Sunday, 17 April 2011

POVERTY: Coca-Cola, SABMiller Now Measure Poverty Footprint

Leon Kaye : April 12th, 2011

Coca-Cola/SABMiller employees in Zambia, from
Coca-Cola/SABMiller employees in Zambia, from

Many multinationals have measured their carbon footprint and have assessed everything from their greenhouse gas emissions to how to streamline energy efficiency throughout the supply chain. Coca-Cola and SABMiller the past few years have taken a hard look at their water footprint–in Coca-Cola’s case, they have worked on water restoration projects on some of the world’s largest rivers; SABMiller is an example of how beer companies strive to improve their bottling plants’ water efficiency while struggle to achieve similar metrics throughout the supply chain–and in some countries is the bottler of CocaCola products.
Corporate social responsibility (CSR), however, is not just about the environment–that “S” in CSR is easily overlooked, but nonetheless critical. To that end, Coca-Cola and SABMiller, partnering with Oxfam America, recently released a report that measure’s the country’s poverty footprint.
At a higher level, the report both analyzes poverty through the looking glass of five dimensions of poverty. The framework that Oxfam and the beverage giants developed looks at five impact areas: macroeconomic factors, the companies’ value chain, local environmental practices, product development and marketing, and policies and relationships. This report takes those impact areas and evaluates how they affect locals’ livelihoods, health and well-being, gender and diversity issues, empowerment, and workers’ security and stability. Oxfam then applied this poverty footprint management methodology in El Salvador and Zambia. Both countries are similar in their social, geographic, and demographic diversity, and have similar characteristics in the Coca-Cola/SABMiller value chain from raw sugar production to the final consumption of Coca-Cola products.
Dozens of interviews over several weeks churned out some statistics that on one hand are impressive–but on the other show that much work needs to be done. The Coca-Cola/SABMiller value chain is work over US$100 million between the two countries, with 8000 jobs created as a result. The affects on employment magnify when considering that the products are sold in tens of thousands of retail outlets in both countries, most of which are run by women. While Coca-Cola and SABMiller appeared to have paid their fair share of taxes in Zambia and El Salvador, the over value chain could have had a larger impact on both countries. Coca-Cola and SABMiller’s local companies in both countries, however, often bought supplies from outside these countries’ borders because they were not available locally.
While most workers throughout the value chain make more than the national minimum wage, those who work at both ends of the value chain often do not earn sufficient wages to meet their daily needs. Not surprisingly, workers in Zambia’s sugarcane fields are vulnerable because of the seasonal nature of their work, and often lack formal contractual arrangements that would assure more of a fair wage. Farm workers fare better in El Salvador, but retail employees and even shop owners struggle to make a sufficient living.
The Oxfam poverty footprint report is a thorough analysis of the economic impact a large company has on the small countries in which it operates and the effects a large firm’s value chain can have on society. It concludes with two pages of recommendations, centered on enterprise development, women’s economic empowerment, and access to water. Now comes the hard part: following through and applying what the researchers at Oxfam, Coca-Cola, and SABMiller learned.

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