Coca-Cola and Global Energy Balance Network: An Example
If a scandal hit either the company or the non-profit, both would be affected because of the relationship. Consumers might decide to no longer support either or both organizations.
Consider the case of Coca-Cola and the nonprofit Global Energy Balance Network (GEBN). According to Coca-Cola’s website, it is the number one provider of “sparkling beverages, juices and juice drinks, and ready-to-drink teas and coffee,” and it's the largest beverage company in the world. GEBN is a nonprofit with the goal of promoting healthful eating. More precisely, the nonprofit advocates that “weight-conscious Americans are overly fixated on how much they eat and drink while not paying enough attention to exercise." Coca-Cola, through its foundation, has a goal of promoting well-being and used the slogan “Helping Families Get Fit,” in a 2012 foundation video.
The Coca-Cola Foundation is the philanthropic arm of the company that operates most of its CSR activities and donations. To support the Get Fit goal, the Coca-Cola Foundation gave $1.5 million to GEBN and close to $4 million to two of its founding members. Some critics say the donation was an attempt to deflect sugary drinks’ role in obesity.
The criticism intensified after it was learned that GEBN’s website was registered to the Coca-Cola headquarters in Atlanta, and the company was listed as the site’s administrator. The story received national attention when The New York Times ran a story about the relationship.
The Association Press obtained emails between the company and GEBN that showed “Coke was instrumental in shaping the group. It helped pick its leaders, edited its mission statement and suggested content for the group's website. A proposal circulated at Coke also laid out a vision for a group that would counter the ‘shrill rhetoric’ of ‘public health extremists.’”
The involvement of Coca-Cola in GEBN’s day-to-day operations was not disclosed or readily understood prior to these investigations. Although the president of Coke North America stated he believed that Coke’s intentions with GEBN were good and the goal of the CSR relationship was to be helpful — the damage was done.
Where did all the mutual benefits for Coca-Cola and GEBN go? Even if the intentions were good, the lack of disclosure and transparency turned a CSR activity into a crisis. The end result was that GEBN was disbanded within three months of The New York Times story, and Coca-Cola’s CSR activities were put into question. Ultimately, the end result was a loss of reputation and damaged relationships for the company.
As the Page Principles suggest, and as this example demonstrates, public perception is determined 90 percent by what the organization does and only 10 percent what it says—especially when it discloses very little. Companies and non-profits have to be careful when creating CSR relationships because each organization’s well-being is often dependent upon the other and each other’s actions. As in this case, failing to disclose a CSR program and having it found out later was disastrous.
With the advent of technology such as social media, it is easy to share such omitted or hidden information with a vast amount of people in a short time. Consumers, supporters, employees, stakeholders and even people who might not already have a relationship with either organization would feel deceived and betrayed. Trust would be lost. The negative effect on the organizations would be far-reaching and long-term, and it could be difficult, if not impossible, for the organizations to rebuild relationships and trust with their publics.
Although transparency and disclosure might cause some discomforts, these are the best courses of action and the most ethical communication choice either organization can make. “Transparency leads to authenticity, then listening, which should lead to honest communication,” says Augie Ray, executive director of community and collaboration for United Services Automobile Association.Next Page: Guidelines and Regulations