Coca-Cola has just been the critical focus of an hour-long Channel 4 Dispatches documentary peering into its corporate practices (MW last week). Yet some observers believe the soft drinks company’s belated concentration on social responsibility will offset the damage done to its brand image across the world.
The documentary, which was screened on Monday, made a series of damning charges against Coca-Cola, including claims of environmental abuses and child labour. The soft drinks giant, along with brands such as Nike and Gap, has been subject to a barrage of criticism over its commitment to social responsibility in recent years as consumers increasingly focus on how and where multinationals brands make their products.
As one of the world’s most powerful brands, Coca-Cola is an inevitable whip-ping boy for the anti-globalisation movement. But observers believe the company’s recent commitment to becoming the “recognised global leader in corporate social responsibility” will help drown out some of the criticism.
A slow response
Giles Gibbons, managing director of Good Business, argues that the company is taking CSR seriously, although he admits it has been slow to respond to some issues. “More of its products are now sugar free and the organisation is changing to demands from the health sector,” he adds. “They are working with third parties on issues. Not many companies are asking stakeholders what the issues are or responding to them.” Until recently, Coca-Cola had a reputation for stubborn resistance to criticism but chief executive Neville Isdell has plotted a new course, perhaps realising that the negative headlines have undoubtedly sullied Coca-Cola’s most valuable asset: its brand.
The new course includes bringing greater transparency to its global operations, undertaking a more constructive relationship with its critics, and tie-ups with third parties including Greenpeace on environmental issues.
Jeremy Moon, professor of corporate social responsibility at Nottingham University, believes Coca-Cola’s partnerships – such as its £9.65m investment pledge in conjunction with the World Wildlife Fund for Nature (WWF) – are a sensible strategic move. He says: “These are commonplace but companies can learn about sustainability issues. The partnership model is a useful one.” With the developing world pivotal to Coca-Cola’s future growth, it has also set about working with the International Labour Organisation to assess its practices in Colombia, where there are claims of child abuse, while commissioning a study of its business in India, where it was alleged that its flagship drink contained pesticide residue above the proposed legal limit.
The trouble with domination
While some critics say these moves represent nothing more than lip-service to the issues and that its commitment to CSR is airy rhetoric, there is little doubt that Coca-Cola’s global dominance puts it in a difficult position.
Chairman of Interbrand Rita Clifton says: “Coke has a symbolic significance, which puts it in a difficult position. It is the world’s most powerful brand and it is above the parapet. It is the best and worse of globalisation.”
While Coca-Cola will always struggle to convince its critics that it runs an ethical business, this latest push – although a long time coming – looks a step in the right direction.