- Soda giant facing new revelations of attempted political influence in Mexico
- Despite professed commitment to transparency, corporation failing to disclose political activity and spending globally
- Resolution presented at the annual shareholders’ meeting gets impressive 13% first time vote
- PepsiCo and McDonald’s now face similar resolutions
ATLANTA, GEORGIA — Seven years after making a very public vow to “do better” on transparency, investors are growing impatient. Revelations of Coca-Cola’s efforts to undermine front of package labeling in Mexico are only the most recent to malign the soda giant’s supposed commitment. Today at the corporation’s annual meeting, after years of half measures and inaction, investors representing 562,900,000 shares or 13% of Coca-Cola share ownership voted to compel the corporation to fully disclose its political activity and spending globally.
The total is not only impressive for a first-time vote on a shareholder resolution, it ensures the resolution (see pg. 94) can be reintroduced for 2023. It also portends what is to come for PepsiCo (see pg. 87) and McDonald’s (see pg. 113), both of which face the same investor call in a matter of weeks. And these efforts are not happening in isolation. Pressure has been mounting since the January 6 insurrection, and related attempts to dismantle voting rights for corporations, to open their books, and curb political spending.
“We are asking simply for Coca-Cola to adhere to basic, universal values of integrity and accountability that all corporations should practice in all the places they do business,” said Alejandro Calvillo, and is the Executive Director of Mexican NGO El Poder del Consumidor. “Why should investors fail to be informed about or have any less visibility into Coca-Cola’s political actions in my country or any other? There is no justification for Coca-Cola to have a double standard in the way they apply transparency and ethics principles across countries of the Global North versus the Global South.”
While Mexico is of particular importance to Coca-Cola and its shareholders—given the country buys close to 50 percent of the total volume of products destined for Latin America—it is but one of nearly 200 countries in which the soda giant does business.
In Calvillo’s statement, he addressed Coca-Cola’s enduring and shrouded role in obstructing policy aimed at stemming the tide of Mexico’s dire crisis of diet-related disease; a crisis only compounded during the ongoing pandemic.
“Coca-Cola’s political activities have very tangible, extremely heartbreaking impacts on global public health, human rights, and the environment,” said Ashka Naik, research director of Corporate Accountability. “What remains in the shadows by way of global corporate political action is causing great harm, and must stop. I’d challenge Coca-Cola to prove otherwise by fully leveling with investors and the public on this front.”
What’s further, concealment of political activities is also a significant liability to investors. As Vanguard, the largest issuer of mutual funds in the world, has put it, “poor governance of corporate political activity, coupled with misalignment to a company’s stated strategy or a lack of transparency about the activity, can manifest in financial, legal, and reputational risks that can affect long-term value.” And a recent investor statement from the Interfaith Center on Corporate Responsibility (ICCR), a coalition of investors representing more than $4 trillion in assets, noted that “corporate political spending has a destabilizing effect on the broader economic and cultural environment, inhibiting the long-term sustainability of business…” Indeed members of the ICCR and close to 20 investors, representing nearly $140 billion in assets, are now lending their support for an open letter to food and beverage industry executives to step up their global disclosures.
“Disclosure across all markets should be a fundamental part of a corporation’s license to operate,” said Brianna Harrington, shareholder advocacy coordinator for Harrington Investments, the sponsors of the resolution. “Because transparency laws are weak—often thanks to lobbies funded by corporations like Coca-Cola—does that mean investors should be blind to the risks posed?”
Coca-Cola, for its part, has defended its lacking disclosures by noting that its failing grade for political transparency is the highest among its peers.
The global transparency resolution is pioneering in that it demands an accounting of not just direct political spending and activities (lobbying, campaign contributions, et al), but of all the tactics corporations leverage to peddle influence from bankrolling junk science to charitable giving that afford an undeserved halo of healthfulness to corporations fighting lifesaving policies. Its demand that transparency extend to their membership and spending on trade groups, as well as to every country in which the corporation does business, is similarly trailblazing.
“Making the invisible visible is the first step toward advancing a call demanding corporations stop interfering in our policies and politics once and for all,” said Naik.
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