Walking the Talk: Food and beverage companies

31 March 2015
Walking the Talk
Food and beverage companies slowly start turning policy
into practice in Oxfam’s Behind the Brands campaign
Oxfam’s 2nd Annual Food and Beverage Company Rankings
Oxfam launched its award-winning international ‘Behind the Brands’ campaign in
February 2013. It ranks the biggest international food and beverage companies,
the ‘Big 10’, on the strength of their policies on transparency, women,
agricultural workers, farmers, land, water and climate change. The aim of the
campaign is to create a race to the top, encouraging the Big 10 (Associated
British Foods (ABF), Coca-Cola, Danone, General Mills, Kellogg, Mars,
Mondelez, Nestlé, PepsiCo and Unilever) to improve their policies and practices.
This briefing presents the updated March 2015 scorecard showing changes in
both the ranking of the ‘Big 10’ and changes to the thematic trends. Eight of the
10 companies improved their overall score since February 2014 and Unilever
have now overtaken Nestlé to claim the no. 1 spot. ABF and Dairy giant
Danone have dropped in the rankings.
You can view the current scorecard, and previous ones, on the Behind the
Brands website: www.behindthebrands.org/scorecard
Anglo-Dutch food giant Unilever has taken the top spot on Oxfam’s Behind the
Brands scorecard. Unilever overtakes Nestlé with an overall score of 71% compared
with Nestlé’s 69%. Eight of the 10 companies have improved their overall score since
February 2014, with only Danone and Coca-Cola showing no improvement overall.
Oxfam launched its award-winning international ‘Behind the Brands’ campaign on
February 26, 2013.1 It ranks the biggest international food and beverage companies,
the ‘Big 10’, on the strength of their policies on transparency, women, agricultural
workers, farmers, land, water and climate change. The Big 10 are Associated British
Foods (ABF), Coca-Cola, Danone, General Mills, Kellogg, Mars, Mondelez, Nestlé,
PepsiCo and Unilever.
The Big 10 are increasingly talking about social and environmental issues relevant to
their supply chains. However, their level of ambition to address them varies
significantly. While the companies have improved their policies on paper, they now
need to implement them more thoroughly in order to benefit the farmers, workers and
communities in their supply chains.
ABF still performs badly and, at 30%, is relegated back into last place. The scores of
the four companies at the bottom of the scorecard – Kellogg, Danone, General Mills
and ABF – are less than half that of leader Unilever’s. Dairy giant Danone was
ranked joint 6th in 2014, but it now mingles with ABF and General Mills at the bottom
of the pack.
The lowest scoring theme on the scorecard is farmers. With the exception of Nestlé
and Unilever, a majority of companies lack sufficient ambition to support smallholder
farmers. Today more than ever, these farmers need support, especially to adapt to
climate change. Companies face growing risks of weather-related supply chain
disruption, and as millions of farmers continue to be ravaged by the impacts of
climate change, companies increasingly have both a moral responsibility and a
business case to better support their suppliers to adapt to the changing climate.
Oxfam wants to create a race to the top by encouraging companies to improve their
policies and practices. Since the 2014 scorecard update there has been a mixed bag
of score changes across the seven themes.
Behind the Brands March 2015 scorecard
Nestlé has fallen behind Unilever, despite having published welcome new policies
over the last year, including a commitment on land rights and a detailed action plan
on improving the rights of women in its cocoa business. Unilever moved ahead of
Nestlé after publishing new commitments, including a Responsible Sourcing Policy
that sets out new guidelines and requirements for its suppliers based on ‘continuous
improvement’. However, the two companies remain close in score, and way ahead of
the rest.
General Mills, PepsiCo, Mars and Unilever have made the biggest improvements
overall in the past year. However, despite its score increasing from 21% in 2014 to
31% this time, General Mills again lingers near the foot of the scorecard. Despite
new policies on climate change and water, and improved supply chain transparency,
General Mills still has one of the lowest scores on the workers and land themes, and
it scores only two out of 10 in four of the seven themes. The company, though
improving fast, has a long way to go to catch up with the leaders.
Big 10 scores: changes between February 2014 and March 2015
Danone dropped way down in the March 2015 scorecard, from 6th to joint 8th. Its
score remained unchanged over the past year, while its competitors stepped up. The
company’s water score decreased by two points from five out of 10 in 2014 to just
three this year, in part because it failed to publicly disclose its response to the CDP
international reporting standard. This company has the single lowest score of any
company on any theme in the scorecard: only one out of 10 on gender – a pitiful
score and one worthy of some self-reflection in Danone’s headquarters.
ABF, which makes brands like Twinings and Ovaltine, is once again the lowest
scoring company after having improved to 9th place in 2014. The company has one of
the lowest scores in the water theme, because it still fails to make adequate
commitments or provide sufficient guidelines to its suppliers on issues such as water
pollution. ABF’s 10th place in the transparency theme shows that it is less willing to
be held accountable than other companies. Despite its poor performance, ABF
demonstrates pockets of best practice. For example, its subsidiary Illovo has
published a socio-economic impact assessment of its African sugar operations.2
Supporting smallholder farmers in the companies' supply chains is a major
weakness for many of the Big 10 (though Unilever and Nestlé score comparatively
well, achieving 8 and 7 respectively). Half of the companies (Coca-Cola, Danone,
General Mills, Kellogg and PepsiCo) only score two out of a possible 10 points for
this theme.3 As increasingly volatile weather continues to destroy farmers' livelihoods
across the world, it has never been more urgent for these companies to address their
relationship with the farmers in their supply chains. The companies themselves
recognize that their whole business model is threatened by climate change and yet
continue to neglect farmers in their supply chains.
March 2015: Big 10 scores on farmers
In the last year, Danone, General Mills, Kellogg, Mars, Mondelez and Unilever all
improved their scores on climate change. Unilever and Nestlé remain the leaders
here, though others have also taken progressive steps to tackle climate change. For
example, in response to more than 238,000 actions from Behind the Brands
supporters, General Mills and Kellogg promised to lead the industry by committing to
setting science-based targets to reduce greenhouse gas emissions, including supply
chain emissions from agriculture. It is vital that all companies make bold
commitments to science-based emissions reduction targets, both in their own direct
operations and that they hold their suppliers to account too. Among the 10 biggest
companies, the hidden emissions in the companies' agricultural supply chains are
equivalent to at least 40 average coal-fired power stations4 – too big for any
responsible company to ignore.
In developing countries, on average women account for 43% of the agricultural labor
force,5 making gender equality and women’s empowerment central to increasing
productivity and reducing poverty.6 However, women’s rights are the second lowest
scoring theme: 8 of the Big 10 companies score 5 or below. This is despite efforts
from Mars, Mondelez and Nestlé to follow through on commitments to do more for
women’s rights in their cocoa supply chains. Leading companies on women’s rights
are now only beginning to properly understand and recognize issues faced by
women in their supply chains. However, every one of the Big 10 still falls short of
upholding sufficient guidelines and standards for their suppliers on this issue.
There’s a big gap between the leaders and laggards on farmers, land and workers’
rights. In these three themes the lowest scoring companies score only two, while the
leading companies score eight. For example, Danone, General Mills, Kellogg and
Mars remain at the bottom in the assessment of their policies on the sustainable use
of land, land rights and access to land. Meanwhile, leading companies such as CocaCola, PepsiCo and Nestlé, have made strong commitments to protect people's land
rights. Similarly, Kellogg and General Mills continue to trail behind other companies
in making commitments to good practice on workers' rights, with Unilever ahead of
the rest at the other end of the scale.
Behind the Brands’ supporters have taken more than 700,000 actions to call on the
Big 10 to clean up their supply chains since the campaign began in 2013. A number
of companies have genuinely listened and acted. In 2013, Coca-Cola became the
first ever company to adopt a ‘zero tolerance’ policy against land grabs that applies to
its suppliers. Since then, PepsiCo, Unilever and Nestlé have followed suit. Illovo, a
subsidiary of ABF and a focus of Behind the Brands 2013 Land and Sugar campaign,
came out with a new zero tolerance policy in March 2015. While the policy does not
extend to the whole ABF group, as Africa’s biggest sugar producer, Illovo committing
to adopt a zero tolerance approach to land grabs and requiring its suppliers to do
likewise is a significant step to protect the land rights of the communities in which
they operate.7 Mars, Mondelez and Nestlé promised to tackle the dire situation that
women cocoa farmers typically face in global supply chains. These farmers face
disproportionate challenges, for example, earning less than men, being excluded
from training and lacking access to land.8
But what does all this talk really mean for people who are working in the companies’
supply chains? Will these fine words be ever properly put into practice?
For example, all 10 companies now recognize the principle of free, prior and
informed consent for communities affected by land acquisitions, at least for palm oil.
To ensure that communities are treated fairly, their suppliers must also adhere to this
same principle – or be made to. We acknowledge that it is not easy for companies to
implement these changes, but only by turning promises into practice will these
companies ensure that people affected by land deals are not left homeless and
destitute. As recently noted by Coca-Cola in relation to its land rights commitments,
‘We certainly do not have all the answers, but our approach is to continue to learn, be
open and transparent, and provide the Coca-Cola system and our suppliers with a
practical path that better enables us to recognize and safeguard the land rights [of]
communities and traditional peoples’.9 This is a measured and realistic response.
Oxfam has tracked the progress of Mars, Mondelez and Nestlé in implementing the
commitments each one made to women cocoa farmers in 2013. In October 2014,
Oxfam published the results of an independent evaluation of the impact assessments
and action plans.10 These showed that all companies, especially Mars and Nestlé,
need to raise their ambitions. In response, Nestlé published a more detailed action
plan, while Mars later agreed to strengthen its own by June 2015, while Mondelez is
working to implement their plan through 2015. Oxfam will continue to monitor their
progress. Oxfam has published similar roadmaps for PepsiCo and Coca-Cola in
relation to land, and Kellogg and General Mills on climate change.
It is important that companies improve their management of the social and
environmental issues within their supply chains. But they really need to bring about
systemic change – that’s the big prize. The Big 10 must use their power to achieve
sustainability across the food and beverage sector. For example, they should
continue to use their influence within roundtable and sector initiatives to make
changes. There is also a need to go beyond talking to seeking solutions. This may
involve collectively resolving issues with common suppliers and sharing knowledge
and expertise with others across supply chains. Crucially, these companies can also
use their power and influence to advocate to governments for stronger legislation, for
example, relating to the protection of labor rights.
Some individual scores have dropped on the themes of water, workers and farmers
because of changes in methodology.11 For the scorecard to remain relevant it has to
reflect emerging best practice, as well as lessons that Oxfam has learned from its
own programmes’ research and engagement with others. For example, reflecting on
Oxfam’s concern about growing inequality across the globe, we have strengthened
our focus on the issue of the living wage in the workers theme. In the farmers theme,
we have improved the way we assess company sourcing practices in relation to risk
sharing across the supply chain, living income and the share of value received by
smallholder farmers at the bottom of the supply chain. We update our methodology
each year but try to keep these changes minimal, so that we can still faithfully
compare the companies’ performance over time.
Global leaders will meet in Paris in December 2015 to agree a new climate change
deal. This will be critical in putting the world on a path to avoiding dangerous levels of
climate change. By 2050, there could be an extra 25 million malnourished children
under the age of five because of climate change,12 and 50 million more hungry
people.13 Food and beverage companies must encourage world leaders to agree to a
progressive deal. They should speak up now about the impacts that climate change
will have on their operations and stand up for farmers. Companies additionally must
continue to tackle their own emissions, as well as agricultural supply chain
emissions, leading as a sector and setting an example for wider commitments to
emissions reductions. Companies must use the opportunity of the Paris climate talks
to call for increased investment in farmers, both to protect food security and their own
business interest.
Improving resilience to climate change cuts across the entire scorecard, particularly
the gender, water, climate change and farmers themes. However, many of the Big 10
continue to fail to adequately support smallholder farmers in what they need to do to
adapt to climate change – although there are strong positive exceptions. Food and
beverage companies must do far more. The farmers theme is now the lowest scoring
theme in the scorecard, so it is time that companies did more to treat farmers,
especially women farmers, more fairly throughout their supply chains.
The challenge of finding answers to the systemic problems bedevilling global food
chains is as relevant today as it was when the Behind the Brands campaign was
launched two years ago. The global food system remains broken. The Big 10
continue to thrive while many small-scale producers and agricultural workers struggle
to sustain their families and realize their rights. Women continue to be
disproportionately affected. Too many farmers and agricultural workers still struggle
to make a decent living, and climate change will only make it harder.
The fact that companies are now scoring better on the Behind the Brands scorecard
reflects some welcome new policies and promises. The Big 10 seem more willing to
tackle the big social and environmental issues within their supply chains. However,
some of the Big 10 are going further than others in working with suppliers to
safeguard the rights of farmers, agricultural workers and communities. All of them still
have a long way to go to ensure that their commitments are implemented.
F. Buckingham (2014) ‘Top 10 sustainability campaigns of 2014’ The Guardian
http://www.theguardian.com/sustainable-business/2014/dec/24/top-10-sustainability-campaigns2014 (accessed March 2015)
ABF has a number of different business areas, which are managed in a disaggregate manner. A
partial score of 25% is therefore applied to ABF where at least one but not all of its subsidiaries meet
the criteria. ABF’s retail subsidiary Primark is not considered in the Behind the Brands assessment.
Kellogg has since published new information relating to smallholder farmers, which has not been
considered during this update.
Oxfam (2014) ‘Standing on the sidelines: Why food and beverage companies must do more to tackle
climate change’ https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp186-standingsidelines-big10-climate-emissions-200514-en_0_0.pdf (accessed March 2015)
FAO (2011) ‘The state of food and agriculture’ http://www.fao.org/docrep/013/i2050e/i2050e.pdf
(accessed March 2015)
IFAD (2015) ‘Int’l Women’s Day 2015: Women farmers key to fighting hunger’
http://www.ifad.org/media/press/2015/20.htm (accessed March 2015)
Illovo Sugar Limited ‘Illovo Group Guidelines on Land and Land Rights’
(accessed March 2015)
S. Zoen (2015) ‘The truth about women and chocolate – soft promises or solid change?’ http://policypractice.oxfam.org.uk/blog/2015/03/cocoa (accessed March 2015)
E. Potter (2014) ‘Reflections on our land rights journey’ http://www.coca-colacompany.com/cocacola-unbottled/reflections-on-our-land-rights-journey (accessed March 2015)
10 Oxfam (2014) ‘Women and cocoa evaluation’ https://www.oxfam.org/en/research/women-andcocoa-evaluation (accessed March 2015)
11 In the last year, February 2014 to March 2015.
12 G.C. Nelson et al. (2009) ‘Climate Change: Impact on Agriculture and Costs of Adaptation’,
International Food Policy Research Institute,
13 IPCC (2007), Chapter 5: Food, Fibre, and Forest Products, in ‘Climate Change 2007: Working Group
II: Impacts, Adaptation and Vulnerability’, IPCC Working Group II Contribution to AR4,
http://www.ipcc.ch/publications_and_data/ar4/wg2/en/ch5.html (accessed March 2015)
For further information on the issues raised in this briefing please e-mail
[email protected]
Oxfam is an international confederation of 17 organizations networked together in more
than 90 countries, as part of a global movement for change, to build a future free from the
injustice of poverty. Oxfam America (www.oxfamamerica.org), Oxfam Australia
(www.oxfam.org.au), Oxfam-in-Belgium (www.oxfamsol.be), Oxfam Canada
(www.oxfam.ca), Oxfam France (www.oxfamfrance.org), Oxfam German
(www.oxfam.de), Oxfam GB (www.oxfam.org.uk), Oxfam Hong Kong
(www.oxfam.org.hk), Oxfam India (www.oxfamindia.org), Intermon Oxfam
(www.intermonoxfam.org), Oxfam Ireland (www.oxfamireland.org), Oxfam Italy
(www.oxfamitalia.org), Oxfam Japan (www.oxfam.jp), Oxfam Mexico
(www.oxfammexico.org) Oxfam New Zealand (www.oxfam.org.nz) Oxfam Novib
(www.oxfamnovib.nl), Oxfam Quebec (www.oxfam.qc.ca)
Please write to any of the agencies for further information, or visit www.oxfam.org.