October 24, 2014

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Oxfam Report Teases Out Big Picture on Big Food’s CSR

New report calls for greater commitment and better reporting by the food industry's ten biggest companies on a broad range of food justice issues.

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By Francesca Rheannon 

Big Food is in the news and the buzz isn’t flattering.

Michael Moss’s recent article in the New York Times Sunday Magazine (an excerpt from his just-published book) turned a searchlight on how Big Food companies have manipulated the fat, sugar and salt content of foods to addict consumers to the panoply of obesogenic products that are creating the global obesity crisis.

Mayor Bloomberg’s attempt to start reining in the obesity epidemic by limiting sugary drinks to 16 ounces and under ran smack dab into a judge’s ruling overturning the ban, but opposition to the ban was already fierce from beverage companies like Coca-Cola

Big Ten, Small Farmers Linked – And Compete

Coca-Cola is also one of the companies examined in a new report by Oxfam America, Behind The Brands: Food Justice And ‘The Big Ten’ Food And Beverage Companies. Associated British Foods (ABF), Danone, General Mills, Kellogg, Mars, Mondelez International (previously Kraft Foods), Nestlé, PepsiCo and Unilever round out the other companies highlighted in the report. Together, the Big Ten pull down more than $1.1 billion in revenue per day in a $7 trillion food production industry that comprises about 10 percent of the global economy.

Yet, 60 percent of the world’s people are fed by the toil of small farmers – often grindingly poor producers who are under threat from increasing water and arable land scarcity, climate change, higher input prices, pricing instability -- and exploitation by Big Food in a myriad of ways. They are also facing increased competition from Big Food for dwindling resources, who, according to the report are moving to “guarantee future commodity supplies and to reduce social and environmental risks along their supply chains.”

That sentence begs a fundamental question: how will the drive to “guarantee future commodity supplies” lead the companies to “reduce social and environmental risks?” Will it be through a whole-hearted commitment to real justice throughout their operations and supply chains – or will it be by pursuing exploitive policies on one hand, like land grabs and child labor, while touting their CSR bona fides with feel-good empowerment projects here and there? Or, at best, making serious good faith efforts in one direction, while undermining it in another.

So far, it has usually been the latter two strategies, rather than the first, according to the report. Oxfam hopes the report, along with its companion effort, the Grow Campaign, will motivate companies to use their resources and influence in a “race to the top” to promote a sustainable global food system in which all producers and consumers thrive.

Report Scores Big Ten On Range of CSR Indicators, None Get An “A”

Oxfam report on big food companiesBehind the Brands links to a scorecard ranking the companies on their commitment to (and follow through on) a range of food justice issues, including land rights, equality of access and treatment for women producers, action on the climate, workers’ rights, safeguarding water resources for communities, and transparency. 

No company scored in the “good” range on any one of them.

Nestlé scored at the top of the list – 54 out of 100 points -- with highest scores garnered for its policies on transparency and water (a high “fair.”) One example cited was Nestlé’s recent efforts to address child labor in its cocoa supply chain.

But there is clearly room for improvement: the company rated “2s” on the issue of land rights and fairness to women. On women, the report damned with faint praise:

“Good on the theory, poor on the follow through. Nestlé understands the issues faced by women but has done little to ensure women in its supply chains receive genuine support.”

The company responded with a March 7th letter to Oxfam’s Jose Lopez pledging to:

“actively explore how we can more positively impact the lives of women through the Nestle Cocoa Plan and the Rural Development framework.”

Oxfam called it:

“a promising signal that the company has committed to considering ways to address gaps in their current policies and to producing a detailed plan in the next few weeks.” 

At the bottom of the scorecard:

  • Associated British Foods (score: 19), which, among other products, owns Twinings Tea
  • Kellogg (score: 23)
  • General Mills (score: 23)

Their worst scores came in on the issues of land right, workers’ rights, and support for small farmers. 

Transparency in Reporting: A Keystone Issue

The keystone issue for Oxfam is transparency – it’s the one that makes companies accountable on all Big Food companiesthe other concerns, according to Chris Jochnick, Director of Oxfam’s Private Sector department. “The reporting has to be trustworthy enough so a company's overall record can be assessed,” he told CSRwire.

Jochnick listed four realms that Oxfam in judging companies’ transparency in:

  • Overall headquarter reporting, such as with the Global Reporting Initative, including on such issues as lobbying and on the business groups a company is involved with;
  • Reporting on sourcing for a basket of fourteen commodities, with respect to quantities and what percentages are certified in some manner;
  • Reporting on suppliers and their identities;
  • Reporting on how companies are pressuring their suppliers to conform to social justice standards, such as compliance mechanisms and auditing.

Jochnick says, in general, companies in the food business have a poor record on transparency.

“None of them are reporting on their suppliers, for example, unlike the apparel industry now and even the electronic industry and the mining industry, so it’s probably a coming issue to report on that,” he told CSRwire.

Nestlé was the only company to snag a “7” (out of 10) on transparency, due to good overall corporate reporting and auditing. The company also does some reporting on volumes and certification of some of its sourced commodities. But “they have a mixed record on reporting on suppliers of any of their commodities,” Jochnick added.

Some things are tougher to monitor than others – for example sweat shop labor that goes on inside workers’ homes. Nonetheless, accountability has to start with some basic core elements, Jochnick says. “There has to be a commitment in place, there has to be some kind of mechanism for compliance, there has to be some public reporting.”

Company Commitment Necessary, But Not Sufficient

But those are not expected to do the whole job.

Jochnick is clear that legal structures and government enforcement need to exercise oversight – that Grow Campaign by Oxfamcompanies cannot accomplish the job entirely on their own, if for no other reason than to operate on a level playing field to do the right thing.

But at a time when governments have fallen in many cases under the heavy hand of corporate influence, it’s vital that corporations themselves take the fight for food justice to the public sphere. Jochnick explains:

“We know that these governments are not up to the task -- and we want them to be and we are going to push them to be -- but meanwhile, we want the companies to also step up to the plate. We want them to carry their weight in terms of acknowledging problems, pushing other actors like government to address the problems and reporting on them. These are the building blocks.”

But in a world where there is increasing struggle over resources, will companies step up to the plate? Or will they use their enormous social and economic power to pursue policies in their narrow, short term perceived interest – policies that are embedded in many cases in their business model?

Oxfam is betting that companies can be brought round through persistent pressure on the part of consumers and advocates. They hope their Grow Campaign and the Behind The Brands scorecard will build new constituencies to motivate companies to action. As Jochnick puts it:

By holding a spotlight to these companies and making [our results] accessible to the public, we're trying to raise a groundswell around these issues that will force companies, governments, other stakeholders, consumers, and shareholders to put their shoulder to this thing, if we are going to get any movement.

Companies like Nestlé, Unilever and Pepsico have already begun to move –  I reported on Nestlé’s bold recycling initiatives last week -- but Oxfam wants to make sure that they will make good on their promises.

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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