Companies clean-up act to avoid consumer scorn

EMMA THOMASSON
Last updated 09:47 27/02/2014

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Many of the world's top food and drink companies are taking steps to improve their social and environmental impact on poor countries, although there is still much more to do, development group Oxfam said on Wednesday.

Oxfam launched its "Behind the Brands" campaign a year ago to try to assess the real impact of food and drink companies on the countries where they source raw materials, especially given a proliferation of public commitments to sustainability.

Oxfam said the companies it ranked as most responsible - Nestle, Unilever and Coca-Cola - had extended their lead over the others, while General Mills had replaced Associated British Foods in last place.

Big food and beverage companies have come under increasing scrutiny in recent years over their sourcing of raw materials, courting criticism on issues ranging from child labour on cocoa farms to the impact of palm oil plantations on rain forests.

Oxfam said its campaign had been helped by thousands of consumers bombarding brands with messages calling for action as well as a joint statement from 31 investment funds representing nearly US$1.5 trillion ($1.8 trillion) of assets reiterating the Oxfam demands.

"Those that are not moving fast enough will pay a price with the public, investors and communities in the field," Chris Jochnick, director of Oxfam's private sector work, told Reuters.

"Those companies that move first should see benefits in long-term access to sustainable supply chains which should be reflected in their share price."

Oxfam said the biggest 10 food and beverage companies it studied had huge impact given that their annual revenues of more than US$450 billion ($540 billion) are equivalent to the national income of all the world's low-income countries combined.

Oxfam ranked the firms on their policies in areas it sees as critical to sustainable agriculture: women, small-scale farmers, farm workers, water, land, climate change and transparency.

REPUTATIONAL CONCERN
Nestle came first, Unilever second, Coca-Cola third, Mondelez International and PepsiCo joint fourth, Mars and Danone joint sixth, Kellogg Co eighth, AB Foods ninth and General Mills in 10th place.

Jochnick said General Mills had lost ground due to a lower score for transparency as it was not publishing as much information as before on its water policies.

General Mills said it had a strong focus on sustainability and believed its efforts merited a better score, noting the Oxfam score was based only on publicly available information.

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"We are working to conserve and protect the resources upon which our business depends around the world, and we continue to improve our products and practices broadly across our supply chain," it said in an emailed statement.

AB Foods said it had taken note of the report and that the company was working hard to ensure suppliers met the highest ethical standards.

"We continue to place ethical behaviour and practice at the heart of what we do," a spokesman said.

Oxfam said the biggest improvements in company policies had come on policies over land, gender equality and climate change.

"What initially sparks companies' attention is reputational concern but as they dig into these issues they have started to find financial reasons to do the right thing," Jochnick said.

- Reuters

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