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December 18, 2012

The just-food review of 2012: industry makes progress on CSR

From a sustainability standpoint, 2012 might be characterised as a year when the world went backwards - or at a pinch stayed still - but the food industry moved forward, writes Ben Cooper.

From a sustainability standpoint, 2012 might be characterised as a year when the world went backwards – or at a pinch stayed still – but the food industry moved forward.

There are plenty of campaigners who would beg to differ on the latter point, but few would suggest world governments have covered themselves in glory either, in a year marked by the tepid Rio+20 conference which seemed to disappoint every stakeholder group in equal measure.

Any review of 2012 therefore has to begin, somewhat perversely, in June, with the Rio+20 conference which managed to be a non-event and a significant moment at one and the same time. 

The 128-paragraph declaration certainly left the NGO community distinctly underwhelmed and, although dubbed by campaigners as a sop to industry, received only qualified praise from corporate leaders, such as Unilever CEO Paul Polman who said it had “a lot of good elements” but lacked “specificity, clear dates, funding and accountability”.

So in marking the twentieth anniversary of the UN’s seminal Earth Summit and, some hoped, taking the international community’s sustainability push into a dynamic third decade, Rio+20 was a flop but in showing just how difficult it is for governments to make progress, it underlined the central role that the corporate sector has to play and is playing across a range of global sustainability challenges.

Moreover, it showed that it is leading companies and pan-national corporate organisations like the World Economic Forum (WEF) and the Consumer Goods Forum (CGF) that are setting the agenda and driving change.

And a driving force at WEF on sustainability is also the food industry’s leading sustainability champion, Unilever CEO Paul Polman. In the just-food interview in June, Polman said Rio would show how business is “pushing much harder and faster” on sustainability than governments which are tied down by the short-termism of election cycles.

Companies like Unilever and Marks and Spencer have been leading the way for their peers for many years; now they are leading the way for governments too. 

This year was a significant milestone for Marks & Spencer marking the culmination of the first five-year phase of the retailer’s Plan A sustainability strategy. Later in the year, Swiss retailer Migros and US food giant Wal-Mart Stores both announced enhanced sustainability commitments.

Clearly in Unilever and M&S the food sector has two highly effective standard-bearers, their pioneering efforts consistently drawing praise from industry and external stakeholders.

An important area where collective corporate engagement is showing some results and offers genuine prospects for considerable further change is in particular supply chains of concern, such as palm oil, soy, cocoa and fisheries.

Reflecting just how mainstream sustainability concerns are becoming, in April it was announced that the iconic Birds Eye fish fingers brand had gained Marine Stewardship Council (MSC) certification. The MSC stamp appeared on Birds Eye cod and haddock fish fingers from September. 

In May, Jaap Oskam, president of the Round Table for Responsible Soy (RTRS) said at its annual conference in London the scheme now had momentum after the first batch of RTRS-certified soy was acquired last year, some five years after the round table was founded. He said the scheme had the capacity to accelerate. 

Almost 300,000 tonnes of RTRS-certified soy have been sold since last June and the initiative is targeting 5m tonnes to be sold by 2015. The RTRS “is aiming for the mainstream”, Oskam said.

The RTRS is following the model of the Roundtable on Responsible Palm Oil (RSPO) which continued to make progress during 2012. 

In October, the UK food industry made a concerted pledge to work towards using only “sustainable” palm oil in their products by 2015. “Many food and drink manufacturers have in place long-standing commitments to using 100% certified sustainable palm oil and the national statement is an important step towards a wider reassurance for consumers that the products they enjoy contain oil from environmentally friendly sources,” said FDF director of sustainability Andrew Kuyk. In February, the Belgian food sector had made a similar pledge.

Unilever announced in April it plans to build a palm oil processing plant in Indonesia specifically aimed at helping the company reach its target to use only “traceable” sources of the commodity by 2020.

Critically, both the RSPO and RTRS are multi-stakeholder initiatives, representing a collaboration between heavyweight corporate participants, such as Unilever and Carrefour, and NGOs, most notably WWF. Indeed, the last year has seen the continuation – and perhaps the acceleration – of the trend towards closer partnership between the NGO and corporate sectors on sustainability issues, whether human or environmental.

This was remarked upon by Maya Albanese, associate for sustainable agriculture at the Rainforest Alliance, at the FMI/GMA Sustainability Summit held in Washington DC in October. Indeed, the Sustainability Summit itself embodied that greater spirit of collaboration, with more non-industry participants and speakers in evidence than before. 

Albanese stated in a panel discussion that cross-stakeholder partnerships were becoming increasingly central to the development of the sustainability agenda, adding that the “NGO landscape is changing” with more NGOs now looking to collaborate with companies. 

The Rainforest Alliance certification scheme continued to make progress in 2012. For example, in February Unilever announced its Magnum brand would become the first ice-cream brand to contain only cocoa from farms certified by the Rainforest Alliance. The consumer goods giant said Magnum ice creams will only contain the cocoa by 2015, and it would be able to source 60% of the cocoa from sustainable sources by the end of 2012. 

Hershey announced earlier in the year its Bliss chocolates would be Rainforest Alliance-certified by the end of 2012, and in October made a further announcement that it would be sourcing 100% certified cocoa for its global chocolate product line by 2020.

The year was yet another good one for the Fairtrade movement, which arguably represents the most prominent consumer-facing example of this type of heightened collaboration between the corporate sector and NGOs. In July, Fairtrade International reported that sales reached EUR4.92bn (US$6.05bn) in 2011, up 12% from the previous year.

The year also saw the Fair Labor Association (FLA), a US-based multi-stakeholder initiative which had hitherto worked primarily in the clothing sector, move into the food market, with the organisation undertaking an investigation into Nestle’s cocoa supply chain, the results of which were published in June. The FLA made 11 recommendations to Nestle.

While it is too early to say whether FLA’s intervention will make a material difference to the hitherto intractable problem of child labour in the West African cocoa supply chain, the fact that Nestle sought out collaboration with the FLA is a further example of how the corporate and NGO sectors are working together.

Indeed, the year closed with two examples of cooperation between NGOs and companies. In December, Arla Foods Ingredients pledged its support to a new research programme designed to tackle malnutrition among children in the developing world. The study, which will be undertaken in Malawi by US food aid organisation Project Peanut Butter, and will investigate the potential benefits of using whey permeate and whey protein in ready-to-use food supplements for the treatment of children with moderately acute malnutrition. Also in December, Hershey announced that it would be funding Project Peanut Butter to make and distribute vitamin-enriched nutritional packets to impoverished children in rural Ghana. 

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