Stamina needed for sustainability in the food sector
April 5, 2021
Food and beverage companies are making progress through their policies to promote women’s economic empowerment, secure land rights and limit greenhouse gas emissions in their supply chains, but implementation on the ground remains uneven, a report from Oxfam finds. But the buck doesn’t stop with consumer-facing brands—Oxfam points out that gaps in the policies and implementation of large agribusinesses pose additional limitations for brands. Companies across the entire food value chain should be enhancing transparency and traceability, using responsible procurement practices, adopting strong human rights due diligence and ensuring climate justice, among other steps.
In 2013, NGO Oxfam launched the Behind the Brands campaign with the objective of “chang[ing] how the world’s largest food and beverage companies do business.” From February 2013 to April 2016, the campaign scored and ranked the social and environmental sourcing policies of the ten largest food and beverage companies globally: Unilever, Nestlé, The Coca-Cola Company, Kellogg’s, Mars, PepsiCo, Mondelez, General Mills, Associated British Foods plc and Danone. Companies were scored based on their publicly available policies, commitments, initiatives and outcomes in seven categories: Land, Women, Farmers, Workers, Climate, Transparency and Water (you can read more about the scores, indicators and the methodology used here).
As a complement to Behind the Brands, in 2019 Oxfam launched an assessment of seven major agribusinesses with ties to the food and beverage sector and a significant role in the trade of sugar, cocoa and palm oil, in recognition that company pledges would “only be truly effective if global agribusinesses followed suit.” The companies include: Archer Daniels Midland (ADM), Barry Callebaut, Bunge, Cargill, Louis Dreyfus Company, Olam International and Wilmar International Limited. This 2021 report also shares some findings from that assessment.
We have summarised some of the key takeaways from the report and its executive summary below.
Some positive examples of progress, but blockages remain
“[W]hile companies have taken action at the global level, progress stalls in translating those approaches to countries and through supply chains. There are positive examples and innovations happening in key sourcing countries. Particularly promising are implementation efforts that are locally owned and involve engagement between multinational and national companies, civil society, labour unions and governments. But key blockages must be addressed – including by providing the right incentives, disclosing suppliers and supporting suppliers to take up the agenda – to create change at scale.”
Gaps remain in addressing gender equality
“On women’s economic empowerment, companies have produced gender assessments and action plans of variable quality that leave persistent gaps in addressing gender equality in supply chains.” For example, in the wake of the campaign, “Mars, Mondelez and Nestlé … committed to conduct and publish impact assessments to understand and show how women in their cocoa supply chains are faring, and then to put in place specific action plans to address the issues raised by the assessments.”
However, some of the gender assessments “fail to give voice to cocoa-growing communities by engaging in and fully documenting participatory methods, and leave critical issues – like discriminatory employment practices affecting women workers – unaddressed.” In addition, “[g]aps in the provision of gender-disaggregated data and publicly available information remain. Two of the three companies have developed action plans; however, in their sequencing and content the action plans bear little relationship to the challenges raised in the gender assessments, which undermines their intended purpose.”
Companies are adopting land tenure security frameworks, but implementation is patchy on the ground
“On land rights, companies have made significant progress in adopting and utilizing available frameworks and guidance at global and headquarters level, but implementation is uneven within specific supply chains and geographies, as the task becomes increasingly complex.”
According to Oxfam, companies have gained significant awareness of land rights issues in their supply chains compared to the start of the campaign, when “very few companies had land rights on their agendas.” Since then, The Coca-Cola Company, PepsiCo, Nestlé, Unilever and Associated British Food’s subsidiary Illovo Sugar “all pledged to respect women’s, communities’ and smallholder farmers’ land rights across their sourcing, and adopted provisions on free, prior and informed consent (FPIC). Most also committed to engage suppliers on land investment models, help remediate land conflicts and encourage governments to improve land governance.”
All of the companies “have integrated provisions on land rights into their supplier requirements and guidance documents; there is also evidence of training programmes and support mechanisms to encourage suppliers to become compliant. These governance structures have established a foundation for implementation.”
“However, the evaluation finds that compliance with these codes, provisions and standards is still largely based on voluntary commitments. This makes enforcement difficult. The result is low uptake of land commitments among the companies’ suppliers, and mixed evidence of implementation progress across different locations.”
There are improvements in emissions data and disclosure and progress towards a 2°C global warming scenario…but more limited progress towards a more ambitious 1.5°C
“On climate change, companies have made progress on delivering targets in line with a 2°C global warming scenario, by addressing agricultural emissions, and have also improved data and disclosure. But not all companies have kept pace with a 1.5°C global warming scenario, and serious action on deforestation remains elusive.”
“In sum, we have found that while companies have taken important steps at the global level to make good on their commitments on women, land and climate, progress stalls in translating those approaches to countries and through supply chains. Common to the three themes is an implementation gap among suppliers. Food and beverage companies sit toward the end of massive value chains: to implement their own sustainability commitments, they must review their purchasing practices and work with and through their suppliers, all the way to the farm gate.”
Agribusiness companies are “lagging far behind their customers”…
“More than 90% of the agribusinesses’ scores came out at below 50%, with the lowest scores seen on the themes of transparency and accountability, and small-scale producers.” (You can see the 2019 and 2020 scorecards for each company starting on page 16 of the report.)
“On the land theme, only four of the seven agribusinesses scored for integrating the principle of FPIC into their supplier codes, requirements or guidance to respect the rights of indigenous peoples.”
“On the climate theme, only two agribusinesses had adopted science-based targets to reduce greenhouse gas emissions across their value chains.
…But companies have made some “notable” policy commitments since 2019. For example:
“Olam has signed up to the UN Women’s Empowerment Principles – the only major agribusiness to do so.”
“Barry Callebaut, Cargill and Olam have all adopted emissions reduction targets that cover Scope 1, 2, and 3 emissions, although only Barry Callebaut and Olam base these on the stricter 1.5°C global warming scenario.”
“Four out of the seven agribusinesses support low carbon and regenerative agricultural approaches.”
“All seven agribusinesses have made explicit commitments to support small-scale producers in their supply chains to increase their resilience and income.”
“All seven agribusinesses now disclose the names and locations (site level) of suppliers along the value chain of at least one of their highest-risk commodities, including recent commitments by Barry Callebaut, Cargill and Olam to disclose their cocoa suppliers.”
Six key learnings from Oxfam’s work to advise companies on implementation
“Engagement between different value chain actors – including multinational companies, national-level companies, national and local civil society organizations, community leaders, labour unions and governments – creates space for developing innovative solutions.”
“Lack of transparency continues to be a roadblock to greater progress. Experience across countries shows that it is not possible to build connections and dialogue between value chain actors without adequate information about which companies source from which suppliers, and where.”
“Local ownership of companies’ sustainability efforts promises better results. When companies locate staff and resources where the work is needed most, their implementation efforts are more locally rooted and more relevant.”
“Greater integration of and incentives for sustainability are needed across global management systems. Staff responsible for sourcing and procurement within companies play a significant role in ensuring that companies deliver on sustainability policies in countries where they source raw materials.”
“Supplier engagement is foundational to implementation in countries, and is best done pre-competitively. To implement their sustainability commitments, food and beverage companies need to ensure that their suppliers – the agribusinesses, as discussed previously, but also smaller suppliers and nationally or regionally owned companies – have the right policies and practices in place to advance women’s economic empowerment, respect human rights and land rights, and mitigate agricultural emissions.”
“Gender, land, climate and other sustainability issues are interlinked: companies need to take a rights-based approach to address the underlying systemic dynamics. … Rather than choosing a sustainability issue and designing an intervention to address it, companies should look at systems holistically. They must prioritize the issues that affected communities and workers find most salient, while seeking to address the root causes of the challenges.”
The way forward: Recommendations for companies and investors
“The only way business can become truly sustainable is by changing what, how and where we buy. Procurement must be at the heart of sustainability strategy and action. That’s why Mars has united our sustainability and procurement functions to advance the radical changes that are needed in our sourcing plans.”
“Businesses thrive when they serve all their stakeholders: consumers, employees, suppliers, partners, and those who make up the extended value chain. By fully integrating our business and sustainable living objectives into one, unified strategy – the Compass – we aim to demonstrate that being a purpose-led, future-fit business drives superior performance. Accountability and responsibility for the delivery of our sustainability commitments spans across the business, as we will only be successful if every Unilever employee, and those connected to us, joins us in this journey.”