Behind the scenes: Oxfam reports stalled industry progress on supply chain sustainability
With the coronavirus pandemic impacting notably on food insecurity around the world, Oxfam assesses major companies including Mars, Mondelez and Nestle, regarding progress on sustainability goals, and finds that despite positive gains, progress has stalled in some key policy areas
The coronavirus pandemic is exacerbating inequality and has further exposed vulnerabilities in the food system. In 2020, more than 270 million people experienced acute hunger, a major increase of 82% compared with before the pandemic.
Farmers and workers capture a fraction of the value of what they produce, yet food and beverage companies’ revenues continue to skyrocket. While the food system is complex and its problems multifaceted, the world’s largest food, beverage and agribusiness companies, as well as their suppliers and customers, have enormous influence over how that value is distributed and the power to elevate critical issues.
Eight years ago, motivated by food price spikes and these long-standing challenges, Oxfam set out to change how the world’s largest food and beverage companies do business. Between February 2013 and April 2016, the Behind the Brands campaign called on the world’s 10 biggest food and beverage companies to adopt stronger social and environmental sourcing policies and spurred significant commitments on women’s empowerment, land rights and climate change.
Mars, Mondelez and Nestlé committed to tackling gender inequality in their cocoa supply chains. The Coca-Cola Company (TCCC), PepsiCo and others declared zero tolerance for land grabs across all their supply chains. General Mills and the Kellogg Company pledged to fight climate change, setting science-based targets for reducing greenhouse gas emissions and eliminating deforestation in their sourcing.
Sustainability commitments
Companies made landmark commitments, but have they taken action to make them a reality? For the past five years, we have advised and monitored companies and agribusinesses on the implementation of their commitments in Brazil, Ghana, Guatemala, India and Malawi specifically – recognising that commitments are only a first step.
To shine a spotlight on companies’ progress, Oxfam commissioned four external evaluations (two on women’s economic empowerment, and one each on land rights and climate change) and updated our 2019 agribusiness scorecard.
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. On land rights, companies have made significant progress in adopting and utilising available frameworks and guidance at the global and headquarters level, but implementation is uneven within specific supply chains and geographies, as the task becomes increasingly complex.
Regarding 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. Implementation of commitments requires policy and practice change from suppliers, especially large-scale agribusinesses.
As traders and processors of key commodities, agribusinesses command a huge global footprint and many dominate market share, yet several have policies that lag behind those of their peers and customers in the food and beverage sector. Oxfam first assessed seven agribusinesses’ policies in 2019, using an adapted version of the Behind the Brands scorecard.
In Oxfam’s 2020 assessment, there have been some small improvements in scores, particularly in the ‘small-scale producers’ and ‘transparency and accountability’ themes. However, the divide between the top performers and those at the bottom is widening.Implementation requires stamina from companies.
Overall, we have found that while companies have taken important steps 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, supporting suppliers to take up the agenda and advocating for more regulation – to create change at scale.
Transparency remains a core challenge. Companies largely treat transparency as a reporting requirement, rather than an opportunity to drive innovation and improvements and become more resilient through sharing and learning
with peers and stakeholders.
Greater transparency in global supply chains paves the way for new business models that empower small-scale producers and workers. It enables stakeholders to tailor context-specific and locally relevant solutions that respond and adapt to complex local realities. Without transparency, companies cannot hope to meet their human rights due
diligence obligations.
Expectations that companies will meet these obligations continue to increase, driven by consumers, civil society organisations, investors, employees, governments and inter-governmental bodies. On human rights performance, the gap between the goals we need to meet and actual practice remains very large.
As a result, a number of countries, particularly in the European Union, are crafting new laws to require human rights due diligence across companies operating in Europe. Specific regulations for supply chain human rights issues are already legally binding in California (US), the UK, France and Australia.
Fixing food supply systems
Eight years on from the start of Oxfam’s campaign to fix the broken global food system, some of the ingredients of progress are there, but transformative action by big corporations and governments remains to be seen.
A more resilient global food system requires urgent, systemic change. This change demands a move away from current business models, which are founded on short-term profit maximisation, towards more holistic ones which internalise social and environmental performance and good governance.
During the next decade – already dubbed the ‘decade of delivery’ by the United Nations – we must make progress on the systemic drivers of this inequality to protect the only planet we have and to ensure that small-scale farmers and workers get their fair share of the value they create. The global pandemic brings an opportunity for industry to recognise workers’ and farmers’ true value, and has shown that doing so would minimise food supply chain disruptions and strengthen business continuity.
