Study grades sustainability reporting of top food and beverage companies

by Eric Schroeder
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CLAREMONT, CALIF. — The Coca-Cola Co., InBev, Smithfield Foods, Inc., and PepsiCo, Inc. are leading the way in corporate environmental and sustainability reporting, according to a new report issued by the Roberts Environmental Center of Claremont McKenna College.

The report, "2009 Consumer Food, Food Production, and Beverages Industry Report," is issued every two years and examines Pacific Sustainability Index (P.S.I.) scores evaluating the environmental and social reporting of the largest companies on the Fortune Global 500 and Fortune 500 Consumer Food, Food Production and Beverages sector lists. The P.S.I. uses a general systematic questionnaire to analyze the quality of sustainability reporting. The selection of questions was based on the most frequently-mentioned topics in almost 1,800 corporate sustainability documents analyzed from 2002 through 2008 by the Roberts Environmental Center. Draft sector reports then were made available to companies inviting a review of the analysis.

"Coca-Cola, PepsiCo and InBev, the world’s biggest beverage (and snack) companies, established the top of the curve for this sector’s P.S.I. grading scale, as they presented the most comprehensive, exemplary sustainability standards," said Jennifer Ward, lead research analyst for the report. "These companies displayed optimistic environmental intentions and supported their visionary statements with innovative involvement in external environmental issues.

"The beverage companies perhaps have an advantage in being more transparent because of a more standardized, cleaner nature of their business, but Heineken, SAB Miller, Constellation Brands, do not follow this rationale. Paradoxically, Smithfield Foods, a company that is more vulnerable to negative environmental impacts because of its massive pig farming operation, reports more than other companies that are perceived to have cleaner operation such as a bottling company like Coca-Cola Enterprises or Pepsi Bottling."

Pacing the way in the food and beverage category was The Coca-Cola Co. With a P.S.I. ranking of 55.13 and an overall grade of "A+", the Atlanta-based company received "excellent" comments from researchers in the areas of environmental and social intent accountability, environmental and social intent vision, environmental reporting on water and social reporting on human rights and management.

Ranking just behind Coca-Cola with a P.S.I. ranking of 52.72 and an overall grade of "A" was PepsiCo, Inc., Purchase, N.Y. The report noted that PepsiCo "has done a good job of reporting its social and environmental views, as well as what it has done to back them up."

The highest non-beverage ranked company was Smithfield Foods, Inc., Smithfield, Va. With a P.S.I. ranking of 48.97 and an overall grade of "A" Smithfield was applauded by researchers for the implementation of a carbon dioxide emission tracking program put in place in 2007, a move the report indicated is "essential to decrease greenhouse gas emissions in the long run."

While noting that more companies than ever before were in the top quarter of the overall range of scores, researchers said several companies still have a lot of work to do.

With P.S.I. rankings of 8.8 and overall grades of "D," Land O’Lakes, Inc. and Pilgrim’s Pride Corp. tied for the bottom spot in the report.

General comments for nearly all of the categories studied for Land O’Lakes were marked with "needs substantial improvement."

"Land O’Lakes Inc. and its associated cooperative members are dependent on the environment for financial well-being and have stated commitment to appropriate conservation measures," the report said. "However, they do not have a demonstrated commitment to good environmental practices."

While less harsh in its critique of Pilgrim’s Pride, the report stated the company still has "much room for improvement in quantitative reporting of sustainability."

"There is no reporting of how much waste is produced or recycled, the energy portfolio and use of clean energy, the effect of company operations on the environment, and nothing regarding green purchasing," the report noted.

In 2007, the highest ranked company was Groupe Danone, Paris, with a P.S.I. score of 54.54 and an overall grade of "A+", while the lowest ranked company was Sara Lee Corp., Downers Grove, Ill., with a P.S.I. score of 4.29 and an overall grade of "D-".


Making the grade


A+ Coca-Cola Co.

A PepsiCo, Inc.

A InBev

A Smithfield Foods, Inc.

A- Groupe Danone

A- Unilever

A- H.J. Heinz Co.

A- Molson Coors Brewing Co.

B+ Tyson Foods, Inc.

B+ Nestle S.A.

B+ Kellogg Co.

B+ Sara Lee Corp.

B General Mills, Inc.

B Campbell Soup Co.

B Dole Food Co.

B Coca-Cola Enterprises

B Bunge

B- Kraft Foods Inc.

C+ Wm. Wrigley Jr. Co.

C+ Archer Daniels Midland Co.

C+ Hormel Foods Corp.

C+ Pepsi Bottling

C Heineken

C ConAgra Foods, Inc.

C Dean Foods Co.

C SABMiller

D+ Constellation Brands

D Pilgrim’s Pride Corp.

D Land O’Lakes, Inc.


Source: 2009 Consumer Food, Food Production, and Beverages Industry Report

This article can also be found in the digital edition of Food Business News, June 9, 2009, starting on Page 16. Click here to search that archive.

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