{"id":11592,"date":"2016-11-04T14:58:35","date_gmt":"2016-11-04T18:58:35","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/cokes-woes-in-india\/"},"modified":"2016-11-04T14:58:35","modified_gmt":"2016-11-04T18:58:35","slug":"cokes-woes-in-india","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/cokes-woes-in-india\/","title":{"rendered":"Coke’s woes in India"},"content":{"rendered":"

Climate change is decreasing natural water storage capacity from glacier\/snowcap melting, and is subsequently reducing water availability for more than 1\/6th<\/sup> of the world\u2019s population that lives in ice fed river basins. The situation is worsened due to extreme changes in precipitation patterns and intensity. In particular, the subtropics and mid-latitudes, where much of the world\u2019s poorest populations live, are expected to become substantially drier.<\/p>\n

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This reduction in supply is being complemented by a massive increase in demand. Population growth and economic development are driving increases in agricultural and industrial demand for water. Some research estimates an over 40 percent increase in irrigated land by 2080. Freshwater consumption worldwide has more than doubled since World War II and is expected to rise another 25% by 2030. The percentage of global land classified as \u201cvery dry\u201d has doubled since the 1970s.<\/p>\n

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In India, this impact is even more severe. The Central Water Commission data shows that India’s major reservoirs are 79% empty, and 75% of India’s basins are holding less water than the 10-year average. India is currently in the midst of one of the worst droughts ever, with over 330 million people affected. At current rates, the World Bank estimates that India will have exhausted available all water supplies by 2050.<\/p>\n

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Coke\u2019s (Coca Cola) management is acutely aware of this situation. Listing some of the issues that were affecting the company, Jeffrey Seabright, Coke\u2019s vice president for environment and water resources, mentioned \u201cIncreased droughts, more unpredictable variability, 100-year floods every two years,\u201d<\/p>\n

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For Coke, freshwater is the most valuable resource required. Nearly 2.7L of water go into producing 1L of Coke. The company has been criticized for causing extreme water shortages in developing countries where supplies are scarce. Not only does Coke suffer from direct business risks from scarcity of its as its primary raw material, it suffers an even larger reputational and legal risk as its business puts it in direct conflict with one of humanity\u2019s most basic needs.<\/p>\n

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Coke has said India could be one of its five biggest markets within the next few years. However, the company has faced crisis in India due to their mismanagement of water resources, including the forced closure of their bottling plant by government authorities in Kerala in 2005, the closure of its 15 year old plant in Varanasi in 2014, the refusal by government authorities to allow a fully-built expansion plant to operate in Varanasi in August 2014, a proposed plant in Uttarakhand cancelled in April 2014, and the withdrawal of the land allocated for a new bottling plant by the government in Tamil Nadu due to large scale community protests in April 2015.<\/p>\n

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To respond to this challenge, in India and globally, Coke has made this one of its key priorities and instituted a bunch of measures including –<\/p>\n

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