Q3: Drawing on lessons learnt from Coca-Colas environmental issues, identify the materiality topics of a global soft drinks producer with bottling capacity in Kerala (India) and explain how these should be used to implement supply chain due diligence. List the GRI standards that this company should use to prepare a sustainability report. Use India as the example to write about

Case study

COCA-COLAS ENVIRONMENTAL ISSUES

Coca-Cola was accused of draining the underground water table and of releasing improperly treated industrial effluents in less developed countries. The company was hit hardest in India. The focal point of the environmental accusations in India was the Coca-Cola plant located in the southern state of Kerala. Coca-Cola, through its subsidiary in India, The Hindustan Coca-Cola Beverages Pvt. Ltd. (Coca-Cola India), had established a bottling plant in the Plachimada locality of Palakkad district in Kerala. It was alleged that Coca-Cola India had dug more than 65 bore- wells at the factory site to extract groundwater for production and operations. Daily production was estimated at 85 truck loads of beverages wherein each load contained 550-600 cases and each case contained 24 bottles, each of 300 ml volume. It was estimated that every day, 15 million liters of groundwater were extracted free of cost and used for production and bottle washing.

Many local residents in the villages surrounding the factory site alleged that over the years, they had been facing depleted underground water levels, leading to water scarcity. In addition, the bottle washing operations involved the use of chemicals and the generation of effluents. These effluents were allegedly released without being adequately treated, leading to the contamination of groundwater. As a result, it was reported that the groundwater had turned turbid or milky on boiling and was unfit for consumption. Another by-product of bottle washing was a foul smelling dry sediment sludge waste. It was said that the waste was initially sold to unsuspecting farmers as a fertilizer. When there were no takers, Coca-Cola India allegedly offered it free of charge.

In 2003, BBC Radio 4s Face the Facts program revealed that a separate study conducted by it has shown that the sludge contained high levels of carcinogenic heavy metals like cadmium and lead. It was alleged that when the farmers came to know that it was toxic and raised protests, the waste was dumped on the wayside and on the lands at night. In the same year, the Center for Science and Environment (CSE) published a report which revealed that 12 soft drink brands sold by Coca- Cola and Pepsi in India had pesticide levels far higher (almost 36 times more) than what was permitted by the European Economic Commission(EEC). This issue again re-surfaced in August 2006, when CSE tested around 57 samples of carbonated drinks of Coca-Cola and Pepsi in India and found pesticides in all the samples. CSE alleged that the pesticide residues were 24 times higher than the standards proposed by the European Union and the Bureau of Indian Standards

In 2004, Coca-Cola India utilized 283 billion liters of water, which was equal to the worlds consumption of water for a period of ten days. Moreover, the company used 2.7 liters of water for the production of a single beverage bottle wherein 1.7 liters were discarded as waste.