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Food companies’ nutrition records under scrutiny

A study of the world’s largest food and drinks companies finds that the industry is falling short on nutrition-related commitments, performance and disclosure. DanoneUnilever and Nestlé came out on top of the Access to Nutrition Index, but their score of 6.3 out of 10 leaves considerable room for improvement. Danone and Nestlé both face accusations violating the International Code of Marketing of Breast-milk Substitutes, for instance.

Among the recommendations of the report were clearer and more measurable targets to improve nutrition, as well as increased public disclosure of nutrition activities. The survey of 25 companies, which was financed by the Gates Foundation among others, will be published every two years. More than three dozen investor groups currently support the index, representing more than $2.6tn of assets under management.

The report echoes findings of research by anti-poverty group Oxfam. Its Behind the Brands report makes the point that 1.4 billion people are overweight, while 900 million suffer malnutrition. It also highlights the purchase of land for agricultural export. Since 2000, Oxfam has counted more than 900 large-scale land deals, the “vast majority” of which took place in 32 countries with “alarming” or “serious” levels of hunger. Three-fifths of foreign land investors intend to export everything that they produce.

The Oxfam report ranks 10 of the world’s largest food companies according to their policies covering supply-related social and environmental risks. Nestlé (38 points out of 70) and Unilever (34) come out on top, with Kellogg’s (16) and Associated British Foods (13) at the other end of the list.

SRI ranking for emerging markets

China and Brazil get a good showing in the inaugural Dow Jones Sustainability Index Emerging Markets, with two constituents each in the top five. Of the 69 companies that make up the list, the top five were Taiwan Semiconductor Manufacturing, the Industrial & Commercial Bank of China, China Mobile, Itau Unibanco and Petroleo Brasileiro. DJSI Emerging Markets tracks the performance of leading companies from 20 developing economies, with a potential universe of 800 firms. Participants in the new index, which is governed by a best-in-class approach, have a total market capitalisation of $681bn.

Meanwhile, the semi-annual review of FTSE4Good sees 20 new companies added to the benchmark index. Featuring among the notable inclusions are Spanish hospitality company NH Hotels, UK online gambling company Betfair and US software and computer services provider Mitsubishi finds itself among four companies deleted from the index. Recent research carried out at Edinburgh University finds that half of the companies with which investors engage using FTSE’s non-financial data see improvements to their environmental, social and/or governance performance. This compares with a control group in which only 13% improved.

Waste not, want not

Food waste is emerging as one of the hot topics of 2013. The latest to champion the issue is UK environment group Wrap, which finds that consumers waste about £6.7bn a year by not eating perishable food in time – equivalent to £270 per household. Allowing food to go past its shelf-life accounts for 60% of all UK household food waste, a new report by Wrap finds. The research points the finger at food retailers for failing to make best use of the information on food packets and for not adjusting packaging to make “in-home shelf-lives” longer. Only one in five consumers looks at on-pack storage guidance, according to Wrap.

A parallel study in the US finds that two-fifths of all food produced goes uneaten. Research by the National Resources Defence Council puts the value of wasted food at $165bn a year. Food waste is the single largest component of solid waste in US landfills, double the figure in the 1970s.

Renewable energy investors’ ranking

Royal Bank of Scotland may have had some rough years on the high street, but its record in renewables is a welcome success story. For the second consecutive year, the largely UK government owned bank topped the clean fuels investment list. RBS lent or arranged finance worth $258.3m for clean energy projects in 2012, figures published by the Infrastructure Journal reveal.

Its place among the four-strong coalition of financiers behind the 367MW Walney wind farm off the Cumbrian coast secured its pole position. In December 2012, RBS launched a £200m carbon reduction fund in the UK with the goal of financing sustainable energy projects. Even so, renewables still only represent 6% of all infrastructure transactions registered last year. The bulk (61%) falls to the oil and gas sector, followed by transport (11%) and mining (7%).

Organisation snapshots

CR standards registering with European corporations

Public acknowledgement of responsible business is increasing across Europe, a study by the European commission finds. More than two-thirds of large European companies make reference to “corporate social responsibility” or an equivalent term on their corporate websites.

Two-fifths, meanwhile, refer to at least one internationally recognised corporate responsibility framework. As CR standards go, there are two clear front-runners: the UN Global Compact (referenced by 32% of companies) and the Global Reporting Initiative (31%). Further down the list are the OECD Guidelines for Multinational Enterprises, ISO 26000, the UN Guiding Principles on Business and Human Rights and the ILO’s Multinational Enterprises and Social Policy Declaration. Companies with more than 10,000 employees are three times as likely to cite one of these standards than those with a workforce of 1,000-10,000.

At a national level, meanwhile, it is the Danes, Spaniards and Swedes that mention international frameworks the most. Those at the bottom of the list include Czech, German, Polish and British firms. The study was based on 200 randomly selected companies from 10 European countries.

Emerging market term card: good, but could improve

Environmental inaction is the one blot on an upbeat assessment by the United Nations of development progress in the world’s poorer nations. The UN Development Programme’s 2013 Human Development Report warns that that number of people in extreme poverty could increase by three billion by 2050 if coordinated environmental policies, especially on climate change, are not promoted.

On the plus side, however, the report finds that more than 40 developing countries made greater human development gains in recent decades than earlier predictions suggested. Girls’ education, the authors note, is as close to a “silver bullet” as there is when it comes to ensuring development. Among the headline findings of the report is the prediction that the aggregate production of China, India and Brazil will surpass that of the US, Germany, UK, France, Italy and Canada by 2020.

The report also finds a big change in developing countries’ portion of world trade, which jumped from 25% in 1980 to 47% in 2010. Another highlight is the proportion of people living in extreme income poverty worldwide, which plunged from 43% in 1990 to 22% in 2008. China’s ability to lift more than 500 million people out of poverty played a significant part in this achievement. Even so, 1.57 billion people still live in what the UN terms “multidimensional” poverty. More than a third of these (612 million) are in India.

The report’s primary conclusion echoes recent research by risk management firm Maplecroft, which rates a range of emerging economies as being at “high risk” of extreme weather events. The list includes a number of highly populous Asian countries, such as Bangladesh, India, Indonesia, and China. Maplecroft’s Socio-economic Resilience Index warns that many emerging economies lack the capacity to bounce back after devastating natural hazards. Fewer than 10,000 people lost their lives as a result of the 251 natural disasters recorded globally last year.

Africa’s untapped agricultural potential

Africa’s policymakers need to support agriculture, farmers and agribusinesses. Do that, the World Bank predicts, and the continent could see its agricultural sector become a trillion-dollar proposition. According to the Growing Africa report, agricultural activities represent about half of the continent’s economic activity and are worth about $313bn a year at present.

Africa boasts almost 450m hectares of land that is suitable for farming but that is not presently cultivated – reckoned to be about half of the world’s total uncultivated land suitable for food production. Africa uses less than 2% of its renewable water sources, compared with a global average of 5%, the report finds. Yields are routinely 60% to 80% less than what they could be, according to the World Bank. The lender also points out that post-harvest losses of cereals amount to as much as 20% of total production.

Company insights

Nestlé in (mega) numbers

Water is one of the big messages of Nestlé’s latest Creating Shared Value report. The $88bn food and drinks company used 84m cubic metres of water in 2012. Over the same period, it invested almost $30m in water conservation projects at facilities across the world. The Swiss multinational recently pledged to cut water consumption per tonne of product by 40% from 2005 levels by 2015. In terms of climate change, its direct and indirect emissions measured 3.71m and 3.39m tonnes of carbon dioxide equivalent respectively during 2012. Nestlé currently employs almost 340,000 people worldwide and works directly from more than 690,000 farmers.

IADB invests £3.75bn in sustainability projects

Forty-five of the 169 projects financed by the Inter-American Development Bank in 2012 supported initiatives related to climate change, sustainable energy or the environment. The bank’s green investment portfolio represented $3.75bn, comprising one third of its outlay for the year.

Corporate Responsibility Research  CR Cheat Sheet  CR Stats  CSR Cheat Sheet  Oliver Balch 

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