This paper examines two major global corporations — De Beers and Coca-Cola — through the lens of corporate social responsibility, stakeholder management, and ethical conduct. Part One explores De Beers' structure, key stakeholders (including the Kimberley Process and Diamond Development Initiative), the controversial issue of conflict diamonds, and coalition-building strategies. Part Two investigates Coca-Cola's code of conduct, compares it with PepsiCo's sustainability commitments, and analyzes how Coca-Cola addresses water stewardship, environmental management, technological innovation, lobbying, and global corporate citizenship programs such as its Active and Healthy Lifestyle initiative in Israel.
De Beers is the world's most recognized diamond company, established in 1888, with expertise in the exploration, mining, and marketing of diamonds. More than 20,000 employees contribute to the communities in which the company operates. De Beers carries out profitable business activities that help governments achieve their aims of converting natural resources into lasting national wealth, and the company is committed to providing positive long-term development for Africa. Anglo American and the Government of the Republic of Botswana are the two shareholders of De Beers, holding 85% and 15% respectively. The company is made up of wholly owned partnerships, investments, and subsidiaries, and is involved in most segments of the diamond value chain — including exploration across four continents; mining in Namibia, Canada, South Africa, and Botswana; valuation, sorting, and sale of rough diamonds to sightholders; sale and marketing of polished diamonds and jewelry to consumer markets; and development of synthetic materials for industrial applications (De Beers Group, 2012a).
The external environment of the organization involves the discovery and mining of diamond deposits — stages that are typically carried out by governments, sometimes in joint ventures with companies such as De Beers. When a reserve is discovered, it is considered worth exploiting because the market value of producing the raw material is very high, leading to significant financial rewards (De Beers Group, 2012a).
De Beers has three key stakeholders. The first is the Kimberley Process, which is a joint government, industry, and civil society initiative designed to stop the flow of rough diamonds used by rebel movements to finance wars against legitimate governments (De Beers Group, 2012b).
The second stakeholder is Business Action for Africa, an international business organization that supports three core objectives: positively influencing policies needed for growth and poverty reduction, showcasing good business practice, and promoting a balanced view of Africa. De Beers encourages ongoing business engagement to ensure long-term development for Africa, and this commitment is reflected through its substantial social investment activities in South Africa, Namibia, and Botswana (De Beers Group, 2012b).
The third stakeholder is the Diamond Development Initiative (DDI), a program that seeks to alleviate poverty among more than one million African informal or artisanal small-scale diamond diggers and their families by formalizing the economies surrounding artisanal diamond mines (De Beers Group, 2012b). A meaningful proportion of proceeds is returned to the African continent every year by De Beers. Their approach to sustainable development is built around five critical focus areas: Environment, Communities, Ethics, Employees, and Economics. The DDI was co-founded by De Beers alongside prominent NGOs, the British Government, and the World Bank, inspired by the cross-sector cooperation model of the Kimberley Process. It brings together governments, NGOs, and the private sector to make diamonds an engine for development (De Beers Group, 2012b).
Successful marketing has positioned diamonds as the singular way to express heartfelt, enduring devotion — gifts given to celebrate weddings, births, and anniversaries. Diamonds hold a unique place in the hierarchy of jewelry, and no true substitute exists. To a limited degree, jewelry made of platinum, silver, and gold may serve as alternatives, but these are integral products in their own right; diamonds are frequently mounted on gold or silver in their final consumer form (Durnovich, 2014). Synthetic diamonds are produced on a large scale — approximately three billion carats — but the vast majority are used for industrial purposes. Only a few thousand carats of gem-quality synthetic diamonds are produced annually, compared to 120 million carats of natural diamonds. Because very few non-clear natural diamonds are produced each year, synthetic diamonds manufactured for the jewelry industry are mostly colored to meet consumer demand for colored gems. Given their limited substitutes, diamonds remain a highly inelastic product (Durnovich, 2014).
De Beers has succeeded in attaching deep emotional value to diamond jewelry, effectively making it a necessity for marriage proposals as well as other significant occasions such as anniversaries and birthdays. Today, diamonds are perceived as the ultimate expression of enduring love and devotion, and consumers are both willing and expected to pay a substantial premium for such a gift (Bieri and Boli, 2011).
This emotional positioning drove a significant increase in demand for diamonds throughout the 20th century, even as prices rose steadily. Since the discovery of diamond fields in South Africa in the 1870s, production has risen consistently; an estimated total of 4.5 billion carats have been mined since then, with 20% of that amount extracted in the last five years alone. The increased global demand for diamonds owes much to the marketing enterprise of the De Beers Group. From the 1930s onward, De Beers managed rising consumer demand by presenting diamonds as the only true symbol of love and commitment, making the diamond ring an essential element of marriage proposals. The company also introduced the famous slogan "A Diamond is Forever" to invest stones with sentimental value. This campaign resulted in very few diamonds being resold privately — the public holds more than 500 million carats of gem diamonds, more than fifty times annual production — yet demand for new diamonds from jewelry retailers has not declined as a result (Bieri and Boli, 2011).
Globalizing consumer markets for diamonds is another achievement credited to De Beers. The company successfully grew demand for diamond jewelry in countries such as Japan, Brazil, and Germany. When Russia began producing large quantities of small rough diamonds in the 1960s, De Beers adapted its marketing campaigns to build consumer desire for jewelry featuring numerous small diamonds on a single piece, rather than one large stone. This created demand that matched the new supply. De Beers has long maintained substantial control over the market and has been able to preserve premium prices, reinforcing diamonds' association with exclusivity and luxury (Claasen and Roloff, 2012).
"Conflict diamond controversy and UN sanctions on De Beers"
"De Beers monopoly history and coalition challenge strategies"
One of the world's largest beverage companies, the Coca-Cola Company also owns twelve other billion-dollar brands, including Minute Maid, Powerade, Vitaminwater, Coca-Cola Zero, Sprite, Fanta, and Diet Coke. The company is the world's number-one provider of ready-to-drink coffees and teas, and also offers juices and other beverages. It sold approximately 24.4 billion beverage cases globally in 2009 and generated $8.2 billion in cash flow. Coca-Cola also operates the largest distribution system in the world, with around 300 local bottling partners and retailers serving customers in more than 200 countries at a rate of 1.6 billion servings per day (Coca-Cola, 2009 Annual Review).
As part of its strategic planning, Coca-Cola developed a "2020 Vision" addressing six key areas: productivity, portfolio, partners, profit, people, and planet (Coca-Cola corporate website, 2010). The company also introduced a "Live Positively" mantra for sustainability, focusing on managing and measuring water use through accountability and transparent reporting (Coca-Cola, 2009 Annual Review).
The company's 2008/2009 Sustainability Review focuses on energy and climate protection, sustainable packaging, and water stewardship. Coca-Cola has set targets for reducing recycling waste, reuse, and carbon emissions, and for replenishing the water used in beverage production. Key goals include improving water efficiency by 20% by 2012 and achieving "water neutral" status by 2020. In 2009, the company improved its water-use ratio to 2.43 liters per liter of beverage produced, and has participated in numerous community water partnerships globally to provide safe drinking water (Coca-Cola, 2008/2009 Sustainability Review).
Comparison with PepsiCo: PepsiCo has also moved toward a sustainability stance, unveiling "Performance with Purpose" as its guiding mantra. The company announced fifteen global commitments emphasizing water use, packaging, energy efficiency, responsible land use, and protection of natural resources through innovation. PepsiCo set 2015 sustainability targets including a 20% improvement in water efficiency, providing safe drinking water to three million people, and reducing electricity consumption and greenhouse gas emissions by 25%. The company also announced plans to use potato peelings for crisp packaging and, in 2010, pledged to reduce carbon emissions and water usage while training and funding farmers. PepsiCo also developed a web-based crop management tool called i-crop to help farmers calculate their carbon emissions and water use (PepsiCo, 2010).
Compared to PepsiCo, Coca-Cola is addressing a stronger strategy specifically on water stewardship. While both companies show similarities regarding packaging and recycling, PepsiCo uses 10% recycled materials in its products, whereas Coca-Cola is testing bottles made from 30% plant-based materials and has been more active in partnering with NGOs on water strategy. By working closely with growers to implement sustainable agricultural methods, Coca-Cola has strengthened its water management approach. The company's overall sustainability business framework has been assessed at 3.5 out of 5. Coca-Cola has a crucial 10-year vision that includes achieving a water-neutral position by 2020, supported by short-term targets such as 20% water efficiency improvement and 5% carbon emission reduction by 2012.
"Water stewardship, lobbying, recycling, and Israel CSR programs"
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