On August 20, 2003 Sanjiv Gupta, President and CEO of Coca-Cola India, sat in his office contemplating the events of the last two weeks and debating his next move. Sales had dropped by 30-40%1 in only two weeks. On August 5th, The Center for Science and Environment (CSE), an activist group in India focused on environmental sustainability issues (specifically the effects of industrialization and economic growth) issued a press release stating: "12 major cold drink brands sold in and around Delhi contain a deadly cocktail of pesticide residues" (See Exhibit 1). According to tests conducted by the Pollution Monitoring Laboratory (PML) of the CSE from April to August, three samples of twelve PepsiCo and Coca-Cola brands from across the city were found to contain pesticide residues surpassing global standards by 30-36 times including lindane, DDT, malathion and chlorpyrifos (See Exhibit 2). These four pesticides were known to cause cancer, damage to the nervous and reproductive systems, birth defects, and severe disruption of the immune system. After this incidence the brand image of Coca Cola was tarnished and people started avoiding coca cola consumption. Since 2003 following the various allegations and issues such as presence of pesticide residues in its beverages and water resource contamination issues that the soft drink giant faced in India, their community-focused initiatives were further accelerated. To address these issues and to rebuild its tarnished brand image in India, Coke engaged itself in a number of environment-focused initiatives, like executing the eKO management system in 2003, under which it preserved local water resources. It also adopted measures to reduce water consumption in its production processes. This case facilitates discussion on whether Coke used CSR as a tool for its sustainability in India or only as a green washing effort to counter its allegations. The case also helps to emphasize the need for adopting ethical...
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