World Water Day is a United Nations observance that focuses attention on the importance of freshwater and advocating for the people’s right to have access to potable water. This day is observed annually on March 22. I would like to honor this observance in my own small way by sharing the amazing socially responsible investment (SRI) work of faith communities like the Passionist and their recent shareholder dialogue with Coca-Cola and our interest regarding their sustainable management of freshwater resources.
A number of investors sat with a management team from Coke regarding this issue on the 18th of March. This dialogue is part of an SRI process which serves the mutual interest of religious investors and the long term and sustainable goals of our companies. The process serves the interest of religious stakeholders by creating a venue where we can offer our moral position and share the social concerns that we have either from our own missionary experiences or from the public concern that catches our attention. In this way we engaged with our corporate partners in developing a strategy for sustainable and just business practices that relate to the moral concerns that we have.
In representing a Catholic religious community our moral perspective is informed by the social teachings and position of our Catholic Church. There are a number of Catholic social principles involved here and certainly one of them is the “Universal Destination of Goods” which I elaborated in a previous blog post, “Revisiting trade and introducing the ‘Universal Destination of Goods.’” However in a 2003 message prepared by the Pontifical Council for Justice and Peace to the Third World Water Forum in Kyoto the Catholic moral concern on access to water was primarily addressed through the “Right to Life” principle. Presenting the message Cardinal Martino stated:
Many people living in poverty, particularly in the developing countries, daily face enormous hardship because water supplies are neither sufficient nor safe. Women bear a disproportionate hardship. For water users living in poverty this is rapidly becoming an issue crucial for life and, in the broad sense of the concept, a right to life issue. …
Respect for life and the dignity of the human person must be the ultimate guiding norm for all development policy, including environmental policy. While never overlooking the need to protect our eco-systems, it is the critical or basic needs of humanity that must be operative in an appropriate prioritisation of water access. Powerful international interests, public and private, must adapt their agendas to serve human needs rather than dominate them.
“Right to Life” is usually associated with the issue of abortion but in the recent social teachings of Pope Benedict XVI I have noticed a broadening use of this principle. The “Right to Life” principle is used to defend all social issues that essentially impact human life. In this case the Vatican is concerned with water access because without access to potable drinking water a struggling community is essentially facing extermination.
Our social interest as investors of a company like Coke is that their product requires the steady use of a water supply. In certain water scarce regions the use of this supply may further deplete potable water to a community that is already struggling. This shareholder dialogue began in response to a 2004 concern that was raised when Coca-Cola lost the use of its water license in the water scarce area of Kerala, India. Our own Passionist community has a missionaries and ministries in Kerala and our concern was with the potential negative impact that a company which we invest in may have to a suffering community that we minister to.
While Coke has defended what they consider their responsible use of water this issue did serve as a wakeup call for Coke to become a corporate leader in sustainable water usage. This incident demonstrates the potential business loss due to water concerns. The loss was felt immediately with the loss of the water license to a plant in India but it was also felt with the negative public relations stemming from this incident. The purpose of these shareholder dialogues is to further commit our company to demonstrate corporate leadership in this crucial issue which other companies especially in the agro-business sector are causing even greater water scarcity issues. Coke’s leadership here may provide a standard process for measuring its water footprint and achieving a ‘water neutrality’ impact on the local communities where they do business.
We are impressed with Coke’s current involvement with this issue and we are excited about emerging developments in water risk management. Coke is also moving ahead with addressing the water needs of other local communities that it operates in with a number of water recycling technologies. Recently Coke announced its Replenish Africa Initiative (RAIN) where Coke will invest 30 Million dollars for water projects in Africa with the goal of offering potable water to 2 million people in Africa by 2015. Coke’s stated goal on this overall issue is to “safely return to nature and to communities an amount of water equivalent to what we used in all our beverages and their production by 2020.” This is quite a challenge. Our job as a responsible investor is to annually evaluate this goal with Coke while raising any further social considerations.