Published in December by Switzerland-based Bank Sarasin, "Food and sustainability: Will the seed bear fruit?" (download the PDF here) highlights three central sustainability themes that affect food producers: health and nutrition, sourcing more raw materials from sustainable agriculture and committing to fair working conditions. The sustainability ratings of the world’s biggest food producers put Danone, Unilever and Heinz in the lead, followed by Nestlé.
Despite good results, most companies still have a lot of ground to cover on the path towards sustainability. One of the key challenges facing the industry is procuring more raw materials from sustainable sources. This is not simply a question of ensuring long-term supply and environmental responsibility. As consumer companies with many leading global brands, controversial themes which come under the media spotlight such as child labor or the destruction of the rain forest pose a serious threat to the brand’s image.
Giants of the food industry realize they need to invest in the mainstay of their products: agriculture. Together these industry heavyweights purchase a big share of global harvests: 15-20 percent of the world’s coffee, over 10 percent of its tea, tomatoes and peas, and 5 percent of its palm oil. For this reason, companies that already obtain large volumes of their raw materials from sustainable sources and also have a clear strategy in place for improving environmental and social standards at their suppliers score well on Bank Sarasin’s matrix of sustainability criteria. The leader here is the Canadian company SunOpta, which is committed to organic farming methods. But the bigger players Heinz and Unilever also score well. Although most of the big food producers do not actually have a commitment to organic farming, they do respect other sustainability standards, some of them formulated in-house. The big U.S. food producers have also begun to develop their own strategies for promoting sustainably produced raw materials, and some of them are seeking cooperations with leading environmental organisations.
With bottled water, the main areas of conflict are its environmental footprint compared with normal tap water and the privatization of a public resource. These companies are therefore repeatedly coming under media scrutiny.
When it comes to working conditions, most of the raw material producers in agriculture and plantations attract public criticism. On cocoa plantations, for example, child labor and generally poor working conditions are very common. So far the working conditions in the food producers’ own manufacturing plants across the globe have not come under heavy scrutiny. Precarious working conditions in the value chain of branded products pose a threat to the brand’s reputation, as experiences in other industries show. Bank Sarasin’s sustainability study points out that only Danone has signed a framework agreement with the International Union of Food concerning globally valid employment standards. With Nestlé and Unilever, one of the major areas for improvement is employment rights in their numerous production facilities in developing countries.
