Strategic decision Making discussionForum 6

Discussion Forum

Go to the end of Chapter 10 and do Exercise 10A "Is Coca-Cola or PepsiCo's Sustainability Report Better?" Complete all the steps (one-page minimum assignment).  After submitting your report in the discussion forum for this week, type at least two peer replies (200-word minimum each).  As a class, attempt to make a decision as to which company wins.

Text -

Fred R David, F. R. (2019). Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 17th edition. Pearson.

Chapter 10. Business Ethics, Environmental Sustainability, and Corporate Social Responsibility

Chapter 11. Global and International Issues

Answer the question in APA format, NO plagiarism, need two peer responses

Student 1

Which firm has a better sustainability report, Coca-Cola or PepsiCo?

            The Coca-Cola environmental and social governance report 2020, identified at least six key strategies and goals that Coca-Cola is actively working to achieve.  The report outlined many initiatives and steps the company has taken to fulfill their role in business ethics, social responsibility, and sustainability efforts to ensure a competitive advantage.  The six best initiatives on this report were water reduction, healthy choices, a world without waste, reducing carbon footprint, diversity, equity, and inclusion, and enabling women.

            Water reduction has been a key initiative for the Coca-Cola Company and according to the Coca-Cola governance 2020 report, Coca-Cola has met or exceeded the replenish goal over the past six years.  Coca-Cola describes their 2030 water strategy as a strategy that will increase water security in all areas where they touch people’s lives through operations, source ingredients and through product packaging.  These are all important aspects of being committed and working towards improvement of the environment.

            Healthy choices are another area Coca-Cola is trying to improve upon with offering wide range of beverage options, including coffee, tea, dairy, juices, and water.  Coca-Cola is committed to reducing sugar and adding healthier nutritious beverage alternatives.  Coca-Cola understands people are becoming more health conscious about what they choose to consume, which means providing alternative options and reducing sugar are targeting a different consumer base which will increase revenue.

            World without waste initiative is one that encompasses many goals, mainly reducing plastic waste by creating more sustainable packaging and by collecting and recycling a bottle or can for each one sold by 2030 (Coca-Cola, 2020).  Coca-Cola plan on making 100% of its packaging recyclable on a global scale by 2025.  They have partnered together with Ocean Cleanup to intercept plastic waste before it enters the ocean which demonstrates their commitment to a better environment.

            Coca-Cola is trying to reduce their carbon footprint which means increasing their water efficiency.  According to Coca-Cola Social Governance Report (2020), Coca-Cola has improved water usage over the past 10 years.  Coca-Cola is focused on packaging design, recycling initiatives, and partnering with others in support of a cleaner environment.  Coca-Cola is taking steps to achieve a more sustainable and inclusive economic future (Coca-Cola, 2020).

            Coca-Cola claims diversity, equity, and inclusion is part of their core values and growth strategy.  Initiatives that the Coca-Cola company are pursuing are the commitment to spend 1$ billion dollars with suppliers in the upcoming years and to foster an inclusive culture within the workplace by measuring progress against gender globally.  Coca-Cola is making efforts to include all individuals, regardless of gender identity, culture and generational life experiences.

            Coca-Cola believes in equality and enabling women and has set forth some initiatives to achieve this goal by year 2030.  One initiative is for the Coca-Cola Company to be 50% led by women globally and encourages advancement of women through its Global Women’s Leadership Council.  Another initiative is conducting pay equity analysis on a frequent basis to ensure elimination of gender or race discrimination.  Coca-Cola also provides transparent reports regarding race and gender and provide the board members with diversity metrics on a frequent basis.  This shows their commitment to a fair and equitable workplace for their employees which in turn will yield a more satisfied and productive workforce.

            PepsiCo 2020 sustainability report shared six key focus areas where they have taken initiatives including agriculture, water conservation, product and packaging, climate and people.  PepsiCo focuses on food products as well as beverages therefore, it is important for the company to focus on sustainable agricultural practices.  According to PepsiCo (2020), they achieved 100% sustainability sourced direct-source crops in 28 countries in 2020.  PepsiCo views farms as natural ecosystems as opposed to factories in which the company has implemented the use of cover crops to build soil health and isolate carbon.  One goal PepsiCo has set is the Positive Agriculture ambition, which is to spread regenerative farming practices across 7 million acres by 2030, which is equal to PepsiCo entire footprint (Pepsi, 2020).

            Water reduction is of critical importance on everyone’s part, especially large corporations such as Coca-Cola and PepsiCo.  PepsiCo has initiated the Net Water Positive goal which focuses on reducing water usage by improving operation and agricultural water efficiency.  They are working on strategizing a plan to identify reuse opportunities for process wastewater within their operations section, in hopes for a 50 percent reduction by 2030.

            Product and packaging are also important to PepsiCo and they have started to build better labels with easy-to-read nutritional labels, reducing sugar in beverages and reducing saturated fats in foods.  Reducing sugar in beverages is the same initiative Coca-Cola is exploring and both companies are offering different healthier options.  PepsiCo is also looking to make a difference in their carbon footprint and the climate crisis.  They have set a goal to eliminate 5 million tons of greenhouse gases by 2030.  PepsiCo is also vested in their employees and their customers as they look to improve the livelihood of 250,000 people in the agricultural supply chain (PepsiCo, 2020).

            In my opinion, I believe Coca-Cola and Pepsi share some of the same initiatives and goals and each appears to be using strategic planning.  This being said, Coca-Cola does a better job outlining their initiatives and providing real sustainable evidence of the steps they have employed to achieve their initiatives.  They are both successful corporations Coca-Cola’s social governance report (2020) is more clearly laid out and defined which allows the reader to more easily navigate and understand.

Reference

David, Fred R., David, Forest R. and David, Meredith E. (2020).  Strategic management: A Competitive Advantage Approach, Concepts and Cases (17th Edition).   Pearson.

Coca-Cola (2021).  Retrieved from  https://www.coca-colacompany.com/content/dam/journey/us/en/reports/coca-cola-business-environmental-social-governance-report-2020.pdf#page=5

Coca-Cola (2021).  Retrieved from  https://www.coca-colacompany.com/reports/world-without-waste-2020

PepsiCo (2020). Retrieved from  https://www.pepsico.com/sustainability-report/strategy

Student 2

In 2020, the Coca-Cola Company continued its sustainability mission and reported on the progress of its major priorities including reducing added sugar in beverages, reducing carbon emissions, minimizing packaging and ramping up recyclability of packaging, returning water to communities, more utilization of sustainable agriculture, prioritizing diversity, equity, and inclusion through promotion of women leadership globally, and giving back through foundation contributions to various charitable organizations (Coca-Cola Company, 2021).  The Coca-Cola Company has reported significant gains in all of it sustainability efforts.  Through the 2020 Business & Environmental, Social and Governance Report (2021), the company announced actually achieving three of its goals in 2020:  reducing relative carbon emissions by 25% against a 2010 baseline, replenishing ALL the water used in the brand’s drinks and in their production (goal achieved since 2015), and enabling the economic empowerment of 5 million women entrepreneurs (the company actually exceeded this goal with over 6 million women entrepreneurs enabled globally).  As previously mentioned, all the goals have made significant progress.  Coca-Cola reports that approximately 125,000 tons of added sugar has been removed on an annualized basis through recipe changes in 2020, 60% of the equivalent bottles and cans introduced into the market in 2020 were refilled, collected or recycled, and the company developed a Global Social Justice Framework for Action focusing on listening, leading, investing, and advocating as a mechanism to support diversity, equity, and inclusion goals going forward (Coca-Cola Company, 2021).

PepsiCo Sustainability Efforts

            Similarly, the PepsiCo Company reported positive gains it its 2020 sustainability efforts.  The six main areas of focus for PepsiCo include advancing communities of the world through supportive practices that promote improved farmer livelihoods and agricultural resiliency, lead efforts in water security in communities, creating more nutritious product offerings, reduction of packaging and waste from packaging, reducing greenhouse gas emissions, and creating a diverse, equitable, and inclusive workplace (PepsiCo, 2021).  Some areas of significance as reported in the PepsiCo Sustainability Report (2021) include growing Demonstration Farms to more than 350 globally with 80% adopting regenerative farming practices, 22% of the company’s global markets offer a PepsiCo product in 100% rPET packaging, investments of more than $55 million in safe water access programs, achieving 100% renewable electricity for the company’s U.S. direct operations, achieving 71% of the food portfolio containing less than 1.2 grams of saturated fat per 100 calories, and introducing the Racial Equality Journey commitments, which include increasing diverse representation within the company and committing over $570 million to support black and Hispanic businesses and communities (PepsiCo, 2021).

Analysis

            As one can imagine and as the reports point out, both companies have very similar sustainability goals and objectives.  The common themes include a reduction of the carbon footprint, water accessibility and regeneration, packaging improvements, agricultural improvements and advancements, a focus on health-consciousness and product improvement, and diversity and inclusion awareness and goals.  Each has made concerted efforts to set and achieve goals that encompass business ethics, social responsibility, and environmental sustainability.  However, in reviewing both companies’ sustainability report, it seemed to me that the Coca-Cola Company instituted goals with more measurable results.  The Coca-Cola Company set clear benchmarks and deadlines in which achievement should be met in every category and goal that was set.  PepsiCo also set some concrete benchmarks, however, in some categories the goals implemented and achievements discussed were geared more towards ideas instituted, partnerships made, and dollar amounts invested.  As a result, I would award the Coca-Cola Company a solid ‘A’ grade.  Not only have they set long term and short term objectives in each of the categories (ethics, environment, and social responsibility), the goals are clearly measurable and results driven.  I would award the PepsiCo Company a ‘B’ grade.  They, too, have instituted goals focused on all three categories, however, in some areas the results are not clearly measurable and defined.  Having noble ideas and aspirations, though meaningful, is not quantifiable, but having measurable concrete results is showing commitment, action, and clear progress.

References

David, F. R., , David, F. R., & David, M. E. (2020). Strategic management: Concepts & cases, a competitive advantage approach (17th ed.). Pearson.

PepsiCo. (2021). 2020 sustainability report summary.  https://www.pepsico.com/docs/album/sustainability-report/2020-csr/2020_sustainability_report_summary.pdf?sfvrsn=2b435ae0_8 .

The Coca-Cola Company. (2021). 2020 business & environmental, social and governance report.  https://www.coca-colacompany.com/content/dam/journey/us/en/reports/coca-cola-business-environmental-social-governance-report-2020-highlights.pdf.