Coca Cola Unethical or Unsustainable Behavior

Coca Cola

Give examples of unethical or unsustainable behavior that firms in the food and beverage industry might undertake

Firms in the food and beverage industry have been criticized for various unethical and unsustainable behaviors. One of these is endangering scarce natural resource supplies; for example, coca-cola has been criticized for endangering scarce water supplies, which is an unsustainable behavior (“CSR at Coca-Cola”).

Another is the promotion of unethical eating behaviors, especially through the manufacture and provision of unhealthy foods, e.g., coca-cola has been criticized for its high-calorie drinks. Also, firms in the food and beverage industry have been criticized for targeting vulnerable groups of the society; for example, coca-cola has been criticized for marketing soft drinks to teenagers (“CSR at Coca-Cola”). Another unsustainable and unethical behavior is tolerating inferior working place conditions; for example, Coca-Cola’s inferior workplace conditions in its bottlers located in developing countries.

What types of sustainable practices has Coca-Cola adopted over time?

Coca-cola has invested millions in developing and installing wastewater treatment facilities that are superior. In arid areas where the company has firms, it has implemented sustainability programs to replace all the water extracted from the natural aquifers (“CSR at Coca-Cola”).

The company has undertaken to offer low and no-calorie beverage alternatives to their consumers. In high populated regions, e.g., Uruguay, the company has adopted hybrid delivery trucks to improve sustainability and cut down on pollution. In some of its firms, coca-cola has adopted renewable sources of energy; for example, one firm in Belgium operates on 100 percent geothermal energy (“CSR at Coca-Cola”). The company also recycles the cans and bottles it uses and has transitioned to the use of biodegradable materials for its bottles. It has also done away with advertisements target vulnerable groups, e.g., children.

In what ways does Coca-Cola help improve the lives of those who live in developing economies and emerging markets?

The first initiative for developing economies is the adoption of the Manual Distribution Center (MDI) program, which has helped advance economic development in developing countries (“CSR at Coca-Cola”). In Africa, this program, the MDI is a source of employment for delivery entrepreneurs who distribute coca-cola products to the local retailers located in the interior and hard-to-reach areas. The MDI accounts for about 80 percent of sales in the East African region, and the company is looking to expand it to other developing economies in Latin America and Asia.

In what ways does Coca-Cola violate CSR? Given these violations, what recommendations do you have for Coca-Cola to support principles of corporate sustainability, social responsibility, and ethical behavior within a global environment?

Through its operations on a global scale, Coca-Cola has faced various accusations of CSR violation. In 2003, an NGO in India alleged that pesticide residues exceeded the acceptable levels as per the European standards in Coca-Cola drink (Karnani, 2014). In 2006, another report also claimed there were high pesticide residues. However, in 2008, independent research by The Energy and Resources Institute cleared these claims by concluding that the water used in making coca-cola beverages was free of pesticides (Torres et al., 2012). Coca-cola has also been accused of causing water scarcity for the Plachimada community in Kerala, India. Coca-cola was accused of water pollution by releasing its wastes into water bodies in the region. In some developing economies, Coca-Cola has been accused of poor working conditions in its firms.

To prevent future violations of CSR, it is recommended that Coca-Cola adopt various strategies to support CSR. First, Coca-Cola must adopt strict manufacturing protocols and require all their firms to adhere. Such strict protocols would allow for thorough filtration of water used in their processes and eliminate any contamination concerns. Second, Coca-Cola should institute clear and mandatory waste management protocols.

For example, treating wastewater to accepted levels before it is released would eliminate any concerns about the pollution of the environment. It is also recommended that Coca-Cola have certain irreducible minimums concerning their workplace conditions for their firms. Such irreducible minimums would allow for acceptable working conditions in their firms. Lastly, the company must understand the culture and social expectations of the societies in which their firms are located (Hamilton, 2015; “What is EKOCENTER,” 2021). This understanding would allow for a clear understanding of how society would translate specific CSR initiatives adopted by the company.

Is it financially feasible for a company like Coca-Cola to be both profitable and socially responsible? How does executive-level concern for Coca-Cola’s stock price influence their CSR behavior? Is there evidence that stakeholder interests impact Coca-Cola’s CSR behavior? What is the evidence?

Yes, CSR is essentially compensation for the effects of a company’s actions on the environment and community (Jenkins, 2004). Moreover, given the scale of operations and the huge revenue margins, the company budget can comfortably accommodate CSR initiatives.

At the executive level of any company, the primary role is to look out for the shareholder’s interests. This is no different for the Coca-Cola Company as those at the executive management level must ensure all initiatives undertaken by the company promote the interests of the shareholders (Blomgren, 2011). In selecting CSR initiatives that the company is to engage in, the immediate and short-term goal is to improve the company’s social image. Still, the ultimate and long-term goal is to improve the financial return for the company. For coca-cola, while the direct goal of CSR might not be to affect the stock price positively, it is the long-term and indirect goal, and consequentially, benefits shareholders.

For coca-cola, there is surely evidence that the executive level management must consider the interests of the various stakeholders in their CSR behavior. In developing its CSR initiatives, Coca-Cola has identified a range of targeted CSR initiatives that bear the potential for maximum impact on two crucial aspects; the community and the environment (“2018 Business & Sustainability Report,” 2019). An example of this is the environmental management system of TCCC, known as the eKOsystem. This system ensures that the company conducts its operations to preserve, protect, and enhance the environment. As a result, the company’s leadership focuses on three critical areas; water quality and efficiency, energy efficiency, and doing away with solid waste. These initiatives show stakeholder interests as water quality and efficiency eliminate any possible lawsuits for product contamination, energy efficiency cuts down on energy costs, and elimination of solid waste eliminates the otherwise high costs involved in disposing of solid waste. All these initiatives increase the Profit margin, and a high-profit margin causes a rise in stock price, thus benefiting shareholders.