Coca-Cola is to consult more fully with local communities around its
facilities after having suffered bad publicity about the effects of its
operations worldwide on the alleged depletion of local water supplies.
The US-based multinational denies being an irresponsible user of water,
but concedes it has lost the argument in some areas and is seen as a
culprit.
The criticism has come at a sensitive time for the company, which has
been building a presence in the fast-growing global bottled water
market, particularly in Europe, where it has recently made a number of
strategic acquisitions in an bid to close the gap on Danone and Nestlé,
the market leaders.
Bottled water accounted for more than a third of total worldwide volume
sales of soft drinks in 2005, according to Euromonitor International.
Coca-Cola is now seeking to reinforce trust in its brands globally by
improving the quality of its conversations with interested parties in
India and elsewhere. It has fallen foul of heavy campaigning in India’s
Kerala state and some other locations over allegations that its
bottling plants contribute to local water shortages (EP7, issue 2, p8).
Neville Isdel, Coca-Cola’s chief executive, said water would now be a
‘key focus’ of corporate responsibility programmes. ‘What Kerala has
taught us is that we need engagement with local communities at an early
stage, and to listen and learn,’ he said. ‘That is something we haven’t
done often enough or well enough.’ Isdel said the company had not been
sufficiently engaged with civil society in relation to some of its
facilities. This had enabled campaigners to push the perception that
Coca-Cola has been a major cause of water shortages.
He said: ‘We need to engage with the communities around us to ensure
the health of local watersheds and to [earn] our social and
environmental licence to operate. We also need to increase our
commitments to the communities from which we draw water. In Kerala, for
instance, we are in no way the largest user of water – in fact, we are
a very small user – but that’s not to say there isn’t a serious problem
with diminishing groundwater, and that’s why we have to set out how to
play our part.’ The company, which uses 73 billion gallons of water a
year worldwide, has now installed rain collection systems in 28 plants
for use in its own processes and to recharge local aquifers. It will
take part in the Global Water Challenge, a UN drinking-water and
hygiene education programme, and is also setting up programmes in
various countries, such as Kenya, where it will provide safe water for
500 schools in Nairobi.
In addition, the company has a global water stewardship policy that
commits it to become ‘best-in-class at water management’, to provide
clean drinking water for under-served communities where it operates, to
support the protection of watersheds, and to ‘mobilize the
international community … around water challenges’. Each of the
company’s 31 divisions has been told to produce business plans that
take account of water as a resource.
