The present society has placed greater demands on corporations. They want companies to be conscious both socially and environmentally while pursuing their economic goals. These demands require corporate management to understand how their firms’ activities influence the society, the environment, and the interests of various stakeholders. Most scholars associate these changes to the birth of the concept of corporate social responsibility (CSR). Singh, Sethuraman, & Lam (2017) defined CSR as practices and initiatives that businesses adopt that contribute to their sustainability by delivering social, environmental, and economic benefits to their stakeholders. In recent times, the concept of social responsibility has gained tremendous prominence in the corporate world. As opposed to ancient times, many firms today are investing a significant amount of resources in CSR programs. A company such as coca-cola has integrated into all aspects of its business practices. This report examines the impact of CSR on the value of the Coca-Cola Company.
Coca-Cola Company and CSR
Coca-Cola Company is a multinational firm that embraces the concept of CSR in all its endeavours. According to Coca-colaarabia.com (2016), Coca-Cola Company has over 500 brands, and that makes it one of the largest beverage firms in the world. In addition, the company serves about 200 countries in different parts of the world. Since its inception, Coca-Cola Company has enjoyed significant success in the market. The company attributes this success to strong CSR programs that aim at building sustainable communities. Coca-colaarabia.com (2016) indicates that the firm donates at least 1% of its operating income to various initiatives in the society every year. In 2014, for instance, the company supported numerous programs in the community by giving back $126 million. That is about 1.3% of the firm’s operating income (Coca-colaarabia.com, 2016). These donations are used for various purposes such as supporting education programs, athletics, and campaigns for environmental protection. All these inputs have portrayed the company as socially responsible.
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Stakeholder Engagement
Coca-Cola Company comprises of different categories of stakeholders. That includes customers, employees, bottling partners, non-governmental organizations, media, and communities. Other groups that the company considers as its stakeholders are government and regulatory authorities, peers and suppliers, shareowners, as well as trade groups and policy organizations (Coca-Cola Company, 2018a).
Stakeholders play a crucial role in organizations. A significant number of researchers have shown that the stakeholders have a direct influence on organizational performance. For instance, Singh, Sethuraman, & Lam (2017) noted that stakeholder engagement enables organizations to shun legal implications and bad publicity. Owing to this reason, Coca-Cola Company believes in engaging stakeholders in all levels of decision-making. According to the Coca-Cola Company (2018a), the firm views stakeholder engagement as a continuous process that helps in identifying and addressing potential problems collaboratively and proactively. Coca-Cola Company is committed to creating equal opportunities as it continues to grow.
One of the tenets that guide stakeholders’ engagement in this company is transparency. Coca-Cola Company respects the opinions and values of the various stakeholders present. It also communicates openly with the stakeholders during the decision-making process and other activities in the firm. The company also embraces inclusivity. The company comprises of a wide range of stakeholders to embrace the concept of diversity. Another principle that guides Coca-Cola Company is consistency. Under this aspect, the company values consistent and regular communication with its stakeholders to ensure both meaningful and continuous engagement (Coca-Cola Company, 2018a). Finally, the company observes accountability when engaging its stakeholders. It does so by informing them the impact of their feedback on the corporate strategy or the outcome of a decision the company made.
Recent social responsibility initiative and its impact on stakeholders
As noted previously, Coca-Cola Company embraces strategies that create not only sustainable societies but also a healthy environment (Coca-Cola, 2018b). CRS requires organizations to pursue their goals while reducing the negative impacts of their activities on the environment. In recent times, global warming and increased presence of solid waste on the environment have forced governments to implement policies that tend to reduce the emission of greenhouse gases and the dumping of residues on the environment. Today, for instance, most governments have banned the use of plastic bags and plastic bottles. As a result, most companies are trying to find innovative ways of packaging their products not only to adhere to the policies set by governments but also to demonstrate it is committed to protecting the environment.
Recently, Coca-Cola launched “Next Generation Cup Challenge”. The initiative aims at helping the company to identify and commercialize environmentally friendly packaging materials for its drinks. The cups are designed such that they are biodegradable and recyclable. Coca-Cola Company (2018b) shows that every year, approximately 250 billion fibre cups are shipped to various parts of the world. Notably, most of these cups have a plastic lining that cannot be separated easily for recovery in recycling markets. Resultantly, they end up in landfills thereby causing packaging waste and environmental pollution (Coca-Cola, 2018b).
The Coca-Cola Company (2018c) indicates that packaging is vital for the firm since it ensures that consumer needs are met conveniently, and the product is protected adequately. The company also acknowledges that its packaging materials could cause severe environmental pollution and significant waste if proper measures on how they can be recycled are not implemented. As a result, Coca-Cola Company environs zero waste implying that it is working with various stakeholders to ensure recovery and reuse of its packaging (Coca-Cola Company, 2018c). In North America, for instance, Dasani® is packaged in a PlantBottle, a recyclable plastic bottle made from polyethylene terephthalate (PET). This implies that the company’s decision to use recyclable containers requires its bottlers (one of the stakeholders) to develop reusable and eco-friendly bottles.
The need to protect the environment has also seen the company developing slogans that encourage the consumers of its products to be environmentally conscious as well as help it in its quest to recover and recycle packaging materials. For instance, the Give It Back ® initiative tends to encourage consumers to return the packaging of the product they purchased so that the cans could be recycled. To further encourage the society to play a part in the recycling initiative, the company has increased access to recycling bins. In other regions, the Coca-Cola Company is working together with the community and its bottling partners to make recycling a rewarding endeavour. Notably, it collaborates with retailers and local authorities to educate the public and facilitate this recycling program. Precisely, the company has a prize manned patrol vehicle that moves randomly and rewards people whenever they are spotted engaging in proper recycling activities.
The implementation of these practices had enabled the company to reduce packaging wastage as well as curb the pollution caused by its packaging materials. In 2010, for example, the company saved about 100 million pounds of materials compared to the weight of the raw materials required to create packaging materials in 2007 and 2008. In 2011, the company prevented the dumping of about 150 million pounds wastes in landfills (Coca-Cola Company, 2018c). Thus, the strategy adopted by Coca-Cola Company is effective and could enable the company to develop a good public image as well as shun legal issues.
CSR has become indispensable in today’s corporate world. It requires companies to execute their activities while minding their impacts on the society and the environment. Socially responsible firms tend to have a good public image and face little or no legal actions. Coca-Cola Company is one of the companies that have been propelled to success by strong CSR. Precisely, the company’s commitment to protecting the environment and support of various programs in the society has enabled it to achieve greater success in the market.
References
Coca-Cola Company (2018a). 2017 Sustainability report: Stakeholder engagement. Coca-colacompany.com. Retrieved on 28 September 2018 from https://www.coca-colacompany.com/stories/stakeholder-engagement#1
Coca-Cola Company (2018b). Next generation cup challenge; Coca-Cola joins effort to source sustainable solutions. Coca-colacompany.com . Retrieved on 28 September 2018 from, https://www.coca-colacompany.com/stories/coca-cola-joins-effort-to-source-sustainable-fiber-cup-solutions
Coca-Cola Company (2018c). Sustainability update: Sustainable packaging. Coca-colacompany.com. Retrieved on 28 September 2018 from https://www.coca-colacompany.com/our-company/sustainability-update-sustainable-packaging
Coca-colaarabia.com (2016). Corporate social responsibility: It’s in our DNA. Coca-colaarabia.com. Retrieved on 28 September 2018 from, https://en.coca-colaarabia.com/our-company/corporate-social-responsibility-it-s-in-our-dna
Singh, P. J., Sethuraman, K., & Lam, J. Y. (2017). Impact of corporate social responsibility dimensions on firm value: Some evidence from Hong Kong and China. Sustainability , 9 (9), 1532
