An update of the Behind the Brands scorecard reveals all but one of the Big 10 food companies are making improvements.
Danielle Smith works in Oxfam’s Private Sector Team in Great Britain.
Unilever and Nestlé are now neck and neck in a rigorous assessment of supply chain policies and practices. Launched in February 2013, the Behind the Brands campaign has successfully used the power of consumers and investors to call on the world’s ten largest food and beverage companies to publish new commitments to improve how they address seven issues: climate change, water, women, workers, smallholder farmers, land, and transparency.
As the leaders of a $7 trillion industry, the Big 10 – ABF, Coca-Cola, Danone, General Mills, Kellogg, Mars, Mondelēz, Nestlé, PepsiCo and Unilever – have the size and reach to guide the food and beverage sector into a new era of fair and sustainable practices. These companies have extensive supply chains, where they can use their power to change how their suppliers conduct business.
They are improving, but the challenge for the Big 10 is that they must continue to strengthen their approach if they are to drive sustained improvements within global supply chains.
Improvers at top and bottom of the ranking
Since the last update of the Behind the Brands scorecard in February 2014, all of the Big 10 have published new policies or assessments relating to the issues covered within the campaign. The latest update of the Behind the Brands scorecard sees all companies apart from Danone improving their score in at least one of the seven themes.
The greatest improvements in score have been recorded by PepsiCo (with an increase of 11% since February 2014), followed by the company previously ranked 10th, General Mills (with an increase of 9%).
Nestlé vs. Unilever for first place
The two companies at the top of the scorecard, Nestlé and Unilever also saw significant increases of 6% and 7% respectively, with both having demonstrated real improvements in their approach to responsible sourcing.
Unilever’s score has increased in the workers, land, transparency and gender themes, with the company having stepped up from second to join Nestlé in first place. Unilever’s new responsible sourcing policy has contributed to the company’s improved score, particularly in the workers and land themes. The policy provides a framework for Unilever’s suppliers to demonstrate continuous improvement in the management of social and environmental issues. Unilever has published key dates by which it expects all of its strategic suppliers to firstly meet mandatory requirements, and then to improve to achieve good practices, leading to better conditions for the people within Unilever’s supply chain. Beyond this, the Responsible Sourcing Policy defines best practice standards, which Unilever encourages suppliers to work towards.
Regarding fair compensation, for example, Unilever’s mandatory requirements expect that all workers receive wages that are at least in line with legal minimum wages or relevant industry standards (whichever are higher). To meet the company’s good practice standards, suppliers will then be required to go beyond this by taking a living wage approach to fair compensation that considers whether wages are enough to both meet workers’ basic needs and to provide a level of discretionary income.
Nestlé has a new score of 9 in the climate change theme, which is the highest ever score in the scorecard. The increase has been influenced by a new responsible sourcing commitment, which links Nestlé’s commitment on climate change to its supplier code.
In July 2014, Nestlé also made new commitments to protecting the land rights of small-scale farmers. In its commitment, Nestlé recognised that a lack of secure legal land rights affects an estimated 1,110 million people globally. As recognized by Oxfam in August, Nestle will therefore not only seek to manage relevant issues on land rights within its own operations and supply chain, but will also work with external stakeholders.
General Mills and Kellogg climate change scores jump
Over 238,000 Oxfam supporters took action to call on General Mills and Kellogg to improve their climate change policies since May 2014. First General Mills and then Kellogg responded with bold new commitments, which have been reflected in improved scores. General Mills increased from 2 to 5 in the climate change theme and Kellogg increased from 4 to 6. Crucially, both companies have committed to implementing industry-leading science-based targets to reduce greenhouse gas emissions, including supply chain emissions from agriculture.
Moving from policy to practice
We’ve already seen positive indications that companies are prepared to follow through on commitments and Oxfam will continue to engage with companies to monitor and support their progress. For example, since last year, Oxfam has been publicly tracking the progress of Mars, Mondelez and Nestlé in implementing commitments they made to women cocoa farmers through a gender roadmap. All three companies have now published third-party social impact assessments, which consider the impact of their cocoa sourcing on women, as well as action plans for key cocoa producing countries to ensure the commitments are put into practice.
What’s next for the Big 10?
Consumers are increasingly demanding more transparency and traceability, creating a need for systematic industry-wide mechanisms to monitor global commodity supply chains. There is a unique opportunity for pre-competitive collaboration among the Big 10, where companies can systematically engage suppliers within shared supply chains, share best practice with peers, engage in advocacy towards governments and other regulators, and work with NGOs and community groups that are crucial in addressing many of the issues highlighted in the Behind the Brands campaign.
There is still significant scope for all ten companies to improve across the seven themes of the scorecard. For example, while we’ve seen incremental improvements in the water and transparency themes, there remains much potential for bolder steps.
With significant improvements in the score of General Mills, which had been ranked 10th in the scorecard and with companies in the middle of the scorecard demonstrating that they are willing to continue to make new commitments, all of the Big 10 remain in the running in the race for the top.