Expert insight

Pictures of Rachel Wilshaw and Danielle Smith

Rachel Wilshaw and Danielle Smith
Private Sector Team, Oxfam GB

How business-NGO partnerships are tackling sustainability challenges in food chains

The scale and complexity of food supply chains have made large global food companies vulnerable to a range of new challenges. Raw material supplies are at increased risk of disruption from factors such as climate change. Increased societal expectations towards ingredient traceability and labour standards create additional complexity for companies, as well as significant reputational risks if poor practices in supply chains are uncovered. The UN Guiding principles on business and human rights have raised the bar on companies’ responsibility to respect human rights by identifying and addressing adverse impacts caused or affected by their business.

Behind the Brands
Through its Behind the Brands campaign, launched in 2013, Oxfam has campaigned for the world’s ten largest food and beverage companies to use their power to address sustainability challenges in global supply chains. The ranking and scoring of companies has identified gaps in companies’ knowledge of their supply chains and in their commitments. The companies have responded to actions by over 700,000 supporters by announcing new policies and commitments in relation to critical sustainability issues such as land, gender and climate change mitigation. For instance, after the campaign highlighted a corporate blind spot about women in the cocoa supply chain, the world’s ’Big Three‘ chocolate companies – Mars, Mondelez and Nestlé – committed to publishing gender impact assessments and action plans to address gender inequalities in their cocoa supply chains.

Behind the Brands encourages multinational companies to compete in a ‘race to the top’. Yet, increasingly, companies need to collaborate, as well as compete, since many issues with political, social and economic drivers cannot be solved by individual companies, however powerful. One such issue is that of ensuring labour rights are respected in their supply chain.

Public governance’s critical role
Companies have traditionally taken a compliance approach, using private, confidential audits which are neither shared with each other nor made available to civil society organisations. But this has not quenched the flow of exposés of labour abuses, such that consumers cannot square what they read in the media with what they read in companies’ sustainability reports.

The collapse of Rana Plaza in Bangladesh, which had been audited many times by different companies, crystallised the deficiencies of this approach. It led to a partnership with a difference: the Bangladesh Accord on Fire and Building Safety, voluntary to join but legally binding on the 180+ global brands who have signed.

Rana Plaza focused attention on the critical role of public governance in the protection of human rights. Oxfam welcomes the emerging collaborations which aim to influence public policy, whether of host governments or governments in key sourcing countries. For instance, conditions of slavery thrive most where gaps in public and private governance are greatest, from seafood to fresh produce, cocoa and palm oil.

In September 2014, companies, NGOs and trade unions got together under the auspices of the Ethical Trading Initiative (ETI) and sent a letter to the British government asking for a ‘transparency in supply chains’ clause in the bill on modern slavery going through the UK parliament. The same month eight global garment brands sent a joint letter to the Cambodian government calling for an increase in the minimum wage, saying that they were “ready to factor higher wages” into their pricing. In November the minimum wage was raised 28 per cent.

The value of partnership
Oxfam has developed ways to partner with companies which show a readiness to explore key sustainability issues and publish the findings, to inform and encourage change. In 2011, with Unilever’s co-operation, Oxfam undertook a gap analysis between the company’s high level policy commitments on labour rights and the reality on the ground in Vietnam. Focusing on workplaces where risk and leverage were highest, researchers found that in the company’s own factory, workers lacked a trusted mechanism to voice their concerns and, although wages exceeded the legal minimum, they fell well short of a living wage. Following the publication of the report in 2013, Unilever created a senior role for social impact, integrated human and labour rights better into its corporate plan and moved from compliance to a continuous improvement framework with its new Responsible Sourcing Policy.

When Oxfam did a Poverty Footprint study with Unilever in 2004, such a partnership was highly unusual. Since then, more and more companies have recognised that partnerships with critics and competitors can be greater than the sum of their parts in taking on complex sustainability issues. In a recent study of corporate/NGO partnerships, 87 per cent of corporate respondents said partnering with an NGO has increased its understanding of social and environmental issues, while 59 per cent said it had helped them change their practices for the better (up 14 per cent on the previous year’s survey).

With the global nature of today’s sustainability challenges, from climate change to inequality, which can so easily impact on companies’ security of supply and reputation, multinational companies must become as good at partnering with critics and peers as they are at competing with each other in the market.