Bloomberg News

Nestle Tops Oxfam List as General Mills Falls to Bottom

February 25, 2014

General Mills Inc. (GIS:US) fell to last place among 10 major food companies ranked by Oxfam International on their support for sustainability and human rights, including treatment of women and farm workers.

Associated British Foods Plc (ABF), the London-based maker of Ovaltine drinks and Twinings teas, which was rated last a year ago, rose one position in the report released today. Nestle SA (NESN), Unilever NV (UNA) and Coca-Cola Co. (KO:US) had the best results, and every company except Minneapolis-based General Mills improved its score from last year when the scorecard was first issued.

The rankings consider corporate policies related to land rights of small farmers; exploitation of women, farmers and workers; climate change; business transparency; and water use.

“Companies are definitely willing to make bolder commitments because of the pressure they’re feeling,” Chris Jochnick, a director for Oxfam America, the U.S. arm of the U.K.-based human-rights advocacy group, said in an interview.

Companies including ConAgra Foods Inc. (CAG:US) and Royal Dutch Shell Plc (RDSA) have joined initiatives such as the Roundtable on Sustainable Palm Oil and created certifications such as Fair Trade to monitor business practices and encourage improvements.

The 10 businesses studied in the report are among the top producers in the global food-and-beverage industry.

General Mills, maker of Cheerios cereals and Haagen-Dazs ice cream, fell because of changes to judging criteria, Oxfam said. The company said it may have scored poorly because its public report on corporate responsibility doesn’t mirror Oxfam’s categories.

‘Stronger Score’

“We do feel our efforts merit a stronger score,” spokeswoman Kris Patton said in an e-mail. “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.”

Vevey, Switzerland-based Nestle is the world’s largest food company by revenue. It reported 2013 fiscal-year sales of $92.2 billion, just above the gross domestic product of the Slovak Republic and enough to put it in the top third of all nations that year, according to company and International Monetary Fund data. It again topped Oxfam’s rankings.

“We will continue to support the efforts of Oxfam and other NGOs in making progress toward a sustainable food system,” Nestle spokeswoman Meike Schmidt said in an e-mail. “Improving food security worldwide requires a lot more effort by all stakeholders.”

Land Grabs

Companies improved in creating policies against so-called land-grabs of developing-world farmland by richer nations and wealth funds as well as in the treatment of women farmers by their commodity suppliers. Oxfam has highlighted those two areas in its campaign criticizing food companies over the past year, Jochnick said.

Conversations with the advocacy group have “been helpful in showing us how we can extend our leadership in this area,” Richard Buino, a spokesman for Deerfield, Illinois-based Mondelez International Inc. (MDLZ:US), said in an e-mail. The company rose to fourth place from sixth last year, with improvements noted in land-rights and climate policies, as well as treatment of women.

Companies that make products sold to the general public were selected for the report because of their recognizable brands, according to Oxfam. Major food shippers and traders such as Archer-Daniels-Midland Co. (ADM:US) and Louis Dreyfus Commodities BV were not included.

Consumer Sensitivities

Advocates tend to target such businesses because consumers are sensitive to how companies engage with society, said Caroline Flammer, an assistant business management professor at Western University in London, Ontario, who didn’t participate in the study.

“Their clients are the consumers, so for those companies it makes more sense to invest in social responsibility,” Flammer said in an interview. Even so, some companies may not be as sensitive to Oxfam’s priorities because they define such responsibilities differently, she said. “Because they don’t collaborate, that doesn’t mean it isn’t important to them.”

Oxfam plans next to focus on climate change in its attempts to change food-company behavior, Jochnick said.

Of a possible 70 points, the scores were: Nestle, 45; Unilever, 44; Coca-Cola, 38; Mondelez, 23; PepsiCo Inc. (PEP:US), 23; Danone and Mars Inc., 22; Kellogg Co. (K:US), 20; Associated British Foods, 19; General Mills, 15.

To contact the reporter on this story: Alan Bjerga in Washington at abjerga@bloomberg.net


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Companies Mentioned

  • GIS
    (General Mills Inc)
    • $52.86 USD
    • 1.01
    • 1.91%
  • KO
    (Coca-Cola Co/The)
    • $44.97 USD
    • 0.68
    • 1.51%
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