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At UN Food Systems Summit, Did Business Show It Is Serious About Addressing the Crises Facing Global Food Systems?


At UN Food Systems Summit, Did Business Show It Is Serious About Addressing the Crises Facing Global Food Systems?

by
Nora Mardirossian and Kimathi Muiruri
|September 30, 2021

Global food systems face a mounting series of crises. Millions around the world still suffer from hunger compounded by nutrient-poor diets. Industrial agriculture is a major contributor to climate change and threats to biodiversity. The farmers who produce food throughout the world disproportionately experience poverty. Last week, the UN held its first ever Food Systems Summit in order to tackle these challenges.

From the start, the Food Systems Summit faced criticisms stemming from concerns that corporate interests and perspectives dominated the agenda. These concerns led to a boycott by hundreds of civil society organizations through the Civil Society and Indigenous Peoples Mechanism of the UN Committee on World Food Security. In a letter, the organizations voiced their concerns that the Summit would contribute to a shift towards the privatization of public efforts to address the environmental and human rights challenges in food systems which affect producers, workers, and communities. Three UN Special Rapporteurs joined in expressing deep concern that the Summit would “serve the corporate sector more than the people who are essential to ensuring our food systems flourish such as workers, small producers, women, and Indigenous peoples.”

Given the degree of attention—and mistrust—expressed toward the Summit’s approach to including the private sector, the businesses who were given a seat at the table had an opportunity to make the case that their inclusion was an asset. They had the chance to make meaningful and significant commitments to action to prove that they could be accountable for being part of the food systems transformation.

While some pledges and commitments were made, overall, they did not meet the moment.

On one hand, there was a significant pledge towards ending hunger. On September 21, 42 companies pledged $345 million in 34 countries as part of the Zero Hunger Private Sector Pledge. Aimed at achieving SDG 2, ending hunger by 2030, the pledge requires companies to “commit to internationally accepted principles,” including respecting human rights. The pledge’s implementation is bolstered through the involvement of international organizations including the FAO and the UN World Food Programme.

However, the Business Declaration on Food Systems Transformation by the Private Sector Guiding Group – the broader, more widely-signed business commitment emerging from the Summit – fell short of the potential shown in the Zero Hunger Pledge. The Declaration is a voluntary commitment for high-level business leaders to affirm their “ambition to scale investments, enhance collaborations and ensure that business is part of the solution,” as part of broader efforts to align the food sector with the UN Sustainable Development Goals (SDGs) by 2030. The one-page Declaration has, as of the writing of this article, been signed by over one hundred and fifty executives and leaders in the food and beverage ecosystem.

The Declaration is a positive signal that the private sector is willing to engage with the challenge of food systems transformation. It has attracted signatures from executives at massive firms with global impact, including Nestlé, PepsiCo, and even Google. The Declaration mentions many of the significant challenges facing food systems, including climate change, resilience, and living income and wages for producers and workers. Importantly, the Declaration’s commitments recognize the need for change that goes beyond the margins, and beyond CSR or philanthropy; it even refers to the need to transition business models themselves. It is no minor feat to bring together so many business leaders to sign onto a single statement outlining a joint vision for food systems transformation.

However, the Declaration falls short of making significant strides on three key objectives vital for transforming the food sector over the next decade. These three objectives are: (1) meaningful commitments which enable accountability for business; (2) clear action plans for improvement which align with existing international standards, and reflect what companies can do to drive change; and (3) good corporate governance which eschews undue influence over public institutions and allows them to play their role in food systems transformation.

Here, we point out where the Business Declaration can be improved upon to help meet these three objectives. We also share some learnings from our work on the Fixing the Business of Food project’s Four Pillar Framework Standards. Across four areas of business activity – products, operations, value chains, and corporate citizenship – we have elaborated a holistic set of twenty-one standards for food processing company alignment with the SDGs. We propose our Four Pillar Framework Standards can build upon the Business Declaration to help ensure the private sector is part of the solutions to address the crises facing global food systems.

(1) Accountability for Business

Accountability for business is imperative for achieving the food system transformation. Accountability entails independent mechanisms to monitor which business actors are continuously improving their practices, scrutinize those who do not, and provide incentives to make sure that they do. The approach of the Business Declaration in three key areas makes accountability unlikely.

Time-bound commitments

The Business Declaration contains no clear, time-bound commitments for signatories—the bedrock of accountability. The main covenant of the document is that the signatories “commit to… implementing actions,” for efforts such as “[scaling] science-based solutions” and “[providing] investments in research and innovation.” But these calls to action are broad and nonspecific. There are no minimum investment obligations, time horizons, or even key performance indicators for impact. The Declaration calls on businesses to “[report] in line with emerging ESG [Environmental, Social, and Governance] standards,” but does not name any standards to abide by nor key metrics which businesses should report as part of their commitment. The relatively vague language and lack of clear benchmarks is not consistent with measuring progress and ensuring accountability.

Past efforts for ESG improvement show that commitments can be ineffectual when they lack accountability. For example, the UN Global Compact CEO Water Mandate, established in 2007 and signed by over two hundred companies as of 2021, was designed to foster an “industry-led initiative to reduce water stress by 2050.” A 2014 analysis of the Mandate argued that “water sustainability was framed by the needs of the company,” rather than all affected stakeholders or agreed upon standards and mandatory minimum commitments. The analysis also noted a 2009 study from the Pacific Institute which found that, out of one hundred and ten companies (including a significant proportion of signatories to the Mandate), only 62% showed conformity with even one of three basic performance indicators for water conservation and progress reporting. A lack of clear accountability mechanisms limited the efficacy of the Mandate. The similar issues found in the Business Declaration raise concerns.

Board approval

The nature of commitment to the Business Declaration—by individual executives’ signatures without internal Board approval—also limits accountability and the extent to which the statement represents a meaningful commitment on behalf of the company as a whole.

Another recent private sector effort, the 2019 Business Roundtable Statement of the Purpose of a Corporation, provides a striking example of the challenges stemming from commitments backed solely by the signatures of individual executives. The members of the Business Roundtable, an association of U.S. CEOs, signed onto the Statement declaring that companies should serve all stakeholders, not only their shareholders. The Statement enjoyed widespread media coverage, with some expressing hopes that it would be a turning point for corporate behavior away from short-term gains and towards longer-term benefits to people and planet. However, a survey found that only one out of 48 respondent signatories said the decision was approved by their company’s Board of Directors. Without Board approval, a CEO signature is unlikely to result in internal action or accountability. If a company is ever publicly held to account for failure to live up to the Statement’s commitment, the signing CEOs will have likely long retired from their roles (making these “next, next, next, next management’s problem”). Predictably, a recent paperfound that no Business Roundtable company has changed their governance guidelines, shareholder proposal positions, or director compensation to align with this Statement. Without Board buy-in, the seriousness of executive commitments to change corporate behaviors is called into question.

Much like the Business Declaration, the Roundtable Statement can be recognized for the extent to which it represents a shift in executives’ public representation of their role in addressing the social and environmental crises. The executive signatories of the Declaration can still use their significant internal influence to prioritize seeking Board approval and institutionalizing the Declaration’s commitments. However, without concerted pressure on the companies to do so, the lack of impact of the Roundtable Statement forebodes a similar outcome for the Business Declaration.

Accountability to affected stakeholders

Finally, the Business Declaration signatories commit to creating transparency, which can help drive accountability. However, the Business Declaration’s transparency is aimed at “proving greater clarity to capital markets” (italics added). While ESG and the role of investors in driving corporate sustainability have gained attention in recent years, transparency should be aimed at serving those whose lives, livelihoods, and environment are at most risk, not just those who own food sector companies.

The Four Pillar Framework can help address these accountability challenges. Our standards elaborate the expectation that companies begin their due diligence efforts for all issues by adopting strong company policy commitments to help ensure accountability. Companies are guided to adopt policy commitments for each standard that are (1) grounded in internationally recognized standards, including human rights, (2) approved at the most senior level of the company, and (3) embedded into governance and management systems. Importantly, the Four Pillar Framework recognizes that commitments, while significant, merely represent the first step towards SDG-alignment. Commitments must be followed up by action, the tracking of specific targets, and public disclosure which allows all parties to hold them accountable for meeting expectations. Our standards provide guidance on what sustainable action and time-bound targets look like for each issue area relevant to SDG-alignment.

(2) Clear mandates that align with the responsibility to respect human rights and reflect what business can do

Corporate sustainability initiatives must align with global expectations regarding what companies are already responsible for doing, such as the UN Guiding Principles for Human Rights (UNGPs), and reflect what they are capable of doing to drive change and influence others. The Business Declaration misses the mark in these two areas.

Respecting human rights

In relation to what business are already responsible for doing, the Business Declaration could have more clearly set the baseline for action as established in the UNGPs, the UN’s authoritative global framework for responsible business conduct. The UNGPs clarified that all businesses are expected to respect all internationally-recognized human rights in their operations and value chains. The Declaration’s commitments do not sufficiently affirm this expectation, and may even undermine it.

The preamble of the Business Declaration says that business “recognises… the transformation can only be achieved by collaboration with all stakeholders everywhere, respecting the rights and dignities of all people.” However, in the commitment that follows which addresses some human rights issues, the operative language is not firm. The Declaration calls on business to “contribute to improved livelihoods and wellbeing across food value chains by strengthening decent work and income opportunities in line with the SDGs and promote living income and wages for farmers and workers everywhere” (italics added). Rather than reiterating a baseline commitment to “respecting human rights,” this statement limits the proposed role of business to contribution and promotion, rather than direct actions. For example, companies should commit to paying living wages, in addition to promoting them more broadly.

Additionally, some of the rights most at risk in food value chains – including the rights to life, land, water, and food, and especially for women, Indigenous Peoples, communities, and human rights defenders – are not mentioned. Nor are the severe issues of child labor and forced labor in food systems. All of these issues are widespread in food value chains, and must be priorities for a just transition of the food system that respects human rights and aligns with the SDGs.

Some progress has been made in recent years to ensure food sector companies understand their responsibility to respect human rights across their value chains. In fact, some of the signatories’ companies have robust Board-approved commitments to respect human rights, as the UNGPs call for, and report on how they conduct human rights due diligence. By failing to fully embrace respect for human rights as a baseline, the Declaration fails to move the ball forward, and risks undermining the progress that has been made.

A primary claim of the organizations boycotting the UN Food Systems Summit has been that the Summit’s plans for food systems transformation were not adequately grounded in a human-rights based approach. The Declaration’s shortcomings in this area thus raise concerns about the Declaration’s legitimacy and credibility among civil society – an important stakeholder and partner in sector transformation.

What companies are capable of doing

In relation to what business are capable of doing, in several instances, the Business Declaration defines commitments for action in ways that do not match the role companies can play in contributing to human health and sustainability.

For example, signatories of the Declaration commit to “incentivize consumers as agents of change to create demand for sustainably produced, high-quality animal, plant-based, and alternative proteins, as part of healthy and nutritious diets that are accessible and affordable for all.” As executives in food sector businesses, these signatories have significant leverage to change the health of the products sold and marketed by their companies. For them, creating demand for healthy products involves supplying those products through product design, marketing, and pricing decisions which are within the direct control of companies. The demand side of the equation – consumers being empowered as agents of change – is something companies have much less control over.

By focusing on consumer empowerment, the Declaration evokes the “carbon footprint” campaigns of oil and gas companies that externalized responsibility to improve outcomes engendered by their own products. Nearly 20 years ago, British Petroleum and its marketing agency executed a successful marketing campaign empowering consumers to reduce their “carbon footprints” by recycling and adopting a low-carbon diet. This diversion tactic, often called a smokescreen, shifted responsibility and attention for fighting climate change away from fossil fuel companies and onto consumers. The effect has been to allow oil and gas companies to appear concerned about rising emissions and the changing climate, while continuing to exploit fossil fuels with impunity.

In order for food sector companies to avoid this unfavorable comparison in years to come, initiatives to address consumers’ nutritional health must first clearly focus on how companies can make their product portfolios healthier and market those products responsibly.

The Four Pillar Framework includes features which address these gaps. In terms of clearly setting the baseline at the existing expectation that companies respect human rights, the Framework includes standards on child labor, forced labor, non-discrimination and equality, health and safety, living wages and incomes, freedom of association and collective bargaining, resource rights, and food security. Each is grounded in international human rights standards and the responsibility of companies to respect these rights across their entire value chains. Each recognizes that much of the action required of companies is related to making changes to their common business practices, such as significantly reducing agrichemical use and paying workers living wages. In relation to nutritious diets, the standards on products and strategies set out clear expectations that focus on what companies can do to make diets healthier and more sustainable. Namely, food companies should understand how their products, as they are actually consumed, contribute to negative health impacts, and tailor product design and marketing decisions to ensure their products contribute to healthy and sustainable diets.

(3) Corporate governance which avoids undue influence

The Declaration also fails to account for another concern of civil society: the undue influence of corporations in global and national governance. Indeed, many of the fundamental challenges plaguing food value chains have to do with the power and influence of big business interests over policymakers.

Refraining from undue policymaking influence

In the Declaration, business “calls for leadership by governments to… Co-design policies and redirection of subsidies supporting regenerative and nutritious agricultural practices, healthier consumption and reduced food loss and waste.” The operative proposal of ‘co-designing’ suggests that governments should invite companies in as partners in designing these policies and subsidies. Business support for worthy government interventions along these lines may help push them forward, but it can also affect the policies pursued in a way that favors business interests over the public interest. Undue business influence in policymaking threatens the legitimacy and independence of public institutions, which should be accountable to the public alone. The proposition that companies should be co-designers undermines the notion that the people, through their representatives in government, hold the power to craft the rules that govern food systems. This proposal is particularly noteworthy given the civil society concerns about the Food Systems Summit.

Furthermore, the Declaration does not meaningfully engage with the importance of corporate engagement with policymaking, regulatory, and judicial bodies in achieving, or undermining, the SDGs. The food systems transformation will require not only changes to corporate conduct in their operations and with business relationships in their value chains, but also in the ways they influence public institutions. SDG 16 specifically recognizes the need for strong institutions, without which, the government action needed to achieve the SDGs becomes impossible. The current system of corporate influence over policymaking (on issues ranging from soda taxes to climate action), of tax dodging, and of using the judicial system to target human rights defenders, undermines these institutions and needs to change.

The food system transformation cannot and will not come from companies alone. It will require flourishing civil society and concerted government efforts to regulate company behavior. To foster these, part of the role of the private sector is, simply put, to stay out. Holistic alignment with the SDGs requires changing the activities companies and their trade associations currently undertake which threaten the strength of institutions, public participation, and the civic space needed for civil society organizations to do their work to fight for accountability.

In the past year, experts have highlighted the need to ensure corporate activities such as tax practices, litigation activities, and lobbying activities are included in corporate responsibility frameworks. Without corporate policy coherence across all business activities, sustainability commitments ring hollow – and governments and the public are increasingly attuned to identifying greenwashing and hypocrisy. The fourth pillar of the Four Pillar Framework, on Good Corporate Citizenship, recognizes the need for companies to refrain from undermining institutions, lobbying for pro-business policies, avoiding accountability, silencing civil society, avoiding taxes, and incentivizing short-term profits at the expense of people and planet. The World Benchmarking Alliance’s Food and Agriculture Benchmark, too, recognizes this need and benchmarks the top 350 food and agriculture companies on their tax and lobbying practices. While business support for strong government efforts to achieve the SDGs may help some initiatives progress, business cannot presume to act as equal partners with governments in designing these solutions.

The Path Ahead

Changes in private sector behavior will be required for food systems transformation. Business commitments must be robust and serious, and translated to real changes in practice.

While the Business Declaration can be stronger in some critical ways, it is still significant in signaling the private sector’s acknowledgement that their business models need to be revisited and that they must engage with the challenge of food systems transformation.

To build upon the Declaration in the months ahead, commitments by the signatories’ companies must be hardened to enable accountability, come into alignment with internationally recognized human rights expectations, and consider holistically all of the corporate practices which can contribute to, or undermine, achievement of the SDGs. We hope our Four Pillar Framework can help bring clarity to the commitments and actions that are needed.




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