Koninklijke FrieslandCampina

Transcription

1 BMS NUTRITION GENERAL UNDERNUTRITION BMS 3 24% RANK 8 19 (2013) SCORE 2.8 A Governance (12.5%) 4.6 B Products (25%) 5.8 C Accessibility (20%) 2.5 D Marketing (20%) 2.9 E Lifestyles (2.5%) 3.8 F Labeling (15%) 3.5 G Engagement (5%) Headquarters The Netherlands Market capitalization Not Available (Cooperative structure) # of employees 22,168 Total revenues* $13,736 m Reported product categories Baby Food; Dairy; Oils and Fats; Juice; Other Reported revenue by geography** Europe 67%, Asia and Oceania 22%, Africa and The Middle East 7%, North and South America 1% Highest score among rated companies * Source: Capital IQ, USD exchange rate as of 31 Dec 2014 ** Source: Capital IQ A Governance B Products C Accessibility D Marketing E Lifestyles F Labeling G Engagement A1 Strategy B1 Formulation C1 Pricing D1 Policy (all) E1 Employees F1 Facts G1 Lobbying A2 Management B2 Profiling C2 Distribution D2 Compliance (all) E2 Breastfeeding F2 Claims G2 Stakeholder A3 Reporting D3 Policy (children) E3 Consumers D4 Compliance (children) Areas of strength - In the 2016 Global Index, FrieslandCampina ranks eight, which is a significant improvement on its previous rank of nineteenth in the 2013 Global Index. Its proactive engagement has contributed to this improvement. - FrieslandCampina has a framework in place through which it addresses issues of nutrition in its commercial strategy. The company focuses on product development, labeling and consumer-oriented programs. Managerial accountability and responsibility for implementation is assigned to a corporate executive one level below the CEO, who reports to the CEO and Chairman. - FrieslandCampina has a range of product reformulation targets covering all relevant product categories. - Formal policies guide the company s approach to marketing to children. The company sets a stricter threshold than most other companies assessed for determining whether its marketing is directed at children. FrieslandCampina has a threshold of 30%. Most other companies assessed have a threshold of 35% child audience. - The company has improved the quality of its reporting since the 2013 evaluation. Global reporting is provided against all objectives and targets, and includes an outlook on future plans. - Through engagement with ATNF, the company has disclosed a NPS that it uses to guide new product development and reformulation efforts. - FrieslandCampina s BOEST program, through which it supports employee health and wellness, indicates a notable improvement since the 2013 Global Index, as programs for employee health and wellness were not previously disclosed. - In addressing undernutrition, FrieslandCampina has provided evidence of its work to complete nutritional profiling in both higher- and lower-priority countries through its South East Asia Nutrition Survey (SEANUTS). The company has also developed beverages for children that seek to address nutritional deficiencies. Further, FrieslandCampina tracks the revenues it derives from Areas for improvement - FrieslandCampina s approach to undernutrition remains relatively poor in comparison to its initiatives to address obesity and diet-related chronic diseases. Milk would be a good avenue for the company to pursue a targeted approach to fortification, as it possesses a high underlying nutritional value. The company should also explore opportunities to address undernutrition through other product lines. - Additionally, FrieslandCampina should target those groups on which it could have the most impact. A focus on school-age children is important but the company could also emphasize other populations at risk, such as women of childbearing age. - The company s commitment to affordability could be strengthened by publicly publishing a strategy and nutrition policy to improve access to nutritious and fortified foods for low-income consumers. - FrieslandCampina ranked third on the BMS sub-ranking. While its policy commitments align reasonably well with The International Code of Marketing of Breast-milk Substitutes (The Code) and subsequent World Health Assembly (WHA), they are not applied to all products in all markets. In both Vietnam and Indonesia, multiple observations of non-compliance with The Code were made. FrieslandCampina was evaluated on the BMS sub-ranking. The company s Global Index score has been adjusted by 1.14 to reflect its level of compliance with the BMS methodology of 24%. BMS Assessed against the BMS methodology

2 BMS products that are specifically formulated for the undernourished. FrieslandCampina was evaluated on the BMS sub-ranking. The company s Global Index score has been adjusted by 1.14 to reflect its level of compliance with the BMS methodology of 24%. BMS Assessed against the BMS methodology

3 Category analysis A Governance - FrieslandCampina acknowledges that it has a role to play in addressing the challenges of obesity and diet-related-chronic diseases and recognizes the priorities set out in the World Health Organization (WHO) Action Plan for the Prevention and Control of Non-communicable Diseases. A Health & Nutrition Strategy is one element of the company s wider corporate social responsibility (CSR) strategy that feeds into its Route 2020 business strategy. This strategy focuses on a range of nutrition issues, including product development, labeling and consumer-oriented programs. It is applicable to all of the company s operating markets. The company should broaden the scope of this strategy to include marketing and engagement with governments and policymakers, as well as other nutrition stakeholders. - FrieslandCampina has defined a set of objectives related to delivering better nutrition. These include goals relevant to product reformulation, labeling and consumer information, providing children with information about a healthy diet, and the company s plan to address undernutrition. Like its overall strategy, the company s objectives are limited in scope and could be broadened to include the issues of engagement, and the pricing and distribution of fortified products. - FrieslandCampina allocates formal accountability for implementing the company s nutrition strategy to its Corporate Director of Sustainability, who reports directly to the CEO and Chairman of the Board of Directors. In doing this, FrieslandCampina demonstrates strong practice consistent with Indexleading peers. The same person is responsible for the day-to-day implementation of the strategy. - FrieslandCampina reports on its nutrition initiatives on an annual basis in its CSR report. - FrieslandCampina makes a commitment to play a role in combating undernutrition in low-income countries. The commitment is primarily targeted at undernourished groups in Malaysia, Vietnam, Indonesia, the Philippines, Thailand, and Nigeria. The strategy to address undernutrition is informed by its nutrition survey SEANUTS, which the company conducted in This survey sought to identify nutritional deficiencies in children located in the company s focus countries. While the survey was used in a variety of ways, the company emphasizes a commercial rather than a philanthropic approach to addressing undernutrition, though it funds these activities in both ways. - FrieslandCampina targets its commercial undernutrition efforts at children under-12 and families, including women of childbearing age. The company states that, family and schools are key target audiences as they play an important role in building healthy diet and healthy lifestyle for the children. The company has been given credit for these activities with all but children under two. ATNI does not give credit to manufacturers of breast-milk substitutes for any activities relating to products for children of two or under, given the concern over their marketing practices. A full analysis of the company s BMS marketing policies and practices is set out in its BMS Scorecard. - Through its non-commercial efforts the company focuses on children, schools and related stakeholders such as nutritionists, doctors, NGOs, the Ministry of Health and the Department of Education through donation, education workshops, employee volunteer programs and sponsorship. These activities are carried out in higher and lower priority countries. To amplify its impact, the company could explore supporting programs run by UN agencies or nutritionfocused NGOs that focus on high priority countries and on priority groups such as children under-two and/or women of childbearing age. B Products - FrieslandCampina identifies four focus areas of research, including growth and development of children, daily nutrition, health and wellness, and functionality. The company is one of a handful to disclose any targets relating to how much the company intends to increase its R&D spending on nutrition in the coming years. - FrieslandCampina has set targets for sodium, saturated fats and sugars, and applies them to all relevant product categories. The company was an early mover, having set its first targets on sodium in 2007, for certain cheese lines. - FrieslandCampina adapted an existing Nutrient Profiling System (NPS) in order to guide its product development and reformulation efforts. The company s practices align with strong practices demonstrated by Index-leading peers. Overall, FrieslandCampina s NPS is of high quality. It is applied to all products and product categories, to assess both positive and negative nutrients and calculate an overall score for each product s nutrient profile. As a result, the company gets the maximum healthy multiplier. FrieslandCampina should publish its NPS in order to improve transparency and accountability to stakeholders. - FrieslandCampina has a stated goal to address undernutrition through its products, but the company has not set a specific target to increase R&D spending on the development of fortified foods. Other key commitments are also absent, including the use of ingredients with high inherent levels ofmicronutrients, only fortifying products of high nutritional quality, or committing to tackle undernutrition and micronutrient deficiencies in developing countries through initiatives that aim to increase the number and/or volume of fortified foods available to undernourished populations. - FrieslandCampina has developed fortified products in the past two years aimed at children in Malaysia over-six. While the company demonstrates some efforts, it should extend its focus on women of childbearing age in higher priority countries in order to have the greatest impact. C Accessibility - FrieslandCampina states that a crucial part of its nutrition ambition is to ensure that its products are affordable to a wide range of population groups. This statement is globally applicable but is made without explicit reference to low-income populations. Beyond its statement on affordability, the companyoffers a selection of packaged food sold in small sizes, priced to be affordable for low-income customers. - Specific to product accessibility issues, FrieslandCampina conducts initiatives in developing countries to improve product supply chain and store coverage. - FrieslandCampina s commitment to affordability/accessibility is not explicitly extended to fortified products for undernourished populations. - Despite this lack of an applicable commitment or policy, FrieslandCampina operates multiple projects in developing countries to improve fortified product affordability and accessibility. - FrieslandCampina could improve its disclosure of affordability and accessibility activities. Information on FrieslandCampina s activities is not currently available to the public. D Marketing - FrieslandCampina has an internal standard that directs its marketing practices. The standard for all consumers applies to all marketing communications and has a broad scope with regard to the responsible representation of products. The company should strengthen the standard by introducing an explicit ban on the use of models with a Body Mass Index (BMI) under FrieslandCampina s internal standard on marketing to children covers all geographic markets and all media assessed by ATNI, except in-store and point-

4 Category analysis of-sale marketing. The policy includes some key commitments, such as supporting the role of parents or others responsible for guiding diet and lifestyle choices (or not to undermine them). The company also commits to not create a sense of urgency in its marketing directed to children. However, the company could implement a stronger policy by committing to not use inappropriate price minimization when marketing to children. FrieslandCampina also supports the EU Pledge on marketing to children in that region. - The company could further improve by making a commitment not to advertise near schools or in other places where children gather. - FrieslandCampina has a stronger threshold than most for determining whether an advertisement is directed at children. FrieslandCampina s threshold is set at 30% of a given audience, though the company does not ban advertising to children aged two to six, as other Index-leading companies do. - Through its support for the EU Pledge, an independent third party audits FrieslandCampina s compliance with its marketing to children commitments in some of European countries. The company does not appear to take part in nor undertake its own audits in other regions and does not disclose its individual compliance levels, areas on which it could improve its performance. E Lifestyles - FrieslandCampina has committed to support staff health and wellness in the Netherlands through its BOEST program. The program focuses on supporting participants to reach their goals related to exercise, diet and relaxation. Participation targets for the program have not been articulated. The company also does not disclose any programs for employees located outside its home market of The Netherlands. - The BOEST program is administered by an independent third party, which also conducts an evaluation of its impacts. To date, the program has indicated improvements in physical, mental and emotional health for participants. - FrieslandCampina should focus on defining the clear health and business outcomes of the program and expand its scope beyond the Netherlands as well as to employees family members. - FrieslandCampina has made a commitment to provide breastfeeding mothers with appropriate working conditions. However this is not codified in a formal policy document. In the Netherlands, the company provides access to private, hygienic and safe rooms were women can express breastmilk. Women are also provided access to refrigerators for storing milk and are afforded breaks to express milk. While performance in its home market is strong, it could be strengthened by also allowing flexible working arrangements to support breastfeeding mothers. The company could also expand this commitment to all of its global operations. - In relation to supporting consumer-oriented healthy eating and active lifestyle programs, FrieslandCampina runs its own programs as well as supporting independently implemented programs that promote healthy eating/nutrition education and active lifestyles. For example, the DMBS program in Southeast Asia encourages children to engage in physical activity and to drink milk. Details on the DMBS program are published online, including the number of children that have been reached. Information on the health impacts of the program is not publicly disclosed. - The company does not disclose information about specific programs that are designed and implemented exclusively by a third party. - FrieslandCampina falls behind Index-leading companies by not disclosing significant commitments or consumer-oriented programs relating to the benefits of consuming fortified foods specifically formulated to address undernutrition and other important issues. F Labeling - FrieslandCampina has relevant commitments relating to back-of-pack (BOP) labeling, which are applicable across all operating markets. On BOP labels, the company uses a nutrition content table that includes Guideline Daily Amount (GDA)/reference intake, expressing nutritional values per 100 grams or milliliters. - The company applies health and nutrition claims to products in compliance with local regulations. In the absence of such regulations, FrieslandCampina ensures that the use of these claims complies with its Standards on Nutrition and Health Claims, which it states include Codex. The company could improve transparency by explaining more fully how it implements Codex guidelines. - FrieslandCampina shows strong performance by tracking the number of products that meet its healthy standard, and carry health and nutrition claims. The company tracks the use of these claims in a compliance assessment of its Corporate Health and Nutrition Standard that has occurred annually for the past three years. - FrieslandCampina commits to labeling naturally high levels of micronutrients or nutrients that have been added to a product if allowed by national legislation. G Engagement - FrieslandCampina s Code of Conduct, which covers lobbying and government involvement, makes note of social and ethical issues, but does not specifically discuss nutrition. As a food company, FrieslandCampina could be more explicit about when and how it lobbies issues relating to overweight, obesity and noncommunicable diseases. - In its stakeholder engagement, FrieslandCampina is yet to incorporate the AA1000 standard into its processes. However, the company can demonstrate a comprehensive and well-structured approach to stakeholder engagement. This is accomplished through The Milk Story, an online and offline platform used for dialogue. - FrieslandCampina does not demonstrate a commitment to, or activities specifically focused, on playing an active role in supporting government efforts to address undernutrition through policy or regulatory interventions. However, the company does liaise with external stakeholders on undernutrition issues, as demonstrated by its engagement with the Indonesian Ministry of Health with regards to feedback on the results of the SEANUTS, for example. Breast-milk substitutes (BMS) FrieslandCampina was included in the ATNI BMS assessment, which comprised: i) assessing the company's BMS marketing policy commitments, management systems and disclosure, and; ii) assessing its marketing practices in Vietnam and Indonesia over the summer of FrieslandCampina scored 24% and was ranked third out of the six BMS companies assessed. The adjustment made to the Global Index score was Key ways in which FrieslandCampina could improve its compliance would be to: - apply its policy consistently in all markets, as recommended by The Code. - adopt the industry best practice of going beyond compliance with local regulation and follow its own policies where they are stronger than local regulations and where local regulations are weaker than The Code. - strengthen its management systems where they are weak and make

5 greater efforts to ensure that they are applied consistently in all markets. The full analysis and recommendations are available in the BMS chapter of the Global Index report and the company's BMS Scorecard. General disclaimer As a multi-stakeholder and collaborative project, the findings, interpretations, and conclusions expressed in the report may not necessarily reflect the views of all companies, members of the stakeholder groups or the organizations they represent or of the funders of the project. This report is intended to be for informational purposes only and is not intended as promotional material in any respect. This report is not intended to provide accounting, legal or tax advice or investment recommendations. Whilst based on information believed to be reliable, no guarantee can be given that it is accurate or complete. Note Sustainalytics Research is responsible for the scoring and ranking of company performance for the Access to Nutrition Index. Sustainalytics Research contributed to the report and company scorecards for the Index, and engaged with food and beverage companies as part of the data collection and analysis process. The user of the report and the information in it assumes the entire risk of any use it may make or permit to be made of the information. NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS ARE MADE WITH RESPECT TO THE INFORMATION (OR THE RESULTS TO BE OBTAINED BY THE USE THEREOF), AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, ALL IMPLIED WARRANTIES (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF ORIGINALITY, ACCURACY, TIMELINESS, NON-INFRINGEMENT, COMPLETENESS, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE) WITH RESPECT TO ANY OF THE INFORMATION ARE EXPRESSLY EXCLUDED AND DISCLAIMED. Without limiting any of the foregoing and to the maximum extent permitted by applicable law, in no event shall Access to Nutrition Foundation, nor any of their respective affiliates, have any liability regarding any of the Information for any direct, indirect, special, punitive, consequential (including lost profits) or any other damages even if notified of the possibility of such damages. The foregoing shall not exclude or limit any liability that may not by applicable law be excluded or limited.