International corporations faced under scrutiny: Candriam highlights 7 companies for their human rights records and supply chain practices
In a recent study, seven major consumer goods companies – Procter & Gamble, Nestlé SA, The Coca-Cola Company, PepsiCo, PLC Unilever, Reckitt, and Danone SA – were assessed for their revenue dependence on certain commodities and their exposure to human rights risks in the coffee and cocoa sectors.
The research, conducted by Candriam, used data from CDP Forest and corporate documents to evaluate the companies' involvement. Notably, the study revealed that between 21% and 30% of Nestlé SA's 2021 revenue depends on coffee. However, the study did not provide a specific percentage for Nestlé SA's revenue dependence on cocoa.
Comparing human rights practices, disclosure, and exposure to human rights risks among these companies, the study found that Nestlé and Procter & Gamble (P&G) engage in collaborative programs addressing human rights in complex supply chains, including child protection efforts in commodity-rich sectors like palm oil, which is closely linked to cocoa and coffee supply risks.
P&G, however, has faced specific human rights risk exposures related to child and forced labor in its supply chain, particularly linked to raw material suppliers such as Wilmar International in the palm oil sector. Amnesty International reported that P&G's suppliers profited from child labor and forced labor involving children aged 8 to 14.
Unilever, on the other hand, emphasizes governance and ethical risk management, particularly in AI and data ethics, reflecting a broader commitment to ethical practices. However, detailed information on Unilever’s transparency and specific human rights disclosures in the coffee and cocoa sectors is less evident in these results.
Disclosure tends to be stronger around programmatic approaches to issues like child protection in plantations, with manuals and capacity-building resources publicly shared. However, transparency about ongoing human rights risks, such as forced and child labor incidents, varies and tends to be less comprehensive, especially where violations are reported by external watchdogs like Amnesty International for P&G.
In summary, while all three companies show engagement to varying degrees, Nestlé and P&G have more explicit documented efforts and risk exposures reported publicly, especially regarding labor abuses, with P&G facing criticism for ongoing child labor linked to suppliers. Unilever shows strong ethical governance but lacks detailed public disclosure specifically on coffee and cocoa human rights issues.
The study also highlighted a lack of international standardization of reporting requirements in the agro-food sector, making it challenging for investors to gain a comprehensive understanding of human rights risks in the supply chains of food and beverage companies. Unfortunately, the study did not disclose specific descriptions of human rights risks for Nestlé SA, unlike 30.5% of food and beverage companies mentioned earlier. Additionally, the study did not provide information on the structure and risks of Nestlé SA's supply chain, unlike some other food and beverage companies mentioned.
The agro-food sector remains under scrutiny for human rights issues in its supply chain, with only 30.5% of food & beverage companies having provided specific descriptions of human rights risks, and 68.4% not providing information on the structure and risks of their supply chain. This underscores the need for increased transparency and disclosure in the sector to ensure ethical practices and protect human rights throughout the supply chain.
[1] BSR - Nestlé/P&G Coalition [2] Amnesty International - P&G Suppliers Profiting from Child Labor [3] Unilever Sustainable Living Plan
- The study found that Nestlé SA, along with Procter & Gamble (P&G), are among the seven major consumer goods companies that were assessed for their revenue dependence on commodities like coffee and cocoa, as well as their exposure to human rights risks in the corresponding sectors.
- Specifically regarding Nestlé SA, the study revealed that between 21% and 30% of its 2021 revenue depends on coffee, although it did not provide a specific percentage for the company's revenue dependence on cocoa.
- With regards to human rights practices, the study indicated that Nestlé and P&G engage in collaborative programs addressing human rights in complex supply chains, focusing on child protection efforts in commodity-rich sectors like palm oil, which is linked to cocoa and coffee supply risks.
- On the other hand, P&G has faced specific human rights risk exposures related to child and forced labor in its supply chain, particularly linked to raw material suppliers such as Wilmar International in the palm oil sector, with Amnesty International reporting that P&G's suppliers profited from child labor and forced labor involving children aged 8 to 14.
