26 Feb Strategic Management
9519Discussion post response:
Coca-Cola’s 2020 Business & Environmental, Social and Governance (ESG) Report, published in April 2021, focuses on six areas: “water leadership, reducing added sugar, world without waste, climate, diversity, equity & inclusion, [and] enabling women 5by20” (Coca-Cola, 2021). Similarly, PepsiCo’s Sustainability report has six areas: “Agriculture, water, packaging, product, climate, [and] people” (Pepsi, 2021). Their strategies are quite similar: respond to consumer demands and trends in the food and beverage industry while remaining competitive.
3BL Media released their list of 100 best corporate citizens of 2021, and Coca-Cola ranks number 89 while PepsiCo ranks 22 (100BEST). The 8 factors that they included in their ranking are: employee relations, environment, climate change, stakeholders and society, human rights, ESG performance, governance, [and] financial. Their platform allows users to see company performance based on industry. For example, for food and beverage, PepsiCo comes in second with an overall score of 79.73 while Coca-Cola comes in 6th and last with a score of 71.96 (100BEST). For climate change, PepsiCo is at the top outperforming the other five food and beverage companies that made it to the 100 list. Interestingly enough, for 7 out of the 8 factors, PepsiCo outperforms Coca-Cola, and the only factor where Coca-Cola is ahead of PepsiCo is governance (100BEST).
Looking at Coca-Cola’s and PepsiCo’s reports, it is obvious that both companies have adopted strategies to show their commitment to social responsibility and environmental sustainability. As David and David (2019) point out, social responsibility refers to “actions an organization takes beyond what is legally required to protect or enhance the well-being of all living things, including employees” (p.300). Similarly, an environmentally sustainable company takes actions that protect the environment and correct any environmental harm their operations may have caused. One can only hope that good business ethics is at the foundation of the socially responsible and environmentally sustainable efforts that PepsiCo and Coca-Cola are implementing — such as investing in local communities for water access and pollution reduction or building inclusive and equitable workforces. However, ethical decision-making implies more than simply giving something back to communities because, let’s face it, community investment started when consumers used their purchasing power to boycott unethical practices. The seven principles of admirable business ethics that our textbook highlights in table 10-1 include avoid misleading with marketing and reports and engaging in accounting practices that eliminate questionable practices (David & David, 2019, p.301) —two guidelines that require a radical change in any organization. Based on all the factors above, I would give both companies a solid B with the hope that in 5 years their ESG efforts will be measurable to get them an A.
References
100BEST Corporate Citizens of 2021. (n.d.). 3BL Media. https://100best.3blmedia.com/
Coca-Cola. (2021, April). 2020 Business & environmental, social and governance report [Reports].
https://www.coca-colacompany.com/reports/business-environmental-social-governance-report-2020
David, F.R. & David, F.R. (2019). Strategic management: A competitive advantage approach, concepts and cases (17th ed.). Upper Saddle River: Pearson.
PepsiCo. (2021, June). 2020 Sustainability Report Summary. https://www.pepsico.com/docs/album/sustainability-report/2020-csr/2020_sustainability_report_summary.pdf?sfvrsn=2b435ae0_8
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