Smucker’s sustainability, take 3

by on August 8, 2012

JM Smucker’s, owner of Folgers and other grocery and convenience coffee brands, is one of the world’s largest coffee buyers. Yet only a fraction of a percent of that coffee is certified in any way, and the company has a lousy sustainability record.

Since 2010, two large investors have been trying to get Smucker’s to work on substantive and meaningful annual sustainability reporting and address risks associated with climate change, with marginal success. The investors planned on trying again with a shareholder proposal for the 2012 annual meeting. They have withdrawn the proposal based on some positive signs in Smucker’s 2012 corporate responsibility report.

The Smucker’s 2012 CSR report (PDF) does have more meat than the previous effort (PDF).  Among the coffee-related highlights, some of which led to the withdrawal of the proposal, are:

  • A goal for certified coffee purchases to reach 10% of its total retail purchases by 2016. Not surprisingly, they are focusing on UTZ Certified coffees, which don’t have strong ecological criteria; this is the most popular certification for the big commodity coffee buyers. It will greatly improve transparency, however, and UTZ standards have been evolving over time to include more and better-defined environmental criteria. Not sure what specifying “retail” purchases means. Does it not include coffee going toward the wholesale or food service segments?
  • Various partnerships with organizations that offer smallholder support.
    • First, there is their existing relationship with TechnoServe. As I’ve pointed out before, this particular “partnership” is a continuation of a donor/sponsorship started by Folgers’ previous owner, P&G. Both companies offered support at $150,000 (tax-deductible, I assume) annually — less than 0.03% of Smucker’s profit from their U.S. Retail Coffee segment alone. Presumably, their commitment is at or near the same level.
    • A partnership with the Hanns R. Neumann Stiftung Foundation to focus on agronomy training, organizational development, and climate change adaptation strategies in order to improve the farming conditions, yields, and incomes of small-scale coffee farming families. The language in the CSR report (“our work with…”) indicates that this may be a more substantive relationship, but I can’t find any details on the Neumann website.
    • Similar wording introduces their new partnership with World Coffee Research which will focus on developing hybrid varieties using classic breeding techniques. But then the report says Smucker’s is a “platinum sponsor” and I see that they are listed as donor members and not listed as partners on the WCR site.

However, there is this item in a featured box, which I consider a deceptive bit of greenwashing:

“Folgers was the first buyer of coffee from the Rainforest Allaince Certified Fazenda Modena farm in 2011, the inagural year of its certification. This Robusta coffee farm in Espirito Santo, Brazil, designates more than 30 percent of the farm as protected forest and borders a large natural lake.”

Fazenda Modena is the first robusta farm in Brazil to be Rainforest Alliance certified. But the entire production of this farm is 600 metric tons (or 0.24% of Smuckers annual coffee purchases). Further, Brazilian law requires preservation of a minimum of 20% of forested land by rural landowners. The 2012 revision of this law allows landowners to use non-native species — including coffee — to meet their legal requirement. Ergo, trumpeting this move doesn’t impress me.

I don’t have major objections to companies working on sustainability efforts by supporting worthwhile outside organizations, at least to begin with. But really, if you are going to throw money at something, make it an amount that will have impact that matches the magnitude of impact you have from your lack of sustainability efforts, and commensurate with your huge profits.

Smucker’s noises about producing their original sustainability report also resulted in a similar proposal by Trillium and Calvert in 2010 to be withdrawn, but the resulting report was short on substance. We’ll have to see how serious the company is about making real progress.

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Revised on October 30, 2013

Posted in Corporate coffee

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