Questions and answers about The Coca-Cola Company and the TERI assessment
Why did you agree to an independent assessment of your India operations?
This unprecedented step of opening our operations to an independent, public assessment by a prominent NGO demonstrates our commitment to transparency and accountability. Our customers, our system and our knowledge base all stand to benefit.
This assessment of The Coca-Cola Company's water management practices in India was initiated in response to concerns raised by the students of the University of Michigan as well as other stakeholders. The University, in response to the concerns of their students, began conducting a review of The Coca-Cola Company's operations in India.
The University of Michigan and The Coca-Cola Company agreed that an independent assessment would provide the information needed for the University and agreed that TERI, a New Delhi-based international research organization, would conduct the assessment guided by a Steering Committee comprising eminent experts. In addition, the parties agreed that the credibility of this effort would be strengthened if a neutral mediation and facilitation organization were called upon to facilitate the interactions between The Coca-Cola Company and TERI, and to help the parties ensure that the appropriate protocols and procedures were in place that would preserve and protect TERI's and the study's independence. The parties agreed that the Meridian Institute, an internationally recognized neutral mediation organization based in the United States, would be the appropriate organization to fill that role.
What is the focus of the TERI assessment?
The focus of the assessment was water resource management practices at The Coca-Cola Company facilities in India. The assessment included:
Formation of an expert Steering Committee to oversee and review implementation of the work plan and methodology.
Corporate-level assessment of The Coca-Cola Company's policies, procedures, management systems; and compliance mechanisms relating to environmental protection and water resource management; and questionnaire-based secondary data collection from selected Coca-Cola facilities in India.
Plant level on-site assessment of water management at six Coca-Cola facilities in India.
On-site assessment included: primary monitoring of water balance and water quality; surveys; and interviews with key personnel from each facility, the community within the defined area (surrounding villages/panchayat/ward), and other stakeholders to address the relevant issues associated with water stewardship.
Was this an independent report?
Yes, great care was taken to ensure the independence of this report. The parties agreed that the credibility of this effort would be strengthened if a neutral mediation and facilitation organization were called upon to facilitate the interactions between Coca-Cola and TERI, and to help the parties ensure that appropriate protocols and procedures were in place to preserve and protect
TERI's and the study's independence. The parties agreed that the Meridian Institute, an internationally recognized neutral mediation organization based in the United States, would be the appropriate organization to fill that role.
In its role, Meridian:
Facilitated all discussions leading up to the finalization of the formal Scope of Work for the independent assessment.
Monitored all TERI requests for, and Coca-Cola Company responses to these requests, for data, information, and documents.
Facilitated agreed upon procedures for TERI's ability to carry out unannounced initial access to Coca-Cola Company plant sites.
Served as the sole communication channel between The Coca-Cola Company and TERI throughout the assessment when the parties had questions or needed to anticipate or resolve assessment-related issues (e.g., ensure that security personnel at Coca-Cola India facilities were aware and had a protocol internally to allow TERI staff access to plants, given that they would be arriving unannounced).
Served as the fiduciary agent for the study with a final financial audit forthcoming.
TERI itself and its external Steering Committee established assessment-specific protocols intended to ensure maximum objectivity and independence (such as the unannounced site assessment visits).
How extensive is the Coca-Cola operation in India?
The Coca-Cola System in India includes 24 Company-owned bottling operations and another 25 franchisee-owned bottling operations that directly employ 5,500 local people and create jobs for another 150,000. During the past decade, The Coca-Cola Company has invested more than $1 billion U.S. in India, making us one of the country's largest international investors. We have committed to invest another $250 million U.S. in the next three years.
What facilities did TERI assess?
TERI conducted an assessment of both Company-owned and franchise-owned facilities. They were located in: Kaladera, Mehndiganj, Fathegarh (Nabipur), Nemam, Pirangut, and Sathupalle. These six plants are viewed by TERI and its independent Steering Committee as a diverse sample in India, and were assessed on hundreds of criteria. The assessments included regional and in-plant water quality assessment, in-plant water audits and key stakeholder discussions.
How were the plants chosen for this report? Why these six?
These plants were chosen because they represent a range of geographies and ownership and produce a range of beverages. An independent Steering Committee was constituted by TERI to oversee the entire study and provide strategic direction to the assessment process. The Committee, comprised of a broad-based group of experts having in-depth knowledge of the issues involved, met periodically to review processes and work in progress and to provide guidance on segments of the assessment to be concluded. TERI, in consultation with the Steering Committee, chose these plants for the purpose of the assessment.
What is the Company going to do as a result of the TERI assessment?
The report finds that The Coca-Cola Company meets Indian regulations and consistently, with a few minor exceptions, meets its own environmental and quality standards. It also confirms that there are no pesticides in the water used to make our products. However, it also identified some areas where we can – and will – do better.
As a result, we are strengthening our plant siting requirements, our monitoring capabilities for both rainwater harvesting and effluent treatment, and our guidelines for source protection and operating in water scarce areas. We also are expanding our efforts to work with local communities to ensure the sustainability of local water resources, and we have launched the Coca-Cola India Foundation for sustainable development and inclusive growth.
What did you learn from this lengthy report?
Our procedures and practices were found to be in compliance with Indian regulations and, on balance, with The Coca-Cola Company's own global standards, which are more stringent than local standards in a number of areas. The TERI report graded us on a number of criteria where we did well, along with providing suggestions of where we can do better. We plan to apply key learnings from the report not just to our Indian operations, but system-wide in cases where findings lead to best practice improvements.
