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.

Notwithstanding 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. 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 as it prepares to implement its new CSR strategy in the country.

Issues:
» Analyse the CSR strategy adopted by Coca-Cola India.

» Understand the issues and challenges faced by Coca-Cola with regard to its sustainability
initiatives in India.

» Analyse the underlying reasons for the growing criticism against Coca-Cola in India and
explore ways in which the company can address this issue.

» Understand the concept of green washing and discuss and debate whether Coca-Cola is
serious about its water sustainability initiatives.
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 4 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.

"Coca-Cola India undertakes a diverse range of activities for the benefit of the community
across the country. As part of our CSR strategy, sustainable water management remains our
top priority."

- Deepak Kaul, Regional Vice-President, South, The Hindustan Coca-Cola Beverages Pvt.
Ltd., in 2007.

"It is in India where the company's abuse of water resources has been challenged
vociferously, and communities across India living around Coca-Cola's bottling plants have
organized in large numbers to demand an end to the mismanagement of water…. In
response to the growing Indian campaigns against Coca-Cola, the company has decided to
promote rainwater harvesting — a traditional Indian practice — in and around its bottling
plants in India. Touting rainwater harvesting initiatives is now central to Coca-Cola's public
relations strategy in India."

- Amit Srivastava, Coordinator of India Resource Center, in 2007

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.

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.

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.6 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.

Coca-Cola India announced it  '5-Pillar' growth strategy to further strengthen its bonds with India.
The strategy focuses on People, Planet, Portfolio, Partners and Performance. The Company
announced a range of initiatives under each of the 5 pillars and they are being  communicated
through  its integrated communication initiative-"Little Drops of Joy" which aims to reinforce the
Company's 'connect' with stakeholders in India using a single platform.

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 commitment to after-profit investment in local communities cannot be

denied. The company has worked alongside many government and non-governmental
organisations in funding various education, healthcare and water conservation initiatives that
target poor communities and those most in need of help.
However, criticisms of the company’s before-profit practice in India have increased over the
course of the last year. There have been reports of sit-ins and other protests directed at the
Coca-Cola plant in Kerala, Southern India. Much of this relates to water conservation. It has
been claimed that;
• The Kerala plant has drained in excess of one million litres of water per day reducing local
supplies leaving many families and farmers with dry wells.
 • This in turn has created unemployment as coconut groves and vegetable crops have dried
up.
• The industrial waste (or “sludge”) that Coca-Cola sells or gives to local farmers as fertiliser
due to its high phosphate content has been alleged to be of no chemical use to
agricultural land.
• It is also alleged that the sludge is dumped in dry riverbed which has led to concern over
the safety of local drinking water supplies. One report, having analysed water from
around the plant, claims that it contains high levels of cadmium and lead – both of which
pose serious health risks to flora and fauna and can affect the growth of children’s
nervous systems, and cause cancer, kidney and liver damage in any age group.

Coco Cola CSR Activities:

The Company provides direct and indirect employment to more than 2500 people in its five
bottling plants in Andhra Pradesh situated in Ameenpur, Moula Ali (near Hyderabad), Vizag,
Vijayawada, and Nellore. The Company has been recognized for Best HR practices like KO
Role Model -Deferred Rewards program, reinforce performance and behavior, KO Key
Contributor - Cash reward for superlative performance (CE & Solid Citizens) with citation & a
gold pin, KO Vacations - A program to include the associate's family in celebrating his
professional success by sending them on a vacation, motivational programs like Surge
Beyond 100% to recognize team performance.

In addition to the professional growth of the employees, the Company also focuses on
personal and social growth by involving employees in various corporate social responsibility
projects undertaken in Andhra Pradesh. These include blood donation camps, health camps
for local communities around the bottling plant, education support to local community, etc
in association with NGOs like Red Cross and Hyderabad Round Table. In addition to the
above, the Andhra Pradesh team came forward to donate generously to Chief Minister's
Relief Fund during the tsunami tragedy besides working on location to help the victims.

Coca-Cola’s Concern for The Disabled

The Company employs 88 people with hearing and speaking disability, who work as “Special
Inspectors” at its Nemam plant near Chennai. They have been trained by the Company to
observe the bottles and check for any foreign particles during quality

The "Abhyaasa Project" (Systematic on-the-job training) in particular, undertaken with the
objective of enhancing technical skills of casual workers and as well as consistent
harmonious industrial relations displayed by the workers as well as the management also
helped the company

The Coca-Cola plant in Kerala has been providing commercial waste to local farmers as
fertiliser which has proved to be contaminated with toxic substances.
The programme said it had discovered dangerous levels of cadmium and lead in the sludge
produced by the plant which was lying on the fields of local farmers. It was alleged that the
substance was actually useless as a fertiliser. BBC reporters also said they had seen waste
leaving the factory to be dumped directly into a local river.

The Vice-President of Coca-Cola in India, Sunil Gupta, said that the fertiliser was absolutely
safe.

However, Professor John Henry, consultant at St Mary's Hospital in London, said that the
levels of toxins found in water samples taken near to the plant would cause serious
problems of pollution that could have "devastating consequences".

On January 20, 2009 SOS Children’s Villages of India, The Coca-Cola Foundation and Coca-
Cola India announced a partnership to implement water conservation projects for a better
life for children. This partnership will collaborate to ensure sustainable water resources by
undertaking rainwater harvesting (RWH) projects at 39 SOS locations spread across the
country. The partnership will also support creating or improving the awareness on Water
conservation and artificial recharge.

In the beginning of 2008, a pilot project was initiated in SOS Children’s Village, Bawana, to
collect rain water to replenish ground water by using funds from SOS-India budget. Coca-
Cola India stepped in to fund this project and helped SOS save funds from its budget for
other use. The success of the project in terms of professional implementation and impact on
quality of life of SOS children prompted The Coca-Cola Foundation and Coca-Cola India to
join hands with SOS for undertaking RWH projects in the remaining 39 SOS locations.

Further, The Coca-Cola Company in India has been recognized for its community programs
and environmental practices by prominent global organizations such as the Red Cross and
has won prestigious Indian environmental awards for environmental practices.

The rainwater harvesting technology it has established at many locations (including the
plants at Plachimada in Kerala, Kaledera in Rajasthan and Varanassi in Uttar Pradesh).

State Government figures have confirmed that since a Coca-Cola plant has been built, in
some areas (including Kaladera in Rajasthan) groundwater levels have shown lower levels of
depletion than other areas and in some areas (including Varanassi in UP) water levels have
actually risen since the plants were built. We believe this is due, in part, to the rainwater
harvesting technology employed at these plants

In Kerala, where ground water levels have certainly decreased, the rainfall has been well
below average for several years. The Kerala State Ground Water Department has said that
any depletion in ground water was due to poor rainfall and could not be attributed to the
plant. The Central Ground Water Authorities have also confirmed there were no abnormal
changes in groundwater levels around the plant that can be attributed to the Coca-Cola
operation. Most recently the interim report of the Centre for Water Resources Development
& Management (CWRDM) groundwater depletion and the Coca-Cola plant in Kerala.

Coca-Cola is one of the few companies in India to have made any contribution to recharging
groundwater in India and uses less water, more efficiently, than many other industries in
India and yet a small number of politically motivated groups have still chosen to target just
The Coca-Cola Company, using the Coca-Cola brand name for the furtherance of their own
anti-multi-national agendas.