Coca-Cola's new formula for water stewardship: government partnership


Standing before cameras with Illinois tall grass gently swaying in the breeze, agriculture secretary Tom Vilsack and Coca-Cola America’s president Steve Cahillane in September announced a partnership to help restore and protect damaged watersheds around the country for five years.

Keeping watersheds – the areas that drain into a river, lake or other water source – clean is key to protecting the water supply, and the deal represents the one of biggest corporate sustainability partnerships ever for the USDA.

“We are very fortunate that Coca-Cola has been a strong partner with us,” Vilsack said at the event. “It’s local communities, it’s Coca-Cola, it’s government, it’s us working together to get the job done. Budgets are tight. Our capacity to do more projects is limited. Coca-Cola comes along and says, ‘Hey, we’re here to help. We’re going to extend the number of projects you do.’”

The signing, which took place with great fanfare, was the culmination of a couple of years of Coke and USDA partnerships on various sustainability projects. The watershed projects are expected to return more than 1bn liters of water to the National Forest System, which provides drinking water to more than 60 million Americans. And that’s on top of a half billion liters the previous projects were already estimated to have replenished.

But what the announcement and subsequent press release failed to mention is that most of the projects actually supply water to Coca-Cola’s own factories. A comparison of the locations of current and past projects with those of Coca-Cola plants – via a deep dive into company archives and reports, as well as conversations with company officials – shows that four of the six projects touted by the USDA involve a water source for Coca-Cola facilities.

These include:

• restoration of a creek in New Mexico that flows into the Rio Grande, which supplies water to Coca-Cola facilities in El Paso and McAllen, Texas

• repairs in Michigan related to Osborne Creek, which flows into Lake Michigan, a water source for Coca-Cola’s Grand Rapids plant

• a watershed restoration project in the Sierra Nevada Mountains, which supply water to a bottling facility in San Leandro, Calif.

• restoration at Colorado’s Trail Creek watershed, which also supplies Coke’s Denver bottling facility.

There’s nothing wrong with a corporation helping its operations while working to improve public resources. After all, many sustainability experts have said it’s important to make sustainability material to core business operations. Still, Coca-Cola’s direct benefit from these projects was notably absent from the communications about the partnership.

The USDA declined to speak on the record about the deal, but Coke was happy to chat.

Jonathan Radtke, water resource sustainability manager for Coca-Cola North America, said the company doesn’t always pick projects based on proximity to plant facilities.

“Sometimes, if there’s a project in a region where there may be more of a need for restoration, and it’s not right where we’re sourcing water, we’ll select that project,” he said. “And in some cases, [projects] are within the sourced watersheds. That’s sort of the sweet spot, a win-win for both of us.”

The partnership began when Coke reached out to the government agency. From there, the company selected restoration projects it was interested in working on. Coca-Cola sees the USDA partnership as a way to align its water sustainability goals with public good, Radtke said.

The bigger question

The partnership is part of a larger trend of the federal government’s growing reliance on corporations, as well as non-profits, to help solve sustainability challenges. Whether it’s helping with natural disaster recovery, tree planting or protecting other watersheds, public-private partnerships, it seems, are here to stay.

But are these types of partnerships an effective way to protect the environment, or do they amount to corporate greenwashing? Well, that’s a complicated question, and the answer depends on whom you ask. Experts take extremely divided stances on both sides.

“Coke is the leader in using their influence and money to build programs like this to deflect criticism from its environmental record,” said Jesse Bragg, a spokesperson for Corporate Accountability International.

Certainly, over the years, the company has run into its share of water problems, both abroad and at home. It was sued in 2010 by a small Michigan town for water contamination from one of its manufacturing plants. Coca-Cola denied the town’s claim.

But the company also has taken serious strides to address its water issues. The company has teamed up with environmental groups and other corporations in more than 100 community watershed restoration projects in the US.

So far, Coca-Cola has spent $660,000 on USDA projects. Money from the National Fish and Wildlife Foundation, the National Forest Foundation and Coke together makes up two-third of the total funding for the partnership, with federal dollars accounting for the rest.

Some activists, including Bragg, are concerned that conflicts of interest could potentially arise from partnerships between corporations and government. The USDA, the agency charged with setting dietary guidelines as well as agricultural policies, could be seen as receiving financial assistance from a corporation that is directly impacted by its decisions.

Darcey O’Callaghan, international policy director for Food and Water Watch, says relying on corporations for public resources is “a serious problem”. “Protecting our watershed is in our national interest and it’s a sorry state of affairs when the USDA has to rely on corporations to do their mandate,” she said.

A critical model for success?

Others, however, argue that it’s critical for society to engage large corporations in sustainability efforts tied to their own self-interest.

Lauren Kelley Koopman, director in sustainable business practices at US business advisory firm PwC, said it makes sense for corporations to fold sustainability work into their business models.

“In the past, a lot of it was altruistic or around philanthropy,” she said. “And now, they’re finding out that there are ways they can help communities and align it with their business strategy, which ensures that sustainability work will go on.”

And, some argue, rather than leaving the entire burden to taxpayers, isn’t it a good thing for corporations to play a role in protecting the environment? At the press event in September, Vilsack said the partnership should be a model for many others.

It’s a good thing for corporations to be actively involved in finding solutions to water issues, said Suzanne Apple, the World Wildlife Fund’s vice-president of business and industry, who has worked on sustainability projects with Coca-Cola since 2007.

“These issues around global fresh water are going to take all of us together to do the work that needs to be done,” she said.

You can return to the main Market News page, or press the Back button on your browser.