“True” CSR: PepsiCo and the Human Right to Water
The term “corporate social responsibility” has come to mean a host of corporate actions that confuse any efforts at definitional consistency. What is CSR? Who does it benefit? And why should companies engage in it?
The following case study focuses on what I term “true” CSR. True CSR focuses on doing good for those who are affected by acorporation’s actual line of business. “True” CSR looks at legal rights, including human rights, and builds policies and practices that enhance them. “True” CSR moves beyond marketing and constitutes corporate activity evidencing a concern for more than the bottom line.
Earlier this year, the Pepsi Refresh Project was launched. The Refresh Project harnesses social media tools to empower communities to support projects that benefit social and environmental causes. By supporting organizations with cash donations, PepsiCo can be said to be exhibiting corporate social responsibility, but all with an aim outside its own operations. The value to communities and projects that benefited from the Refresh Project is undisputed. Further, the recognition of PepsiCo as a corporate leader in this space is not questioned. However, the Pepsi Refresh Project is not “true” CSR. For all the media attention gained by its efforts, the Refresh Challenge in no way affects the human rights issues at the core of PepsiCo’s actual line of business.
As a user of tens of billions of gallons of water in its food and beverage operations globally, including in many nations facing water shortages, PepsiCo has recently adopted a water policy dedicated to fulfilling the human right to water as defined by the United Nations. This water policy is exactly the outcome that stakeholders should be heralding and seeking to encourage. This water policy is “true” CSR.
The policy has already achieved significant outcomes. In India, PepsiCo’s manufacturing team has reduced its water use by more than 45% since 2005, conserving more than three billion liters and in 2009 achieving a positive water balance–that is, giving back more water than its facilities consumed. PepsiCo also partners with non-governmental organizations to help install irrigation systems, improve sanitation programs and recharge dry wells in developing communities around the world. Since 2005, the PepsiCo Foundation has committed more than $15 million to initiatives that provide access to safe water and sanitation to communities in developing countries.
To be clear, PepsiCo is not beyond reproach. It has run into some problems with human rights in the past. From 1991 to 1997, Pepsi invested in Burma and incidentally supported the junta regime. Facing massive opposition, PepsiCo officially divested from Burma on May 31, 1997. The message here, however, is that PepsiCo’s recognition of the human right to water, and its commitment to ensuring that it sources water in ways that do not have a negative effect on local communities and ecosystems, is where the attention and media hype should be focused.
More than one year after PepsiCo adopted policies in support of the human right to water, the U.N. General Assembly formally recognized “the right to safe and clean drinking water and sanitation as a human right that is essential for the full enjoyment of life and all human rights.” PepsiCo was one step ahead of the curve.
The lesson: CSR needs to be refocused. While CSR tools like the Pepsi Refresh Project are certainly innovative and empowering, they must be paired with actual respect for human rights in business activities. Only then will the proper balance be reached in promoting a corporation’s commitment to social responsibility while ensuring that those affected by its activities benefit. Only then will “true” CSR be achieved.
To read more case studies on “true” CSR, click here.
- California’s Call to go “Conflict-Free”
April 7th, 2011
- Guiding Principles for Business and Human Rights from the United Nations
January 3rd, 2011
- President Obama Proclaims Human Rights Day, Bill of Rights Day and Human Rights Week
December 10th, 2010
- Ruggie Releases Draft Guiding Principles on Business and Human Rights
December 6th, 2010
- Promoting Corporate Citizenship by Crowdsourcing Market Power
November 29th, 2010
- Political Advertising and Corporate Responsibility: A Call for Shareholder Action
November 8th, 2010