Erinch Sahan (right), a private sector policy advisor at Oxfam GB, introduces Behind the Brands, a big new report and company
scorecard, launched today.
So we didn’t know we were eating horses. What else don’t we know about the supply chains delivering our food? 18 months ago, Oxfam posed this question to the Big 10: the world’s 10 largest food and beverage companies. In alphabetical order, they are Associated British Foods, Coca Cola, Danone, General Mills, Kelloggs, Mars, Mondelez, Nestle, Pepsico and Unilever. Today, we launch the results of our research and make it the centre piece of a brand-spanking new campaign: Behind the Brands.
The results aren’t pretty. The Big 10 seem unengaged with their supply chains (they don’t seem to know what’s going on and how to address it). Nor do they tell us much about where their commodities come from and next to zilch about how they use their power to shape the behaviour of suppliers. We came up with numbers to show this and ranked them across some important issues. This is how we did it.
7 critical themes
We chose seven themes that directly or indirectly change conditions for the poorest people in the food system: women, small-scale farmers, farm workers, land, water, climate, and transparency; asking whether the Big 10 are:
- improving conditions for women, small-scale farmers and farm workers;
- promoting equitable and sustainable access to and use of land and water;
- reducing emissions and helping farmers adapt to climate change; and
- being transparent about their supply chains and broader corporate activities
How the Big 10 stack up
After 18 months of analysis by Oxfam – and a long process of consultation with academics, industry experts, Oxfam staff on the ground, organisations working on international supply chains and the companies themselves – we came up with the following scores:
So what lies beneath these scores? The following questions transcend the themes and form the back-bone of the scorecard.
Are they telling their suppliers to do the right thing?
Most of what goes into the products does not come from farms operated by the Big 10. So the most important issue is how they shape the behaviour of their suppliers. On this point, the most relevant documents are their supplier codes (and supplier guidelines), which contain the standards they ask their suppliers to meet. An example is Unilever’s Sustainable Agriculture Code, which tells its suppliers to work with farmers’ groups to provide training to farmers and to provide safe working conditions for workers.
We had two problems in assessing supplier codes. Firstly, we cannot know if the codes are enforced, partly due to a lack of transparency around the auditing of suppliers. Secondly, most of the codes contain little meaningful detail. So we could not rely on supplier codes alone and had to broaden the scope of our scorecard.
Are they aware of the broader issues?
Across the themes, we assess if the Big 10 recognize the challenges faced by agricultural communities. For instance, under the women theme, we rewarded Coca Cola, Nestle, Pepsico and Unilever for publicly acknowledging that women lacked access to training related to food markets and for recognizing that small-scale farmers need assistance in adapting to climate change. While this can seem disconnected with their actual practices, for a company to address a problem, it must at least be aware of it.
Do they know details of their own supply chain?
Do companies know the relevant details of their supply chains? A company that knows where there is poorer land governance, will know it needs to focus on that part of its supply chain; a company that identifies water-stressed regions that they operate in is better equipped to channel its efforts.
Are they committed to improving conditions?
Once they identify an issue, we want to see a company commit to tackling it. This could be a target or a general commitment to tackling a problem. For instance, under the water theme, we rewarded nine of the Big 10 for setting a target to reduce water use in their own operations (since this impacts availability of water for local farmers). In farmers, we looked for a commitment to ensuring that small-scale producers receive a price that allows them to earn a decent income (none of the Big 10 does this).
Do their projects address core issues in their supply chains?
The Big 10 are active in philanthropic projects but we focused on whether they are doing anything to address the core issues in their supply chains. For instance, we looked for projects that improve farmer productivity, women’s empowerment, wages, land rights, resilience to climate change and access to water (we have a long list). Under most themes, we also required that they work with a relevant organisation, such as a local union or a farmers’ organisation. Few of the projects conducted by the Big 10 met our criteria.
What remains unanswered
Whether the Big 10 use their power to make their suppliers do the right thing is not very clear. It is hard to get information about who they do business with and exactly where the commodities in their products come from. We know even less about how they engage with their suppliers and, after assessing information in the public-realm, are left with unanswered questions such as:
- How much emphasis do they put on social and environmental issues when negotiating contracts?
- Do they know how much it would cost for their suppliers to do business responsibly and do they pay enough to allow this to happen?
- How much information do they provide to their suppliers in terms of advance notice of upcoming orders and quality requirements?
- Who bears risks relating to transport and weather-related disruption and fluctuating demand?
Greater transparency about how they manage these issues with suppliers is an essential first step – starting with some facts on whether and
how they incentivise their buyers to take account of these issues. Until the Big 10 stop hiding behind the excuse of “commercial sensitivity”, they are not serious about being held to account for their power to improve the lives of the marginalised, many of whom are growing the food we eat.
What do the Big 10 need to address?
The Big 10 have several gaping holes in their policies but Oxfam suggests that they prioritise taking action as follows:
1. Make explicit commitments to recognize and fix the injustices in their supply chains.
2. Identify areas of high risk and analyze and disclose their impact on supply chain issues.
3. Make clear their expectations of their suppliers and support them to do their part to fix the injustices.
Erinch Sahan led the team across Oxfam International that put together the scorecard.