We have come a long way since 1970. The year is often recognized as the birth of the environmental movement, marked by the first annual Earth Day. It is also the year that Nobel Prize winner in economic sciences, Milton Friedman, wrote that “the social responsibility of business is to increase its profits”, in a seminal New York Times Magazine article.
34 years later, top leaders of The Coca-Cola Company (TCCC) convened to draft the Manifesto for Growth, with the objective of transforming the company. Following the death of its CEO, TCCC saw a record dip in business performance. This strategic blueprint laid out a roadmap based on what TCCC calls the “5 P’s” of sustainable growth:
- Portfolio – the design of their 500+ brands across the world
- Partners – constructive engagement with stakeholders
- Planet – health of the business is directly related to the health of the planet
- People – fair and dignified treatment of all people working for the company
- Profit – maximize shareholder value in conjunction with environmental and social value
TCCC had been engaged with the World Wildlife Fund (WWF) on a philanthropic basis for a while, however, it is not until 2007 that their integrative collaboration began. At the time, both organizations had recently begun seeking deeper partnerships within TCCC’s Manifesto for Growth and WWF’s Market Transformation Initiative (MTI).
MTI was created based on the idea that, while over a billion people are globally involved in producing, growing and extracting natural resources for the world, only handful of major companies control them somewhere along the supply chain. The goal is to work with major influencing bodies to produce commodities more sustainably. It is capital for a global organization such as the WWF to set precise priorities and strategies in order to make a difference and avoid spreading its efforts thin. WWF, through extensive research, has identified the major natural resources that directly affect the places they refer to as the Global Priority Ecoregions. With an established focus on both the “where” and “what”, the organization is able to better identify which of these main controlling companies represent an opportunity for effective projects.
The TCCC-WWF Love Story
WWF’s partnership with TCCC began with the recognition of a common objective: the sustainable use of freshwater sources. On one hand, water is TCCC’s main ingredient and thus central to the health of their business operations. On the other, the responsible use of water is essential to WWF’s conservation objectives, especially within the Freshwater Priority Ecoregions, and to human development. The idea is that by combining their different skillsets and perspectives, more effective solutions for all stakeholders can be realized.
Together, they identified 7 freshwater basins that are within WWF’s Priority Ecoregions and where TCCC is active. The former brought the conservation background to the table while the latter contributed the business perspective. This allowed each stakeholder to walk in each other’s shoes leading to an interactive understanding. For example, WWF would take Coke operatives onto the field in order to demonstrate and put into context the environmental impacts to a specific basin. In turn, Coke would take WWF employees to their plants active in these regions, providing a common view of the operations and the role of the plant in the community.
Over the years, the partnership underwent continuous expansion of its role and objectives. This included a focus on climate emissions and agricultural impacts. As a result, both parties can boast about successful improvements in water and energy efficiency in manufacturing operations, the sustainable sourcing of sugarcane and the conservation of the identified priority river basins.
Coke’s operations, however, are not the only facet of the business that has leveraged WWF’s resources. They have worked together on communications and shaping TCCC’s marketing strategy to their sustainability objectives and beyond. This part is crucial to TCCC’s ability to develop brand equity. In fact, in the spirit of leveraging all resources from each other, WWF has recently begun a communication campaign of their own through TCCC named Arctic Home. The goal is to “raise awareness and funds to help create a place where polar bears and people can thrive in the Arctic.” Perhaps you’ve seen the polar bear Coke cans recently?
Looking forward, WWF sees another great opportunity within this corporate partnership: tackling the policy frontier. They see a real opportunity to institutionalize change at a policy level. For example, they wish to influence how we value nature, or more specifically, wetland governance in a given country. By coming together to lobby a change in laws, they benefit from greater leverage.
The Public Will Judge
While both parties are, at the very least, content to continue their engagement, what does the public think of all this? WWF’s activities are largely dependent on private donations and the business reasoning for TCCC’s involvement is the reputation capital they are building from consumers. It is natural that the “blurring of boundaries” between the two sides poses the risk of some backlash, primarily through the perception of greenwash. For example, the Institute for Public Affairs, a libertarian think tank, has recently questioned whether WWF is engaged in “naked extortion,” especially through the system of commodity roundtables. An example of these roundtables can be found within the Coca-Cola partnership. BONSUCRO is a multi-stakeholder certification scheme that has defined specific standards for the sustainable production of sugarcane. These standards are agreed upon by all member NGOs and companies with a focus on environmental and social issues related to the production stage. Furthermore, one group did not even wait to see the progression of the partnership before announcing, in 2007, that WWF is “taking greenbacks in return for greenwashing its corporate benefactors” using TCCC as the latest example.
Both sides understand the sensitivity of their work together and know that certain measures must be implemented to guarantee a success, not only with each other, but also with the public. WWF, for example, is very careful in allowing the use of their logo. Furthermore, each project undertaken is based on time-bound goals with detailed criteria made publicly available. This allows the consumers and donors to be involved and provide accountability in the process.
This delineated liability and the recognition of common goals are, and will continue to be, the unifying factors making effective partnerships between the private sector and non-profit organizations possible.
“Watersheds are nature’s water factories, and the first line of our supply chain. But they are also a vital resource that underpins the health and well-being of communities and ecosystems. Our work with WWF has shown that by protecting this ‘natural capital,’ we can help sustain our business while benefiting people and nature.” – Jeff Seabright, Vice President for Environment and Water Resources, The Coca-Cola Company
“I’ve seen firsthand how this partnership is conserving Earth’s resources, protecting its species and improving livelihoods. From safeguarding species in coastal East Africa to helping communities in rural China access clean water, we’re inspiring local action that is having a global impact. Together we’re leading a transformational movement to conserve freshwater resources and protect the environment on which we all depend.” – Suzanne Apple, Vice President, Business & Industry, World Wildlife Fund