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Identity Crisis? The Coca-Cola Company and World Wildlife Fund

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A closer look at this paradoxical pairing.

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MINYANVILLE ORIGINAL

This series profiles companies in "identity crisis," covering corporate pairings that appear on some level to contradict one another.

With its recent earnings call, Coca-Cola (KO) has been garnering attention for its higher-than-expected second quarter profits. Coke is the largest distributor of non-alcoholic beverages worldwide.

Over the past few years, Coke has also gotten attention for its support of World Wildlife Fund. WWF is the world's leading conservation organization. According to its website, WWF's mission is to "conserve nature and reduce the most pressing threats to the diversity of life on Earth."

In a statement released by the company, Coke describes the focus of their partnership with WWF:
Water is vital to both WWF and The Coca-Cola Company. Beverages are The Coca-Cola Company's business, and water is the main ingredient in every product we make. Safe water also is vital to the sustainability of the communities we serve. WWF's mission is the conservation of nature and the protection of natural resources for people and wildlife. Protecting freshwater ecosystems is a top priority in WWF's work. Now, through a partnership announced on June 5, 2007, we are combining our international strengths and resources to support water conservation throughout the world.

Coca-Cola's sponsorship of WWF is fairly transparent. A quick look at Coke's track record regarding water conservation reveals that it hasn't been the company's strongest selling point. In fact, Coke has had considerable legal trouble in the past related to misuse of water resources, including water contamination and water depletion.

These problems have continued despite Coke's partnership with WWF. Coke was sued by a small Michigan town in 2010 for allowing heavy metals from a nearby production plant to leach into the groundwater. The company did not fight the charges, but instead has done what it could to remedy the damages. Ironically, Coke distributed free Dasani water bottles to affected citizens for over a year.

Similarly, the Indian community of Plachimada has experienced severe drought and pollution due to a nearby Coca-Cola factory. Coke products produced in the region have also been accused of containing high pesticide levels – so high, in fact, that local farmers used the beverage rather than buy higher-priced pesticides from brands such as Monsanto (MON).

Many PR analysts label the Coca-Cola-WWF partnership as an attempt to "greenwash" the Coke brand. Both parties benefit: WWF receives funding, while Coke receives an improved (although deceptive) public image.

Some credit can be given to Coke; it has committed to furthering sustainable packaging, as well as to reducing its overall carbon emissions. The company has also established a goal to "safely return to nature and to communities an amount of water equal to what we use in our finished beverages and their production" by 2020.

No positions in stocks mentioned.
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