Showing posts with label food insecurity. Show all posts
Showing posts with label food insecurity. Show all posts

Thursday, February 27, 2014

Rights is the new black

At the Third Smarter Sustainability Reporting conference this week in London (more about that to come on the CSR Reporting Blog), we were privileged to hear from Erinch Sahan, Policy Advisor, Private Sector, Oxfam GB about the updated Behind the Brands Scorecard, released today, 26th February. Erinch gave a passionate, informative and entertaining overview of the work he and his team have been leading at Oxfam. Sort of a Behind the Scenes at Behind the Brands.

As you may know, Behind the Brands is part of Oxfam’s GROW campaign to help create a world where everyone has enough to eat. Oxfam says that while the food system is complex and its problems multi-faceted, we know that the world’s largest food and beverage companies have enormous influence. Their policies drive how food is produced, the way resources are used and the extent to which the benefits trickle down to the marginalized millions at the bottom of their supply chains. The Behind the Brands Scorecard assesses the agricultural sourcing policies of the world's 10 largest food and beverage companies. It exclusively focuses on publicly available information that relates to the policies of these companies on their sourcing of agricultural commodities from developing countries. Companies selected are those with the largest overall revenues globally, and are included in the Forbes 2000 annual ranking, which measures companies on the basis of composite sales, assets, profits and market value. The intent is to provide stakeholders with information about the brands they engage with, and also urge them to take action to drive these companies to do more to address issues in their supply chains.


The work of the Oxfam team started with an initial assessment a year ago, and during that time there have been significant instances of engagement with the companies in the Behind the Brands scorecard and several achievements can be noted. For example, on issues relating to lack of gender ineqality in chocolate supply chains, Mars, Nestle and Mondelez all committed to investigating barriers to women and making plans to address these, as well as signing the UN Women's Empowerment Principles. Similarly, in focusing on the issue of land acquisition, Oxfam was able to drive change.


Since this campaign, which urged companies to establish and implement a zero tolerance policy on land grabbing, including adherence to the principle of FPIC (free prior and informed consent) in the operations of the company and its suppliers, Coca-Cola announced a set of industry-leading commitments to protect the land rights of farmers and communities in the world’s top sugarcane-producing regions. Other major companies have followed suit with declarations of policy and new action in this area. Behind the Brands, therefore, is not only a review of policy but a powerful tool to drive change through transparency, engagement and focus.

When the original Behind the Brands scorecard was published, I admit to having some reservations about a tool which tracks only declared policy rather than actual practice. I asked Erinch Sahan about this. Here are his thoughts:

1. We chose policies that link to processes that would be harder to disclose without changing behavior.
2. Tracking policy also allows others to hold companies to account. Once there is a public commitment from global companies to do something, local efforts to improve practices on the ground have greater legitimacy and influence.
3. Most importantly, most of the indicators require companies to be more engaged in their supply chains collect information on the issues and often, conduct joint projects with suppliers and stakeholders to address issues and have the right requirements in supplier codes and guidelines. In our experience, these correlate strongly with the companies who are doing more on the ground.

After hearing about the massive progress that has been made in issues largely ignored in most of the Sustainability Reports of large food companies to date, I am tending to believe that Behind the Brands is indeed an effective tool to drive performance change, proving one of my long-time mantras: transparency (and reporting) is a catalyst for performance improvement.

Erinch was kind enough to send me some further information explaining the updated Behind the Brands Scorecard. Here are his words, a sort of rare "guest post" on the CSR Reporting Blog.

*******

A year later, Big 10 improving but more is needed 

It’s a year since we launched our scorecard. Having clawed through company reports, analyzing every commitment and policy of the world’s 10 largest food and drinks companies (‘the Big 10’), we scored companies on a range of issues impacting the lives of people living in poverty around the world. A year later, having rigorously updated the scorecard, we reflect on how companies are tracking on the seven issues we cover: workers, farmers, women, land, climate, water and transparency.


Most are improving 
The companies are on the right track. All but General Mills have improved their overall scores since February 2013. The top three (Nestle, Unilever and Coca-Cola) separated themselves further from the pack and saw the biggest jump in scores with overall increases of 10 percent, 14 percent and 13 percent. The companies in the middle of the pack (Danone, Mars, Mondelez and PepsiCo) saw mild improvements. There were some improvements also at the bottom of the scorecard. Associated British Foods and Kellogg’s - previously ranked 10th and 8th respectively - saw increases in scores of 7 and 6 percent respectively. As a result, General Mills is now at the bottom of the rankings.

High performers emerging 
A year ago, no company could be classified as having “good” policies on any issue (scoring 8 or above out of 10). There are now two that achieve this feat. Unilever, with its score of 8 for farmers, has shown true leadership in pursuing supply chains that are inclusive and fair for smallholder farmers. Nestle (scoring 8 on climate) continues to lead all companies on climate, where we assess both efforts to reduce emissions and to help farmers adapt to a changing climate. In both cases, the results mirror broader assessments of these companies. The Carbon Disclosure Project’s Leadership Index puts Nestle first among its peers, and Unilever is widely recognized for its work on dealing more fairly and inclusively with smallholder farmers.

No longer ignoring land and women’s rights and improvements on climate 
A year ago, it was clear that the industry was failing on two key issues: how it addresses women’s inequality and land rights. Scores were woeful and none of the Big 10 had an approach that addressed the plight of women working on farms around the world and none were making suppliers respect the rights of communities over land. In response, we spent the last year reminding companies about these blind-spots, asking supporters (nearly 400,000 supporters spoke up), investors (representing billions of dollars asked the companies to act) and civil society to join us in urging the Big 10 to start addressing gender and land issues.

The results are encouraging. Led by Coca Cola, six of the Big 10 now endorse the principle of Free, Prior and Informed Consent on land acquisition. This is key in ensuring communities have a say over what happens to the land they depend upon. Seven of the Big 10 have signed on to the UN Women’s Empowerment Principles, which demonstrates a commitment to ensuring the industry starts addressing the barriers faced by women on farms and markets around the world. Similarly on climate, companies have started putting in place targets to reduce emissions and start disclosing more about their carbon footprint.

Too many issues remain unaddressed 
While we saw impressive improvements on women’s rights, land and climate change, we didn't see the same level of movement in the workers, farmers and water themes. On these themes, (apart from Coca Cola on water), no company showed significant improvements. On water and workers issues, companies had already picked off the ‘low hanging fruit’ and taken some steps to strengthen their commitments. For instance, a year ago, most companies had already recognized the International Labor Organization’s labor rights conventions and were disclosing key water information through the Climate Disclosure Program’s Water Program. But a year later, still only PepsiCo recognizes the UN Human Right to Water and no company has set a specific target to reduce its water use along its whole supply chain.

On farmers, only four companies (Danone, General Mills Nestle and Unilever), mildly improved their performance over the course of the year. Most continue to ignore the importance of ensuring dealings with farmers are fair and inclusive (e.g. through transparent contracts and ensuring farmers are paid fairly).

What are they hiding? 
The industry has started to disclose a little more about their agricultural sourcing, but many still shy away from revealing who they buy from. Allowing consumers, the public and communities to work out which producers connect to which global brands is key for accountability. Though the Big 10 are by-and-large preventing this.

The updated scorecard now also assesses a critical new component of transparency – taxes – focusing on whether companies disclose information linked to the use of tax havens. New indicators on transparency now ensure that we better capture this important theme. People and corporations using tax havens are depriving the world of more than $150 billion in lost revenue, enough money to end extreme poverty twice over. Through our new tax indicators Oxfam aims to identify which companies are most open and accountable in their tax dealings. With the exception of Unilever and Coca-Cola, all the companies fail miserably in tax disclosure. This helped drag the transparency scores of four companies down by 1 point, with only Unilever slightly improving its overall transparency score over the course of the year.

What next? 
We’ll continue to score the companies on these issues, highlighting where they improve and drawing attention to where they don’t. We’ll also keep talking to supporters, investors, civil society and governments to get others to also deliver the message on fair and sustainable agriculture to the Big 10.

If companies are to show leadership on these issues (and see their scores improve), they have to start taking some tougher actions, such as:

1. Pay a sustainable price
Addressing sustainability comes at a cost. In many circumstances it may seem to cost more in the short term to grow ingredients in a way that respects rights, pays farmers and workers fair prices and wages, and protects the planet. But the farmers who grow the ingredients capture a tiny amount of the value of the prices paid by consumers, with cocoa farmers receiving as low as 3.5 per cent of the price of a chocolate bar, coffee growers receiving as little as 7 per cent of the price of coffee in supermarkets and tea farmers getting as little as 1 per cent of the price of tea. With so little of the final price going to the farmers, ensuring farmers get a fairer and more sustainable price for their producer won’t necessarily require consumers to pay. It can be covered by a marginal shift in how value and profits are shared between farmers and the rest of the food system. For company commitments to be more meaningful, there needs to be an assurance of their intention to pay the price for fair and sustainable production.

2. Proactively find and address problems
The UN Guiding Principles on Business and Human Rights (‘the Ruggie Principles’), which are quickly becoming the consensus on how responsible companies approach human rights, ask companies to be proactive in finding human rights risk. It is no longer acceptable to wait passively for problems to pop up. Too many companies are still struggling to show they know where the problems are in their operations and remain uncomfortable opening up their supply chains to scrutiny.

3. Focus on rights and give the poorest real voice
Emerging issues like land and women’s rights are rising up the agenda. Rights is the ‘new black’ in sustainability and recognizing and respecting rights should be core business for any company. However, ‘voice’ is quickly joining the rights agenda as the ‘next black’. Giving marginalized people a say over their lives (like on land rights where 5 of the ‘Big 10’ are giving communities the right to free, prior and informed consent) is critical. Whether it’s workers having a say in their working conditions through collective bargaining, farmers able to control their destiny through producer organizations or women able to raise concerns via women’s organizations, there are many ways the ‘Big 10’ can use their immense power to give people with little power a real voice.

4. Avoid catastrophe on climate change 
Climate change is already having a terrible impact on the lives of agricultural communities around the world. Extreme weather is also impacting the supply chains and operations of the Big 10. The Big 10 need to both reign in their own emissions (and those of their suppliers) whilst also helping farmers adapt to a changing climate. More broadly, the planet needs their powerful voice needs to get behind broader action to tackle climate change. Oxfam will be increasingly speaking up on this issue.

*****

Behind the Brands seems to me to be doing great work. I guess we will be seeing more of these issues showing up in the Materiality Matrices of the Big 10 in their new G4 Sustainability Reports in coming years. Thanks to Erinch for great insights and for the guest post!


elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me at www.twitter.com/elainecohen   or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

Thursday, July 11, 2013

Sustainability with Passion

The Novus International 2012 Sustainability Report, the fifth annual report of this billion $ privately-owned company was published recently online. 
 

Novus International, Inc. is a provider of health and nutrition solutions for livestock, poultry, pets and people, headquartered in St. Charles, Missouri, U.S.A., employing more than 800 people in over 50 countries and serving more than 3,000 customers worldwide in over 100 countries. Novus operates facilities including corporate offices, research and development laboratories and manufacturing operations, as well as smaller offices with field staff in most local markets. Working from a strong base of scientific understanding and technological innovation, Novus has brought more than 100 new products to market over the past decade, contributing consistently to sustainable animal agriculture production and global food security while growing revenues and global presence. The Novus pledge is a Triple S Bottom Line – Solutions, Service and Sustainability.
 
I am particularly happy to blog about Novus, because (here it comes... disclosure >>>) Novus has been my client for some years now and I have been involved in developing and writing the 2012 report, as well as prior reports for 2011 and 2010. In preparation for the report, I interviewed around 50 Novus executives (including the CEO who is directly involved and passionate about Novus's sustainability journey) and many staff all over the world, and some external stakeholders, and collected data from over 10 manufacturing, offices and research sites. The thing that always impresses me each year about working with Novus is the absolute clarity that all the people in the organization have about their company's mission and purpose, and the passion with which they talk about their role in advancing the mission. When I asked Thad Simons, the President and CEO of Novus, about his major achievements as CEO over the past few years, without hesitation, he talked about creating an organizational culture that supports the sustainability mission - "building Novus with a sense of purpose and passion and a service culture". A CEO who leads a sustainable culture is a CEO who creates a sustainable business. Novus has grown year on year and makes a significant contribution to advancing sustainable food and improving food security in many ways. This approach is paying off!
 
The highlights of the Novus 2012 Sustainability report are to be found in the approach to reporting as well as in the data and information presented. For the first time, Novus includes a description of the organization's value chain, which shows where and how Novus generates triple bottom line impacts. Also for the first time, each section of this report is presented personally by the managers and staff who lead the organization. In each section, a Novus person tells her or his story, in her or his own words. For example, the Human Resources VP and Director talk about how they are advancing this prized organizational culture, and different managers talk about their experience in nurturing partnerships to advance sustainable solutions, while EHS Managers talk about sustainable design of offices and working spaces (Novus has a LEED Platinum certified HQ which has won several awards). The insights shared by Novus people  - the narrative is what they actually said,  not professionally copy-written texts  - are what makes up the Novus story: information and data combined with the personal contribution, leadership and drive of all the individuals. Supplementing the written narrative are several short videos, prepared specially for the report, which give you, report-users and stakeholders, a chance to see the faces behind the names and experience the passion beyond the written word. 
 
At GRI B level, GRI-checked Sustainability Report, Novus is not short on transparency either, and this report includes evidence of good performance. For example, energy consumption in production operations reduced by 5.7% in 2012, and safety performance continues to be well above industry averages with an injury rate of 0.48 per 100 employees (compared to a rate of 3.8 in all sectors in the U.S.).

One of the highlights in helping prepare the report for me is the Novus employee wellness program - see insights from Judith Thelwell who manages the program. For years, Novus has been demonstrating leading practice with one of the most comprehensive and highly engaging employee wellness programs around, that offers practical benefits for employees, and financial benefits for both employees and the company. This is a vibrant program which enables employees to engage in health and fitness related activities and earn benefits for doing so, beyond the personal benefit to their own health. In my discussions, I chatted with Andy Critchell, who works in IT Systems at Novus, (read his insights, too, in the same section), and his story was very moving. Diagnosed with diabetes, Andy had to make some serious life changes. The accessibility of Novus wellness benefits helped Andy take control and actually terminate medication for his condition. Without me even having to ask, he confirmed that this actually makes him a more productive employee. This conversation brought home to me, once again, the massive impact companies have on the lives of individuals, and the force for good that companies can become.

Another inspiring part of this report is the section on Valuing Partnerships. Novus works in partnership in almost every area the company is involved in. In fact, partnership development is a core competency of Novus, whether this means global partnerships to effect major transformation - such as the collaboration with the International Egg Commission (IEC) to advance the consumption of eggs as a low-cost, highly accessible source of nutrition (read Joanne Ivy's insights - she's President of the IEC), or specific local partnerships, such as a multi-stakeholder public-private partnership in Chad, to help build a $50 million industrial poultry production facility which will provide around 30 percent of the country's poultry needs and contribute substantially to food security in that country. This partnership includes the Chad government as well as a Novus customer, Globoaves, and a financing partner, working together to provide affordable, wholesome food for the Chad population and improve the quality of their lives. Read insights from Luis Azevedo about how all this came about. Partnerships are at the heart of sustainability. Companies who know how to collaborate in the true spirit of partnership are the ones that will be around for many years to come.

Please take a look at the Novus report and as always, give feedback.



elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen   or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

Sunday, June 19, 2011

From good to great: reporting materiality

So many Sustainability Reports published in this period... it's like being in an ice-cream parlor... haha.... very hard to know what to choose. You want to read all of them but you clearly cannot otherwise you would explode (yep, that's what happens when I go into an ice-cream parlor.).

One thing that distinguishes a great sustainability report from a good sustainability report, for me, is the way the reporting company handles materiality. I think we have seen many reporters mature in the last couple of years. The better reports are tending to be less shopping-list style with long lists of activities and more issues-based. In the best cases, the issues that companies focus on are plotted on a materiality matrix.

The GRI defines materiality as:

Topics and indicators that: reflect the organization’s significant economic, environmental, and social impacts or that would substantively influence the assessments and decisions of stakeholders.


Materiality matrixes (matrices?) come in many shapes and sizes. Some are rather creative. Some are minimalistic. Some are interactive. Some are so vague that they make you wonder if they have anything to do with materiality. But simply posting your materiality matrix is not enough. Good reporters ensure that the content of their reports actually address the material issues in some depth, providing both reasonable context and strategic relevance. This is the first in a series of materiality posts which examines how companies represent materiality and report on key issues. 

This is the fourth report of this Belgian-based retailer, operating 2,800 stores in six countries with 138,000 people. This report is Application Level C of the GRI. Retailing has many sustainability issues and Delhaize has navigated these skillfully and present their materiality matrix in which healthy eating and food safety are the number one issues.




Safety is clear to all, but why would a supermarket select healthy eating as its most material issue both for its own business and for its stakeholders?

Delhaize's "healthy eating" goals include improving the nutritional quality of private brand products, improving health and wellness communications and applying Guideline Daily Amount labels to private brand products. Aha! Private label brands are a clear competitive arena for retailers and for the first time in Europe, private labels reached 40% in five countries with as much as 57% in Sweden in some categories. In the U.S., private label is said to account for 17% of retal grocery sales.  At the same time, private label brands are both more profitable for the retailer and significantly lower in price for the consumer. Surveys show that consumer perception of private label brands is strong. These days, retail brands are all about health and nutrition. There is no self-respecting food manufacturer around who is not reducing salt, sugar, artificial colorings, trans-fats and other undesirables and making loud noises about the fact that they are doing so. Much of the pressure to improve health parameters is coming from consumers who are concerned about the long-term health effect of manufactured foods as well as more and more regulation in this area, including product labeling regulation.

It makes great sense for a retailer such as Delhaize to focus on both improving the health qualities of private label products so as to compete more effectively in this arena and also support the ongoing education of consumers in the healthy options available to them and why. Delhaize claims that private label brands account for over 50% of their revenue in Europe and 26% of revenue in the U.S. and provide a consumer price benefit of up to 20%. This is surely a compelling business case for sustainability. In 2010, Delhaize reviewed formulations of almost 2,000 private label products.

Other materiality "musts" for Delhaize that appear in their Materiality Matrix are Employee (associate) development, health and wellbeing, social compliance and climate change.  These are all covered well in the narrative of Delhaize's report. Middle-ranking materiality issues for Delhaize include waste, packaging, organics, fair-trade, local sourcing and community, while low-ranking issues include biodiversity, water, animal welfare and more.

Delhaize's Corporate Responsibility Report addresses materiality well, in my view. There is a clear link between the high-focus issues and corporate strategy and stakeholder interests. The only thing lacking is a more comprehensive discussion of how the materiality prioritization was developed and what kind of feedback significantly prompted the selection of issues and their ranking by Delhaize. For example, Delhaize does not report on commercial relationships with food manufacturers and food pricing policies, post-purchase food waste prevention (via consumer education), overall contribution to food security and access to food beyond specific community outreach programs. Downstream impacts on packaging and packaging waste is discussed briefly but there is no explanation for the marginal reduction of only 2% of non-reusable carrier bags issue to customers which has barely changed since 2008. I wonder if and to what extent these issues arose in the stakeholder feedback and materiality methodology.

Overall, the Delhaize report gets the message through. The design is bold, clean and clear. Goals and progress against targets are presented in an orderly way and in general, reflect improving performance. The structure for managing CR is transparent and includes people with names and faces.   The online report is nicely navigable and includes case studies, stakeholder voices and the opportunity to provide feedback by email or engage in dialog via the Delhaize CSR blog, and a glossary. (Though some elements, such as the important "About this Report" section, including the GRI Index, are only in the PDF download and not accessible from the website, which means you cannot rely entirely on the online report).  The CEO message is delivered via video. As is now becoming popular practice with online reports, you can  "like" each page of the report and share your sentiments on the Delhaize Facebook page. No iPad app, yet, though!

The Delhaize report is partially (a small number of specific indicators)  externally and internally assured and includes a statement from Forum for the Future. Internally assured? Delhaize includes a statement from the Group's Internal Auditors alongside the statement from external auditors. While there is a clear conflict of interest regarding internal auditing, it does demonstrate a level of internal rigor in the reporting process and I like it. I don't recall having seen an internal audit statement before in CSR reports.

Anyway, rounding off this Materiality Post One, Delhaize seems to be moving in the right direction. Next time I am in Delhaize territory, I will be sure to visit! Hope they sell ice-cream......

  
elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

Friday, January 7, 2011

11 top food companies fail at sustainability

A very interesting report was published recently by Bank Sarasin and Co Ltd,  called: " Food and Sustainability: Will the seed bear fruit? " . It discusses the sustainability ratings of the top 15 listed food and beverage manufacturers worldwide including Heinz, Danone, Unilever, Nestle and others. The report highlights three central sustainability themes that affect food producers: (1) health and nutrition, (2) sourcing more raw materials from sustainable agriculture and (3) committing to fair working conditions.  How the sector approaches these core sustainability material issues is the basis for the Bank's rating.

Health and Nutrition - some of the issues

Obesity: We all know about the problems of obesity, exacerbated through manufactured, processed, ready-cooked, fast, faster, junk, junkier and junkiest food. There is also a suggestion that the drop in levels of breast-feeding in favour of infant formula may contribute to fatter kids. In fact, obesity levels have been steadily rising for the past 20 years and are predicted to continue to do so. This report quotes that the cost of healthcare could increase by 240% by 2040 due to upward-trending obesity levels, checked only by the fact that life expectancy of the expensively obese is shorter than that of the thinnies. Not that it's ok to enjoy your food and die early, because in the meantime, equitable access to nutritious food is still a problem.

Problem food content: Salt, sugars, fats, What role does and should government play in ensuring healthy food availability and non-availability of healthy food, for example, banning high-cal snacks in schools. More legislation can be expected as governments and consumers increase awareness.

Enjoyment food: I wonder if this concept existed in the days of Fred Flintstone? The entire food industry has created a special place for enjoyment, indulgent, pleasure foods, all of which are really superfluous to a healthy diet and a sustainable planet. The trade-offs between health and enjoyment are a phenomenon of our advanced commercialized world and food industry. Would banning chocolate make us all more sustainable? Oy! and what about Chunkey Monkey ..... err...... help....

Raw materials and sustainable farming - some of the issues 

Problem agriculture: The report quotes that agriculture, once "an emblem of prudent management of natural resources" now accounts for 90% of global deforestation, is the biggest consumer of chemicals, generates the highest volume of GHG's and consumes about 70% of the planet's freshwater resources. Not a pretty picture, huh ? We are simply eating the planet for lunch, bite by bite. Food manufacturers are key protagonists in these global dining habits.

Organics: Even with the continuing buzz around organic food, organics is still a niche market and will account for less than 1% of farmland worldwide during the next 50 years, according to the report by Bank Sarasin. Important crops such as sugarcane, palm oil and soya are still not moving up the organic ladder. How manufacturers are revising their strategies to ensure long-term sourcing security is critical for sustainable food supply. 

Green genetic engineering: For or against? Modifying seeds to make them more resistant to pests and therefore reduce use of pesticides may well sound like an ideal solution but the technology is controversial and not readily digestable by all (haha, what a pun!). Bank Sarasin thinks the risks of GMO's outweigh the opportunities and discount seed producers from their investment recommendations. 

Sustainable farming methods:  The approach of manufacturers to ensure sustainable farming methods are a part of their overall supply chain strategy is critical. Heinz, for example, is the world's biggest producer of processed tomatoes and has pioneered the cultivation of tomatoes requiring fewer pesticides. The report mentions that some major food producers have entered into agreements with leading environmental organisations to advance sustainable farming.

Factory and field - fair working conditions - some of the issues

Global rights and global labour:  As more production is outsourced, so fewer employees are protected by international labour conventions and enjoy freedom of association, the report advises. The implementation of globally applicable employment standards is problematic leaving many workers with no protection of their rights. An indicator of this is whether a company discloses how many employees in their supply chain have a fixed employment contract. Apparently, not many disclose this detail.

Poor working conditions: Issues abound in farming and food production - seasonality, "subsistence risks through crop failure and price collapse", accidents and illness caused through agrochemicals etc. It is quoted that 60% of child labour is concentrated in agriculture.

Market power of big companies: In what Bank Sarasin called a bottleneck market structure, prices and conditions are dictated by a very small number of retailers, despite sourcing from many small-scale farmers. This gives rise to an inequitable distribution of wealth and inevitably, the small guy whose quality of life depends on the price he gets for his banana takes the hit. Fairtrade, development of relationships with farming cooperatives and other approaches are available to address these issues, in part. The take-up of these options by food manufacturers is a key element in creating a responsible and sustainable supply chain.   


Overall, this report of Bank Sarasin, authored by Dr. Gabriella Ries Hafner,  offers some fascinating insights about the sustainability impacts of the big food manufacturers. It is clear that the issues are still far from resolved and that overall, food manufacture has light-years to travel before it has a net positive sustainable impact. Rethinking the entire food value chain management in a systemic way is the task ahead. In Bank Sarasin's analysis, only four of the top 15 global food and beverage manufacturers (Danone, Heinz, Unilever and Nestle)  fall into the "social investment universe"  because they appear to be addressing these issues effectively. (See the matrix in the Bank's repease about the report)

We all have a role to play in making food supply more sustainable. The issues highlighted by the report published by the Bank are just some of the things we should be watching for as we read the Sustainability Reports of these corporations (and we should be reading them).  If they are not addressing these issues, amongst others, they are not serious about sustainability and we should be letting them know that we know.

And as for Chunky Monkey... well, every rule has its exception, no ?  


elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

Monday, June 28, 2010

B2B Yes you can! Danisco shows how.

It is quite a pleasure to write about a recently published Sustainability Report - this time from Danisco, the Danish bio-based food ingredients supplier. It is a pleasure not only because the Danisco report is somewhat different from most of the reports you will see flying around these days, but also, because, by way of disclosure, I supported Danisco in the development of this particular report. Don't get me wrong - Danisco did all the hard work - I came in at the back end of the process to offer some specific assistance to the reporting team. Anyway, let me tell you a little about Danisco and their 2010 Sustainability Report. 

Danisco uses raw materials from nature and transforms them into ingredients which contribute to the improved sustainability of our lives - mainly ingredients which improve the quality and health properties of what we eat, but also of things we wear, drive, use and interact with in many different ways. In fact, I had been familiar with Danisco as a food ingredients supplier - I had no idea of the wide range of applications their products can serve. Danisco is based in sunny Copenhagen, Denmark, employes 6,800 people, and operates from over 49 manufacturing sites around the world. Danisco’s ingredients are used globally in a wide range of industries including bakery, dairy, beverages,  animal feed, laundry detergents, tyre manufacture, and bioethanol. Danisco's Sustainability Director, Jeff Hogue, is a frequent social-media-ite and tweets as @JeffreyHogue.

The most significant thing about Danisco's sustainability impacts are that they are greatest once the shipments have left the plant. Many companies' significant impacts are indirect in this way. But Danisco's impacts are two degrees removed - first they sell to manufacturing businesses, then the manufacturing businesses sell their brands to the final consumer. So, although Danisco might not be a household name (well, except perhaps, in Copenhagen),  Danisco makes a far greater impact on our lives than you might guess, doing so through the way the Company develops innovative technology and new products, and supports and collaborates with its customers who make the end products we consume. Take bread, for instance. Danisco tells us that  "In the UK alone, more than 320,000 tonnes of bread is discarded each year because it has lost its freshness. Methane produced by that waste equates to more than 1.4 million tonnes of CO2 equivalents." Addition of Danisco enzymes can help  keep bread fresher up to seven days longer, potentially saving two million tonnes of flour per year and making more bread available with no increase in flour. In the UK alone. Think of that as applicable worldwide. Big numbers. How many times have you thrown out bread that became stale and unappetizing ? It happens, right ? Danisco doesn't make bread. But through Danisco's work with bread-manufacturing companies and bakeries, the consumers have access to a much more sustainable product and lifestyle.

Another example? Take this story about milk in Kenya: " In 2007, worldwide milk production is estimated to be 655 million tonnes with over 30% produced in developing countries. The UN Food and Agriculture Organization (FAO) forecasts that demand for milk in the developing world will double by 2030. Developing countries are not self-sufficient with milk, and dairy imports to developing countries in value terms grew by 43% between 1998 and 2001.The vast majority of the milk in developing countries is produced on small-scale farms (fewer than five milking cows), without cooling systems. The FAO estimates that 25-50% of the milk from small-scale farmers is wasted." Danisco is working on a technology involving adding an enzyme to the milk at the point of production which would extend the life of milk for 12-15 hours without cooling - thereby avoiding most of the waste in this supply system. This development offers a tremendous economic, social and environmental benefit, a true sustainability springboard. Danisco does not produce milk either. As consumers, we are happily unaware of the positive impact on the sustainability of our lives that the Danisco range of products offer, yet we gain the benefit in many of our everyday consumption patterns. One final example of a super development is in the area of car tyre production - in a collaborative project with Goodyear, Danisco is developing a bio-based, renewable synthetic rubber for use in car tyres with an investment of $50 million, to support our move away from dependency on fossil-based fuels. Renewable car tyres. Danisco are not in the tyre business, but when you are taking your new hybrid out for a spin, you will be able to rest assured that fuel consumption is low not only in the engine but also in the road-grip. These examples represent the core "ingredients for sustainability" proposition that is the backbone of Danisco's sustainability strategy and 2010 report.

Danisco's reporting squarely places these issues in context. Going way beyond the Company's internal, direct, impacts - and these are reported comprehensively (massive reductions in waste, total carbon emissions, water consumption and wastewater generation in the environmental sphere and significant positive workplace improvements including reduced accident rates etc,)  Danisco's report addresses overarching challenges our global society faces in the run-up to 2050, where the global population will increase to 9 billion (from 6.8 billion) and will need solutions to food security issues, dependence on fossil fuels and petroleum-based chemicals, and  growing health issues. Danisco explains the naure of these challenges, the associated risks, and strategy that Danisco has developed to adapt its core business proposition to support finding the right solutions - the right "ingredients for sustainability". 

As mentioned, I am entirely not impartial in relation to this particular Company report, though I spare you many other interesting aspects that I would have been pleased to mention (I know blog-readers have short-attention spans) but I hope this will not prevent you from taking a look at the Danisco report and pondering the broader issues we face as a society and the role that responsible businesses play, even those whose brand-names doen't jump out at us from the supermarket shelf or the car showroom. And when B2B Companies tell you that CSR doesn't apply to them because they don't produce consumer-facing brands, you can quote the Danisco report as absolute proof of the opposite.

elaine cohen is a CSR Consultant, Sustainability Reporter and Co-Manager of Beyond Business, a leading social and environmental consulting and reporting firm. Visit our website at www.b-yond.biz/en

Thursday, February 25, 2010

A merger of value and values

Now that I have got the hang of embedding slideshare presentations in my blog posts, I wanted to share with you the story of a non-profit merger which I have been supporting in my consulting work for the past 9 months or so. I am referring to the establishment of Leket Israel, Israel's only non-profit umbrella organization whose mission is to alleviate food insecurity through providing hundreds of food non-profits (who provide meals and food supplies directly to the needy) with a consistent supply of safe and nutritious food of all types, and supporting these non-profits through capacity building training, advice and resources. Leket Israel's operation is truly outstanding and an exemplary social AND environmental net positive impact organisation. Leket's positive Social impact comes through ensuring more people have access to basic nutritional requirements and increasing levels of food security in Israel. Leket's positive Environmental impact comes through massively reducing food waste by rescuing food and ensuring it gets to people who need it.  

The food comes from 4 sources:
  • Gleaning of agricultural fields and salvaging fruit and vegetables which would otherwise be left to rot, or salvaging fresh produce which cannot be sold from packing houses.
  • Rescuing catered meals from a wide range of venues including large catered events,  corporate dining drooms, restauraunts and even Army bases. The rescued meals are, of course, those which have not been served to the table and remain in their original catering packing.
  • Collecting unsalable manufactured food products from food manufacturers and importers - these are typically products which are close to sell-by date but risk reaching expiry date by going through the regular supply chain to groceries, or products which have wrong labels or similar issues which don't affect the quality of the contents. 
  • Operating a collective purchasing program, whereby food non-profits can purchase food (which they will distribute to the needy, to supplement donated food) as part of a collective operation run by Leket, and achieve up to 30% in savings versus regular food purchase prices.
Leket Israel employs around 70 staff and engages tens of thousands of volunteers each year in the gleaning program and food rescue collection and distribution (much of which is at night time). In 2009, the combined organisation  provided over 10 million meals in this way. That's one meal per day every day for over 25,000 people suffering from food insecurity. That's over 12 million lbs of food which would otherwise have become carbon-emitting organic waste.

At the beginning of 2010, Leket Israel was formed through the merger of two organisations, which you can see in the following presentation :

Back in 2006, I had the privilege of consulting to one of the merger partners ("Leket: the Israel Food Bank" - the collective purchasing arm)  (and in doing so, getting to know the other merger partner as well, "Table to Table", the food rescue arm). At this time, I supported the establishment of "Leket: The Israel Food Bank" after a year long and complex process of market research and dialogue with a wide range of stakeholders including facilitating several group discussions. I led the formulation of a comprehensive business plan which was used to secure funding for the establishment of "Leket: The Israel Food Bank" . Having completed my role, I was pleased to see the organization develop and increase its activity year on year.
 
During 2009, I was approached by the Chairmen of the two merger partners to assist in reviewing the viability of a merger between the two, and, if agreed, support the merger process and post-merger operational development. The result is a new organisation, "Leket Israel", bigger, better, more efficient,  and with a strong and optimistic future, as it consolidates the merger, drives synergies and significantly expands its activities. The name Leket refers back to the biblical commandment of leaving behind for the poor any grain that the harvesters’ sickles have missed.
 
The process of the merger is described in the presentation, so I won't dwell on that here. Suffice it to say that this is social entrepreneurship at its best. The issue of resource inefficiency in the non-profit world should not be underestimated. Non-profits, which look beyond the personal interests of the founders, or the ego of the key players, to focus on the optimal way to further a social mission, are the true leaders of this sector. In recent years there has been much talk about the convergence of the non-profit world and the business world. M&A's (mergers and acquisitions) are still a rare thing in the charity sector. I am sure that Leket's pioneering progress sets an example for many others. 

As a consultant, I have to say that this sort of work is both challenging and  immensely rewarding. The ability to work with philanthropists who are committed to a better future, visionary social leaders and  motivated and capable staff and volunteers is humbling. It remains  for Leket Israel to deliver their challenging 3 year work-plan  (supported by  a Scorecard measurement and metric process), and improve the understanding and measurement of the true scale of this organization's positive direct and indirect impacts . I am sure that, once an appropriate total measure of overall impact is established, the scale of positive contribution to society and environment will surprise even the founders.

elaine cohen is the joint CEO of BeyondBusiness, a leading reporting and social-environmental consulting firm. Visit our website at: www.b-yond.biz/en  
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