Core food and agricultural indicators for measuring the private sector’s contribution to the achievement of the Sustainable Development Goals
The achievement of the Sustainable Development Goals (SDGs) calls for collective transformational changes of all key actors in society. Businesses and the private sector more broadly can provide an important contribution to achieving the SDGs, although their specific role is not sufficiently mainstreamed in the SDG agenda.
SDG 12 (sustainable consumption and production) and target 12.6 explicitly encourage companies, especially large and transnational companies, to adopt sustainable practices and integrate sustainability information in their reporting. As the custodian agency of SDG indicator 12.6.1(number of companies publishing sustainability reports), the United Nations Conference on Trade and Development (UNCTAD) developed the Guidance on core indicators for entity reporting on the contribution towards the implementation of the Sustainable Development Goals (GCI). UNCTAD’s GCI provides a useful starting point for assessing corporate performance on the SDGs as a set of standard baseline indicators. FAO has sought to build off of UNCTAD’s indicators by identifying additional indicators and tailoring guidance to assess the specific impact of food and agriculture private actors on the achievement of the SDGs.
The resulting Core Food and Agricultural Indicators for Measuring the Private Sector Contribution to the SDGs Supplement Guideline provides practical information on how to measure the contribution of food- and agriculture private actors to the SDGs in a consistent manner and in alignment with countries’ needs on monitoring the attainment of the SDG agenda. The indicators address four sub-sectors of the food and agriculture sector, namely: i) agriculture production (crop and animal production and aquaculture); ii) food processing, iii) food wholesale, and iv) food retail. For each indicator, the guideline provides the definition, rationale, measurement methodology and conceptual interpretation. The links and alignment of each indicator with relevant SDG indicators are also included.
The indicators and associated methodological guidelines are the result of an extensive review of existing frameworks and key standards, and wide internal peer review among FAO’s technical departments.
The Office of the Chief Statistician of FAO invites you to review the draft indicators and guideline and provide feedback as part of wider efforts to seek feedback within the UN agencies and partner institutions, and pilot testing of the indicators with private organisations. The indicators will then be finalised based on the input received through this consultation process and pilot testing, and launched alongside the Food Systems Summit later this year. FAO will work with countries and relevant partners across UN agencies and standard setting bodies to support private sector organisations in using the indicators, and support national governments and wider stakeholders on integrating information into overall analysis and reporting of progress on the SDGs.
We are seeking input on the questions outlined below. Please feel free to choose the question(s) where you can share the most relevant input and expertise.
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?
- 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?
- Would it be helpful to include the specific list of indicators which apply to each type of production, e.g. aquaculture, livestock, crop 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:
- Indicators related to reporting entity’s relationship with suppliers: A.5.1 Proportion of local procurement, A.5.2 Fair pricing and transparent contracts,
- Indicators related to impact of suppliers: B.1.4 Water Management practices, B.2.3 GHG emissions (scope 3), B.2.4 GHG Emissions management, B.7.1 Land conversion, B.7.3 Sustainable use and conservation of biodiversity, C.4.2 Incidence/frequency rates of occupational injuries, C.5.1 Incidents of non-compliance with child labour laws, C.6.3. Non-compliance in food safety and food quality, C.7.1. Non-compliance with land tenure rights regulations, D.2.1. Amount of fines paid and payable due to corruption-related settlements, 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?
2. Clarity
- Is the supplementary guidance clear in terms of type of private entities targeted and reporting rules?
- 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?
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?
- Do companies have country-level information in order to provide disaggregated data by country to feed into SDG monitoring/reporting?
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?
- 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.
- 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?
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?
- 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?
- 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’?
- 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?
- 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?
Comments are welcome in English, Spanish or French. The consultation is open until April 30th, 2021.
We thank you very much for taking the time to provide your feedback on the core indicators and guideline. Your input will be very valuable in ensuring that they are effective at contributing towards measurement of progress on SDGs.
Pietro Gennari, Chief Statistician, Office of the Chief Statistician, FAO
Valerie Bizier, Senior Statistician, Office of the Chief Statistician, FAO
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The International Fertilizer Association (IFA) recognizes the impressive effort that has gone into this framework, and we acknowledge its ambition to be as comprehensive and exhaustive as possible in terms of data collection. However, its ambition could undermine the feasibility and practicality, in particular for smaller-sized companies, which have limited resources for that type of exercise. We have the following suggestions for improvement: The indicator B.9. 2 on the Management of Fertilizers provides a diverse and complete list of recommended sustainability practices, but it is unclear how the wealth of information reported could ultimately fit under a single indicator. We are fully supportive of this indicator, but believe that it deserves more thought.
However, we question the Fertilizer Use Intensity Indicator (B.9.1), expressed in Kg / ha. Fertilizer use intensity depends on a number of biophysical (soil, crop, and climate) as well as socioeconomic factors, thus different conditions will necessarily lead to higher or lower fertilizer use per ha. In addition, access, supply, and government policies could influence the amount of fertilizers applied in a given region. Thus we recommend eliminating the indicator of fertilizer use intensity or replacing it with a Nutrient Use Efficiency Indicator.
Last but not least, the soil degradation indicator (B.8.1) is vague and responsibilities and knowledge of soil conditions are unclear, in particular, if the land is owned but not used. Who should report in this case? While this indicator is highly relevant for national data sets, it is difficult for a company to report on, as most companies do not manage a lot of land directly. While we fully recognize the importance of knowledge improvement on soil health, we would recommend removing this indicator from this assessment and rather enforcing it for countries to be measured on a regional or national scale.
When reviewing the core food and agricultural indicators for measuring the private sector’s contribution to the achievement of the Sustainable Development Goals I noticed that it heavily relies on the established set of social, environmental and governance (ESG) indicators that have been developed prior to the UN SDGs. However, the UN SDGs stand for a paradigm shift in the sense that they do not just recognize corporate efforts to minimize their negative externalities (social and ecological footprint) but also the potential of companies to create positive externalities for society and the environment through their responsible and innovative core business (also known as the 'handprint'). Such positive externalities must not necessarily be deliberate but are often 'unintended side' effects resulting from long-term investments and the development and commercialization of sustainable scalable innovations.
For example, a multinational company that invests in low-income countries and encourages its subsidiaries to embed themselves in a principled way into the local economy is unlikely to get rewarded for these efforts in the conventional sustainability ratings. In fact, often they score worse than multinational companies, which only operate in high-income countries where they are less exposed to risk. However, the contribution of embedded multinational companies to sustainable change in general and to UN SDG 8 (and its targets) in particular, are potentially huge (see https://www.springer.com/gp/book/9783030037970).
These contributions may manifest themselves through
- the creation of new decent jobs in the formal economy
- the reduction (directly or indirectly via local companies that obtain contracts) of youth unemployment
- the upgrade of local businesses to become sustainable suppliers in an integrated global value chain (contribution to inclusive and sustainable growth),
- the tranfer of technology and capacity development into the local economic ecosystem
- the economic empowerment of local entrepreneurial women
- investments in innovative local solutions that make use of external knowledge and know-how to enhance the value and sustainability of local products
However, I do not see how the set of indicators is capable of calculating a potential net impact of companies for all UN SDGs (discounting the assessed negative impact from the assessed positive impact in all areas of concern). It would also be hugely burdensome forcing companies to allocate more resources to monitoring, reporting and verification - often at the expense of investment in innovation and the local economy).
Even though it is commendable to focus on quantitative indicators it is far from clear to me how they promote the measurability and comparability of the sustainability performance of companies within their particular industry. For that purpose, a set of indicators (based on raw data) would have to be captured in form of key performance indicators that enable an appropriate benchmarking based on a score function.
Since doing this for every UN SDGs and respective selected targets would be too burdensome why not focusing instead on UN SDG 8 and its targets? In our research we noticed that UN SDG 8 and its focus on 'inclusive growth and decent work' directly or indirectly impacts all other SDGs, because companies that contribute substantially to UN SDG 8 become drivers of inclusive and sustainable change in the respective region in which they invest.
We discuss these issues in our forthcoming book on UN SDG 8: https://www.mdpi.com/books/pdfview/edition/1227.
Santosh Kumar Mishra
Dear Pietro Gennari and Valerie Bizier,
I am pleased to submit herewith my contribution to consultation on “Core food and agricultural indicators for measuring the private sector’s contribution to the achievement of the Sustainable Development Goals”. The attached document (in MS Word) runs in 20 pages, including references. I hope that you will find my submission useful and informative.
Dr. Santosh Kumar Mishra (Ph. D.)
The core indicators should be measured in line with agriculture activities the private sector are offering to societies. Do those activities promote human health, agroecology health that enhances man to harmoniously live with features supported by nature. In addition synthetic inputs being offered by the private sector, we need to understand if many farmers really understand the impacts of using such products on both their side and ecology as well.
Lastly, Is the private sector really promoting processing that doesn't undermine the reputation of the population interms of products being processed.
An example is recently Kenya rejected maize coming from Uganda citing that the maize was heavily infested with alot of aflatoxins but on the same issue the private is claiming to be promoting proper post harvest handling.
Thanks
Jonan Murungi
From Uganda
Dear Ms. Bizier and Mr. Gennari,
I have worked extensively on the use of animal power in agriculture and open-air museums and am helping a friend organize a congress and virtual archive on animal draft on 8-9 May 2021. We, and all the network we are in, have always been impressed by the total lack of information on working animals in the world available from the FAO or other official sources. This is not a criticism, it is an observation.
Please verify our identities here:
- Dr. Cozette Griffin-Kremer
Associate Researcher (retired) CRBC (Centre de recherche bretonne et celtique), Brest FR: https://www.univ-brest.fr/crbc/menu/Lab-members/Enseignants-chercheurs_…
- Claus Kropp, farm director Lauresham Open-Air Laboratory, Kloster Lorsch DE
https://www.researchgate.net/profile/Claus-Kropp
Online presentation of the draft animal congress: https://www.youtube.com/watch?v=TPbbu1XKvJg
It would be very worthwhile for someone involved in the examination of SDG-efficiency as proposed by the FAO to be aware that important numbers of people worldwide use animal power. The congress programme is already available from Mr. Kropp and the event involves experts who have worked for the FAO such as Paul Starkey or Pit Schlechter.
With all best regards,
Cozette Griffin-Kremer
Private sector (i.e., mainly multinationals) must face four securities: food security (food availability for everyone worlwide), food safety, nutrition/health and environment. With the globalization of ultra-processed foods, food security and food safety have been almost fully met, but to the detriment of human health and environment. The challenge relative to SGD for private sector would be to meet all four dimensions at the same time:. For this, developping minimal processing? And to both fragment and relocate food transformation to avoid long distance (allowed by ultra-processing). Food systems are 34% GHGE (Crippa, M., Solazzo, E., Guizzardi, D., Monforti-Ferrario, F., Tubiello, F.N., Leip, A., (2021). Food systems are responsible for a third of global anthropogenic GHG emissions. Nature Food 2(3), 198-209.). The largest contribution came from agriculture and land use/land-use change activities (71%), with the remaining were from supply chain activities: retail, transport, consumption, fuel production, waste management, industrial processes and packaging. This means 10% of GHGE by "retail, transport, consumption, fuel production, waste management, industrial processes and packaging", but we should not forget that all is linked and that probably the 24% by agricultural productions is dependent on the way that we process foods. Notably, ultra-processed foods drive intensive agriculture and breeding (see attached file). An important issue would be to measure impact of private sector on GHGE when coming back to less processed foods, and private sector fragmentation and relocalization, and how it will impact in return food agricultural production.
This activity is now closed. Please contact [email protected] for any further information.