Oxfam criticizes AB Foods on development impact, praises Nestle

ZURICH (Reuters) - Associated British Foods scored lowest among 10 of the top food and beverage companies assessed for their social and environmental impact on poor countries, development group Oxfam said on Tuesday.

Meanwhile, Nestle and Unilever ranked highest for their policies on seven areas assessed by Oxfam as critical to sustainable agriculture: women, small-scale farmers, farm workers, water, land, climate change and transparency.

Oxfam said in the report that Nestle and Unilever had done more to tackle social and environmental risks within their supply chains than companies it ranked less favorably including AB Foods and Kellogg Co.

Big food and beverage companies have come under increasing scrutiny in recent years over their sourcing of raw materials, courting criticism on issues ranging from child labor on cocoa farms to the impact of palm oil plantations on rain forests.

Oxfam said it had launched the 'Behind the Brands' campaign to try to assess 'ubiquitous' declarations of sustainability made by food and beverage companies as well as a proliferation of corporate social responsibility programs.

'There are enormous gaps in terms of basic transparency which makes it very difficult to hold these companies to account,' Raymond Offenheiser, President of Oxfam America, told a phone conference for journalists.

'The goal is not to criticize these companies for poor performance but encourage a 'race to the top'.'

Oxfam ranked Nestle first, Unilever second, Coca-Cola third, PepsiCo fourth, Mars fifth, Danone and Mondelez International joint sixth, Kellogg Co and General Mills join eighth, and AB Foods in 10th place. (www.oxfam.org/behindthebrands)

AB Foods, whose brands include Twinings tea, Ryvita crackers and Ovaltine cocoa drink, rejected its ranking.

'We treat local producers, communities and the environment with the utmost respect,' an AB Foods spokesman said.

'The company has worked hard for many years, over a wide geography, at all levels of the supply chain to ensure its suppliers meet the highest ethical standards.'

Jane Nelson, director of the Corporate Social Responsibility Initiative at Harvard Kennedy School, said the 10 companies Oxfam had studied had already made major progress in improving their impact on poor farmers.

'These 10 are among the most respected and best managed companies in the world,' she told the Oxfam call. 'They are well ahead of other companies in the agricultural system.'

Among positive developments, Oxfam highlighted the fact that all of the companies, bar Coca-Cola, have signed up to more sustainable policies on palm oil. It also praised Unilever's target to halve greenhouse gas emissions by 2020.

(Editing by David Cowell)