:

1. The shrinking role of government, decrease of government funds, coupled with the growing
distrust and leading inefficiencies has lead to greater role of the corporate to work towards
social development

2. Demands for greater corporate disclosure. There is a growing demand for corporate
disclosure by the stakeholders involved. In some countries like India it is mandatory to invest
2% of their annual profits in CSR Activities.

3. The increasing interest of customers. Ethical behaviour of companies has an increasing

influence on customers’ purchasing decisions and thus improves their brand image and
profitability

4. Growing investor pressure. A survey by International Environics (Frazer 2005), revealed that
more than 25% of the shares Americans own, was purchased taking into account the ethical
values of the companies.

5. In order To be to recruit and retain qualified employees, companies are forced to improve
working conditions.

6.Access to large funds and technology it is necessary for corporate to develop some of the solutions
towards societal problems .

CSR is closely linked to transparency. An organization envisaging transparency provides

information in such a way that the stakeholders involved obtain a proper insight into the issues
that are relevant to them. Transparency is an absolute necessary condition for CSR. CSR will
remain marginal as a governance mechanism as long as stakeholders are unable to closely keep
their eye on them.
Though off late companies are becoming more and more responsible there are still certain
shortcomings
1. Complete implementation of CSR and Transparency might be costly to company and
thus society as a whole from an economic point of view. This is further complicated by
the fact that many aspects of CSR cannot be measured very accurately.
 2. Because of the limited cognitive powers and restricted time for solving, absorbing and
holding information, an overload of problems may cause the user to overlook the most
important information or even to refrain from inspecting the information.
3. Full CSR transparency may come into conflict with other moral principles, such as the
right to privacy of workers or other parties.
4. The impact of CSR Projects are longterm and this turns organizations against taking
moral responsibility and thus defect from their cause of CSR. The organizations mostly
use CSR activities then to increase their brand image and take on issues that are more in
public eye which causes neglect of some of the other important social issues and also
duplication of efforts.

CSR Program and Transparency-Coca Cola

Coca-Cola has been investing reasonably in reporting of its CSR activities and sustainability goals
and thus maintains a high level of CSR Transparency. In the company’snewsletter for the
employees, its various annual reports and sustainability report and in some journals on social
development, there are the mention of some impressive initiatives for the future by Coca-
Cola. Coca Cola’s CSR activities are based on the 5 pillars of business ethics i.e. contribution to
economic growth, creation and maintainence of jobs, , protection of the natural environment,
contribution to the development of the region and finally contribution to the fight against social
rejection. In 2013, Coca-Cola invested 1% of its annual revenue in CSR initiatives (Dudovskiy J.,
2015)iTo address concerns on increasing obesity and diabetes specially among the youth , Coca-
Cola removed sugar in 25% of its products worldwide (Dudovskiy J., 2015) and has come up
with many new sugarfree variants and health drinks. In India, Coca-Cola plans to invest more
than $1.7 Billion in creating a robust logistics and supply chain for fruit suppliers and beverage
manufacturing sector (Coca-Cola Sustainability Report, 2018) and improve the livelihood of
these suppliers and the community under which they live. Coca-Cola also previously invested a
large sum of money in Global Energy Balance Network, a Not for Profit organization which
works extensively in eradication of diabetes and obesity (Hays, E., 2015). To improve their
workplace environment and employee welfare , the company works extensively and has
designed policies that comply with work rights policy of United Nations (Coca-Cola, 2017).
Coca-Cola is also an equal opportunity company and promotes diversity in the organization by
inclusion of different cultures, races and sex (Coca-Cola Sustainability Report, 2017). Coca Cola
also works extensively in the field of women empowerment the testimony to which is there
5by20 initiative under which Coca Cola invested around 2.4 million helping more than 660,000
business women, by giving them education about business management (Tornhill, S.
20161&Niethammer,C. 2013).Coca-Cola has also further taken initiatives in the field of water
waste management in PPP (Public Private Partnership) model, wherein, it has replenished more
than 248 billion liters of water (Coca-Cola Sustainability Report, 2017&Chaklader, B & Gautam,
N., 2013). Coca-Cola has also announced the “World without waste” initiative under which it
would strive to make packaging of its products 100% recyclable by 2025 and to further reuse
at least 50% of its packaging content by 2030 (Coca-Cola Sustainability Report, 2017).

Critical Evaluations and further recommendations

Corporate Social Responsibilities as defined are actions that are meant to serve a larger array
of stakeholders importantly the community, society and environment (Goel,M. & Ramanathan
2014). In short a notion to move from wealth maximization of its shareholders to the idea of
value maximsation of its stakeholders . Many organizations have started to use corporate social
responsibilities as a tool to generate value, improve brand image (Goel, Sanghvi & Dahiya
2013). We observe Coca-Cola to be one such organization. All their initiatives appear to be
genuine, but if we closely observe the wrongdoings of the company in the past, all these
initiatives would seem to be company’s attempt to rectify its own mistakes and sometimes as a
PR stint which kind of gives a feeling of Greenwashing. Thus on a proper Critical evaluation of
Coca Cola’s CSR Initiatives there definitely lies some gaps

Coca-Cola’s product line still mostly includes beverages induced with sugar, carbon and
additives and preservatives that are not healthy (Ventura, E.E., Davis, J.N. & Goran, M.I., 2011).
With the increase in fatal diseases such as diabetes, companies producing sugar-based drinks
had to gradually shift their product line to more sugar-free drinks (MacMillan, I.C., 1988)2.

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Thus in order to sustain in the market, and counter its competitor particularly Pepsi it was
imperative that Coca-Cola removed sugar from its drinks or manufactured new sugar free range
of beverages. The company has managed to do both and thus it is more of a marketing
strategy rather than a social initiative (Curtis J., 2017) . Coca-Cola’s next move was to invest
heavily in Global Energy Balance Network, a not for profit which provides scientific solution to
fight obesity and Type 2 diabetes. Ironically, Type 2 diabetes is 39% more likely to occur if a
human being drinks 1 or 2 cans of sugary drinks daily (Harvard School of Public Health, 2015).
Centre for Science in the Public Interest filed a law suit against Coca-Cola for its product Vitamin
Water, which was promoted to be a health drink , yet contained 30 grams of sugar (Stempel J.,
2015). Further,there have been a lot of criticism about the sustainable use of water by the
company particularly in the developing countries with a greater population density. One of the
issues regarding this was sighted in India, wherein local farmers and population was deprived
of drinking and clean water because of Coca-Cola’s excessive use of the resource (Hills, J. and
Welford, R., 2005)3. After decades of extensive use of water, one of the company’s CSR
initiatives and sustainable goals is to replenish water.Thus more than the philanthrophy part
that they show with this initiative it s their duty to replenish the natural resources that they use
for their own profit motives (O’Brien J., 2018)4. Everyone knows about the Use of plastic by the
company for its products. Some of the plastic waste is recyclable, but the waste that is not
creates disbalance in environment (McMaster A., 2017). After decades of pollution in the
environment, the company decided to re-use its recyclable plastic, an initiative that should have
been taken long ago.According to Greenpeace , Coca-Cola has failed to reach its goal of using
25% of its bottles from recyclable and renewable material (Sauven, J., 2017) and thus it looks
that such kind of initiatives are more to improve its brand image and investor trust. Another
initiative of Coca-Cola was to include more diversity and gender equality but according to Luke
Visconti, the founder of DiversityInc. Coca-Cola has many times been accused of racial
discrimination against Afro-American employees in USA and thus need to focus more on their

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racial discrimination practices (Shin A., 2004)5. Thus All these examples probe a question
“Whether it was an initiative or guilt?”.

Source : Samson Et al,2018

Thus if we look at the triangle Coca-Cola at present is somewhere in the phase of Ethical
Responsibility although being ethical focusing on Avoiding Harm ,but being a Global
organization of the revenue of $32Billion(in 2018)(Macrotrends) and being followed by millions
Coca-Cola needs to be at the highest level of the triangle i.e. needs to contribute more to the
community. It can do so further by providing Value to its suppliers-Initiating more activities
similar to their program in India which would provide a sense of trust among them regarding
the company and it will provide them with a sense of being Partner that would further help
them grow Value to Employees - Employees acquire a sense of identity and mutual respect for
the company because it recognizes their contribution. Value for the customers because they
see that the company produces products that respect human health and the environment in
which they live further they perceive that the company is trying to develop and understand the

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messages of the market. Value for shareholders because the company remains a leader,
understands the needs of consumers, acts accordingly and as a result it is profitable and finally
providing Value to society by offering programs that governments cannot provide aimed at
improving the quality of life,work towards sustainability of the environment, take up a cause
for ex like that of a climate change reduce company carbon footprints and finally adopting the
regions where they have their manufacturing plants and improve the area around it thus
working on the principle of creating shared values

References

Dudovskiy,J., 2015, Coca Cola Corporate Social Responsibility, Research Methodology. Available From:
https://research-methodology.net/coca-cola-corporate-social-responsibility/. [1st October 2018]

Hays,E., 2015, Setting the Record Straight on  Coca-Cola and Scientific Research, Coca-Cola. Available From:
https://www.coca-colacompany.com/stories/setting-the-record-straight-on-coca-cola-and-scientific-research. [1st
October 2018]

Coca-Cola Company, 2017, Coca-Cola Co releases 1st stand-alone Human Rights Report, aligned with UN Guiding
Principles Reporting Framework, Business Human Rights Resource Centre. Available From: https://www.business-
humanrights.org/en/coca-cola-company-releases-first-stand-alone-human-rights-report-aligned-with-un-guiding-
principles-reporting-framework. [1st October 2018]

Tornhill, S., 2016. “A bulletin board of dreams”: corporate empowerment promotion and feminist
implications. International feminist journal of politics, 18(4), pp.528-543.

Niethammer, C., 2013. Women, entrepreneurship and the opportunity to promote development and business. The
2013 Brookings Blum Roundtable Policy Briefs.

Coca-Cola, 2017, 2017 Sustainability Report, Coca-Cola Company. Available From: https://www.coca-
colacompany.com/content/dam/journey/us/en/private/fileassets/pdf/2018/2017-Sustainability-Report-The-Coca-
Cola-Company.pdf. [1st October 2018]

Chaklader, B. and Gautam, N., 2013. Efficient water management through public-private partnership model: An
experiment in CSR by Coca-Cola India. Vikalpa, 38(4), pp.97-104.

Goel, M. and Ramanathan, M.P.E., 2014. Business ethics and corporate social responsibility–is there a dividing
line?. Procedia Economics and Finance, 11, pp.49-59.

Goel, M., Sanghvi, T., Dahiya, K. (2013). Role of Corporate Social Responsibility in Entrepreneurship Development.
Unpublished.
Ventura, E.E., Davis, J.N. and Goran, M.I., 2011. Sugar content of popular sweetened beverages based on objective
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O'Brien, J., 2018, Coke Claims To Give Back As Much Water As It Uses. An Investigation Shows It Isn’t Even Close,
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MacMillan, I.C., 1988. Controlling competitive dynamics by taking strategic initiative. Academy of Management
Perspectives, 2(2), pp.111-118.

Curtis,J., 2017, How We're Changing Our Business, Inside and Outside the Bottle, in Western Europe, Coca-Cola
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and-outside-the-bottle. [1st October 2018]

Galician, M.L., 2004. Harry Potter, Coca-Cola, and the Center for Science in the Public Interest: An Interview with
Michael F. Jacobson. Journal of Promotion Management, 10(1-2), pp.227-231

Harvard School of Public Health, n.d., The Nutrition Source; Soft Drinks and Diseases, Harvard T.H. Chan School of
Public Health. Available From: https://www.hsph.harvard.edu/nutritionsource/healthy-drinks/soft-drinks-and-
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Stempel, J., 2015, Coke to change Vitaminwater labels to settle U.S. consumer lawsuit, Thomson Reuters. Available
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to-settle-u-s-consumer-lawsuit-idUSL1N1211HX20151001. [1st October 2018]

Hills, J. and Welford, R., 2005. Coca‐Cola and water in India. Corporate Social Responsibility and Environmental
Management, 12(3), pp.168-177

Shin, A., 2004, Foundation Helps Sodexho Counter Discrimination, Washington Post. Available From:
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