Sustainability and Business

INDIAN INSTITUTE OF MANAGEMENT, KOZHIKODE

Fiji Water and CSR – Green Makeover or

Roll Number Team Member Name

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1. Do you think FIJI Water is engaged in greenwashing? What could the company do to gain environmental
credibility?

Yes, we think FIJI Water is engaged in greenwashing. The same can be corroborated through the following
instances:

➢ New website launched by FIJI Water (‘FIJIgreen.com’ - subsequently taken down in 2010), did not
provide the necessary backup calculations for its ambitious claims of 120% reduction in carbon
footprint

➢ The company also claimed that its process and products were so environmentally sound that purchase of
half a litre bottle of Fiji Water leads to net carbon negative outcome of the magnitude of “turning off a
light before you leave home for the day.” (As stated on the now defunct site FIJIGreen.com)
(https://www.motherjones.com/politics/2011/01/fiji-water-sued-greenwashing/)

➢ Further, Fiji Water’s website declared that it was responsible for afforestation of trees to the extent of
250 acres as against their self-stated claim of 85,396 metric tonnes of carbon dioxide emissions (for
base year ending 30 June 2007.) As per our back of the envelope calculations, Fiji Water would be
required to plant a minimum of around 85000 acres in order to be carbon negative.

In order to gain environmental credibility, the company may engage in the following:

➢ Provision of detailed calculations and breakup of current reduction of carbon footprint as well as future
reduction due to planned/ ongoing measures

➢ Continuous research and development on sustainable materials used in manufacturing as well as

➢ Transparency and being forthwith with regards to any claim of ‘forward crediting’ i.e., taking
undeserved credit of carbon emission reduction of the future in the present

2. Are the Fiji government’s concerns about the “negative” contribution of the FIJI Water to the local
economy justified?

Yes, the concerns about the negative contribution of the Fiji Water to the local economy are justified on account
of the following:

➢ Due to purported transfer price manipulation, the amount of money received by the local subsidiary
would be lower than the rightful amount. This not only would cause deprivation of necessary funds for
the payment of import bills, but also lead to loss of ‘multiplier effect’ i.e. income generated as a
multiple of investment in local economy

➢ Operations of the bottled water companies cause damage to the national roads and bridges to an extent
which is in excess of the cess paid by the company thus in essence, FIJI water was being subsidized by
the citizens.

➢ Use of capital-intensive manufacturing process led to minimal employment generation

Overall, the companies were not contributing favourably to the economy of Fiji. They were consuming a
considerable number of resources and were not making any investments in the local economy. Fiji Water, in
particular, was diverting the monetary resources to the US, considering it to be a safe haven.
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3. What else should/can the company do to improve its CSR performance and its relations with the Govt/
Community?

Steps that the company can take to improve its CSR performance -

➢ "Recycle the Bottle": Conducts plastic collection drives in school, colleges, malls, corporate offices as
well as festive and social gatherings to create awareness about the recyclability of plastic as PET bottles
can be recycled up to 8 times. The proceeds from these plastic collection drives goes for the welfare of
waste pickers’ underprivileged children
➢ Multi-partnership projects with civil society organizations and the local communities for the
rejuvenation of water bodies and educating about a better waste management system through the simple
act of segregating wet and dry waste in homes, offices, etc.
➢ Focusing on rainwater harvesting by building community lakes and wells to increase groundwater level
and setting up small production plants throughout the country to reduce carbon footprints and save
transportation cost
➢ Green Energy: Using solar power to reduce the dependency on fossil fuels for the production, Also,
using the electric vehicle for the transportation of water throughout the region to reduce the carbon
footprint

FIJI water company can continue to upheld the CSR initiatives it was taking in FIJI and can add further to them
so as to create a positive image in the society. Due to its retaliation against the rise in prices of the export duty,
the government might already feel like the corporation is evading or avoiding taxes and FIJI Waters should
work upon getting a mid-way out of the situation. By creating a positive image as well as genuinely contributing
towards the society, FIJI water can real long-term rewards and profits and can improve their business value and
reputation as well as include stakeholder’s interest. FIJI waters should measure its performance on a Corporate
Social Performance

Audit and can measure itself and the organisation's impact on the surroundings as well as reap results that are
substantial.

4. Critique - compare and contrast Fiji water’s approach and that of Patagonia

The companies can be differentiated based on the following factors:

➢ Innovations: Fiji water aimed towards innovation (Square bottle, hibiscus flower print on bottles, etc)
while Patagonia aimed towards sustainable innovation (Common Threads initiative, Organic Cotton,
others)
➢ Marketing Campaigns: Fiji Water used celebrity endorsements, image building of the brand as a
tropical paradise, and other campaigns to clearly differentiate themselves from competitors and increase
their sales. On the other hand, Patagonia had marketing campaigns like 'Don't buy this jacket' that aimed
at reducing Consumerism while spreading information and educating consumers to make better
decisions.
➢ Company Objective: Patagonia strived to positively impact its employees and environment by
incorporating stakeholder benefits rather than just prioritizing profit maximization for the shareholders
(Sourcing costly raw materials, pledging 1% sales or 10% profit towards environmental initiatives). In
comparison, Fiji Water is seen to be putting shareholder profit maximization as their priority.
➢ Motive: Fiji Water initiated sustainable practices in a reaction to the environmentalist’s criticism and
initiated PR campaigns alongside (“carbon negative”, “every drop is green”) in response. On the
contrary, Patagonia had environmentally friendly initiatives in its operation since its inception.
➢ Transparency: Fiji Water disclosed the emissions data and impact that their products had on their
website but it was critiqued that the actual footprints were not disclosed and that the company was busy
greenwashing. While, Patagonia was transparent in its activities by sharing the study results with other
retailers, lifecycle analysis, supply chain information in the public domain, and stating negative
externalities associated with its products