Forget Carbon Footprints: Coke, SABMiller Analyze Their Poverty Footprints

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Carbon and water footprint measurements have become almost commonplace among large corporations, at least in part because of prodding from organizations like the Carbon Disclosure Project. But these measurements only tell part of the story. The piece where a corporation mows down an entire village in the developing world to make way for a carbon-cutting wind farm is rarely mentioned.

Oxfam's Poverty Footprint--a methodology to help companies understand how their operations are affecting communities in developing countries--is trying to fix that. Earlier this month, Coca-Cola and SABMiller (the beer manufacturer and bottler of Coca-Cola products) released the poverty footprint analysis of their operations in Zambia and El Salvador.

Fortunately, Coke and SABMiller didn't attempt to complete the analysis on their own; they enlisted third-party firms, NGOs, and Oxfam America to help out. The poverty footprint framework analyzes five areas: macroeconomy (how a company's operations support the country where they operate), value chains (how a company's practices help poor people find employment), local environmental practices, product development and marketing, and policies and institutions. These "impact areas" are viewed through the lenses of empowerment, diversity and gender equality, security and stability, health and well-being, and livelihoods (access to quality jobs).

How can anyone possibly quantify the effects that these two companies have on these suppliers, distributors, and retailers? The answer, of course, is that you can't. Instead, Coke and SABMiller make things up as they go along. In an analysis of minimum wages, living wages, and benefits, the report admits, "At present, a credible study of what would constitute a living wage in either Zambia or El Salvador is not available. There are few indicators that could approximate a living wage in both countries since most indicators that measure basic needs of an average family in developing countries tend to focus on poverty levels." Suffice it to say, if anyone actually bothered to calculate a living wage, the pay would probably be below it.

Eight out of 14 workers interviewed as part of the study were "fairly satisfied" with their wages and benefits. But this doesn't include the workers at the edges of Coke/SABMiller's value chain--the sugar harvesters and informal retailers. And no matter how much a sugar harvester makes, you can't measure everything in dollars; there is a high incidence of HIV/AIDS among sugar harvesters in Zambia.

None of this is as simple as measuring the amount of carbon dioxide that a company spews or tracking how much water is used in manufacturing. So while we can't begrudge Coke and SABMiller for analyzing their operations, we wonder if they should really use the word "footprint." That implies some sort of quantifiable measurement, and keeping track of the spiraling social impact of corporate operations in a developing country is more like trying to measure an entire ecosystem. We'll see if Coke and SABMiller actually take any of the recommendations to heart. Finding out your footprint is great--but then you have to reduce it.

Reach Ariel Schwartz via Twitter or email.

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2 Comments

  • Bill Baue

    Ariel,

    Thanks for covering Oxfam America's poverty footprinting work. While I'd hardly call carbon and water footprinting "simple," I agree with your underlying point that ecological footprinting lends itself to quantification more readily that social footprinting, which requires more subjective yardsticks. The methodology isn't perfected yet -- it's still iterating, and will likely improve with candid feedback from folks like you critiquing its living wage criteria. But I gotta agree with Kyle here that I'd much rather see Coke and SABMiller (and many many other companies measuring -- and managing -- their poverty footprints, than to see them continue business-as-usual -- which is to say, sweeping their social impacts under the rug while focusing exclusively on financial metrics.

    I proposed the notion of "corporate sustainability footprinting" a couple of months ago (and cited Poverty Footprinting as one of the very few efforts to measure social impact) -- I'd be interested in your feedback on that idea.

    Best,
    Bill Baue

  • Kyle Cahill

    As the article points out, measuring social issues such as empowerment, gender, and health and wellness isn’t easy and will never be an exact science. But Oxfam believes that we can’t allow an inability to achieve perfection to stand in the way of trying. There is a critical gap in tools that help companies and NGOs measure and act on social impacts, and this methodology can help bridge this gap. As we have noted (http://tinyurl.com/4h9clk9), the focus of the poverty footprint work is to create a measurable, consistent and comparable framework through which private sector impacts on communities can be reported and accounted for. By taking this approach, the process goes broad, looking across the value chain. As such, we cover impacts on all key dimensions of poverty but do not go into depth on particular issues such as conducting a living wage or water use analysis. These are extremely complex but necessary studies in their own right; ones that we strongly recommend be conducted.

    Oxfam America, The Coca-Cola Company and SABMiller all have a mutual interest in understanding how businesses impact development. We entered into this collaboration realizing that while measuring impacts on poverty is challenging, it is an incredibly important endeavor that can lead to positive and significant change. We hope others feel the same.

    -Kyle Cahill, Oxfam America