Free Essay Sample «Social Corporate Responsibility Reporting in Coca-Cola Company»

Corporate Social Responsibility: History and Overview

The concept of corporate social responsibility is not new and is being adopted in many companies and corporations for ensuring sustainability and reputation. However, this conception was not so popular several decades ago because companies believe that organization’s profitability is the major indicator of success, and there is no need to address environmental concerns (Moura-Leite & Padgett 2011). Apparently, a rapid shift to transparent reporting and corporate governance has occurred with the rise of globalization process, when all business activities have transferred at an organizational level.

The concept of corporate social responsibility dates back to the 1960s, when a company’s managers have realized that ideas and people were pivotal in defining social changes, and many businesses have been involved in a total reassessment of their values and missions. Prior to this realization, the primary focus had been made on society, contributing to welfare and health. Further analysis later revealed that multiple concerns with people’s welfare should not be confined to clients’ only, but to the working personnel within an organization (Moura-Leite & Padgett 2011). In the 1970s, executives employed traditional management while dealing with corporate social responsibility issues. A decade later, social and business interests have become connected to persuade business managers to be more responsive and sensitive to their stakeholders (Moura-Leite & Padgett 2011). In the 1990s, the concept became more popular because it had become a part of strategic management. Currently, CSR is definitely one of the most important strategies within a business organization.

There are assumptions that the idea of Corporate Social Responsibility had also taken place prior to the 1960s. Specifically, it has been reported that the CSR was growing in the end of 19ths century, the time when corporations had also been involved in public goals accomplishment and public interest, along with the private economic goals in mind. However, the period from 1945 till 2004 was indeed profound and evident in changes, although it has not been premised on false and invisible theories. It could be admitted that some of the CSR concepts relied heavily on communism concept and expectations because it was world fighting against socialist governments and capitalism that did not support socially oriented economies. The history shows that there was a significant difference between the European and American economies. Specifically, “at the risk of some exaggeration, Europeans are instinctively more trusting toward government and distrustful toward corporations. Americans, on the other hand, seem to trust corporations more than they trust government institutions” (Center for Ethical and Business Cultures 2005, p. 6). The social attitudes, as a result, have given rise to new approaches to regulating the public and private sectors. The development of trade unions has provided a new stance for employment protection, which is also one of the reasons for the emergence and development of CSR concerns.

Currently, more and more global corporations and international organizations are concerned with corporate social responsibility because it is an inherent condition for sustaining a competitive advantage and expanding the percentage of clients buying their products and services (Mullerat 2011). Environmentally conscious consumers prefer using the services of the companies oriented at protecting the ecology and environment and acting in accordance with the accepted moral and ethical norms. Coca-Cola Company is one of such companies whose brand is currently one of the most popular ones among the consumers (Meek, Meek, Palmer, & Parkinson 2007).

With the development of corporate social responsibility initiatives, the need for establishing a global organization controlling the adherence to CSR principles was pivotal. As a result, the emergence of Global Reporting Initiative (GRI), a leading organization working on controlling sustainability, was logical. Specifically, GRI encourages the use of sustainability and transparent reporting as a mean for the companies to increase their sustainability and contribute to developing sustainability in general (Global Reporting Initiative n.d.). In order to control the adherence to the new values, the GRI has introduced Sustainability Reporting Framework, aimed at presenting organizational values and business models that demonstrate connection between the company’s strategic framework and its commitment to the sustainability of a global economy.

GRI was created in Boston, in 1997. It originates from U.S non-profit organizations specializing in environmental responsible economies and their control. This former CEO of the coalition Dr. Robert Massie created the new project, called Global Reporting Initiative to create a responsibility scheme aimed at controlling company’s activities and making sure that their strategies are congruent with the general social and ethical values. The first generation of these initiatives refers to 2000. Two years later, the second version was issued to have developed the United Nations Environmental Programme. In 2011, GRI released G3.1 Guidelines, an expended guide on reporting community, gender, and human rights analysis (Global Reporting Initiative n.d.). This initiative has become one of the most important ones because it introduces greater equality and responsibility for the welfare of employees working for international organizations. Currently, this sustainability reporting guidelines have spread over 69 countries.

Analysis of Corporate Social Responsibility Report of Coca-Cola Company

Coca-Cola Company strives to keep pace with the recent guidelines of the GRI and deliver their Corporate Social Responsibility Reports. Due to the fact that GRI, 3.1 provide new standards for performance protection of human rights, Coca-Cola Company should pay specific attention to make sure that their strategies align with the utmost values dictated by the non-profit organization (Coca-Cola Enterprises 2013). As it has been seen from the report, the company adheres to the G3 guidelines. Additionally, the report focuses on the key achievements in CSR practices. To begin with, the company was considered the major food and beverage producer in 2012. It also achieved about 15% of the industry, according to the Dow Jones Index. It also took the first place in Carbon Disclosure Project Leadership in 2012. There were several activities in the sphere of climate change control, sustainable recycling and packaging, water pollution, control, community healthy programs development, and workplace (Global Reporting Initiative 2011). The latter requires specific attention because it is the core of the modified 3.1 guidelines of the GRI.

Major Stakeholder Groups

Apart from business and environmental initiatives, the Coca-Cola Company has introduced the major stakeholder groups involved into business environment. In particular, the company’s executives have established value chain goals which face more important social issues that identify society as a whole. Specifically, Coca-Cola’s major stakeholders include investors, academics and networks, suppliers, customers, employees, non-governmental organizations, communities, media and social media, and shareowners. All of these stakeholders analyzed from the viewpoint of frequency of engagement, interest field, and CCE response (Coca-Cola Enterprises 2013). The latter requires specific attention because it identifies the extent to which the company cares for its stakeholders. As such, the engagement of academic and networks contributes to the sustainability leadership due to active participation and experience sharing. Further, investors are more concerned with the strategies that would improve disclosure and promote effective supply chain frameworks. The connection with media and social media is also the key to ensuring the company’s sustainability. As such, sustainability reporting is premised on ongoing communication that promotes active partnership and interaction with other stakeholders, including suppliers, employees and customers. Due to the fact that Coca-Cola Company is a multinational corporation, the active interaction and cooperation with suppliers is essential because it defines the quality of product and its timely delivery (Coca-Cola Enterprises 2013). Therefore, ongoing engagement of CSR initiatives contributes to the support of environmental plans. Analysis of the new approaches should be premised on such issues as educational plans that have been developed specifically for supplier by the Coca-Cola Company. When it concerns customers, the company is seriously oriented to promote business plans oriented as a specific group of clients. The customer-oriented approach contributes to the improvement of customer services, logistics, recycling, innovation, and sustainability (Coca-Cola Enterprises 2013). To ensure higher quality of communication with customers, employees should be considered as important stakeholders. The development of effective two-communication channels is the key for sustaining collaboration with the employees. In response, the company works on improved leadership strategies that would motivate employees to work more effectively.

Company’s Engagement into Sustainability Reporting Process

It is evident that Coca-Cola’s policy is closely associated with the globalization process because of its wide influence on multiple countries and economies. Starting its expansion since 1928, it has managed to capture the African countries and establish popularity in 56 countries with 170 plans operating in Africa only. The case study shows that “Coca-Cola has embraced CSR in Africa via its support of HIV/AIDS workplace policies” (Cook 2008, p. 88). It also included antiretroviral provision and confidential screening for workers. Furthermore, the company invests about $140 million into development of corporate social responsibility programs. Since 2000, the company actively involves employees in community services to promote engagement strategies (Cook 2008). In India, for instance, the Coca-Cola Company has introduced the union composed of several NGOs that bring computer-mediate learning courses for communities and schools. Additionally, Lucent employees acted as guest lecturers. There were multiple investments into Russian subsidiaries, which were sponsored for encouraging competition among young people to promote innovative technology development.

As it can be seen from the above, the engagement policy has been a regular policy introduced by the company prior to the development of 3.1 guidelines. While analyzing the report, it should be stressed that some of the initiatives have still been practiced. In particular, the report shows that employees are essential for the company to achieve sustainability goals and promote new CRS communication policies. In 2011, the company introduced to major drivers of employee engagement. One of them is CRS guide. Specifically, these opportunities engage the community and environment and make employees more focused on the external factors. Finally, the employee engagement and engagement with sustainability reporting is premised on three major values which are included in the company’s vision – customer orientation, teamwork, and accountability (Coca-Cola Enterprises 2013). The company’s executives believe it is essential to promote support and integrity among people, being the main pillar of greater sustainability in reporting. The development of the Code of Business Conduct has become the cornerstone of the company’s ethic program (Coca-Cola Enterprises 2013). The Code allows managers to take greater control of actions, behaviours, and decision, and practice such values as integrity, respect, honesty, judgment, and trust.

Identifying the Reports on Specific Concerns

Although the Coca-Cola Company makes everything possible to adhere to the principles of GRI, there are still numerous challenges and concerns. The tragedy of commons is among the most recognized cases revealing Coca-Cola’s bottling operations in India. The Indian operations were highly criticized by environmentalists and scientists because the company failed to adhere to its water stewardship efforts, particularly in the desert location in India, which is called Rajasthan. Despite choosing a context admitted to the proposition, the case shows that CRS fails to avert the tragedy. In the studies by Karnani (2012), the attention has been paid to the failure of the Coca-Cola Company to follow CSR principles and promote the water stewardship initiatives. Such an approach has driven heavy criticism on the part of non-governmental organizations that accuse the company of inappropriate use of groundwater in Rajasthan in India. There were serious accusations of the crimes committed by Coca-Cola companies against local Indian community. The development of bottling plants in India also met severe protests on the part of environmentalist and the Indian communities. These issues are still on the rise because they should be solved both at local and international levels. The latter is more important because the world should recognize the problems and develop the corresponding corrections to the GRI’s guidelines.

With regard to the above, there are still concerns with the Coca-Cola sustainability missions and vision. Rogers (2014) agrees with the fact that the company severely violates human rights, by pumping groundwater in the area when these resources are not limited, or are in deficiency. There are multiple cases when Coca-Cola failed to address the events, particularly those related to Columbia case. In 2011, the UN Human Rights Council introduced “The Guiding Principles on Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’s Framework” as a response to the inadequate policies promoted by the company.

Identification of Priority Issues

The 2012 reported presented for analysis proves that the Coca-Cola Company has made significant progress in correcting the mistakes of past policies. The orientation on employees, and development of new environmental reforms could become a potential solution for returning the company’s good reputation. Looking deeper into GRI, the company paid specific attention to the protection of human rights and developed a new framework within which it planned to initiate the environmental reforms and improved the previous policies. Such a shift is evident, but the 2012 Report should be checked for sustainability and approval in several years, when these initiatives will be enacted. The 2012 Report does not directly focus on 3.1 guidelines, but on G3 guidelines in general. The problem is that, although the company strongly underscores its full commitment to corporate social responsibility issues and ensures its employees and clients that their policies are constantly improving. In order to prove their commitment, the international organization should conduct independent expertise to make sure that all of their reforms and strategies coincide with the real activities.

Conclusion

The Coca Cola Sustainability Reporting for years 2012-2013 apparently shows that the executives are committed to their major stakeholders, which are clients, suppliers, employees, investors, media, NGOs, and academics. However, previous case studies reveal criticism of Coca-Cola’s strategies and policies that violate human rights. This particularly concerns the case with Indian, when the company created the bottling plant and made use of groundwater in Rajasthan. Although this resource is not limited, the executive managers still believed it was reasonable to use local resources. Currently, the company tries to persuade the international community that it recognizes the problem of water usage and underscore the necessity to enhance human rights policies. In response to the accusation, the 2012 is more oriented on 3.1 guidelines and emphasizes the importance of managing people. The priority is also given to employees, customer relations, and establishing fruitful partnerships. Trust and respect are also among the major values practiced in the company.