Assessing Coca-Cola’s partnering impact
Early observations of a partnership researcher
As a for-profit company, the corporate giant that is Coca-Cola has made billions of dollars. It is one of the world’s largest beverage companies. Most of the people you know have probably tasted its signature carbonated soft drink, conveniently named Coca-Cola.
In recent years, the corporation’s philanthropic arm (The Coca-Cola Foundation) has taken the lead on corporate social responsibility, particularly with cross-sector partnerships to promote water stewardship. The United Nations Industrial Development Organization (UNIDO) defines water stewardship as “using water in a way that is socially equitable, environmentally sustainable, and economically beneficial.” Coca-Cola is also a founding member of the Beverage Industry Environmental Roundtable (BIER), along with ABInBev, American Beverage Association, Bacardi, Beam Suntory, Brown-Forman, Carlsberg Group, Constellation Brands, Diageo, HEINEKEN, Keurig Dr. Pepper, Molson Coors and MillerCoors, Ocean Spray, Pernod Ricard, and its traditional competitor PepsiCo. Setting competition aside, members of BIER have pledged their commitment to the Sustainable Development Goals (SDGs), and some have designed formal approaches to implement and support the SDGs on a more formal scale after the UN adopted the SDGs in September of 2015. Partnerships are one of these aspects.
From my observations, Coca-Cola’s partnerships are mostly water-related. By taking the lead on water stewardship, the company is using partnerships to improve water sanitation in underserved areas. Meanwhile, PepsiCo is doing the same, with BIER demonstrating the collaborative efforts from both. Though both companies’ partnerships focus on water activities, the main difference seems to be that PepsiCo’s partnerships are more related to increasing rural access to water, while Coca-Cola’s partnerships are more to do with the general cleaning and improving of polluted waterways.
Now you might be wondering: why would a multinational corporation whose goal is to make the most profit by outselling its competitors decide to partner to preserve clean water for the world? This is a research question that I am trying to answer by analysing Coca-Cola’s approach to partnering and its partnership trends around the world, but especially in Asia and Africa. My research focuses on the evaluation of partnerships after implementation using Impact17’s Partnering Framework. It is one of the many ways that Impact17 is trying to learn about how other organizations participate in partnerships and why. Observations of partnering trends allow Impact17 and its Associate Partners to better understand partnerships, promote them and adapt support tools and services to be more effective. It may also give these organizations an understanding of how their own partners and competitors are doing, with the possibility to tailor their approach and improve their efforts.
As the world’s rivers, lakes, and aquifers are reducing faster than they can be replenished naturally, companies like Coca-Cola see a case for necessary action. A click on the Coca-Cola Company’s website on Water Stewardship gives access to the public version of the company’s logic explained in simple words “Water is the first ingredient in most of our beverages.”
Coca-Cola’s strategy is explained in its “Water Security 2030” plan to replenish water to underserved communities. Very simply, its business viability and sustainability is intrinsically linked to the availability of water hence it prioritizes water stewardship near the top of its sustainability strategy.
My research on Coca-Cola’s partnering trends has not been an easy task. As a multinational corporation, the Coca-Cola Foundation has partnerships around the world. My research has been limited to the continents of Asia and Africa, but my amazing colleague Beatriz Picard has been helping research Coca-Cola’s partnerships in Latin America as well.
The most pertinent issue in my work to understand Coca-Cola’s partnering strategy was comprehending its approach to each partnership. While the company publicly shares information on the partnerships they are involved in, it is hard to know if they are true collaborations. For example, one of their longest partnerships is the “Water and Development Alliance” (abbreviated as WADA; get it?) with the US Agency for International Development (USAID) and implementation by various local non-governmental organisations (NGOs). This partnership has water stewardship-related projects in Asia, Africa, and Latin America. Much of WADA’s website presents signs of progress in these regions, but it is difficult to know the extent of Coca-Cola’s contributions to these partnerships or the form of these partnerships. The most I got was that “USAID provides its development expertise, Coca-Cola provides its network and name recognition, and local NGOs leverage their on-the-ground experiences to integrate such activities through community engagement.” This lack of transparency could be said for almost any other organisation’s partnering strategy.
I am not sure what kind of partnership this is. Impact17 differentiates between commercial, philanthropic and three other types of integrated partnerships: collaborative, strategic and advanced. Even more challenging is finding answers to the 120 questions behind the Impact17 partnering framework categories relating to the partnership’s architecture, execution, growth, capacity, assessment and intent, unless one directly spoke to the individuals involved
In the case of WADA, Coca-Cola is providing financial resources. Although I am not saying that money is not necessary (because it is), not engaging the local community would make it difficult to implement the partnership’s projects. Communication is crucial, and knowing the local communities’ wants and needs is extremely important to take the partnership forward. Providing the local communities with decision-making authority over the activities that directly affect them is an even more important principle.
Coca-Cola has also partnered with the World Wildlife Fund (WWF) since 2007. Unlike the partnership with WADA, WWF has published annual reports that include some of the projects they are collaborating on. The partnership’s website gives glimpses of its ambitious goals, such as 100 per cent regenerative water use and implementation of watershed health plans in 100 per cent of its priority watersheds. These reports document their activities in specific regions and river basins with the highest vulnerability and most ecologically damaged, such as China’s Yangtze River basin and the Mesoamerican Reef catchments in Central America.
While some information exists on the partnership and its related projects, its 2018 partnership report “Toward Water Security for All: 2018 Partnership Highlights” provides only a broad framework for its activities. For example, it says “work on the ground in our key basins, gathering data and analyzing information,” or “take targeted and collective action [by] partnering with local businesses, communities, conservationists, and others…”
Although I appreciate the work done to help protect biodiversity and our climate (who doesn’t?), it makes me wonder about the characteristics of “how.” What is being observed in the data gathering process? Is the research methodology qualitative, quantitative, or both? What types of local businesses and communities are included in the partnership? Is it inclusive of local communities? How do they feel about the partnership’s activities? These are just some of the questions that cross my mind when reading these reports.
I encountered another difficulty during my research: finding quantifiable results. This is a common issue when assessing the impact of partnerships. For example, in 2016, Coca-Cola announced that it had reached its “water neutrality” goal. That meant it was able to replenish the same amount of water used for every drop used in its beverages. Of course, I applaud their achievements. One might not think of a for-profit company prioritising such corporate social responsibilities. However, I could not find anything on these achievements from the WWF. I had the same issue when I searched on the USAID website. The lack of information from the public sector delegitimises the partnership’s achievements, so I might have to take some of its achievements with a pinch of salt.
The lack of international regulation, such as a universal water footprint standard, makes it difficult to measure Coca-Cola’s global water footprint accurately or ensure that the company is using the best available technology to measure its water usage. It also doesn’t help that a resource as precious as water is immensely difficult to price. the data available on the partnership’s achievement, however vague, are only available from Coca-Cola and have been subject to criticism.
Interestingly, when I searched for “Coca-Cola announces water neutrality,” Google directed me to several websites calling out the purportedly “bad science” Coca-Cola used to achieve its sustainability goals. Sara Jerome, writing for WaterOnline, claims that its goals were too low. Christine Macdonald, reporting for The Verge (coincidentally in partnership with The Investigative Fund at The Nation Institute), claims that Coca-Cola did not include the water used in its entire supply chain, such as the water used to grow sugar crops. Although the scope of my research is limited to observing and analysing Coca-Cola’s partnering trends, anyone who is interested should certainly conduct future research on measuring the effectiveness of its partnerships.
I am highly supportive of conservation efforts to protect our climate and biodiversity. Protecting the environment will enhance not just our own health but also the health of our whole ecosystem. All the ecosystems in our environment are deeply connected. We need to maintain a healthy environment and sustainable lifestyle to have a place to live and the resources to survive, for ourselves and future generations. As humans who live here, we must take responsibility to ensure that mother Earth is protected. I am happy that Coca-Cola is taking the lead on water stewardship and helping underprivileged communities, regardless of their self-interest.
Despite some criticisms, I appreciate Coca-Cola’s partnering efforts on water stewardship. It is good to see that companies are increasingly using their network and core competencies to promote practices that protect our environment. Collaborations between the government, businesses, NGOs, and local communities are necessary to solve transnational issues such as the global water crisis. However, it is difficult to measure the effectiveness of these partnerships. I found achievements declared by Coca-Cola only and not from their partners.
There is still much to be done. I believe that Coca-Cola should continue building partnerships and other alliances for long-term sustainable development. A global corporation as well-known as Coca-Cola and its partners can set an excellent example for partnering best practices for sustainable water use.
Zhiyao (Allen) Yang
Zhiyao (Allen) Yang is a Partnership Research Intern at Impact17, focusing on the Partnership Evaluation aspects of already-implemented partnerships and what lessons they can provide for future partnerships to thrive even more.
Zhiyao (Allen) was born in China but grew up in the United States. Currently, he is a Master of Arts student in International Affairs specializing in Global Security and Environment, Resources, and Sustainability at the Graduate Institute Geneva.
His bicultural ties have brought about hopes to strengthen cross-sector relationships in health and environmental global governance. In particular, he wishes to promote stronger cross-sector partnerships between Chinese and American companies that would like to develop stronger partnerships with international organizations. Hopefully, these efforts will eventually pave the way for a fruitful and cooperative bilateral relationship between the United States and China.
Some of Zhiyao (Allen)’s hobbies are listening to music and travelling. He is also a food enthusiast and loves trying out local cuisines when travelling. After a workday, Netflix is his best friend, and he will very likely be watching comedies such as The Office (U.S.) or Modern Family.