Blog 5 - Water.org & Pepsico - CSR Reporting to Stakeholders

COMM 4849-001

Blog 5

Vannessa Sutter-Smith

Dr. Ronald Strand

I believe the PepsiCo organization did an exceptional job of reporting on their community investment and corporate social responsibility (CSR) programs. After a simple google search and a browse through the PepsiCo’s organizations website – it was easy to locate the company’s 2014 report discussing their impact and generous contributions made by the PepsiCo organization to Water.org.

 

I think this example is an exceptional instance of great reporting to stakeholders – the information regarding the corporate social responsibility program between PepsiCo and Water.org was easy to find and is extremely informative down to the last detail. Including funding information, the reasoning for the funding and why the initiatives are moral for the stakeholders of PepsiCo. They explain “PepsiCo remains steadfastly dedicated to building a profitable and sustainable 21st century corporation — one that is a good investment for our shareholders, a good environment for our employees, a good citizen in our communities and a good steward of our planets resources.”

PepsiCo reiterates several times why their funding went towards the Water.org organization, explaining that “Water is the fuel to allow our business, and the communities across the world of which we are a part, to flourish. We owe it to ourselves and to future generations to be responsible stewards of this limited resource.” This example is great because it allows for the organization to encourage continuous support from their stakeholders – the imagery, storytelling and detailed reporting in regard to the initiatives associated with Water.org all appear to continuously encourage the support of stakeholders to help sustain the environment and help those around the world.

According to Noam (2013) it is extremely important for companies to engage in CSR activities and to effectively report on these instances to their shareholders. He explains “Companies today are being called upon by their shareholders and other stakeholders to not only boost the bottom line, but also to help address some of the country’s most challenging problems, including those concerning economic development and the environment.”

PepsiCo continues to go onto explain that the organization is dedicated to investing in sustainable social change through various enterprises with numerous water partners. However, they also take the opportunity to explain why Water.org is different than that of other organizations and why PepsiCo has taken the directive to dedicate resources to this particular organization. PepsiCo explicates that, “Water.org created WaterCredit. Expanded in India in 2008 with help from a $4.1 million grant from the PepsiCo Foundation, WaterCredit works with select microlending organizations to provide families the opportunity to finance the water or sanitation soloutions they need most.”

Another important reason that this type of reporting to stakeholders should be done is because “The CSR report due to the typical breadth of information most relevant to stakeholders’ interests, can be a key component of a company’s stakeholder engagement strategy. The CSR report is also a medium for transparency (which often improves a company’s reputation with certain stakeholders, particularly shareholders, employees, suppliers and communities within which the company operates) and may be used as an effective outreach tool as part of an ongoing shareholder relations campaign.”

             

Blog 4: The Water Project and the Water Challenge - Ryann Churla

I have always struggled with drinking enough water each and every day. I always find myself reaching for coffee or something sweet, like the occasional soda. I want to drink more water not only to improve my health and my skin, but the health of my bank account!

A quality cappuccino does not come cheap these days and tends to really add up by the end of month, but thankfully water is very budget friendly! For those like me who aim to become water lovers, and are always looking for ways to engage with charitable causes, The Water Project has the perfect solution; The Water Challenge!

The Water Challenge is a social marketing campaign started by The Water Project to motivate people to not only drink more water and save some money, but make a donation to help fund water projects throughout Africa. This campaign works by participants vowing to only drink water, a typically zero cost beverage, for two weeks and donating what they save through this lifestyle change to The Water Project. This can also be done by giving up another frequent expense if drinking only water is not achievable.

 

The Water Challenge

The organization markets this project as being an easy challenge that everyone can do, and should do. The Water Project mentions that this is a great alternative to other fundraisers, not only because it is unique but because you do not have to ask others to tap into their savings to make a contribution; The Water Challenge is marketed as a way to make a small sacrifice with a big impact. 

There is no ideal target for this campaign, the organization encourages anyone to partake and believes that it would be an ideal project for people to get their school, community group or church involved with. From a communications standpoint, I believe that this a great approach as it opens the campaign to as many people as possible and allows for anyone to participate at their own convenience. I believe that the communications tactics implemented are appropriate for the wide range in audiences they wish to reach. The graphics and information are easy to follow and engaging, however, the organization marketed a wristband along with the campaign which I found to be unclear as it did not specifically relay how the purchase of one effected one’s participation or funds to be raised.

However, it should be noted that there seems to be a preference for getting schools involved as when you chose the “Receive Water Challenge Complete Kit” option on the website, it prompts you to enter your educational institution’s name. In this kit, participants receive a variety of resources to aid their campaign and are encouraged to additionally start a crowdfunding page to further supplement the money saved and donated. I think this also a great addition as it further motivates those involved by including incentives and features such as showing the specific community and cause your efforts aided, as well as a potential update with videos and pictures from those you helped. This is a fantastic way to personalize the cause and project, and get people signed up for The Water Challenge.

The organization is also clear in describing how they benefit from people participating in this social marketing campaign. Over 3,000 children die from diarrheal diseases daily, a serious and devastating situation that can be aided through access to clean and safe water. This access can be achieved through the funds raised through The Water Challenge, The Water Project states that through drinking only water for two weeks, the average person can accumulate enough funds to help give one person that access. However, they do not communicate for how long or how much water can be supplied.

While I believe that this campaign can help promote a healthy habit and financial management for many across the globe, the organization itself does not mention any reasoning for increasing water consumption outside of donating to their cause. Any benefit involves donating to the organization, which I believe is a missed opportunity for the organization to not only further promote their cause, especially in schools as this seems to be an objective of theirs, but to provide a benefit to donors other than engaging in philanthropy.

 

Drink Water!

Ultimately, I believe that The Water Project has employed a successful campaign, however they need to add clarification to some aspects while seeking to actively instigate a positive behaviour amongst its targeted audience.

Blog 3: Criticisms of Generosity Water's CRM

Any time an organization sets up a cause-related marketing campaign, it will struggle with backlash from a sceptical audience. People are protective about their money and they are even more protective about being scammed by charities promising to help others. This means that an organization must work to provide transparent information to their consumers and provide the most efficient funding plan possible.

One criticism of Generosity Water is that they are based in California. In general, one of the difficulties with cause-related marketing is that you have to convince your audience that you are succeeding in providing a benefit to a cause. California is currently in talks to have restrictions placed on their daily water consumption due to frequent droughts and I feel like it may be difficult to convince Californians that selling their water to people in other countries is beneficial at that current time. The website provides a link to an article explaining how they are preventing harm to the state’s water source and promises that “We will soon be opening up additional manufacturing locations in other parts of the US and even around the world”. I appreciated the research done around this problem however, I still feel like Southern California is an odd place for an organization to take water from. It is important to provide water to those in other countries, however California struggles with water shortage on a yearly basis and it could be argued that they too are suffering from the Global Water Crisis. California might be willing to contribute to a good cause, however I wonder if they are the right target audience for this campaign.

Generosity Water’s impact map

Another problem with this organization’s cause-related marketing tactic is that the section on their website that lists their currently funded projects, was unavailable. The world map that apparently listed the projects on the website was not working. Though this might have been a small IT issue, it could make a massive difference for the organization’s credibility. One of the first things I look for when thinking about donating to an organization, especially with cause-related marketing, is that I look for the impact the organization has already made. It is one thing to promise your consumers that you will provide people with water; it is another to actually make a difference. This is especially true after the campaign KONY 2012. KONY 2012 initially promised that if consumers purchased a kit for a set amount of money, they would be able to capture the warlord Kony. Though they initially set out as an awareness campaign, people bought several packages believing that their money would be put to good use. The organization Invisible Children has since closed down and although the organization did bring awareness to the problem, many people criticized it for its lack of action.

I believe that Generosity Water could also correct their cause-related marketing strategy by changing the location of their water source and correcting issues around their currently funded projects. People generally need to see the credibility around an organization and will look to see if the cause-related marketing program is actually effective. Without these changes, the organization could suffer greatly from its lack of awareness.

Generosity Plastic Bottles

Cause-related marketing (CRM) has the potential to be highly successful and provide many benefits to the cause they are aiming to promote and support. However, there are often cases when the organization fails to be genuine and make a positive impact on this chosen cause. Often this is due to hypocrisy or disingenuous CRM activity. I believe that there is a paradoxical relationship between Generosity Water’s CRM campaign and their chosen cause of providing safe water.

My main criticism of this CRM involves the organization’s use and promotion of plastic water bottles. While Generosity Water’s plastic bottles are recyclable, this does not mean that their use comes without consequence. Each piece of plastic recycled poses a potential environmental threat. The recycling process is accomplished through melting down used plastics, requiring large amounts of heat, resulting in the emission of fumes known as Volatile Organic Compounds (VOC). The heat requirements as well as the VOC imputed, is known to cause considerable harm to plant and animal life as well as contribute to the growing problem of climate change.

These harmful fumes also negatively impact the health of people who may come into contact with either the direct fumes, or recycled plastic. I would argue that this is a major pitfall for consumers, the cause as well as the organization. These plastics may put people into direct contact harmful chemicals such as BPA and DEHP. These chemicals can potentially lead to an increased risk of miscarriage, a variety of cancers, as well as harm towards children who are in their developmental stages.

It should also be noted that recyclable does not equate recycled. Research has shown that only 30 per cent of the six billion pounds of plastic bottles that are thrown out annually are actually recycled, even if they are made to be recycled. To add insult to injury, only 20 per cent of the bottles actually recycled are reused to create new and more eco-friendly bottles.

The problem unfortunately does not stop there. The production of plastic bottles actually contributes to the global water crisis. Safe water sources are limited, and need to be used with caution. To create one pound of plastic, approximately 22 gallons of water are required. This is incredibly concerning. Based on these findings, it can be assumed that to create the bottles that are thrown out, it would require 132,000,000,000 gallons of water.

Water Bottle Pollution

Through the production and use of plastic water bottles, I believe that Generosity Water is hypocritical in its actions due to these harmful impacts, and is conducting a form of “pinkwashing”; a main mission for Generosity Water is to help bring an end to the global water crisis through providing water to those who cannot access potable water. By reducing the amount of water available through plastic production and contributing to environmental issues such as the pollution of oceans, and potentially harming those it provides water to, Generosity Water is actually contributing to the harm it seeks to reduce.  

To improve the status of their CRM campaign, I suggest that Generosity Water replaces its plastic bottles for a material that carries less health and environmental risks, such as glass. I think this would better drive home their mission for sustainability, longevity, and aiding in global water issues.