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Coke and Pepsi on Damage Control – Cleaning up Their Water Image in China

| Tuesday August 25th, 2009 | 0 Comments

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Coca-Cola and Pepsi recently vowed to clean up their water use practices in China. Thing is, the vows weren’t exactly voluntary. Only after a Beijing economic council released a scathing report on the firms’ water practices did the soft drink firms swear to change. Moving forward, Beijing will monitor the firms, and 25 other companies, for environmental infractions, Environmental Leader reports. (Coke and Pepsi pledged complete cooperation with the plan.) Meanwhile, other sources indicate that Coke and Pepsi do not deserve environmental blacklisting. What does all of this mean for sustainable business?

The List all began with a report, published in April by the Beijing Development and Reform Commission, entitled Catalog of Products of High Water Consuming Technology Restricted and Prohibited in Industry in Beijing. (The report could help the government reach its goal of reducing its energy consumption by 20 percent between 2005 and 2010.) The report, which highlights (among other things) the high level of water pollution and overuse by the beverage making industry, put Coke and Pepsi on Beijing’s top-12 list of water polluters. Following the report, the Commission listed several companies it will keep an eye on, including a Benz-Daimler Chrysler plant, the Capital Iron and Steel Corporation, and the chemical company Praxair, in addition to Coke and Pepsi. Not exactly a positive development, given the already-strained environmental relations between the U.S. and China and the importance of those relations for the Copenhagen Climate Change Conference in December.

Interestingly, though, Coca-Cola and Pepsi’s inclusion on the List runs counter to many of their recent positive environmental measures and press. According to another Environmental Leader report, Coke and Pepsi were ranked number 1 and 2 (respectively) in the food and beverage sector for their sustainable initiatives. Coke’s “Commitment 2020” states that it seeks to reduce its carbon footprint by 15 percent by 2020. Meanwhile, Pepsi is ranked second among Fortune 500 companies for purchasing renewable energy. Is it really necessary for China to light a candle under these companies’ feet? And what could explain the discrepancies between these figures and China’s?

It could be that Coke and Pepsi’s China-based plants do not operate sustainably. Alternatively, it could be that China’s figures, reporting, or motives were incorrect or unclear. There could be a power play involved, or some unknown profit at stake, or both, or neither…. But in my opinion, the bottom line, from a bigger-picture-for-sustainable-business perspective, relates to transparency, effort, and an “at least” mentality. At least Coke and Pepsi allowed China’s investigation into their operations, at least they complied with the reprimand, and at least China is attempting to reduce its environmental impact. If bumps in the road do not distract the green movement’s eye from the goal, sustainable business could shape up pretty well in years to come.

What do you think?


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