Sunday, May 23, 2010

Without full value analysis CSR is only working at the margin.

Dear Colleagues

Corporate Social Responsibility (CSR) is in the news more than it used to be ... but CSR still does not have very much traction. I wrote the following in response to a posting about the publication of a CSR report by a unit in the global Coca Cola organization or network.
CSR has a lot of potential ... but it is a long way from realizing this potential. What CSR does is to reduce the bad impact of a company's mainstream business ... which is a step in the right direction. But CSR avoids the big question about the social impact of the mainstream business ... and no company is ever going to address this matter objectively on their own. This is why Community Analytics (CA) does this from outside the enterprise and from the perspective of society. Tobacco companies are not going report objectively about the health impact of their products ... somewhat the same with soft drink manufacturers ... and fast food operators! These businesses have made good profits, but what has been the social impact of their business? It is not part of any reporting.

Peter Burgess
I think these observations are correct. Coca-Cola has been very profitable for many years, and it is possible to buy their products practically everywhere on the planet ... it is an amazing organization. But has Coca-Cola been a good use of resources ... and has the impact of a mass marketed sugary beverage been positive for society or not. Imagine if all the financial resources and management capacity allocated to Coca-Cola had instead been invested in global initiatives to deliver fortified (with micronutrients) potable water to everyone on the planet. Against this the CSR performance of Coca-Cola is rather pedestrian.

Of course people will say that Coca-Cola's business is to make profit ... and in the present market economy with the present metrics, the outcome is predictably that profits are optimized. Imagine on the other hand that the metrics were to include the value dimension, at which point the role of water might well be more important than the role of Coco-Cola.

I believe that metrics matter ... and until the metrics include the social impact dimension, the market driven allocation of resources is going to "get it wrong"!

This is the text of the press release about the Coca-Cola Hellenic 2009 CSR Report.
Release of 2009 CSR Report - Coca-Cola Hellenic Maintains Sustainability Commitments

Coca-Cola Hellenic, one of Europe's leading bottlers of non-alcoholic beverages, continued extending its Corporate Social Responsibility (CSR) commitments during the 2009 global economic downturn, according to the Company’s latest report, "Towards Sustainability".

The seventh annual report details initiatives, progress and future sustainability goals in the Company's 28 countries of operation and covers activities in all key focus areas both in its own operations, and through strong stakeholder partnerships aimed at benefiting the communities it serves.

Among major highlights was the construction of three Combined Heat and Power (CHP) plants during the year. They represent the first wave of 15 plants being constructed in 12 countries, and will contribute to cutting CO2 emissions by an average of 20% in the group's manufacturing operations.

The Company has worked with suppliers to develop a range of 14 new-generation cooler units that eliminate hydrofluorocarbons (HFCs) and provide up to two-thirds greater energy efficiency. The introduction of 10,000 units in 2009 brought the total in the marketplace to 18,000 - a figure that will be trebled by the end of 2010, helping to reduce the company's Scope 3 carbon emissions.

Through all of its actions in 2009, relative scope 1 and 2 emissions were reduced by 4%, bringing the total amount lowered since 2002 to 31%.

In further supporting the climate strategy of Coca-Cola Hellenic, the lightweighting of packaging improved efficiency by avoiding more than 4,500 tonnes of materials, 9% more than the previous year. Across operations, through Company-wide recovery programmes, the equivalent of 66% of bottles and cans was recycled.

Special attention was given to the protection and preservation of water resources. In addition to continuing the construction of water treatment facilities at bottling plants, partnerships with governments, NGOs and communities were established and further developed to conserve waterways, including those involving the Danube and Tisza river systems.

Another focus in 2009 was the strengthening of measures to protect employees. A structured three-year Health & Safety plan was begun aimed at substantially cutting accidents in the workplace. During the year a further five plants achieved the international occupational health certification, OHSAS 18001, and the Company recorded a drop in serious accidents of 26% compared to 2008.

Coca-Cola Hellenic maintained its support of the United Nations Global Compact (UNGC) throughout the year, and actively participated in the CEO Water Mandate and Caring for Climate, contributing to activities in local networks in 13 countries.

The Company was recognised as one of 44 leaders selected from a short list of 130 to qualify for 'Notable' status in the UNGC Communications on Progress listing. This makes it the only beverage company and the only Greece-based company to achieve this leadership status

Recognition of the Company's CSR commitments and achievements was demonstrated through its listing on the Dow Jones Sustainability World, and European STOXX, indexes for the second consecutive year, placing it among the top 10% of most sustainable companies worldwide, and the top five sustainable beverages companies.

The full CSR report, which follows the Sustainability Reporting Guidelines of the Global Reporting Initiative (GRI), can be viewed at

About Coca-Cola Hellenic Coca-Cola Hellenic is one of the world's largest bottlers of products of The Coca-Cola Company with sales of more than 2 billion unit cases. It has broad geographic reach with operations in 28 countries serving a population of approximately 560 million people. Coca-Cola Hellenic offers a diverse range of ready-to-drink non-alcoholic beverages in the sparkling, juice, water, sport, energy, tea and coffee categories. Coca-Cola Hellenic is committed to promoting sustainable development in order to create value for its business and for society. This includes providing products that meet the beverage needs of consumers, fostering an open and inclusive work environment, conducting our business in ways that protect and preserve the environment and contribute to the socio-economic development of our local communities.

Coca-Cola Hellenic's shares are listed on the Athens Exchange (ATHEX: EEEK), with a secondary listing on the London Stock Exchange (LSE: CCB). Coca-Cola Hellenic's American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE: CCH). Coca-Cola Hellenic is included in the Dow Jones Sustainability and FTSE4Good Indexes. For more information, please visit

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