Global Forum on Food Security and Nutrition (FSN Forum)

FAO Core food and agricultural indicators for measuring the private sector’s contribution to the achievement of the Sustainable Development Goals – World Benchmarking Alliance (WBA) Feedback

Methodology link

1. Scope

• Are the most relevant sectors and areas with respect to the private sector’s impact on the SDG agenda covered? Are the associated indicators adequate to measure private sector entities’ contribution to the SDGs? If not, where are the gaps? Are there any indicators included which are superfluous and why?

We welcome this initiative and strongly support FAO’s efforts on incentivizing and measuring the private sector’s contribution to achieving the SDGs. These efforts are in line with WBA’s mission and vision.

Generally, we appreciate the broad approach in terms of sectors and areas covered by the core indicators. As such, we see a high level of alignment between FAO’s core food and agriculture indicators and the methodology (and indicators) for WBA’s Food and Agriculture Benchmark. We appreciate this alignment, ensuring basic synergies between both frameworks as well as consistency on metrics required. We view this as an important basis for further conversations between FAO and WBA, and looking at potential collaboration on driving the agenda for private sector engagement on the SDGs.

Going through the core indicators, the following questions have come up:

• Sectors covered: The scope of the framework does not include food service and restaurant chains. Why is this sector not included? WBA’s Food and Agriculture Benchmark considers food service and restaurants key players in the food system transformation agenda.
• Animal welfare: This topic is not covered. As we consider animal welfare a key issue for private sector action - is there a reason why it is excluded from the core indicators?
• Promoting sustainable and healthy diets: Indicator C.6.2 contains multiple elements that address different aspects of promoting sustainable and healthy diets. For example, activities related to responsible advertising and promotion of healthy foods. Both elements require separate data points, and as such can both form a separate indicator on responsible marketing activities. Two indicators, one that assesses companies’ efforts on improving the nutritional quality of products and one on (commercial) food promotion practices, can strengthen the focus on these two key topics.
• Forced labour/modern slavery: this topic is excluded except in terms of child labour. As this can be considered a key aspect in many agricultural supply chains, WBA’s Food and Agriculture Benchmark includes two separate indicators in these topics. Why was it excluded from the core indicators?
• Referencing: we much appreciate the referencing of the high number of sources used, including WBA sources. As our materials (notably the benchmark’s methodology) evolve over time, it may be useful to further specify the documentation used:
  
  World Benchmarking Alliance (WBA) 2021, Methodology for the Food and Agriculture Benchmark: A roadmap for corporate action, indicator [xyz]. Available at: https://www.worldbenchmarkingalliance.org/research/food-and-agriculture-methodology/

• The framework is food-centric for the downstream sectors (food processing, food wholesale and food retail), and the scope of the guidance at the production level only includes crop and livestock production as well as aquaculture. Is the inclusion of aquaculture but not fishing the right approach given the similar impacts of aquaculture with other types of agricultural production? Should the framework be applicable to the forestry sector and if so, which aspects should be considered?

If fishing activities are not included in this sectoral guidance, are you planning to develop a separate guidance for that sector? Or maybe refer to an existing standard to guide companies in the industry?

WBA’s Seafood Stewardship Index assesses the performance of the seafood industries in achieving key SDGs. The methodology includes key topics for the industry in moving to a sustainable sector.

• Would it be helpful to include the specific list of indicators which apply to each type of production, e.g. aquaculture, livestock, crop production?

To increase the understanding for stakeholders, including companies, it could indeed be helpful to have an overview of the applicability of indicators to key segments of the food value chain. Further, it could also be helpful to have an overview of the most material/relevant indicators for each type of production.

• For certain sustainability issues, the performance of an entity cannot be assessed without going beyond the entity’s direct operations. Some indicators take into consideration reporting entities’ relationships with their suppliers or suppliers’ impact in the reporting entity’s overall performance:

1. Indicators related to reporting entity’s relationship with suppliers:
   1. A.5.1 Proportion of local procurement
   2. A.5.2 Fair pricing and transparent contracts
2. Indicators related to impact of suppliers:
   1. B.1.4 Water Management practices
   2. B.2.3 GHG emissions (scope 3)
   3. B.2.4 GHG Emissions management
   4. B.7.1 Land conversion
   5. B.7.3 Sustainable use and conservation of biodiversity
   6. C.4.2 Incidence/frequency rates of occupational injuries
   7. C.5.1 Incidents of non-compliance with child labour laws,
   8. C.6.3. Non-compliance in food safety and food quality,
   9. C.7.1. Non-compliance with land tenure rights regulations,
   10. D.2.1. Amount of fines paid and payable due to corruption-related settlements,
   11. D.3.1 Management of risks to people, planet and society through supply chain due diligence. For the other indicators, entities are encouraged to assess and report on suppliers’ performance alongside their own reporting.

• Does this approach capture the relevant sustainability issues related to suppliers? Is it clear where reporting entities need to be requesting information from suppliers?

Depending on where the company sits on the value chain, there are a few more topics that are related to the impact of suppliers. For example, in the WBA Food and Agriculture Benchmark, we also ask about impact of suppliers on the following topics, in addition to the ones indicated above:

• B.1.1 Water stress: if downstream companies source products produced in water-stressed regions, and if they engage with their suppliers.
• B.9 & B.10 Fertilizers and pesticides: if downstream companies expect their suppliers to reduce and/or optimise the use of fertilizers and pesticides.
• B.7 & B.8 Biodiversity and soil: if downstream companies expect their suppliers to adopt practices that improve soil health and agrobiodiversity.

2. Clarity

• Is the supplementary guidance clear in terms of type of private entities targeted and reporting rules?

In some cases, there is overlap between indicators, such as B.7.1. land conversion and B.7.3. sustainable use and conservation of biodiversity if companies were to report on deforestation/conversion-free targets. Acknowledging that the topics are highly connected, would it be relevant to focus B.7.3 on sustainable use of biodiversity (through sustainable agriculture for example), and focus conservation of biodiversity (through no-deforestation commitments for example) under B.7.1 and B.7.2?

• Can entities easily evaluate if their activities and the commodities they purchase, produce, process, manipulate and/or sell are in scope for each indicator? If not, how could this be improved?

The scope of sectors included across p. 7-9 is a useful overview for the general framework. The “scope” section for each of the indicators is also a good guidance for companies. It would be great to have an overview of the indicators and their associated scope for each of the sectors.

3. Feasibility

• Do private sector organisations have access to the type of data required to assess performance against the indicators? If not, is it feasible for them to collect it?

For the indicators as part of WBA’s Food and Agriculture Benchmark, initial research has been done to ensure availability of data and applicability of indicators. There is strong divergence between industries/sectors and companies on the level of complexity of data needs as well as availability depending on the indicator.

• Do companies have country-level information in order to provide disaggregated data by country to feed into SDG monitoring/reporting?

Many companies collect such data. Much divergence exists around quality, depth and public availability of such data, and strongly depends on the topic.

4. Ease of use

• Does the guidance make it easy enough for private sector entities to understand how to calculate their performance against each indicator? If not, where is improvement needed?

The indicators provide great depth in terms of understanding the issue, as well as providing guidance towards measuring impact. However, certain indicators could be strengthened by referencing existing initiatives that already support private sector action. For instance, indicator B.1.2 on water stress can reference existing tools such as the WRI Aqueduct Tool or the WWF Water Risk Filter that provide companies with the database to map their water risk footprint.

• Is there sufficient supplementary guidance in terms of links to additional materials and definitions?

5. Qualitative vs. quantitative indicators

• Are there ways to make any of the qualitative indicators quantitative and how? Qualitative indicators are:
• A.2.3 Financial Risk Management
• A.5.2 Fair pricing and transparent contracts
• B.1.4 Water management practices
• B.2.4 GHG emissions management
• B.7.3 Sustainable use and conversion of biodiversity
• B.9.2 Management of pesticides
• B.10.2 Management of fertilizers
• C.6.1 Food labelling
• C.6.2 Practices promoting sustainable healthy diets
• D.3.1 Management of risks to people, planet and society through supply chain due diligence.

1. For example, would it be preferable to replace the indicator in C.6.2 which focuses on practices with an indicator on the percentage of the entity’s marketing budget spent on promoting healthy foods?

Not replacing, but it could be useful to single out responsible marketing and create a separate indicator that focuses on both regulating negative practices and enhancing positive marketing strategies to promote healthy eating. In this way, a quantitative indicator on the percentage of the entity’s marketing budget spent on promoting healthy foods would be extremely relevant and valuable.

Indicator C.6.1 can include quantitative metrics. Next to acknowledging the countries in which food labelling in regulated by country legislations, companies can disclose the % of products for which they have rolled out labelling commitments beyond legal compliance (ideally, covering all the relevant markets where the company operates).

Examples

• The company has X% of its products (or sales values) compliant to national regulations/Codex Alimentarius in X countries in which it operates.
• The company has rolled out supplementary labelling schemes for X% of products (sales values) in X countries in which it operates.

Many of the environmental indicators in WBA’s Food and Agriculture Benchmark require companies to report on their targets towards reducing their impact on environmental issues. In some cases, this is a mix of qualitative and quantitative data. For example, on soil health, we expect companies to disclose their commitments/policies to improve soil health, but we also ask them to disclose quantitative data on their impact on soil health, for example, through % reduction of land affected by erosion, % of land under regenerative agriculture, etc. Similarly, for downstream companies, the benchmark expects companies to report on the proportion of food it sells that is produced under recognised environmental schemes that replace harmful pesticides with alternatives and optimises fertiliser use.

6. Adequacy of specific indicators

• B.7.1 Land conversion: Do the three sub-indicators address the issues with land conversion as related to the achievement of SDG 15?

It is unclear under indicator B.7.1 on land conversion if downstream entities who source high-risk commodities are required to report on this. Such entities have a huge impact on land conversion through their sourcing practices, and this should be made clearer in the indicator. It might also be useful to specifically call out the main high-risk commodities (such as beef, soy, palm oil, etc.) that are responsible for majority of land conversion, and are found in the portfolio of most global food and agriculture companies. Moreover, the land conversion indicator could be strengthened by including guidance for companies to set targets to eliminate land conversion of natural ecosystems, and report performance against the targets.

• B.7.2 Habitat area protected: Where there is no natural habitat in the reporting entity’s production area, should there be a requirement for reporting on restoration or ‘rewilding’ to create habitat?

A requirement may be too strict when a company does not have any impact on natural habitats. For WBA’s Food and Agriculture Benchmark, companies will not be assessed on this topic, who do not produce/source high-risk commodities, which are among the major threats towards natural habitat destruction.

• C.1.2 Average hourly earnings of all employees: Would it be better to formulate this indicator as ‘Percentage of employees and other workers paid above a living wage, disaggregated by occupation, gender, age, and disability status?

It depends what the purpose of the indicator is – the indicator would be entirely different if it referred to Living Wage.

• C.6.3 Non-compliance in food safety and food quality: Is it relevant to include incidents of non-compliance with GFSI certification as part of this indicator?

We consider the disclosure on the % of companies’ operations (n of plants in all countries in which the company operates) and % of suppliers audited and certified by GFSI (or other independent and globally accepted third-party certification) more relevant than reporting on non-compliance incidents. The former is a measure of how the company supports its suppliers with implementing food safety requirements, which we deem as the key element of our food safety indicator.

• D.3.1 Management of risks to people, planet and society through supply chain due diligence: Does this indicator capture well entities’ institutional efforts and commitments to identify and address social and environmental risks along the value chain?

This indicator seems quite broad. It may be difficult to capture human rights due diligence and environment due diligence in one indicator. Is it possible to split or clarify the objective of this indicator?