Yesterday Oxfam released the Behind the Brands Report and Scorecard aimed at shedding light on the global food system and its massive social and environmental footprint. The food system employs one billion workers (or a third of the global work force), uses 70% of the world’s fresh water, emits close to 30% of all greenhouse gases, and sources from hundreds of millions of smallholder farmers, many living on the edge of survival. Oxfam’s campaign is aimed at giving consumers and investors a little more power to influence the companies controlling that system.

The Scorecard is built on an interactive web platform, allowing anyone to trace their favorite products and brands back to the parent company. On the site, the Scorecard ranks the top ten largest food and beverage companies (the “Big 10”) by evaluating the companies’ policies, commitments, and suppliers. People can dig deeper into the scoring of a specific company across seven themes relating to poverty and their supply chains: smallholder farmers, workers, women, land, water, climate change and transparency. The site enables people to then send messages about the issues most important to them directly to the companies.

A scorecard of this nature is sure to provoke pushback, and here are a few things we have heard or anticipate hearing from company executives:

First, the Big 10 will point the finger at other powerful actors in the food system such as governments, retailers, traders, etc. Oxfam also works to hold these actors accountable. (See our prior report on the big traders.) But the major food and beverage companies exert enormous influence, particularly with respect to certain commodities. The food system can be roughly illustrated below, with billions of consumers at one end, 1.5 billion farmers at the other, and a small group of companies in the middle. We estimate that 500 companies control 70% of that food system. In some sectors as in cocoa, three companies, Nestle, Mondelez and Mars, purchase 30% of the global cocoa supply. We also know that these companies benefit from having great influence through their marketing, trade groups, public sector and business contacts—well beyond their particular market share. Ultimately, we chose to target the Big 10 since they serve as the critical bridge between consumers and the wider system.

Companies will also lament that we don’t give them sufficient credit for good work on the ground. There is merit to that critique. We know of good projects and we’ve even worked with companies on some of them. However, we couldn’t possibly measure all the projects across 14 commodities in the developing world, and that wasn’t our intention. These projects get plenty of visibility already. They benefit from the vast corporate marketing prowess of the major brands and we will highlight some of effective projects on our platform.

Our Scorecard asks the bigger questions: Are companies acknowledging the full range of their impacts? Are they measuring and reporting on those impacts? Are they committing to basic norms and standards? And are they using their influence and supplier codes to push those commitments down through their supply chains? Those are the building blocks for addressing these issues comprehensively. No company should be able to claim it is responsible if it doesn’t acknowledge the problem of land grabs, or assess discrimination against women, or disclose its major suppliers, no matter how many demonstration projects it has.

The flip side of our high level focus is that the Scorecard doesn’t examine particular scandals either. Coca Cola scores better than most among the companies on worker rights, despite a long-standing campaign (“Killer Coke”) for the murders of union organizers at a bottling plant in Colombia. Oxfam considers a company’s public commitments, transparency, and supplier codes as good proxies for practice, but we also recognize the limitations. The Behind the Brand Campaign offers a platform to raise both good and bad practices on the ground, and we will be digging in to certain Scorecard themes and company conduct over the course of the Campaign, starting with cocoa and gender.

Finally, companies (or more likely stakeholders) may complain that we are only looking at one end of the supply chain. We do in fact cover some issues more broadly, transparency and greenhouse gas emissions for example. But, we acknowledge that there is plenty more to consider with these brands, starting with nutrition and obesity. If anyone questions the capacity for mendacity of major food brands, the scathing New York Times cover article last week on the “hyper-engineered, savagely marketed, additive-creating battle for American ‘stomach share’” should put those doubts to rest. We simply weren’t able to tackle all of that in one Scorecard, but see this initiative as filling an important piece of the puzzle.

The Big 10 have already shown that they are willing and able to address complex issues, particularly when they see a business case or feel sufficient pressure. Oxfam’s Behind the Brands campaign is all about both sides of that—highlighting the bottom line and strengthening the consumer, investor, and public constituencies who bring the heat.

Just back from Rio+20, where the one thing everyone seems to agree on is that the draft agreement up for approval by heads of state has failed even the most pessimistic projections. Government negotiators have expressed their dismay and NGOs are widely condemning the event as a farce, or as Oxfam has put it: “Rio will go down as the hoax summit. They came, they talked, but they failed to act.”

Over at the Corporate Sustainability Forum (CSF) and Business Action for Sustainable Development (BASD) events on the margins of the official Rio conference, the mood was decidedly different. The four-day gathering attracted over 2,500 business leaders and sustainability experts to laud private sector progress and launch new initiatives. While government leaders were wringing their hands, here a stream of corporate executives took the stage to call for greener economies and respect for human rights. The panel themes I took part in are indicative—business and water risks in times of conflict, climate change resiliency measures for small farmers, the need for sustainability expertise on corporate boards, and stakeholder expectations of businesses with respect to the human right to water and sanitation (full CSF agenda here).

The CSF’s official report directed to the UN General Secretary includes over 200 corporate and industry commitments and a variety of progressive public policy recommendations, including:

• “Make the Rio+20 conference the beginning of the end of all subsidies to fossil fuels and reorient subsidies towards clean and renewable energy”;
• Enforce human rights, labor, environmental, and good governance standards;
• Invest in agricultural productivity, particularly for smallholder farmers;
• Promote increased disclosure of integrated corporate sustainability information and require all public and private pension and investment funds (including sovereign wealth funds) to integrate environmental, social and governance factors into their operation.

Those recommendations were burnished by specific commitments, including calls by various CEO groupings for more transparency around environmental and social impacts (including a Natural Capital Declaration to “ integrate natural capital considerations into products and services”) and public commitments to water sustainability and access.

The social movements and NGOs gathered at the Peoples Summit across town dismissed these efforts out of hand. If anything, the more business talked the more “the people” objected. Friends of the Earth, La Via Campesina, Third World Network, and others delivered a petition to end “Corporate capture of the United Nations” and to resist market-based solutions as false promises that only serve to “further concentrate the control of corporations over land, resources and peoples’ lives.”

Among the corporate folks at the CSF/BASC events, there was a sense of frustration that business was being misunderstood by all sides – recalcitrant governments believing that stronger regulations and transparency are antithetical to business interests (and therefore being far too timid), and “radical” NGOs refusing to see anything good coming out of business-led initiatives. It’s easy to understand that frustration in the midst of all the clamor around new innovations and good corporate practice at the CSF/BASD, and there is no denying the fact that some business leaders are far ahead of governments in their public advocacy.

That said, for all the energy and promise of the CSF, there is a bit of a disconnect with the concerns of civil society. The explicit attention to human rights, transparency, and public policy engagement are welcome, but these discussions are too often separated from issues of accountability, power inequities, and political capture. Philanthropic initiatives and innovation still figure too prominently and are detached from core business practices and influence, as if a company’s good works could someone make up for harmful products, practices, or lobbying.

If your diagnosis is that we’re on the right course, but we’ve got to chip away at bad practices and scale up the good (and indeed the official theme of the BASD event was “scale up”), then there is much to cheer in the CSF/BASD events. If, on the other hand, your diagnosis is that we are going over a cliff and nothing short of major transformation will suffice—which is the implicit if not explicit diagnosis of all the major studies going into Rio+20—then we need to get to root causes quickly and avoid distractions.

Those root causes are not technological; they are fundamentally about power and politics. That’s not to diminish the good will and good efforts of many CSF/BASD participants, but to urge more focus on the real drivers of poverty, hunger and environmental degradation. There are reasons why governments are feckless and civil society is in the streets—and we won’t make much progress on sustainability until we address them.

 

For almost two decades, communities from the Ecuadorian Amazon have been fighting a long-shot legal battle against Chevron-Texaco for the billions of gallons of oil and toxic wastes dumped into their lands and water (well described in a recent New Yorker piece by Patrick Radden Keefe). With last week’s decision by an Ecuadorian Appellate Court upholding an $18 billion judgment (see prior Oxfam blogging on the case here and here), these communities may finally have what they need to hold the company accountable. Because Chevron has no operations in Ecuador, plaintiffs will need to have the judgment enforced elsewhere. With this decision in hand, they can seek Chevron assets in dozens of countries, including the United States. A memo drafted by plaintiff lawyers details the many options now available to them.

Chevron has gone to unprecedented lengths in fighting this case and its public response to the ruling shows no sign of wavering. Last year, Chevron managed to convince a US federal judge to block enforcement of the case anywhere in the world! That decision—a gross overreach—was fortunately overturned by the US Court of Appeals, making last week’s ruling all the more significant. Chevron continues to litigate the case in the United States and in The Hague, but its prospects for escape are rapidly diminishing. With Chevron also facing a multi-billion dollar lawsuit by the Brazilian government over a recent spill, settling the Ecuador case has to be high on people’s minds.

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Spring is the season of Annual General Meetings (AGMs) – a rare moment when corporate executives have to account to their shareholders. For the growing “socially responsible investment” (SRI) movement and a handful of NGOs and other advocates, AGMs provide a chance to raise critical issues and rally shareholder support for corporate change. Chevron’s AGMs have often been contentious, but this year’s meeting – happening today – should be particularly interesting.

Shareholder advocacy can be a useful tool in campaigns and Oxfam has long worked with the SRI community to put pressure on targeted companies. Among its shareholder advocacy efforts, Oxfam worked with the Coalition of Immokalee Workers to pressure Yum! Brands around farmworker compensation; worked with shareholders and Fair Trade coffee advocates to pressure Kraft at its 2003 AGM, worked with partner groups from Ghana, Peru, and Nevada around Newmont Mining Company’s 2005 AGM; and raised Ethiopia trademark rights at Starbucks’ 2007 AGM.

In 2008, Oxfam America established a Fund specifically aimed at purchasing shares in targeted companies. “As a shareholder, we have added rights and legitimacy to engage with corporate leadership; it has greatly expanded and strengthened our corporate advocacy work,” says Michelle Katz Talukdar, who oversees the Fund at Oxfam America. Among the 25 companies in its portfolio, Oxfam has attended RJ Reynolds AGMs in 2010 and 2011 to support the rights of tobacco farmworkers.

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Below is a blog posting that originally appeared on FSG’s Corporations and Society blog. It is an important perspective from Greg Hills, Managing Director at FSG Social Impact Consultants on Oxfam America’s Poverty Footprint work with The Coca-Cola Company and SABMiller in the context of a broader discussion on creating shared value. The piece raises some important questions about what companies actually know about how their practices affect social issues and why it seems they say they’ll be responsible, but then act differently.

Lifting the Veil…to See Your Own Face

Why do companies say they are responsible, but then act differently? Is it lip service, green washing, and double-speak? Or does this happen for a different reason?

The answer is that most companies are less sinister than skeptics might think, but often they don’t know what they don’t know. Good managers with strong values make bad decisions because they don’t see opportunities to make a difference on social issues. From the outside, they appear to be acting irresponsibly, but often it’s simply a reflection of in-line managers being uninformed about the intersection of their business with society.

I want to share a glimpse into the future of how companies will seek to understand and address social issues. Last week I jumped on a train from Boston to New York City to attend a launch event for the results of a “poverty footprint” study conducted by Oxfam America. This new study looks at the operations of Coca-Cola and its local bottler SABMiller in El Salvador and Zambia and the effects of those businesses on low income communities. The event was a lively and candid panel discussion of representatives from Oxfam America, Coca-Cola, SABMiller, and the UN Global Compact to share the two-year journey of conducting the research and developing the report.

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As the anti-globalization movement gained traction 10 years ago, it was widely reported that of the top 100 global economies, 51 were multinational corporations. For developing countries, the size of these companies was something to be feared, and activists scored a number of victories campaigning around labor, human rights, and environmental scandals. Today, in almost a parallel universe, much of the discussion in the global South is about corporate citizenship, opportunities at the “base of the pyramid,” and public-private partnerships. From either angle, it is clear that multinational companies exercise increasing influence over the lives of poor people. But what does it all amount to for those living in poverty?

Some corporate impacts are easily perceived – jobs created, technology transferred, water consumed, products offered – but some of the broadest impacts will occur far out along the supply or distribution chains, or may result from less easily assessed activities like marketing or lobbying. One of the critical challenges facing the development movement is the opacity of corporate poverty impacts. How do we target our interventions without a clear understanding of a company’s overall scope? And how do we create the right incentives when so much of a company’s impacts are unknown? In order for the consumer to take notice, for stakeholders to engage, for the public to demand change, and for managers to be rewarded – poverty impacts must be brought to light in an easily digestible and standardized fashion.

Today, Oxfam America is releasing a Poverty Footprint Study with The Coca-Cola Company and its local bottler SABMiller aimed at bringing these issues to the fore. The report offers a balanced snapshot of how the Coca-Cola/SABMiller system – bottler, suppliers, and distributors – affects poverty in two developing countries – El Salvador and Zambia. The report’s scope is ambitious: we looked across the full value chain – farmer to consumer – at all significant issues – water, labor, livelihoods, gender, lobbying, revenues, and marketing. That breadth comes at the expense of depth. The report won’t provide the final word on any particular issue, but it identifies the critical areas of impact and provides recommendations by way of follow up.

The Coca-Cola Company and SABMiller have each been subject to high profile corporate advocacy and Oxfam America takes a risk in co-branding a study like this. We do that with eyes wide open. It is much easier to try to affect change with companies from behind closed doors and many organizations take that approach, often with good results. Our approach is based on the belief that top-down, voluntary reforms are not sustainable. They can be driven by vision and good faith initially, but to last there has to be a business case, backed up by commercial opportunities, stronger laws, and sustained engagement by a variety of actors.

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As David and Goliath stories go, it would be tough to match the struggle between poor, marginalized communities and one of the most powerful companies in the world, Texaco (now merged with Chevron), facing off in the Ecuadorian Amazon. That those communities just won a record-breaking $8.6 billion decision against the company is remarkable. The case is far from over – Chevron will continue to “fight until hell freezes over, and then skate on the ice” (in the words of its prior General Counsel) – but some initial reflections are in order.

I made my first trip to the region in 1993 as part of a rag-tag team of lawyers searching for potential plaintiffs for this quixotic case against Texaco. At the time, Texaco had just departed Ecuador, leaving over 900 open waste pits scattered through the jungle and an estimated 18.5 billion gallons of toxic waste dumped into surrounding rivers and streams over a 25-year period. The company, with annual earnings three times the GDP of Ecuador, had been given free rein to open up the Amazon and dispensed with any efforts to protect the environment or population.

We had no trouble finding plaintiffs – people were surrounded by the waste and contamination, which was openly seeping into their only sources of water. An estimated 30,000 people were affected by Texaco’s operations (one group of indigenous peoples disappeared). When the company finished it simply walked away.
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Oxfam International submitted its formal comments on a draft set of UN “Guiding Principles” for business and human rights last week. These Principles, if approved, will constitute a major milestone in a long-standing effort to apply human rights standards directly to corporations. More about where to from here on business and human rights in future posts. This post will try to put the Principles into some perspective.

The Principles cap six years of work by Harvard Professor John Ruggie – the UN Special Representative on business and human rights. Ruggie was thrown into this process by Secretary General Kofi Annan in the wake of a bitter fight over a set of draft “UN Norms” – vigorously promoted by human rights advocates (including Oxfam), but roundly rejected by governments and businesses.

Ruggie’s first full report to the UN Human Rights alienated much of the NGO community by rejecting and thereby essentially killing the Norms. But at the same time, that report provided a very effective argument for the urgent need to address corporate human rights impunity. The core human rights treaties, designed in a post-World War II era of powerful states, don’t contemplate corporations explicitly and are ill-suited to current realities. Jurisdictionally-limited and often weak, under-funded, or corrupt public authorities are little match for today’s 80,000 plus multi-national corporations with their vast and amorphous global networks, buttressed by thousands of trade and investment agreements.
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