Food companies in the FTSE 100 Index are making insufficient progress towards fair and sustainable models, says Maddy Diment.
Thomas Redman, a leading data expert, once claimed “where there is data smoke, there is business fire”. That sentiment feels particularly resonant in the findings from this year’s Tortoise Media Responsibility100 Index.
The index measures FTSE100 companies’ actions against their commitments toward a more sustainable future. Each company is given a ‘talk score’ – a measure of their sustainability commitments – and a ‘walk score’ – an assessment of their real performance across a wide range of areas from poverty to climate change.
Retailing giants – Tesco, Sainsbury’s and Ocado – and prominent food brands – Unilever, Coca Cola HBC (Hellenic Bottling Company), Diageo, Associated British Foods and Compass Group – were included in this year’s ranking.
These are the businesses behind the meat, ready meals, sauces and soft drinks bought and served every week. And collectively they, and their global supply chains, have a huge impact on society and the environment.
However, most of these companies saw a reduction in their ‘walk’ performance, with over half placed in the bottom 50 – Compass Group placed 89th, Tesco 82nd, Ocado 75th, ABF 67th and Sainsbury’s 52nd. Coca-Cola HBC saw the biggest drop in their walk ranking, falling 32 places to 49th. Bunzl, which provides packaging, tableware and agricultural supplies to the foodservice sector, was 77th.
The ‘talk’ performance was more of a mixed bag. Again, Coca-Cola HBC plummeted the most (by 41 places to 46th), meaning that the number and quality of their commitments has reduced in comparison to other food companies. On the other hand, Associated British Foods had the biggest improvement – up 13 places since last year, meaning they are now ranked 72nd. This is not a rank to be complacent with – there is much more work to be done.
The companies also fell short in terms of data transparency and visibility. For example, half the food businesses in the index do not report their annual food waste figures – an issue that represents 8% of total anthropogenic global greenhouse gas emissions.
Of course, in the UK they may soon have to. And where data is available, it portrays a pretty dismal state of affairs.Only two food and drink companies – Unilever and Diageo – pay their employees the real living wage, compared to 46% of all FTSE100 companies. The food industry has some of the lowest paid jobs in the index, and as the cost of living crisis continues to bite, supporting and compensating employees fairly should be at the top of the business agenda.
At the same time, CEOs across the FTSE100 Index were paid 30% more this year than last year. Take Tesco’s CEO, Ken Murphy. He earned £4.74m this year – which includes the highest annual bonus awarded by the supermarket since 2016 – making his total pay 224 times the total pay and benefits of the average member of staff at Tesco. The average employee at Tesco has an annual income of £21,217 – about £4,000 less than the minimum acceptable standard of living, according to the Joseph Rowntree Foundation. Sainsbury’s was hardly any better – with CEO, Simon Roberts, paid 183 times more than the average worker at the company.
In terms of environmental reporting and performance, each retailer in the index has increased their number of climate targets and commitments. However, emissions reporting for scope 3 remains dire. Ocado reported 11.51 tonnes of CO2e for their scope 3 emissions in this year’s reporting period. According to the British Retail Consortium, 80-90% of retail emissions are from scope 3 sources, making Ocado’s figure a laughable underestimation of their impact.
For both the food brands and retailers, the gender pay gap remains; diverse representation in senior management is still poor; voluntary turnover rates are high; and workplace injuries continue to rise.
Without more transparent data and honest reporting, it is impossible to hold public companies to account in their transition to net-zero. We know the stakes are high – action is needed now.
Maddy Diment is Lead Researcher in Tortoise Media's Intelligence Team. Read more about Tortoise Media’s Responsibility100 Index here, and contact [email protected] for more information.
