Home--News
Coca-Cola: In Hot Water
October 6, 2005
From The Economist print edition
The world's biggest drinks firm tries to fend off its green
critics
“WATER is to Coca-Cola as clean energy is to BP.” So declares Jeff
Seabright, Coca-Cola's manager of environmental affairs, when asked
about the firm's new global water strategy. The fizzy-drinks maker
unveiled that strategy as part of its annual environmental report,
released this week. “We need to manage this issue or it will manage
us,” says Mr Seabright.
At first sight, the analogy with oil may seem odd, but it is not so
far-fetched. Big Oil has long been the target of activists clamouring
for action on global warming. BP stole a march on its oily brethren
by accepting that climate change is a real problem, making smallish
investments in clean energy, and grandly proclaiming itself “beyond
petroleum”.
Coca-Cola has also been targeted by activists, but over the issue
of water rather than energy. The firm has been hit hardest in India.
First, experts from Delhi's Centre for Science and Environment, a
green think-tank, tested various soft drinks and determined that they
contained high levels of pesticide. It turned out that Coca-Cola was
not the cause of the problem. But its inept handling of the accusations
left the firm exposed to a much more damaging allegation: that it
is aggravating the growing global problem of fresh-water scarcity.
An ongoing controversy in India concerns allegations that some of
the firm's bottling plants use too much water in drought-prone areas,
thus leaving poor local villagers with too little. Amit Srivastava
of the India Resource Centre, a Californian non-governmental group,
has been using the Indian controversies to stoke an international
grass-roots campaign against Coca-Cola.
The firm brags that it operates in 200 countries—“more than the UN
itself”, says Mr Seabright. But Coca-Cola's global reach and iconic
status make it an easy target. Mr Srivastava points with glee to recent
decisions at a handful of university campuses in America and Britain
to suspend or challenge its contracts on ethical grounds.
Worse may be in store, if some have their way. Corporate Accountability
International (CAI), an activist group best known for organising a
noisy boycott of Nestlé (for selling infant milk powder in countries
without reliable access to clean water), now has its sights set on
the world's largest producer of non-alcoholic drinks. CAI turned up
at Coca-Cola's last shareholder meeting to grill the firm's management
over the water issue. Kathryn Mulvey, CAI's boss, is concerned not
only about its fizzy-drinks divisions but also its newish and booming
bottled-water business. Echoing the sentiments of other campaigners,
she insists that the “misleading marketing campaign” for the bottled
water needlessly undermines confidence in tap water, and amounts to
the “commodification of something that should not be bought and sold.”
Company officials argue that they started measuring and improving
their use of water long before its troubles in India. The firm improved
its water efficiency by 6% between 2003 and 2004. In 2002, it took
3.12 litres of water to produce one litre of final product (as much
water is used to clean the assembly lines, flush out glass bottles,
and so on). In 2004, that global average came down to 2.72 litres.
Mr Srivastava is not impressed: he grouses that it is “ridiculous
that a firm that calls itself a ‘hydration company’ should waste so
much water; most of it does not even end up in the product.”
To improve that situation, Coca-Cola has just completed a detailed
assessment of the “water risks” to its businesses and their local
communities. Going plant by plant, the firm's boffins have calculated
local water-scarcity ratios, depletion levels for local aquifers,
water needs for the local plant, and so on. With this new information,
the firm is now setting local targets for improving each plant's efficiency
of water and energy use. Mr Seabright explains that before this new
study, the firm tried to impose “one-size-fits-all” global targets
which local bottlers (who are often not owned by Coca-Cola) refused
to accept.
Coca-Cola is also working with non-governmental groups such as the
World Wildlife Fund and CARE, as well as UN agencies, in an effort
to burnish its image. In India, it is now promising to capture enough
water via “rainwater harvesting” (an age-old technique for capturing
monsoon run-off) to offset all of its water use by 2006. Even the
deeply sceptical Mr Srivastava concedes that “if this company were
really not to put any strain on local resources then it would be a
different matter. Let us see if this is just greenwash.”
The accusation of “greenwash”—environmental window-dressing as a front
for business-as-usual—has also been hurled at BP. But there the similarities
between Coca-Cola and BP end, for the question of water is far more
important to Coca-Cola than the issue of climate change is to BP.
That is because if oil and gas run out, or are deemed too dirty to
use one day, BP could still peddle ethanol or hydrogen fuel; it is,
in the end, an energy company. Coca-Cola, on the other hand, simply
would not exist without water. So while BP may yet see life beyond
petroleum, Coca-Cola will never get Beyond Water.
FAIR USE NOTICE. This document contains copyrighted material whose use has not been specifically authorized by the copyright owner. India Resource Center is making this article available in our efforts to advance the understanding of corporate accountability, human rights, labor rights, social and environmental justice issues. We believe that this constitutes a 'fair use' of the copyrighted material as provided for in section 107 of the U.S. Copyright Law. If you wish to use this copyrighted material for purposes of your own that go beyond 'fair use,' you must obtain permission from the copyright owner.
|