Topic of Research: STUDY ANY

COMPANY AND FIND THE CSR DONE

THERE IF GENUINE OR NOT
Subject : FUNDAMENTALS OF MANAGEMENT

Submitted To:
Mr. Manoj Mishra

Submitted By:
Sakshi Poddar
1643
1st Semester
1st year

1
 TABLE OF CONTENTS
AIMS AND OBJECTIVES.3

ACKNOWLEDGEMENT..4

RESEARCH METHODLOGY.5

1. INTRODUCTION..6

1.1. DEFINITION..7

1.2. CONSUMER PERSPECTIVES7

1.3. CRITICISMS AND CONCERNS.7

1.4. NEGATIVE IMPACT OF CORPORATE PSYCHOPATH..7

2. EVOLUTION OF CSR IN INDIA8

2.1. INTRODUCTION..9

2.2. THE FOUR PHASES OF CSR DONE IN INDIA..9

2.2.1. THE FIRST PHASE9

2.2.2. THE SECOND PHASE9

2.2.3. THE THIRD PHASE.10

2.2.4. THE FOURTH PHASE.10

2.2.5. THE CURRENT STATE OF CSR IN INDIA.11

2.2.6. LEGAL CONDITION OF CSR IN INDIA..11

3. STUDY OF COCA-COLAS CSR..12

3.1. COCA COLAS CSR POLICIES AND REPORTING.12

3.1.1. POLICIES...13

3.1.2. SUSTAINIBILITY CSR POLICY13

3.2. COCA COLAS CONFLICTS.17

3.2.1. THE PRESENCE OF PESTICIDES18

3.2.2. WATER POLLUTION AND THE OVER EXTRACTION OF

GROUNDWATER..18

3.3. COCA COLAS CSR POLICIES POST-CONFLICTS19

3.4. 2020 VISION OF COCA COLA21

4. CONCLUSION22

5. BIBLIOGRAPHY23

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 AIMS & OBJECTIVES

The aim of the researcher is:-

To study the csr is

To find out ways the csr policies of COCA COLA

1.

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ACKNOWLEDGEMENT
I would like to extend my heartfelt gratitude to the faculty of Fundamentals Of
Management, Dr. Manoj Mishra, who gave me the opportunity to learn and work
upon a topic which has not only enriched me with knowledge but has also enriched
me as a human being. She has been a constant pillar of guidance and support, who
lead me through difficulties and moulded my way while carrying out this research
project, without whom this would not have been possible.

I would also like to thank my parents who supported me in every way they could,
they were a constant emotional support and they led me to believe in my abilities.

Last but not the least I would like to thank my friends and seniors who helped me to
gather various resources and materials to carry out the research.

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RESEARCH METHODOLOGY
This project is based upon doctrinal method of research. This project has been done
after a thorough research based upon intrinsic and extrinsic aspects of the project.

Sources of Data:

The following secondary sources of data have been used in the project-

1. Articles.
2. Books
3. Journals
4. Websites

Method of Writing:

The method of writing followed in the course of this research project is primarily
analytical.

Mode of Citation:

The researchers have followed a uniform mode of citation throughout the course of
this project.

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1. INTRODUCTION

Corporate social responsibility (CSR, also called corporate conscience, corporate

citizenship or responsible business) is a form of corporate self-regulation integrated into
a business model. CSR policy functions as a self-regulatory mechanism whereby a business
monitors and ensures its active compliance with the spirit of the law, ethical standards and
national or international norms. With some models, a firm's implementation of CSR goes
beyond compliance and engages in "actions that appear to further some social good, beyond
the interests of the firm and that which is required by law." The aim is to increase long-term
profits and shareholder trust through positive public relations and high ethical standards to
reduce business and legal risk by taking responsibility for corporate actions. CSR strategies
encourage the company to make a positive impact on the environment
and stakeholders including consumers, employees, investors, communities, and others.1
Proponents argue that corporations increase long-term profits by operating with a CSR
perspective, while critics argue that CSR distracts from businesses' economic role. A 2000
study compared existing econometric studies of the relationship between social and financial
performance, concluding that the contradictory results of previous studies reporting positive,
negative, and neutral financial impact, were due to flawed empirical analysis and claimed
when the study is properly specified, CSR has a neutral impact on financial outcomes.

Critics questioned the "lofty" and sometimes "unrealistic expectations" in CSR.

or that CSR is merely window-dressing, or an attempt to pre-empt the role of governments as
a watchdog over powerful multinational corporations.
Political sociologists became interested in CSR in the context of theories
of globalization, neoliberalism and late capitalism. Some sociologists viewed CSR as a form
of capitalist legitimacy and in particular point out that what began as a social movement
against uninhibited corporate power was transformed by corporations into a 'business model'
and a 'risk management' device, often with questionable results.
CSR is titled to aid an organization's mission as well as serve as a guide to what the company
represents for its consumers. Business ethics is the part of applied ethics that examines ethical
principles and moral or ethical problems that can arise in a business environment. ISO
26000 is the recognized international standard for CSR. Public sector organizations (the
United Nations for example) adhere to the triple bottom line (TBL). It is widely accepted that
CSR adheres to similar principles, but with no formal act of legislation.

1.1. DEFINITION
1 D Wood,(1991)

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The term "corporate social responsibility" became popular in the 1960s and has remained a
term used indiscriminately by many to cover legal and moral responsibility more narrowly
construed.2
Business Dictionary defines CSR as "A companys sense of responsibility towards the
community and environment (both ecological and social) in which it operates. Companies
express this citizenship (1) through their waste and pollution reduction processes, (2) by
contributing educational and social programs and (3) by earning adequate returns on the
employed resources."
A broader definition expands from a focus on stakeholders to
include philanthropy and volunteering.
1.2. CONSUMER PERESPECTIVES
Most consumers agree that while achieving business targets, companies should do CSR at the
same time.3 Most consumers believe companies doing charity will receive a positive
response. Somerville also found that consumers are loyal and willing to spend more on
retailers that support charity. Consumers also believe that retailers selling local products will
gain loyalty. Smith (2013) shares the belief that marketing local products will gain consumer
trust. However, environmental efforts are receiving negative views given the belief that this
would affect customer service. Oppewal et al. (2006) found that not all CSR activities are
attractive to consumers. They recommended that retailers focus on one activity. Becker-Olsen
(2006) found that if the social initiative done by the company is not aligned with other
company goals it will have a negative impact. Mohr et al. (2001) and Groza et al. (2011) also
emphasise the importance of reaching the consumer.
1.3. CRISTICISMS AND CONCERS
CSR concerns include its relationship to the purpose of business and the motives for engaging
in it.
Nature of business
Milton Friedman and others argued that a corporation's purpose is to maximize returns to its
shareholders and that obeying the laws of the jurisdictions within which it operates
constitutes socially responsible behavior.
While some CSR supporters claim that companies practicing CSR, especially in developing
countries, are less likely to exploit workers and communities, critics claim that CSR itself
imposes outside values on local communities with unpredictable outcomes.
Better governmental regulation and enforcement, rather than voluntary measures, are an
alternative to CSR that moves decision-making and resource allocation from public to private
bodies. However, critics claim that effective CSR must be voluntary as mandatory social
responsibility programs regulated by the government interferes with peoples own plans and

2 Epstein-revees 2010
3

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preferences, distorts the allocation of resources, and increases the likelihood of irresponsible
decisions.
Motives
Some critics believe that CSR programs are undertaken by companies to distract the public
from ethical questions posed by their core operations. They argue that the reputational
benefits that CSR companies receive (cited above as a benefit to the corporation) demonstrate
the hypocrisy of the approach.
Misdirection
Another concern is that sometimes companies use CSR to direct public attention away from
other, harmful business practices. For example, McDonald's Corporation positioned its
association with Ronald McDonald House as CSR while its meals have been accused of
promoting poor eating habits.
Controversial industries
Industries such as tobacco, alcohol or munitions firms make products that damage their
consumers and/or the environment. Such firms may engage in the same philanthropic
activities as those in other industries. This duality complicates assessments of such firms with
respect to CSR.
The Kizhakkambalam takeover
Textile company Kitex has taken over the administration of an entire Indian village
called Kizhakkambalam near Cochin by winning the local body elections. Environmentalists
and mainstream politicians of India point out that this can lead to a dangerous precedent
because the company got actively involved in CSR only after they were caught red-handed
inpolluting the village.
1.4. NEGATIVE IMPACT OF CORPORATE PSYCHOPATH
As corporate psychopaths have little or no conscience or care or empathy, it follows logically
that they are not driven by any notion of social responsibility or commitment to employees or
to the wider public

2. EVOLUTION OF CSR IN INDIA

2.1 INTRODUTION
The evolution of corporate social responsibility in India refers to changes over time in
India of the cultural norms of corporations'engagement of corporate social
responsibility (CSR), with CSR referring to way that businesses are managed to bring about
an overall positive impact on the communities, cultures, societies and environments in which
they operate.[1] The fundamentals of CSR rest on the fact that not only public policy but even
corporates should be responsible enough to address social issues. Thus companies should deal
with the challenges and issues looked after to a certain extent by the states.4

4 Making sense of corporate social responsibility(pdf)

8
Among other countries India has one of the oldest traditions of CSR. But CSR practices are
regularly not practiced or done only in namesake specially by MNCs with no cultural and
emotional attachments to India. Much has been done in recent years to make
Indian Entrepreneurs aware of social responsibility as an important segment of their business
activity but CSR in India has yet to receive widespread recognition. If this goal has to be
realised then the CSR approach of corporates has to be in line with their attitudes towards
mainstream business- companies setting clear objectives, undertaking potential investments,
measuring and reporting performance publicly

2.2 FOUR PHASES OF CSR DEVLOPMENT IN INDIA

The history of CSR in India has its four phases which run parallel to India's historical
development and has resulted in different approaches towards CSR. However the phases are
not static and the features of each phase may overlap other phases.
2.2.1 THE FIRST PHASE
In the first phase charity and philanthropy were the main drivers of CSR. Culture, religion,
family values and tradition and industrialization had an influential effect on CSR. In the pre-
industrialization period, which lasted till 1850, wealthy merchants shared a part of their
wealth with the wider society by way of setting up temples for a religious cause. Moreover,
these merchants helped the society in getting over phases of famine and epidemics by
providing food from their godowns and money and thus securing an integral position in the
society. With the arrival of colonial rule in India from the 1850s onwards, the approach
towards CSR changed. The industrial families of the 19th century such
as Tata, Godrej, Bajaj, Modi, Birla, Singhania were strongly inclined towards economic as
well as social considerations. However it has been observed that their efforts towards social
as well as industrial development were not only driven by selfless and religious motives but
also influenced by caste groups and political objectives.

2.2.2 THE SECOND PHASE

In the second phase, during the independence movement, there was increased stress on Indian
Industrialists to demonstrate their dedication towards the progress of the society. This was
when Mahatma Gandhi introduced the notion of "trusteeship", according to which the
industry leaders had to manage their wealth so as to benefit the common man. "I desire to
end capitalism almost, if not quite, as much as the most advanced socialist. But our methods
differ. My theory of trusteeship is no make-shift, certainly no camouflage. I am confident that
it will survive all other theories." This was Gandhi's words which highlights his argument
towards his concept of "trusteeship". Gandhi's influence put pressure on various Industrialists
to act towards building the nation and its socio-economic development. According to Gandhi,
Indian companies were supposed to be the "temples of modern India". Under his influence
businesses established trusts for schools and colleges and also helped in setting up training
and scientific institutions. The operations of the trusts were largely in line with Gandhi's

9
reforms which sought to abolish untouchability, encourage empowerment of women and rural
development.

2.2.3 THE THIRD PHASE

The third phase of CSR (196080) had its relation to the element of "mixed economy",
emergence of Public Sector Undertakings (PSUs) and laws relating labour and environmental
standards. During this period the private sector was forced to take a backseat. The public
sector was seen as the prime mover of development. Because of the stringent legal rules and
regulations surrounding the activities of the private sector, the period was described as an "era
of command and control". The policy of industrial licensing, high taxes and restrictions on
the private sector led to corporate malpractices. This led to enactment of legislation regarding
corporate governance, labour and environmental issues. PSUs were set up by the state to
ensure suitable distribution of resources (wealth, food etc.) to the needy. However the public
sector was effective only to a certain limited extent. This led to shift of expectation from the
public to the private sector and their active involvement in the socio-economic development
of the country became absolutely necessary. In 1965 Indian academicians, politicians and
businessmen set up a national workshop on CSR aimed at reconciliation. They emphasized
upon transparency, social accountability and regular stakeholder dialogues. In spite of such
attempts the CSR failed to catch steam.5

2.2.4 THE FORUTH PHASE

In the fourth phase (1980 - 2013) Indian companies started abandoning their traditional
engagement with CSR and integrated it into a sustainable business strategy. In the 1990s the
first initiation towards globalization and economic liberalization were undertaken. Controls
and licensing system were partly done away with which gave a boost to the economy the
signs of which are very evident today. Increased growth momentum of the economy helped
Indian companies grow rapidly and this made them more willing{Gajare, R.S. (2014). A
conceptual study of CSR development in India. In D.B. Patil & D.D. Bhakkad, Redefining
Management Practices and Marketing in Modern Age Dhule, India: Atharva Publications
(p. 152-154).} and able to contribute towards social cause. Globalization has transformed
India into an important destination in terms of production and manufacturing bases of TNCs
are concerned. As Western markets are becoming more and more concerned about labour and
environmental standards in the developing countries, Indian companies which export and
produce goods for the developed world need to pay a close attention to compliance with the
international standards.

2.2.5 CURRENT STATE OF CSR OF INDIA

5 Corporate social and environmental responsibility in India(pdf)

10
CSR is not a new concept in India. Ever since their inception, corporates like the Tata Group,
the Aditya Birla Group,and Indian Oil Corporation, to name a few, have been involved in
serving the community. Through donations and charity events, many other organizations have
been doing their part for the society. The basic objective of CSR in these days is to maximize
the company's overall impact on the society and stakeholders. CSR policies, practices and
programs are being comprehensively integrated by an increasing number of companies
throughout their business operations and processes. A growing number of corporates feel that
CSR is not just another form of indirect expense but is important for protecting the goodwill
and reputation, defending attacks and increasing business competitiveness.
Companies have specialised CSR teams that formulate policies, strategies and goals for their
CSR programs and set aside budgets to fund them. These programs are often determined by
social philosophy which have clear objectives and are well defined and are aligned with the
mainstream business. The programs are put into practice by the employees who are crucial to
this process. CSR programs ranges from community development to development in
education, environment and healthcare etc.
For example, a more comprehensive method of development is adopted by some corporations
such as Bharat Petroleum Corporation Limited, Maruti Suzuki India Limited. Provision of
improved medical andsanitation facilities, building schools and houses, and empowering the
villagers and in process making them more self-reliant by providingvocational training and a
knowledge of business operations are the facilities that these corporations focus on. Many of
the companies are helping other peoples by providing them good standard of living.
Also, corporates increasingly join hands with non-governmental organizations (NGOs) and
use their expertise in devising programs which address wider social problems.
CSR has gone through many phases in India. The ability to make a significant difference in
the society and improve the overall quality of life has clearly been proven by the corporates.
Not one but all corporates should try and bring about a change in the current social situation
in India in order to have an effective and lasting solution to the social woes . Partnerships
between companies, NGOs and the government should be facilitated so that a combination of
their skills such as expertise, strategic thinking, manpower and money to initiate extensive
social change will put the socio-economic development of India on a fast track.

2.2.6. LEGAL CONDITION OF CSR INDIA

Under the Companies Act, 2013, any company having a net worth of rupees 500 crore or
more or a turnover of rupees 1,000 crore or more or a net profit of rupees 5 crore or more has
to spend at least 2% of last 3 years average net profits on CSR activities as specified in
Schedule VII of the Companies Act, 2013 and as amended from time to time. The rules came
into effect from 1 April 2014.
SEBI, as per its notification on August 13, 2012, has mentioned that enterprises are
accountable to the larger society and "adoption of responsible business practices in the
interest of the social set-up and the environment are as vital as their financial and operational

11
performance". SEBI has mandated the inclusion of Business Responsibility Reports as part of
the annual reports of the Top 100 listed entities based on market capitalization at BSE and
NSE. It is mandatory to make these reports available on the website of the company. In 2016,
SEBI extended this requirement to the Top 500 listed companies.

3. STUDY OF COCA-COLAS CSR

The Coca-Cola Company, which is headquartered in Atlanta,Georgia, is an American
multinational beverage corporation, and manufacturer, retailer, and marketer of nonalcoholic
beverage concentrates and syrups. The company is best known for its flagship product Coca-
Cola, invented in 1886 by pharmacist John Stith Pemberton in Columbus,Georgia. The Coca-
Cola formula and brand were bought in 1889 by Asa Griggs Candler (December 30, 1851
March 12, 1929), who incorporated The Coca-Cola Company in 1892. The company has
operated a franchiseddistribution system since 1889, wherein The Coca-Cola Company only
produces syrup concentrate, which is then sold to various bottlerst hroughout the world who
hold exclusive territories. The Coca-Cola Company owns its anchor bottler in North
America, Coca-Cola Refreshments.
The company's stock is listed on the NYSE (NYSE: KO) and is part of DJIA, the S&P
500 index, theRussell 1000 Index, and the Russell 1000 Growth Stock Index. As of 2015, its
chairman and its CEO is Muhtar Kent.6
3.1. COCO COLAS CSR POLICIES AND REPORTING
In 2007 Coca-Cola launched its sustainability framework Live Positively embedded in the
system at all levels, from production and packaging to distribution. The companys CSR
policy Live Positively establishes seven core areas where the company sets itself measurable
goals to improve the business sustainability practices. The core areas are beverage benefits,
active healthy living, the community, energy and climate, sustainable packaging, water
stewardship and the workplace. Coca-Cola has a Code of Business Conduct which aims at
providing guidelines to its employees on amongst other things competition issues and
anti-corruption.16 The company has adopted international CSR guidelines such as Global
Compact17 and Ruggies Protect, Respect and Remedy Framework (Ruggies Framework),18
but these guidelines do not seem to be integrated into the Code of Business. However, these
CSR initiatives are included in other activities or policies of the company. For instance, the
UN Global Compact principles are cross-referenced in the companys annual Sustainability
Reviews19 and Ruggies Framework is partly adopted in the companys Human Right
Statement.20 After the conflict in India, in 2007 Coca-Cola formed a partnership with the
World Wildlife Fund (WWF)21 and became a member of the CEO Water Mandate, as water
is one of the companys main concerns. Every year Coca-Cola publishes a directors report
denominated The Coca-Cola Company Annual Report; the last one was published in March
2011 and comprises the companys activities during 2010.22 In this report there is a small
section dedicated to CSR and it includes a brief description of the i nitiatives in community
development and water preservation that the company has developed. Since 2001, Coca-Cola
also annually publishes a separate report devoted to CSR called The Coca-Cola Company

6 Coca-colaindia.com

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 Sustainability Review. These reviews, which are published every two years, are verified and
assured by a third party, the sustainability rating firm FIRA Sustainability Ltd.23 This
verification provides moderate assurance on the reliability of the information reported by
Coca-Cola. Both reports the annual c ompany review and the sustainability reports are
elaborated based on the GRI G3 guidelines, which were adopted by the company in 2001.24
Due to its relevance to Coca-Colas business, the company also annually reports on the
progress of the water stewardship programmes targets.
3.1.1. POLICIES
1. Eradicating hunger, poverty and mal-nutrition, promoting preventive health care and
sanitation including contribution to the Swachh Bharat Kosh set-up by the Central
Government for promotion of sanitation and making available safe drinking water;
2. Promoting education, including special education and employment enhancing
vocation skills especially among children, women, elderly, and differently abled and
livelihood enhancement projects;
3. Promoting gender equality, empowering women, setting up homes and hostels for
women and orphans, setting up old age homes, day care centers and such other facilities for
senior citizens and measures for reducing inequalities faced by socially and economically
backward groups;
4. Ensuring environmental sustainability, ecological balance, and protection of flora and
fauna, animal, welfare, agroforestry, conservation of natural resources and maintaining
quality of soil, air and water including contribution to the Clean Ganga Fund setup by the
Central Government for rejuvenation of river Ganga;
5. Protection of national heritage, art and culture including restoration of buildings and
sites of historical importance and works of art, setting up public libraries, promotion and
development of traditional arts and handicrafts;
6. Measures for the benefit of armed forces veterans, war widows and their dependents;
7. Training to promote rural sports, nationally recognized sports, Paralympic sports and
Olympic sports;
8. Contribution to Prime Ministers National Relief Fund or any other fund set up by the
Central Government for socio-economic development and relief and welfare of the Scheduled
Castes, the Schedule Tribes, other backward classes, minorities and women;
9. Contributions or funds provided to technology incubators located within academic
institutions which are approved by the Central Government;
10. Rural development projects.
11. Slum area development.

3.1.2. SUSTAINIBILITY CSR POLICY

A) PROJECT UNNATI

In 2011, Coco Cola launched project Unnati in the state of Andhra Pradesh, along with our
partner, Jain Irrigation. Unnati is a supply chain program aimed at adoption of the Ultra High
Density farming Practice (UDHP) by leveraging drip irrigation to increase the productivity of

13
mangoes required for our juice drinks. The project will encourage sustainable agricultural
methods that can help double yields. In the initial phase, we are covering 200 demonstration
farms of size 1 to 3 acres. This will increase the income of farmers by improving yield/acre
and simultaneously decreasing the quantity of water consumed per kilo of mango produced. A
unique capability building system has been developed to train farmers through Jain Irrigation
and Coca-Cola University.

The variety of orange that is used in the manufacture of packaged orange juices is not
cultivated in India. However, we are at the initial stages of working with some of our partners
to develop a test farm in India to cultivate the variety economically. Initial findings indicate
the possibility of being able to cultivate the variety at a scale that is economically beneficial
to the local farmer. We are hopeful that this will work as it helps reduce our exposure to
global import constraints, and at the same time offers a promise of better revenues to the local
farmers.7

B) PARIVARTAN

Recognizing the need to build the capacity of Kirana retail owners in the country, The Coca-
Cola University (CCU) developed the 'Parivartan' program (the Hindi word 'parivartan'
translates as change towards the better). The program aims to spread knowledge of best
practices and equip traditional retailers with the right skills, tools and techniques necessary
for them to grow their businesses sustainably. The program aims to build business skills in 4
key areas of retail:

Shop management
Stock management
Customer management and
Financial management

The methodology adopted to impart training is a unique audio-visual program specially

designed to enhance current capabilities in retailers, without entailing any significant changes
in their existing investments in resources.8

C) SUPPORT MY SCHOOL AT A GLANCE

Support My School' is a public private partnership to empower underprivileged sections of

society by providing the necessary water and sanitation facilities along with the basic
infrastructure required in any school. 'Support My School' has been instrumental in focusing
public attention on the state of affairs in rural schools in India. Since its launch, several

7 Coca-colaindia
8 Coca-colaindia

14
partners such as Plan India, WorldVision India, SRF Foundation and others have joined and
strengthen the campaign.

15
3.2. COCO-COLAS CONFLICTS
Several campaigns and demonstrations followed the publication of a report issued by the
Indian NGO Centre for Science and Environment (CSE) in 2003. The report provided

16
evidence of the presence of pesticides, to a level exceeding European standards, in a sample
of a dozen Coca-Cola and PepsiCo beverages sold in India. With that evidence at hand, the
CSE called on the Indian government to implement legally enforceable water standards. The
report gained ample public and media attention, resulting in almost immediate effects on
Coca-Cola revenues. The main allegations made by the NGO against Coca-Cola were that it
sold products containing unacceptable levels of pesticides, it extracted large amounts of
groundwater and it had polluted water sources.
3.2.1 THE PRESENSE OF PESTICIDES
Regarding the allegation about Coca-Cola beverages containing high levels of pesticide
residues, the Indian government undertook various investigations. The government set up a
Joint Committee to carry out its own tests on the beverages. The tests also found the presence
of pesticides that failed to meet European standards, but they were still considered safe under
local standards. Therefore, it was concluded that Coca-Cola had not violated any national
laws. However, the Indian government acknowledged the need to adopt appropriate and
enforceable standards for carbonated beverages.
In 2006, after almost three years of ongoing allegations, the CSE published its second test on
Coca- Cola drinks, also resulting in a high content of pesticide residues (24 times higher than
European Union standards, which were proposed by the Bureau of Indian Standards to be
implemented in India as well). CSE published this test to prove that nothing had changed,
alleging that the stricter standards for carbonated drinks and other beverages had either been
lost in committees or blocked by powerful interests in the government. Finally, in 2008 an
independent study undertaken by The Energy and Resources Institute (TERI) ended the long-
standing allegations by concluding that the water used in Coca-Cola in India is free of
pesticides. However, because the institute did not test the final product, other ingredients
could have contained pesticides.
3.2.2 WATER POLLUTION AND THE OVER EXTRACTION OF GROUND WATER
Coca-Cola was also accused of causing water shortages in among other areas the
community of Plachimada in Kerala, southern India. In addition, Coca-Cola was accused of
water pollution by discharging wastewater into fields and rivers surrounding Coca-Colas
plants in the same community. Groundwater and soil were polluted to an extent that Indian
public health authorities saw the need to post signs around wells and hand pumps advising
the community that the water was unfit for human consumption. In 2000, the company
established its production operations in Plachimada. Local people claimed that they started
experiencing water scarcity soon after the operations began. The state government initiated
proceedings against Coca-Cola in 2003, and soon after that the High Court of Kerala
prohibited Coca- Cola from over-extracting groundwater. By 2004 the company had
suspended its production operations, while it attempted to renew its licence to operate. Coca-
Cola argued that patterns of decreasing rainfall were the main cause of the draught
conditions experienced in the area. After a long judicial procedure and ongoing
demonstrations, the company succeeded in obtaining the licence renewal to resume its
operations. In 2006 Coca-Colas successful re-establishment of operations was reversed when
the government of Kerala banned the manufacture and sale of Coca-Cola products in Kerala

17
on the ground that it was unsafe due to its high content of pesticides. However, the ban did
not last for long and later that same year the High Court of India overturned Keralas Court
decision. More recently, in March 2010, a state government panel recommended fining Coca-
Colas Indian subsidiary a total of $47 million because of the damage caused to the water and
soil in Kerala. Also, a special committee in charge of looking into claims by community
members affected by the water pollution was set up. The long legal procedures against the
Indian government that Coca-Cola had to face were not the only consequence of the conflict.
The brand suffered a great loss of consumer trust and reputational damage in India and
abroad. In India there was an overall sales drop of 40% within two weeks after the release of
the 2003 CSE report. The impact in annual sales was a decline of 15% in overall sales in
2003 in comparison to prior annual growth rates of 25-30%. This highly publicised conflict
in India also caught the attention of consumers in the US. After a series of demonstrations by
students who joined two activist groups in the US, ten American universities temporarily
stopped selling Coca-Cola products at their campus facilities.
3.4. COCO-COLAS CSR POLICIES POST CONFLICTS
Two years before the water conflict in India in 2003, Coca-Cola adopted the GRI Guidelines
and started reporting on sustainability. By 2003, the company had already experienced a few
CSR-related conflicts in other parts of the world. However, none of them had the grave
consequence of a loss of trust in the company and its products by consumers and the public in
general. According to Pirson and Malhotra, the main reason why this controversy ended so
badly for Coca- Cola lies in its response to the problem. Coca-Cola denied having produced
beverages containing elevated levels of pesticides, as well as having over-exploited and
polluted water resources. By denying all claims and trying to prove its integrity, instead of
demonstrating concern towards the situation, Coca- Cola failed to regain consumers trust.48
The Indian population viewed Coca-Cola as a corporate villain who cared more about profits
than public health. In comparison, previous conflicts experienced by the company in the US
and Belgium were better handled because it included stakeholder engagement in its strategy.
It appears that the company became aware of its mistake after the controversy had been
ongoing for a couple of years. In 2008 Jeff Seabright, Coca-Colas vice president of
environment and water resources, recognized that the company had not adequately handled
the controversy. He acknowledged that local communities perception of their operation
matters, and that for the company () having goodwill in the community is an important
thing. Although Coca-Cola still denies most of the allegations, the reputational damage
experienced after the controversy in India pushed Coca-Cola to take damage-control
measures. Those measures at first consisted of statements to confirm Coca-Colas integrity.
For example, Coca-Cola dedicated a page in the Corporate Responsibility Review of 2006 to
address the controversy. The statement consisted mainly of providing information supporting
its good practices and water management of its operations in India. But this statement did
little to combat the declining sales and increasing losses exceeding investments.
Two years before the water conflict in India in 2003, Coca-Cola adopted the GRI Guidelines
and started reporting on sustainability. By 2003, the company had already experienced a few
CSR-related conflicts in other parts of the world. However, none of them had the grave

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consequence of a loss of trust in the company and its products by consumers and the public in
general. According to Pirson and Malhotra, the main reason why this controversy ended so
badly for Coca- Cola lies in its response to the problem. Coca-Cola denied having produced
beverages containing elevated levels of pesticides, as well as having over-exploited and
polluted water resources. By denying all claims and trying to prove its integrity, instead of
demonstrating concern towards the situation, Coca- Cola failed to regain consumers trust.48
The Indian population viewed Coca-Cola as a corporate villain who cared more about profits
than public health. In comparison, previous conflicts experienced by the company in the US
and Belgium were better handled because it included stakeholder engagement in its strategy.
It appears that the company became aware of its mistake after the controversy had been
ongoing for a couple of years. In 2008 Jeff Seabright, Coca-Colas vice president of
environment and water resources, recognized that the company had not adequately handled
the controversy. He acknowledged that local communities perception of their operation
matters, and that for the company () having goodwill in the community is an important
thing. Although Coca-Cola still denies most of the allegations, the reputational damage
experienced after the controversy in India pushed Coca-Cola to take damage-control
measures. Those measures at first consisted of statements to confirm Coca-Colas integrity.
For example, Coca-Cola dedicated a page in the Corporate Responsibility Review of 2006 to
address the controversy. The statement consisted mainly of providing information supporting
its good practices and water management of its operations in India. But this statement did
little to combat the declining sales and increasing losses exceeding investments. Coca-Cola
gradually changed its strategy to include damage-control measures that addressed the Indian
communities grievances. In 2008 the company published its first environmental performance
report on operations in India, which covered activities from 2004 to 2007. It also created the
Coca-Cola India Foundation, Anandana, which works with local communities and NGOs to
address local water problems. But perhaps the most outstanding change of strategy by Coca-
Cola consisted of launching various community water projects in India. An example is the
rainwater harvesting project, where Coca- Colas operations partnered with the Central
Ground Water Authority, the State Ground Water Boards, NGOs and communities to address
water scarcity and depleting groundwater levels through rainwater harvesting techniques
across 17 states in India. These techniques consist mainly of collecting and storing rainwater
while preventing its evaporation and runoff for its efficient utilisation and conservation. The
idea behind this is to capture large quantities of good quality water that could otherwise go to
waste. By returning to the ecosystem the water used in its operations in India through water
harvesting, the company expected that this project could eventually turn the company into a
net zero user of groundwater by 2009. In the 2012 Water Stewardship and Replenish Report,
Coca-Cola stated that its operations in India have achieved full balance between
groundwater used in beverage production and that replenished to nature and communities
ahead of the global target. It appears that the controversy in India was a learning experience
for the company, and that it motivated the company to adopt a more proactive CSR policy on
a global scale that focuses on water management. In June 2007, Coca-Cola implemented a
water stewardship programme and committed itself to reduce its operational water footprint
and to offset the water used in the Companys products through locally relevant projects. To
achieve those commitments Coca-Cola established three measurable objectives:

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(1) Reducing water use by improving water efficiency by 20% over 2004 levels by 2012.
The latest data available from 2010 shows a 16% improvement over the 2004 baseline.
(2) Recycling water through wastewater treatment and returning all water used in
manufacturing processes to the environment at a level that supports aquatic life and
agriculture by the end of 2010. By September 2011, the progress observed concerning this
target was 96%.
(3) Replenishing water used by offsetting the litres of water used in finished beverages by
2020 through local projects that support communities and nature (i.e. watershed protection
and rainwater harvesting). Currently, Coca-Cola reports that it holds a global portfolio of 386
community water partnerships or community-based replenish projects. By 2011, about 35%
of the water used in finished beverages was replenished.
It is noteworthy that Coca-Cola publishes, in addition and separate to the sustainability
reports, an annual water report. In these reports the company publishes assessments of and
the progress in its water initiatives. Some of the assessments are made by the Global
Environment & Technology Foundation, an American NGO experienced in facilitating the
creation of public-private partnerships. Also in 2007, Coca-Cola entered into a partnership
with WWF. Its core objectives are increasing understanding on watersheds and water cycles
to improve Coca-Colas water usage, working with local communities in various locations
worldwide, and developing a common framework to preserve water.
3.4 2020 VISION OF COCA-COLA
The company feels that the world is filled with the opportunities that range from doubling
their business revenue by 2020 by developing new beverages products that meet consumers
evolving preference and need, by creating social value and by making positive difference in
the communities in the communities throughout the world. 2020 vision provides the business
goal of converting long term aspiration into reality what the company can accomplish
together with the customers , global bottling partners and along with consumers sustainability
is achieved with measurable growth.
ME, WE, WORLD is the latest framework of sustainability that the company has come up
through which is share the vision of working together so that they could create social value
and make positive difference for consumer, shareholder and communities they served.
ME stands for personal well-being. The company has come up with few non-alcoholic
beverages with very fewer calories under this commitment as obesity has become one of the
major issues. According to the manufacturer the company has exceeded its goal by 400% that
translate to 78% fewer calories per person per day in United States.
WE stands for building stronger communities. The company has started 5by20 stratergy
under this commitment in which the company helped 5 million women to empower their
women entrepreneur. In 2010 5by20 commitment was started in India, South Africa and
Philippines now this initiatives is in 12 countries.

4. CONCLUSION

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The csr of coca-cola India has been a rough patch and yet a successful one. The researcher
through analyzation has come to a conclusion wherein, believes that the CSR of coca-cola
India is progressing and is genuine. It needs to work more in that area but on the whole it is
on the right path.

Its most successful venture is the sustainability agenda it follows. It is working towards an
agenda named 2020 VISION OF COCA COLA, by which they wish to double their
revenue and at the same time work as a social engineer. It also empowers women and helps
them start as entrepreneurs. Almost a total of 5 million women have benefitted from this
sustainability development agenda of COCA COLA. It not only works for itself but gooes
with the slogan of ME, WE, WORLD.

It has many programs for India too. One such is support my school. Support My School' is a
public private partnership to empower underprivileged sections of society by providing the necessary
water and sanitation facilities along with the basic infrastructure required in any school. 'Support My
School' has been instrumental in focusing public attention on the state of affairs in rural schools in
India.

All this brings the researcher to the conclusion that COCA COLA is a company which is progressiong
in the field of CSR at a high growth speed.

BIBLIOGRAPHY

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BOOKS
Meenakshi gupta , Principles of Management(PH) Learning Private Ltd. , New Delhi ,
Third Edition
Anil Bhatt & Arya Kumar , Management of principles, processes, and practices,Oxford
Publication,12th impression 2015
Harold Koontz & Heinz Weirich, Essentials Of Management,Tata mc graw hill
publication,9th edition

WEBSITES
www.wikipedia.com

www.coca-colaindia.com

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