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CSR Assignment

Coca-Cola India

Group No:4

Submitted by:
Abhishek Batra (C011)
MohitGoyal (C025)
Yogesh Kadam (C035)
AyazMahmood(C042)
AnkitaPahwa (C052)
Aparjit Singh (C057)

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Index
Sr. No. Topic Page No

1 Introduction 3

2 The Coca-Cola Company India 3

3 Coca-Cola India Sustainability Framework 4

4 Coca-Cola India Business and CSR Model 6

5 Integration of CSR with business model 7

6 Impact of Sustainability and CSR on stakeholders of Coca-Cola 8

7 Monitoring and measurement of Coca-Cola Indias CSR activity 9

8 Analysis of the Sustainability activities by Coca-Cola India 10

9 CSR Theory application 14

10 References 15

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Introduction
The beverage industry in India constitutes of around USD 230 million among the USD 65 billion
food processing industry. The major sectors in beverage industry in India are tea and coffee
which are not only sold heavily in the domestic market but are also exported to a range of
leading overseas markets. The soft drink market such as carbonated beverages and juices
constitutes around USD 1 billion producing 284 million crates per year. In the peak season, the
consumption capacity reaches 25 million creates per month and during off season the same goes
down to 15 million crates in a month. Pepsi and Coca-Cola are the two leading brands in the
Indian beverage industry. Among all the leading beverage companies in India, Coca cola has
accounted for a thriving growth since its inception. It occupies around 60 percent of the
carbonated drink sector in the Indian beverage industry

The Coca-Cola India Company


Coca-Cola India, is one of the countrys leading beverage companies, offering a range of
healthy, safe, high quality, refreshing beverage options to consumers. Over the last 22 years, ever
since its re-entry in 1993, the company has gone on to establish an unmatched portfolio of
beverages; refreshing consumers with its leading beverage brands like Coca-Cola, Coca-Cola
Zero, Diet Coke, Thumbs Up, Fanta, Limca, Sprite, Maaza, Minute Maid range of juices,
Georgia and Georgia Gold range of hot and cold tea and coffee options, Kinley and Bonaqua
packaged drinking water, Kinley Club Soda and BURN energy drink.

The Coca-Cola system in India has already invested USD 2 Billion till 2011, since its re-entry
into India. The company will be investing another USD 5 Billion till the year 2020. The Coca-
Cola system in India directly employs over 25,000 people including those on contract. The
system has created indirect employment for more than 150,000 people in related industries
through its vast procurement, supply and distribution system.

With an enduring commitment to building sustainable communities, the company is focused on


initiatives that reduce the environmental footprint, support active, healthy living, create a safe,
inclusive work environment for the associates, and contribute to the development of the
communities where they operate.

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India Sustainability Framework

The Sustainability Framework which Coca-Cola calls Me, We, World is their shared vision
for how they can work together to create social value and make a positive difference for the
consumers and communities served.

Below is the framework mentioned in the sustainability report (2013) and on the website.

Me Together we can promote well-being for the people who enjoy our brands every

day.

We Together we can create a better future for local communities where our

operations help raise the standard of living.

World Together we can create a better future for the finite natural

resources that we all share.

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According to Venkatesh Kini, President of Coca Cola India and South West Asia, The concept of
sustainable development is at the heart of our business. We have continuously been striving to
create lasting positive impacts on the communities we proudly serve, actively leveraging
partnerships with communities and government agencies an approach we call the Golden-
Triangle. Our global Me-We-World sustainability framework helps us prioritize sustainability
initiatives focused on our key stakeholder groups. Some key highlights of some of their
initiatives according to him are:

Social responsibility interventions with regards to people and planet.

People: With their products Coca-Cola offers a low or no-calorie beverage option in every
market. They provide transparent nutrition information featuring calories on their packages.
Women play a crucial role in their value chain, through their 5by20 program, they have
economically empowered over 26,000 women (in India alone), and helping them realizes their
entrepreneurship dream. It envisions to empower 5 million women entrepreneur across their
value chain by 2020.Coca-Cola promotes the importance of leading an active healthy lifestyle by
organizing U-15 Football and U-16 Cricket tournaments.

Planet: Water being the most valued natural resource and Coca-Cola having a direct connect
with the use of water have taken up initiatives like Anandana (Coca Cola India Foundation) and
their bottling partners have been undertaking water replenishing projects in different parts of
India trying to improve water efficiency by 25% as compared to 2010. They target to recover and
recycle 50 % of the bottles and cans introduced in the market along with trying to reduce the
carbon footprint of their products by 25% by 2020.

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India Business Model:

India CSR Model:

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Coca-Cola CSR Model description of the components:
People: Be a great place to work where people are inspired to be the best they can be
Planet: Be a responsible citizen that makes a difference by helping build and support sustainable
communities
Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy
peoples desires and needs
Profit: Maximize long-term return to share owners while being mindful of our overall
responsibilities
Partners: Nurture a winning network of customers and suppliers, together we create mutual,
enduring value
Productivity: Be a highly effective, lean and fast-moving organization

Integration of social reasonability with the business model:


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.
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.
I) Under the 5by20 initiative launched in 2010 to enable the economic empowerment of 5
million women by 2020, Coca-Cola is empowering them across all the 6 segments of the
company value chain through the below initiatives.
1) eKOcool - Coca-Cola introduced an innovative solar cooler for gaining competitive edge to
tap new rural markets and ramp up sales of a product which is always best served chilled.
Introduced in select rural markets it helped improve sales dramatically and company expected
orders of the product from other countries in the system as well.
2) Parivartan - Each women retailer who signs up for Parivartan is trained by Coca-Cola for
some 10 days and upon completing the programme gets a certificate of completion from the
company and insurance of Rs. 1 lakh for accidental death or premature disability. This initiative
similar to Project Shakti of Hindustan Unilever Limited (HUL) not only provides the rural
women a source of income but also help increase Coca Colas rural sales. Coke is sold in more
than 2.15 million retail outlets in India of which 7% are run by women.

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3) Unnati A supply chain initiative that would enable 10,000 women mango farmers to adopt
modern farming techniques and good agricultural practices. The objective is to harness the
higher productivity potential of mango farms to source its raw material requirement for the
products (Maaza)

4) Pragati A training and a business start up support initiative to train mom-and pop
kirana retailers to keep pace with changing customer preferences.

The Program received the World CSR award and was featured as a best practice by the
Ministry of Corporate Affairs for empowering women retailers in the distribution value
chain in an environment friendly way.

II) Another way the Coca-Cola integrates CSR with the business model is that it has started
sourcing 25 percent of PET plastic from recycled or renewable material. Also another aspect of
this is that it has improved the packaging material efficiency per litre of product sold by 7
percent as compared to 2013.

Impact of Sustainability and CSR actions on Stakeholders:

Stakeholders Means of Key Areas of How the company has responded


Engagement Interest
Consumers Annual Choice of beverage Utmost importance given on responsible
Consumer Nutritional impact marketing and transparent
Satisfaction of products communication related to nutritional
Reviews Programs promoting information about the products
music and sporting Promoting sporting related activities in
activities view of creating awareness about
healthy life style
Customers Bottling Availability of Come up with innovative cooler -
partners are energy efficient eKocool that operates on solar power,
directly in cooling equipment about 1000 pieces distributed free of
contact with for our products and cost to women retailers.
customers retailer training Also looking on retailer capacity
programs building through Parivartan and Pragati
programs.
Civil Society Focus on Approached directly Under-16 Cricket Cup Indias
Organizations water by several only National Inter-school tournament.
conservation organizations for Under-15 Football -The Coca-Cola Cup
and renewable grants for activities
energy use in the areas their
foundations work in
Employees Periodic Training and Several training programs at different
employee Professional growth, hierarchical levels for employee
engagement diversity, work life development.
survey balance

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Monitoring and measurement of the CSR activity:

Coca-Cola Company has an internally developed tool referred to as the Value Creation Model
(VCM) to help assess the relative value that the sustainability initiatives provide to business and
society. The model supports annual business planning activities by providing a well-defined
framework to quantify the business and social impacts of sustainability initiatives, thus enabling
transparency and cross-functional dialogue to prioritize investments, allocate resources and
assess the benefits from implementing sustainability programs. The VCM tool helps the
leadership identify key impacts across sustainability programs and identify opportunities to build
momentum in areas of strength. It is a component of Coca-Colas web-based Sustainability
Management and Reporting System.
Also the sustainability report has been prepared based on the Global Reporting Initiative (GRI)
G3.1 guidelines which has been assured by external agency M/s DNV Business Assurance India
Private Limited which has provided a provided a GRI application level B+ to the report.

Analysis of the Sustainability activities by Coca-Cola India:

Coca-Cola India directly employs over 25,000 people, while also creating indirect employment
for more than 150,000 Indians in related industries through procurement, supply and
distribution systems. It also provides a source of income for more than 7,000 distributors,
200,000 farmers and 2.2 million retailers. Coca-Cola has also committed to investing USD 5
billion between 2012 and 2020.
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.
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.

1) Coca-Cola in their sustainability report has specified that it believes that all foods and
beverages have a place in a sensible, balanced diet that is combined with regular physical
activity. Obesity is a serious and complex problem caused by many factors, including too
little exercise, consuming too many calories, lifestyle, genetics, environmental, and other
factors. Coca-Cola is committed to enable consumers make informed choice, as well as
promoting the importance of leading an active, healthy lifestyle. It organizes national

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level U-15 Football and U-16 Cricket tournaments to promote healthy lifestyle. However
though the company claims that it produces low calorie/Zero calorie beverages and
mentions the calories content on its plastic PET bottles, there is no mention of the same
on the glass bottles which amount to 50 % of the total sales.
2) The CocaCola Company, which started a program to empower young women
entrepreneurs the 5by20 program aims to bring five million women in the developing
world into its business by 2020 as local bottlers and distributors of CocaCola products.
Research suggests that such an investment in women can have a multiplier effect that
leads not only to increased revenues and more workers for businesses, but also to
bettereducated, healthier families and eventually more prosperous communities thus a
win-win situation for both the parties involved
3) Coca Cola plant in Mehdiganj: Coca-Colas bottling plant, which has been in operation
since 1999, had severely damaged the groundwater resources in the area both through
over-exploitation as well as pollution of groundwater and the soil. The community in and
around Mehdiganj also relied on the same groundwater a common resource to meet
all their water needs, including drinking, cooking, cleaning, providing water for livestock,
as well as agriculture the primary activity and occupation in the area. Coca-Colas plant
in Mehdiganj has been the target of protests since 2003, with local communities and
allies demanding that the company shut down its plant because it is unsustainable. On
June 6, 2014, the pollution regulatory agency who we worked closely with to make the
case against Coca-Cola ordered the closure of Coca-Colas bottling plant due to
violations of the terms of its license.
Coca-Cola has embarked upon an ambitious CSR drive in Kala Dera, and claimed that it
recharges 15 times as much groundwater as they use in Kala Dera. But the company has
not installed any meters to measure the amount of water recharged, even though such
meters exist. According to report of Indian resource centre, there is absolutely no
evidence that Coca Cola recharges 15 times of the groundwater it used.

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If the company were truly serious about being socially responsible, it would stop the
mining of groundwater in Kala Dera because the companys selfish use of water to
generate profits for its shareholders is leading to a tragedy of the commons, the
complete destruction of the groundwater resources in Kala Dera.

In Plachimada plant also Coca Cola extracted about 2 million litres of ground water every
day and releasing toxic waste thus making water unfit for drinking and cooking. Adding
to this controversy was the advertisement that Coca-Cola came up with in which the
famous actor Amir Khan when asked for cold drinking water by certain women is shown
drawing out Coca-Cola bottles out of the well instead of water.

As a reactive strategy to these issue Coca-Cola has started Anandana- Coca Cola India
Foundation to undertake water replenishing projects in different parts of India trying to
improve water efficiency by 25% as compared to 2010.This had a double impact, it
supported the livelihood of the people living around the area and it served as a resource
for its beverages (About 85% of Coca-Cola is water as claimed by the company and also
the packaged water Kinley).

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Images aptly depicting the situation Coca-Colas ground water usage situation:

4) Coca-Cola claims to have an unrelenting focus on safety resulted in substantial


improvements across their system. There were a total of 36 reported Lost time Incidents
resulting in 368 Lost days. Lost Time Incident Rate (LTIR) came down by over 40% in
2013. Sadly, four fatalities were reported in the year 2013 in the bottling operations
(2employees of bottling companies & 2 contracted labourers). These fatal accidents were
thoroughly analyzed and systems were further strengthened. The numbers below show
that there is a decreasing trend in these incidents.

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5) The Indian Parliament has banned the sale of Coke and Pepsi products in its cafeteria,"
The ban came as a result of tests by the Indian government and private laboratories which
found high concentrations of pesticides and insecticides in the colas, making them unfit
for consumption. According to Amit Srivastava of Indian Resource Centre, Some
samples tested showed the presence of these toxins to be more than 30 times the standard
allowed by the European Union. If Coca Cola as it claims was really concerned for the
Health and Nutrition of people then why did its samples tested contained harmful and
banned pesticides and insecticides, this is matter of concern.
6) 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 bagged a special
commendation for its contribution in India towards its efforts in community development.
But the controversy lies in the fact that the Golden Peacock Award is presented by the
World Environmental Foundation for whom Coca-Cola is the sponsor.

Application of the CSR theories:

1) Of the various CSR theories the Keith Davis- Enlightened Self Interest theory is aptly
applicable to the various sustainability initiatives undertaken by Coca-Cola India.
Enlightened self-interest recognizes that a company's prime purpose is to make profits,
but that this goal can be achieved by fulfilling its social and environmental
responsibilities. Coca-Cola has recognized that profit making along with responsible
development is for the betterment of the companys future. All the initiatives Anandana,
5by20 (Parivartan, Pragati, ekO-Cooler, Unnati) etc. will help the company sustain and
grow in future while also fulfilling the social and environmental responsibilities.
2) Stakeholders Theory is also applicable here. The residents and local communities who
live near the bottling plants are Dependent Stakeholders. They are the most affected ones
due to scarcity of ground water caused by bottling plants in their areas. The water is not
fit for consumption and cooking. There are large protests in some areas. Due to these
large protests company has started replenishing water under Anandana. Customers are
demanding stakeholders. Company need to meet their changing needs. With the need of
healthy lifestyle, Coca Cola has introduced low calories beverages in their products.

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References:

1) Sustainability Report Reference:

https://www.coca-colaindia.com/wp-
content/themes/73002/includes/pdf/sustainabilityReports/Sustainability_Report_dec_14.pdf

2) Reference links:

http://business.mapsofindia.com/food-industry/beverage/#sthash.odndC3uD.dpuf

http://www.indiaresource.org/campaigns/coke/2013/mehdiganjfact.html

http://www.righttowater.info/rights-in-practice/legal-approach-case-studies/case-against-coca-
cola-kerala-state-india/

http://www.indiaresource.org/news/2014/1012.html

http://killercoke.org/crimes_india.php

http://www.ritimo.org/The-Plachimada-Struggle-against-Coca-Cola-in-Southern-India

http://www.indiaresource.org/

http://www.indiaresource.org/news/2015/1014.html

3) Video Reference:

(Coca Cola's unethical practices in India - HRM project)


https://www.youtube.com/watch?v=qlsyjfwkIwU

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