{"id":12179,"date":"2016-11-04T16:10:37","date_gmt":"2016-11-04T20:10:37","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/coca-cola-and-water-scarcity-substantial-savings-or-just-another-drop-in-the-bucket\/"},"modified":"2016-11-06T12:30:23","modified_gmt":"2016-11-06T17:30:23","slug":"coca-cola-and-water-scarcity-substantial-progress-or-just-another-drop-in-the-bucket","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/coca-cola-and-water-scarcity-substantial-progress-or-just-another-drop-in-the-bucket\/","title":{"rendered":"Coca-Cola and Water Scarcity: substantial progress or just another drop in the bucket?"},"content":{"rendered":"

\u2018\u2018When the well is dry, we know the worth of water\u201d
\n<\/em>-(Benjamin Franklin).<\/em><\/p>\n

An astonishing 1.9 billion servings of Coca-Cola products are consumed every day throughout the world, requiring the funneling of over 300 billion liters of water through 863 bottling plants each year to deliver carbonated beverages to eager consumers.[1] Although such a feat is logistically impressive, the Coca-Cola Company has grown increasingly concerned about the sustainability of its water usage and the associated implications for its bottom line, [2] especially given that within the next 10 years an estimated 2.8 billion people will be at risk of encountering water shortages [3]. As climate change threatens global water security\u2014and as political activists publicly call into question the acceptability of its practices\u2014the Coca Cola Company has made great strides to establish their position as an eco-conscious producer. But have their efforts gone far enough?<\/p>\n

\"Source:<\/a>
Fig 1: Protesters Outside Coca-Cola Bottling Plant in India<\/figcaption><\/figure>\n

The Case of India<\/strong><\/p>\n

Groundwater tables and freshwater sources are being depleted at alarming rates in many parts of the world due to accelerating demand by industry, and in some markets the consequences are quite serious; for instance, the World Bank recently estimated that without further intervention or technological advancement, all of the available water supplies in India will have been exhausted by 2050. [4] This was especially worrisome for Coca-Cola since, prior to 2007, it operated 24 bottling plants across India. With reliable water access already in short supply, residents and regulators alike began to fervently oppose the presence of Coca-Cola bottling plants, opening the doors to legal and reputational damages to the brand. With bad PR mounting following the shuttering of multiple bottling plants in India due to protracted legal battles with local residents and ongoing protests decrying exploitation of local resources [5], the company shifted focus toward sustainability.<\/p>\n

Steps Toward a Sustainable Future<\/strong><\/p>\n

Their solution was to institute a system-wide water stewardship platform to achieve water neutrality by \u201creturning to nature and communities an amount of water equivalent to what we use in all of our products and their production by 2020.\u201d [6] Strategies to offset water usage included plant-level innovations\u2014such as improving manufacturing efficiency to reduce water waste and reuse of treated wastewater in boilers, evaporators, and chillers\u2014and improving local infrastructure through partnerships with governments and NGOs to finance and build water treatment facilities, install rainwater harvesting structures, construct check dams, and restore water to natural reservoirs. [7] In essence, when water is consumed by the production process, an equal amount of usable water is returned to the environment at large or conserved from use altogether.<\/p>\n

\"Source:<\/a>
Fig 2: Projected percent change in water deficit index for 2030<\/em><\/figcaption><\/figure>\n

Global Neutrality vs Community Inequity <\/strong><\/p>\n

In 2015, Coca-Cola announced that they had achieved global water neutrality five years ahead of schedule. However, there is reason to be skeptical of the mission\u2019s success. Although the amount of water purportedly replenished to the environment may very well balance their overall water usage from bottling, the underlying inequity at the community level remains problematic; notably, each bottling plant is not required to replenish water to its direct source, [8] and thus total water neutrality was often achieved by replenishing aquifers at locations far removed from the plant\u2019s actual water sources, leaving local communities ever vulnerable to depletion of their water source while Coca-Cola reaps positive PR for replenishing it elsewhere. It is imperative that the next step should incorporate a blanket policy to replenish water sources within the community from which it is derived, lest the company remain vulnerable to depletion of its primary input in the given region, regulatory interference, and further reputational damage.<\/p>\n

Bigger Opportunities Ahead<\/strong><\/p>\n

Coca-Cola\u2019s rhetoric grossly underestimates the water footprint required to produce its beverages, commonly citing bottling requirements of 2.16L per 1L of finished product [9]. These calculations only include water consumed as an operational input but do not take into account contributions from the overall supply chain (for example, a single plastic bottle uses 4.5L of water input alone). However, the single largest contributor to the overa<\/p>\n

\"Source:<\/a>
Fig 3: Share of Global Water Usage by Agriculture<\/figcaption><\/figure>\n

ll water footprint of the company\u2019s beverages is its major ingredient\u2014sugar. Agriculture requires immense amounts of water to produce sugar crops, and although highly dependent on region and type of crop, it is estimated that the water footprint per beverage is at minimum 169L (using sugar beet from the Netherlands) up to a maximum of 309L (using sugar cane from Cuba). [10] Indeed, agriculture contributes the largest\u00a0water footprint globally.<\/p>\n

This represents a key opportunity; by utilizing suppliers with efficient water usage strategies\u2014instead of those offering lowest purchase price\u2014Coca-Cola can fulfill ethical obligations to conserve water while also fostering a future competitive advantage since, as water becomes more scarce and crop yields decline due to climate change, the company is better insulated from the expected increases in volatility of input costs and availability. [11]<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

—<\/p>\n

(Word Count: 797)<\/p>\n

Sources:<\/em><\/p>\n

1) Water & agriculture: Adaptive strategies at farm level. (2015). Retrieved November 4, 2016, from http:\/\/www.coca-colacompany.com\/stories\/collaborating-to-replenish-the-water-we-use
\n<\/a><\/em>2) The Coca-Cola Company. (2008). Form 10-K submitted to the United States Securities and Exchange Commission for the fiscal year 2007, Washington, D.C. Retrieved November 4, 2016, from http:\/\/www.coca-colacompany.com\/investors\/2008-annual-report-on-form-10-k
\n<\/a><\/em>3) Water and Climate Change. Retrieved November 04, 2016, from http:\/\/water.worldbank.org\/topics\/water-resources-management\/water-and-climate-change
\n<\/a><\/em>4) The World’s Water 2006\u20132007: The Biennial Report on Freshwater Resources. (2007). P. H. Gleick, H. Cooley, D. Katz, E. Lee, J. Morrison, M. Palaniappan, A. Samulon, and G. H. Wolff. 2006.
\n<\/em>5) Coca-Cola just achieved a major environmental goal for its water use. (2016). Harvey, C. Retrieved November 04, 2016, from https:\/\/www.washingtonpost.com\/news\/energy-environment\/wp\/2016\/08\/30\/coca-cola-just-achieved-a-major-environmental-goal-for-its-water-use\/
\n<\/a><\/em>6) Sustainability Update: Water Stewardship. (2011). Coca-Cola Company. Retrieved November 04, 2016, from http:\/\/www.coca-colacompany.com\/our-company\/sustainability-update-water-stewardship<\/a>
\n<\/em>7) Business and Climate Change Adaptation: Toward Resilient Companies and Communities. (2012). United Nations Global Compact and United Nations Environment Porgramme. Retreived November 04, 2016, from http:\/\/caringforclimate.org\/wp-content\/uploads\/Business_and_Climate_Change_Adaptation.pdf
\n<\/a><\/em>8) Fortune 500 Company to Replenish All the Water it Uses Globally. (2016). The Coca-Cola Company. Business Wire. Retrieved November 04, 2016, from http:\/\/www.nasdaq.com\/press-release\/cocacola-is-the-first-fortune-500-company-to-replenish-all-the-water-it-uses-globally-20160829-00001
\n<\/a><\/em>9) Water Stewardship: Sustainability Update. (2011). The Coca-Cola Company. Retreived November 04, 2016, from http:\/\/www.coca-colacompany.com\/sustainabilityreport\/world\/water-stewardship.html#section-meeting-our-goal-for-water-efficiency
\n<\/a><\/em>10) Ercin, A. E., Aldaya, M. M., & Hoekstra, A. Y. (2010). Corporate Water Footprint Accounting and Impact Assessment: The Case of the Water Footprint of a Sugar-Containing Carbonated Beverage. Water Resources Management, 25(2), 721-741. doi:10.1007\/s11269-010-9723-8. http:\/\/temp.waterfootprint.org\/Reports\/Ercin-et-al-2011-CorporateWaterFootprint-Softdrink.pdf
\n<\/a><\/em>11) Achieving food security in the face of climate change: Final Report from the Commission on Sustainable Agriculture and Climate Change. (2012). Beddington J, Asaduzzaman M, Fernandez A, Clark M, Guillou M, Jahn M, Erda L, Mamo T, Bo NV, Nobre CA, Scholes R, Sharma R, Wakhungu J. Commission on Sustainable Agriculture and Climate Change. https:\/\/cgspace.cgiar.org\/bitstream\/handle\/10568\/35589\/climate_food_commission-final-mar2012.pdf
\n<\/a><\/em>Fig 1:\u00a0http:\/\/water.worldbank.org\/topics\/water-resources-management\/water-and-climate-change
\n<\/em>Fig 2:\u00a0http:\/\/www.ceres.org\/issues\/water\/agriculture\/water-risks-food-sector
\n<\/em>Fig 3:\u00a0http:\/\/www.ceres.org\/issues\/water\/agriculture\/water-risks-food-sector<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Coca-Cola claims to have attained water neutrality, but are communities truly reaping the benefits?<\/p>\n","protected":false},"author":2605,"featured_media":12180,"comment_status":"open","ping_status":"closed","template":"","categories":[28,1435,1218,1221,17,14,1381,1447],"class_list":["post-12179","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-agriculture","category-beverage","category-climate-change","category-coca-cola","category-supply-chain","category-sustainability","category-water-scarcity","category-water-supply"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/climate-change-challenge-2016\/","yoast_head":"\nCoca-Cola and Water Scarcity: substantial progress or just another drop in the bucket? - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/coca-cola-and-water-scarcity-substantial-progress-or-just-another-drop-in-the-bucket\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Coca-Cola and Water Scarcity: substantial progress or just another drop in the bucket? 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