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.