Coca-Cola's Water Neutrality Initiative In the middle to late 2000 s, Coca-Cola faced an emerging issue: its corporate impact on water quality, availability, and access around the world. The Coca-Cola Company (TCCC) was the world's largest beverage company. The company operated in more than 200 countries, providing 1.6 billion servings a day of carbonated beverages, juices and juice drinks, bottled water, and ready-to-drink coffees and teas. The company also partnered with around 300 bottlers, independent companies that manufactured various Coca-Cola products under franchise. More than 70 percent of the company's revenue came from outside the United States. Water was essential to Coca-Cola's business. The company and its bottlers used around 80 billion gallons of water worldwide every year. Of this, about two-fifths went into finished beverages, and the rest was used in the manufacturing processfor example, to wash bottles, clean equipment, and provide sanitation for employees. Water supplies were also essential to the production of many ingredients in its products, such as sugar, corn, citrus fruit, tea, and coffee. Coca-Cola's chairman and CEO put it simply when he said that unless the communities where the company operated had access to water, "we haven't got a business." In 2003, Coca-Cola was abruptly reminded of the impact of its water use on local communities. The Center for Science and the Environment in India, charged that Coca-Cola products there contained dangerous levels of pesticide residues. Other activists in India charged that the company's bottling plants used too much water, depriving local villagers of supplies. In 2004 , local officials shut down a Coca-Cola bottling plant, saying it was depleting groundwater, and an Indian court issued an order requiring soft-drink makers to list pesticide residues on their labels. In the United States, the India Resource Center took up the cause, organiring a campaign to convince schools and colleges to boycott Coca-Cola products. Water was also emerging as a major concern to the world's leaders. In the early 21 = century, more than 1 billion people worldwide lacked access to safe drinking water. Water consumption was doubling every 20 years, an unsustainable rate of growth. By 2025 , one-third of the world's population was expected to face acute water shortages. The secretary general of the United Nations highlighted water stress as a major cause of disease, rising food prices, and regional conflicts such as the one in Darfur, Sudan, and called on national governments and corporations to take steps to address the issue. Coca-Cola fought the challenges to its operations in India, but it also began to take a serious look at the water issue. The company undertook a large study of its global operations to assess its water management practices and impacts. It also reached out to other stakeholders, including the World Wildlife Fund, the Nature Conservancy, the World Business Council for Sustainable Development, UNESCO. CARE, and various academic experts, to seek their advice. As the leader of TCCC's water stewardship initiative later explained, the company also "sat down with each of our top bottlers, all of our operating groups, and walked through all aspects of water and really understood where they were coming from and reached consensus through a very deliberate process. "Internally, it built a set of Web-based tools to allow its bottlers to benchmark against others and learn from their best practices. In 2007, TCCC announced a goal of water neutrality, defined as "returning to nature and communities an amount of water equal to what we use in our beverages and their production." This goal would be accomplished in three ways: reduce, recycle, and replenish. The company would reduce its own use of water by running its operations more efficiently. It said it would discharge water used in manufacturing only if it were clean enough to support aquatic life and treating its wastewater itself where local authorities were unable to do so. Finally, the company would replenish the balance of the water it used (for example, as an ingredient in bottled beverages) by participating in various water conservation projects globally. To help it do so, Coca-Cola announced a partnership with the World Wildlife Fund, providing an initial $20 million to the environmental group to support projects such as river conservation, rainwater collection, and efficient irrigation. "If we do not act responsibly, society will not give us the social license to continue to operate, "said Coca-Cola's CEO. "Water neutrality is an aspirational goal, but behind it is work that's already taken place. You focus on the areas which are relevant to your business. Water is clearly a relevant area. That then gets employee engagement and legitimization from the shareholders as well." 1. What was the public issue facing The Coca-Cola Company in this case? 2. What stakeholders were concerned, and how did their expectations differ from the company's performance? 3. How did TCCC use stakeholder engagement and dialogue to improve its response to this issue, and what were the benefits of engagement to the company? 4. In your opinion, did TCCC respond appropriately to this issue? Why or why not? 5. If you were CEO of Coca-Cola, how would you have dealt with the issue