Class

Datewhen Due:

CorporateSocial Responsibility

Traditionally,businessorganizationconcentratedon activitiesthatwere only focused towardsmakingmaximumprofits.Theapproachesdisregardedtheneedsof otherstakeholders. Thecontemporaryoperatingenvironmenthas becomemorecomplexthan anyothertimein thepastwith theincreasedcompetitionandtheenlightenmentof stakeholders. Playersin variousfieldshavebeenforcedto developa newapproachwheretheconcernabout otherstakeholders isgivenmanyconsiderations.Companieshavedevelopedprogramsreferredto as Corporate Social Responsibility (CSR). Organizationsmakeuseof differentapproachesto their CSR depending on their industryof operations,theobjectivesof theprograms,andthepressurespushingfortheprogramsfrom otherstakeholders. Two CRS programsfrom differentcompanies,Coca- Cola Icecek andCommercial Bank of America areusedas examplesthrough which theanalysison howorganizationare usingtheconceptof CRSs. Theanalysisof thecategoriesof theCSR andthebenefitslikelyto be accruedby theorganizationsinvolvedare thekeyelementsconsideredin thepaper.

Coca-Cola Icecek

Coca-Cola Icecek is consideredas thesixth largestbottling systemforCoca- Cola Company, which is thegiantbeverageorganizationin theworldwidemarket.Coca- Cola Icecek operatesin countriessuchas Kazakhstan, Azerbaijan, Pakistan, Turkmenistan, andKyrgyzstan. ThemostoutstandingCRS programsadaptedby Coca- Cola Icecek, is an effectivewatermanagementstrategyadaptedwithin thelastdecade. Thebottling activitiesare consideredwaterconsuming.Theregionupon which Coca- Cola Icecek operatesisconsideredwaterinsufficientbecauseitis from thedryregions.Theincreaseddemandforwaterfordomesticandcommercialusein theregionhas ledto many crisesdueto shortage.Coca- Cola Icecek has developeda systemto enhancethereductionof theusage,therecycling of theusedwaterandwaterreplenishment. In a bidto reducetheamountof waterspentin theproductionprocess,thecompanyhas adaptedtheaircleaningtechnology anddryoiling conveyors. Theeffortshavebeensuccessfulin reducingtheamountof waterspentdespite theincreasedvolumesof operations.Forexample,in Kazakhstan theusageof thedryoilconveyors, in 2011, ledto 2000 m3,whiletheusageof thedryaircleaningtechnology resultedin thereductionof 3,500 m3of water(Coca-Cola İçecek 1).In total,thecompanysavedabout 56,338 m3 of waterin theregions,which is a significantly highvolumebearingin mindthatits volumeof operationis on therise.

Thepreservationof watersourceshas beena challengeto theworld.Thishas beenidentifiedas one of thecausesof theenvironmental crisisexperiencedin manypartsof theworldtoday.Coca- Cola Icecek has investedina numberof projectsto reducetheamountof watersourced from thenaturalsourcesandto minimize thepollutioncreated by thewastewater from its plants.Thecompanyhas a sewagetreatmentsystemthrough which wastewater is treated,partof itreused, anda portionrealizedto thecommunitysewersystem.In total,thecompanytreated1,289,863 m3of waterin 2011, and43% of thetreatedwaterwasreusedwithin thecompanysystemswhile57% wastewater treatedwasdischargedinto thelocaltreatmentsystem.Thetreatmentandreuse of sucha largevolumeof waterreducetheamountof waterconsumedfrom naturalsourcessuchas groundwater,wells,andrivers(Coca-Cola İçecek 1). In addition,thetreatmentof waterhas assistedin thereductionof groundandservicewaterpollution.Thecompanyhas alsodevelopeda rainwater collectionprojectat Izmir. Theprojectassistedin the collectingof hugevolumesof water,forexample,in 2010, theprojectedcollected2000 m3,partof which wasusedforgardenirrigation.

Despitetheeffortsputin placeby thecompanyon watermanagementsystem,there is theevidencethattheeffortswere not voluntary, but were started out of pressure.Itreacheda pointwhenthesocietyraisedgrievancesthrough socialactivists andenvironmental expertsin severalcountries.Theactivism beganin India andextendedto dryregionsin which Coca- Cola Icecek was operating. Anumberof issueswereraisedincludingthehugeamountof waterconsumedby thecompanyin its bottling facilitiesleadingto a severeshortageof waterto the membersof thesociety(Coca-Cola İçecek 2). In addition,thecompanywasaccusedof dischargingwater wastes into agriculturallandsandon groundwaterbodies.Therefore,it is clearthatthecompanymay haveintroducedtheCSR programson watermanagementto addresstheissuesraised.TheCSR adaptedin thiscasecan be categorizedas a civilregulationdrivenprogram.

Coca-Cola Icecek Company has achieved two advantages from theCSR programin watermanagement.First,thecompanyhas reducedthepotentials conflictwith thecommunitiesupon which itoperates.Thepressurefrom civilactivists andenvironmental expertswould haveledto enmitybetween, Coca- Cola Icecek andmemberof thecommunitieswhoare thecustomersforits products.Potentialboycotts forits products,in addition,thecallforthecloseof theoperationsfrom communitymemberswould haveaffectedthecompanyadversely.Theadvantagein thiscaseis thattheCSR programsby thecompanyhaveenabledthecompanyto continueits operationswithintheregions(Gjolberg630). Thesecondadvantageof theprogramsis thatintheenditwill enhancethereducedcostsof operations.Theprogramshaveenabledthecompanyto reducetheamountof thewaterconsumeddespite theincreasedvolumeof operations.Thecostincurredby thecompanyhas reducedsignificantly andhencethecostper unitis likelyto be relativelylow.

Theentirewatermanagementsystemadaptedby thecompanyin theregionshas a significantimplicationforthesociety.Itis clearthattheregionin which Coca- Cola Icecek operatesis dryandhencecharacterizedby watershortage.Theprogramhas a directimplicationforthesocietyin three ways.First,thehugevolumeof watersavedis an indicationthatthecommunitymembershavean increasedamountof waterfordomesticandcommercialuse.Theotherbenefitto thesocietyis thatpollutionof boththegroundandundergroundwaterhas beenreducedsignificantly. Peoplecan accesscleanwater,which reducesthewater-borne diseasestheyare likelyto sufferfrom.Lastly,someof thewatercollectedby thecompanyfrom therainwatercollectionprojectis usedin irrigation projected.Thisassiststhesocietybecausetheincreasedfoodproductionfrom theprojectreducesthefoodpriceswithin thelocality.

Bankof America’s Transformational Financing Programs

Bankof America is a leadingcommercialbankin United States andbeyond.Manypeoplewould arguethat thecommercialbankmight havelittleor noneedto beinvolvedin environmental sustainability as partof their CSR. Theargumenthas beenputacrossbecauseof theassumptionthattheir activitiesdonot havetangibleadverseeffecton theenvironment.Bankof America is one of thecommercialbanksthat havedemonstratedthatplayersin thesectorhavea rolein environmental careandsustainability. Thebankhas embarkedon transformational financeaimedat enhancingenvironmental careforzero carbonsociety.Thebankprovidesfundsto clientsto supportprogramsincludingenergyefficiency,wind,solar,nuclear,hydro, biomass/biofuel, andgeothermal among others (Bank of America 1).

Accordingto bank’scorporate responsibilityreport,greenbondsworth$ 500 million havebeenissuedto variousclientstosupportenvironmentally sustainable projects.Generally,thebondshavebeenbiasedtowards wind,solarandgeothermal energyin additionto thereductionin energyconsumption.Importantly, the Bank of America wasthefirstbank to starttheprovisionof suchproducts.Therefore, it has attractedmorethan 25 banksacross theworldto supporttheprogramsin their countries.

The$ 500 million spentin thiscasehas beenallocatedto variousprogramsinitiatedby variousclients.Thebankhas provided$88.8 to Silicon Ranch Corporation to launchandrunthelargestsolarenergyprojectreferredto as Simon Solar. Theprojectaimsat producing30 megawatts andit is consideredto havethecapacitytosupplypowerto 6500 homes.Bankof America alsoprovided$40 million to financetheinstallationof thelargestLEDstreetlight projectin theworld,in Los Angeles, California. Before theprogramwasimplemented,Los Angeles consumed168 gigawatt hoursof electricity.Theannualcostof energyforthelightswas$ 15 million, whileabout 110, 000 tonsf carbondioxide wereemitted.Theprojectledto thereductionof energyconsumedby 63.1 % and47,583 metric tonsa year(Bank of America 1).

NextEraEnergy Resources is theotherbeneficiaryof thetransformational financingfrom Bank of America. Thebankprovided$ 170 million equityinvestmentto thecompanyto setup Blackwell andMinco III windfarms.Thefarmsare thelargestin United States, located in central and eastern Oklahoma, andgenerateabout 160 megawatts of greenenergy.Theprojectcan deliverpowerto morethan 42, 000 homes.Theotherprojectedsupportbytheprogramis theMinnesota Municipal Power Agency’s Hometown BioEnergy Project. Thebankoffered$17.9 million to fundtheestablishmentof biogas generatedelectricity(Bank of America 1). Theprojectis consideredthe largestanaerobic energygeneratingprogramsin United States.

Theapproachusedby Bank of America is financialandsustainingthetransformational fundcan becategorizedas individualfirm endeavors.There are nolegalrequirements,industrials policies,associationstandardrequirement,orsocials pressureto havetheorganizationintroducethegreenbondsto interestedclients.Theaimof thebankis thebenefitfrom a win-to- winphenomenon.Its clientsand society benefits,andtheincomelevels of thecompanyimprove(Jones, Daphne, and Hillier, 882–892).

TheBank of America has achievedmanyadvantagesfrom its involvementin transformational financing.First,thebankhas increasedits popularityin theUS marketandbeyond as a socialsensible organization.Thisis because,as theworldcriesabout theincreasedcostsof energyandhighamountof toxicgasemission,thebankpioneerstheprogramsto supportinnovators with fundsto runtheprograms.In addition,theBank increasesitopportunityto be thelargestfunding institutionsto environmental projects.Alotof organizationsandinvestors are increasinglydemonstratinginterestin energyefficiencyandrenewable energyprograms,which putthe Bank of America as themostappropriateto seekthefunding from (Jones, Daphne, and Hillier 882–892).Lastly,thecompanywill benefitfrom theincreasedsupportfrom thegovernmentandinternationalorganizationsuchas theUnited Nations forits supportin addressingtheproblemof energyandenvironmental degradation.

Thesocietyandcommunitieshavebeengiventheopportunityto believeandunderstandthattheissuesassociatedtotheconsumptionof fossil andnon-renewable energycan be addressed.Thesocietyin the proximity to theprojectssupportedby thecompanyare likelyto benefitfrom reducedcostof energy.Thesocietyis alsolikelyto benefitfrom reducedpollutioncausedby theconsumptionof fossilsfuels(Gjolberg605-637). Theamountof carbongasemittedreduceswith theconsumptionof greenenergyandhenceairandwaterpollutionof theregionsconcernedreducessignificantly.

Theprogramsrepresentedin thiscaseare theclearindicationof howdeeptheconceptof CSR has beenperceivedby boththesocietiesandorganizations.Theseprogramsmay showhowcaring thecompaniesare to thesocietiesandtheenvironment,butthere is a left-hand sideof theprogramsthatmanydonot understand.TheCSR programscan be usedto coverup theillscausedby thecorporate (Grayson 10-12). Forexample,theprogramsinitiatedby Coca- Cola to manageits waterusageandthepollutionof undergroundandgroundwater should not be viewedby thememberof thesocietyas a gift.Thepeopleshould be keento determinetheoverall implicationof theoperationsof thecompany.

WorksCited

Bankof America. 2013Bank of America CSR Report. 2013.Availableat:http://about.bankofamerica.com/assets/pdf/Bank-of-America-2013-Corporate-Social-Responsibility-Report.pdf

Coca-Colaİçecek. 2011Corporate Social Responsibility Report. 2012.Available at:http://assets.coca-colacompany.com/51/be/fa1c9a664de5bb38e0304d6ce2af/CCI_CSR_2011.pdf

Gjolberg,M. The Origin of Corporate Social Responsibility: Global Forces orNational

Legacies?Socio-EconomicReview.2009. 7, 605-637.

Grayson,David. The CSR Brand, QualityWorld.2003, pp. 10-12.

Jones,P. Daphne, C., &amp Hillier, D.Corporate social responsibility andthe UK`s top ten retailers.&nbspInternationalJournal of Retail &amp Distribution Management. 2005.&nbsp33&nbsp(12):882–892.