Reflections on ten years of rating big brands for sustainability

27 February 2013

Scorecards that rate big brands according to their social and environmental policies can help shine a light on hidden corners of global supply chains that customers and investors rarely see. But their proof is in impacts on people and planet.

Chinese supermarket. Photo: Simon Lim

An important new rating system comes from Oxfam. On 26 February, it launched “Behind the Brands”, a report and a scorecard, which benchmarks ten leading food and drink brands for sustainability and justice. It scores the brands under seven themes -- land, women, farmers, workers, climate, transparency and water -- and calculates each score according to four measures: company awareness, knowledge, commitments, and supply chain management.

Commenting that global supply chains “should provide everyone with an opportunity to escape poverty and hunger, and cannot allow the few to profit at the expense of the many” Oxfam makes ten big asks of the big brands. They call for companies to take responsibility and get informed, and to take action over smallholder farmers, labour standards, water, land grabs, and greenhouse gas reporting. Oxfam also calls on governments to do their part.

The report does a great job of highlighting the links between corporate policies and the hidden elements of their supply chains, such as the exploitation of farm workers, and grabs on land and water resources.

The big surprise is the company sitting at the top of the league table. It’s Nestlé, the bête noire of campaigners since the early 1980s, with a score of 54 per cent. After Nestlé come Unilever, Coca-Cola and Pepsico. Languishing at the bottom are General Mills, Kellogg’s, and Associated British Foods.

Such a topsy-turvy table shows how far some companies have travelled since the days of intense ‘food fights’ of the 1990s, when they found themselves on the back foot with very little in their armoury -- except some pretty unsophisticated and defensive PR – with which to respond to NGO campaigns.

But it also partly demonstrates the limitations of league tables that measure policy rather than impact. IIED faced similar challenges a decade ago when we coordinated an effort to benchmark the top UK retailers, with the Race to the Top (RTTT) project

At that time, it was perhaps the most ambitious attempt yet to drive increased transparency in the supermarket sector. A wide alliance of civil society organisations agreed on a mechanism by which they could rate supermarkets according to their impacts – on the environment, on workers and communities and animals, both directly and within their supply chains.

While that initiative ultimately failed in its ambitions to drive transparency across the sector, the involved parties took home some important lessons (see the final report [PDF]), many of which are still valid today.

First, companies need this kind of external pressure but they also need room to innovate. Getting the right combination of carrot versus stick, of naming and shaming versus engagement, and of fixed indicators versus flexibility for innovation is a tricky thing for the watchdogs like RTTT and Oxfam to do.

Second, efforts to measure performance that rely only on policies and company statements have their limits. They can result in measures of what companies aspire to, rather than of observable change, for example in the health of trading relations, or the welfare of workers.

There are ways to measure impact, but they are mostly costly and highly labour intensive. In RTTT we worked with Kent Business School to develop a survey tool to measure the fairness and justice of trading relationships. We supplemented company data with independent external surveys, such as store surveys for local food, or surveys of supermarket suppliers. These tools have since been improved and adapted for wider application (see Measuring fairness in supply chain trading relationships: A methodology guide and Survey Instruments).

One last thing. Many of the indicators in both the Oxfam and RTTT scorecards measured what companies had asked or demanded of others -- their suppliers -- rather than what they were doing themselves. This use of the power of big brands to drive ‘sustainability’ in supply chains can be a double-edged sword. It not only offer potential shortcuts and access to positive change, but also creates a mechanism for companies to pass responsibility on to other, often less powerful, actors. It allows companies to push social and environmental requirements up the supply chain to suppliers and farmers, along with any associated costs.

Much has happened in the ten years between ‘Race to the Top’ and ‘Behind the Brands’. The level of corporate reporting and transparency of many big food brands is in a different league. There is much more constructive engagement between companies and NGOs around environment and development issues.

But in the continued absence of government leadership and a reliance on self-regulation, the fact is that we still need people who can look behind these powerful brands, and see if they’re all they appear to be.

Bill Vorley is a principal researcher in IIED's Sustainable Markets Group.

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