Corporate Responsibility in the Food Industry
As part of the growing debate surrounding social and environmental responsibility in the food industry, Agra Informa—a leading information specialist on agriculture and food policy, markets and trade—hosted a conference entitled “Corporate Responsibility in the Food Industry” on September 21 and 22. Present at the London event were representatives from major European retailers along with various research organizations, non governmental organizations and private sector service providers. Although a wide range of topics were presented and discussed, a few key concerns emerged as areas for immediate engagement.
The first was primarily related to improving public awareness and perception of industry efforts in social and environmental responsibility. To help do this, greater transparency and more effective benchmarking and reporting mechanisms were identified as critical elements. It was also suggested that credibility and trust among external stakeholders could be further enhanced by reporting not only successful initiatives, but also those that did not work out or that had negative results. However, such reporting may be too premature for a number of companies in the food industry, especially those that have only just begun to investigate responsible sourcing issues in their supply chain.
The second theme of interest that evolved from the conference was the call for food retailers and manufacturers to work together and to coordinate efforts with regard to responsible sourcing. Although this is already happening to some extent, it is not on the scale that is required. As a result, monitoring costs continue to be high (due to replication of audits) and progress hindered by the array of buyer requirements and programs. As a speaker in one of the panel discussions entitled “Applying the Standards”, I was able to draw on our experience as a monitor in the food industry over the last few years to highlight common failings and best practices within the food industry thus far.
Common failings in the food industry include:
- Supplier/farmer resentment due to high cost and number of audits required (largely the consequence of varying buyer requirements)
- Inadequate supply chain information and difficulties with logistics and securing/mitigating risk from all suppliers
- Poor communication and support from the top to bottom of the supply chain regarding standards, program expectations, monitoring process etc.
- Lack of consistency among/within audit companies
Best practices in the food industry include:
- A multi-program approach, with greater emphasis on training and education for program implementation and remediation of violations
- Better support and development of internal management systems on farms
- Increased transparency by sharing supplier status and farm audit results between retailers and buyers and by disclosing supply chain partners to help with identification of sourcing risks and program logistics
- Improved communication between buyers and suppliers, with the goal of establishing long-term relationships
If we are to learn anything from social responsibility initiatives of the past, developed by pioneers in the field from textiles and garments and the oil and gas industries, greater cooperation early on can help minimize sourcing risk and improve compliance in the future. This means that multiple stakeholders, including competitors, need to meet at the table and develop more cost-effective solutions in order to improve social and/or environmental standards throughout our food supply chains.
