Climate change is having a major impact on water supply across the world by increasing the rate of evaporation and modifying the pattern of precipitation which is reducing the quality of the water supply. Higher temperatures also translate into an increased requirement for water by people and animals which places an increasing strain on the shrinking supply. For Coca-Cola, the largest beverage manufacturer in the world, water is its main ingredient and a core component in its manufacturing process so they have a very strong incentive to ensure they are as efficient in their water use as possible.
As a result, Coca-Cola has taken the lead in water preservation and restoration efforts around the world by investing more than $1 billion since 2001 in wastewater treatment. In 2007, Coca-Cola announced a goal that by 2020, they would restore the equivalent amount of water it uses in its beverages and production and they reached the goal five years early in 2015. They accomplished this by starting in 2008 a requirement that all plants conduct a water Source Vulnerability Assessment which analyzes the risks to the water source used for the plant and the local community. The assessment was conducted in partnership with the local government and community organizations to understand local water requirements and rules. The plants were then required to develop and implement a Source Water Protection Plan in 2012. The five-year plan detailed the mitigating actions, roles, responsibilities, and funding that will be used to address water issues in the community. As a result, by 2012, Coca-Cola had improved its water usage ratio in India by 25% compared to 2005. Coca-Cola has also been recognized as one of the few In 2014, Coca-Cola also announced a major initiative with the United States Department of Agriculture to help restore and protect damaged watersheds for five years. The projects were expected to return greater than 1 billion liters of water to the National Forest System, which provides drinking water to more than 60 million Americans.
While there have been some critics who believe these initiatives are a form of corporate greenwashing since Coca-Cola has focused these initiatives in areas where it has plants, these projects provide an opportunity for both the government and general public to benefit through funding and environmental preservation while Coca-Cola also generates direct business benefit as well. Successful public-private partnerships like this will incentivize additional corporations to get involved which will only help mitigate the effects of climate change and reduce the burden on increasingly constrained tax dollars. The government will have to ensure though that no conflict of interest arises due to the funding provided by Coca-Cola.
There have also been occasional controversies with Coca-Cola’s plants such as in 2014, Coca-Cola faced an issue in northern India where they were accused of extracting too much groundwater at a plant and releasing pollutants above legal limits. As a result, the local community called for the plant’s closure which would add financial cost for Coca-Cola and potential brand damage.
While Coca-Cola did develop a methodology in partnership with NGOs to determine the benefits of its community water partnerships, they should focus on strengthening those quality measures to ensure the plans are followed. Coca-Cola should also look to build stronger connections with the local communities around their plants to ensure the success of their initiatives. The importance of this can be seen by Coca-Cola’s experience in southern India in April 2015 where they decided to not move forward with an $81 million bottling plant due to protests from local farmers who were concerned about the impact of the plant on local groundwater supplies.
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