Abstract

FEMSA Group, a beverage and retail company headquartered in Monterrey, Mexico, has incorporated sustainability into its core business strategy with a special focus on water resource management. This case explores how a multinational corporation relying heavily on water resources can operate in a water-scarce region, advancing conservation and securing a “social license to operate.” It also examines the range of water conservation measures the company has instituted and maps out how FEMSA has created economic, social, and environmental value for the communities where the business operates. This success has emerged, in part, through partnerships with like-minded nongovernmental organizations and other for-profit companies. The FEMSA experience thus demonstrates that corporations working in concert with other stakeholders will often improve sustainability performance and business results.

Introduction

FEMSA Group (Fomento Económico Mexicano, S.A.B. de C.V) began operations in 1890 and has since emerged as a major beverage and retail company with its base in Monterrey, Mexico. FEMSA now operates in 12 countries, registers annual revenues of over US$18 billion, and employs more than 260,000 people. Its conservation and sustainability efforts serve as a beacon of corporate social responsibility in Mexico.

FEMSA's emphasis on sustainability has emerged partly out of necessity. As the operator of the world's largest independent Coca-Cola bottling enterprise, as well as a stakeholder in Heineken, FEMSA Group must steward the most vital ingredient in its beverages— water. To that end, the company created the nonprofit FEMSA Foundation in 2008 to balance environmental protection, social responsibility, and economic growth. The FEMSA Foundation not only works to conserve water resources, but also delivers a broad array of social benefits to the local communities around FEMSA facilities, including nutrition training, clean water, and sanitation infrastructure. Our discussions with FEMSA and FEMSA Foundation employees have shown that the corporate value of sustainable water commitments extends beyond just securing a company's supply of a key resource.

This case study highlights the water conservation activities of the FEMSA Foundation and the closely related Monterrey Water Fund, known in Spanish as Fondo de Agua Metropolitano de Monterrey.