In January 2020 Ethical Consumer viewed Groupe Danone's website for the company's supply chain management policy. Danone's latest "Sustainability Principles for Business Partners" was downloaded, updated in 2017, which contained a suppliers code of conduct. There was a wider discussion of supply chain management on the company's website. On the basis of this, the company was rated as follows:

Supply chain policy (reasonable)
Danone made it compulsory for its suppliers to sign up to the Sustainable Development Principles (social, environmental and ethical) when entering into contracts, and these principles also covered their own suppliers and sub-contractors.

The code included adequate clauses on child labour, forced labour, discrimination and freedom of association. The clause on working hours stated that employees must have at least one day off each week. The clause on wages stated that employees should "receive a decent wage, as compared to standard pay practices in their country." Danone was considered to have a reasonable supply chain policy.

Stakeholder engagement (rudimentary)
Danone did not appear to be part of a multi-stakeholder initiative. It did not mention any systematic input from NGOs, although it had signed various conventions with the International Union of Food and Allied Workers. The Sustainability Principles stated "To report a concern, there is also a dedicated and secured reporting tool available called DANONE ETHICS LINE (www.danoneethicsline.com) that may be used. This reporting tool can be used anonymously. Anyone who genuinely reports a concern shall be protected from any retaliation." However, it was not stated whether suppliers employees were able to use this line in their own language, or whether they were required to be told of its existence.

The company was considered to have a rudimentary approach to stakeholder engagement.

Auditing and reporting (poor)
Danone stated on its website "In accordance with the RESPECT program, the tier 1 suppliers identified as high-risk undergo SMETA audits (Sedex Members Ethical Trade Audit) by a certified third-party organization... In 2017, 195 SMETA audits were conducted on Danone tier 1 suppliers, commissioned either by Danone or by peers."

The website further stated that there were 54 cases in which some action needed to be taken, all of which were resolved.

Very little further information could be found, however. There was no detail on the audit schedule, who paid for the audits or the remediation process, and no committment to audit the whole supply chain. So the companies auditing and reporting was rated as poor.

Difficulty issues (poor)
Danone did not appear to be addressing any of the difficult issues found within supply chains such as illegal freedom of association, payment of a living wage, audit fraud or purchasing practices.

Overall Danone received Ethical Consumer worst rating for Supply Chain Management.

Reference:

Danone website (8 January 2020)

In January 2020 Ethical Consumer viewed the Baby Milk Action website, www.babymilkaction.org, which was running a DanoNO campaign – which was asking campaigners to help expose what Danone is doing regarding sponsoring health worker events and charities. It was asking people to “Say NO to formula company sponsorship – say DanoNO!”

According to the DanoNo campaign page: “Danone is stepping up its targeting of health workers and the public around the world, in violation of international baby milk marketing standards. In the UK Danone’s formula brands are Aptamil and Cow & Gate.”

Baby Milk Action’s 2016 Monitoring Report had referenced Danone in a number of cases where the company was seen to be in breach of law governing the marketing and sale of baby milk formulas.

Regarding advertising the report stated the following: “Danone is countering Nestlé’s SMA PRO launch with its new Aptamil PRO formula, with prominent displays across Boots stores. Baby Milk Action has received pictures showing the infant formula being promoted on the special displays, which is illegal. Sometimes when challenged, managers have claimed it was a mistake to include the infant formula alongside the follow-on formula, which can be promoted under weak UK Regulations.”

Baby Milk Action had also challenged Danone’s advertisements for Aptamil products: “it advertised the brand as giving babies skills. For example, a peak-time television advertisement suggests it turns babies into mathematical geniuses (front cover) and gives them the strength, balance and stamina to be ballerinas (below). The Advertising Standards Authority (ASA) rejected Baby Milk Action’s complaints, arguing that these are common skills. The advertising promotes the Aptamil brand. Danone argues it is for follow-on formula, but labels all products in the range almost identically (in breach of UK Regulations). Danone falsely claims in small print that follow-on formula is not a breastmilk substitute. At the same time, the larger message states it is based on “40 years breastmilk research” implying it is the same as breastmilk”.

Danone was also accused of targeting parents, with reference being given to the Danone giving Aptamil-branded bears as a gift to pregnant women and new mothers to encourage them to join its branded parenting club. According to the report “various articles in the UK Regulations aim to ensure that pregnant women and parents are not targeted with gifts or misleading information, but these do not work in practice.”

Reference:

Baby milk action website (8 January 2020)

On 10 November 2016 Ethical Consumer viewed the most recent "Behind the brand" scorecard (dated April 2016), produced by Oxfam part of its GROW campaign which evaluated the world's top 10 most powerful food and beverage companies. The campaign aimed to challenge the companies to begin a "race to the top" to improve their social and environmental performance.

Danone was ranked joint ninth out of ten companies in the scorecard. Overall the company received a score of 25 out of 70 and was described by Oxfam as having made ‘some progress’ with an overall score of 36%.

The company was rated in seven areas based on information publicly available and marked out of ten for each area. According to the report Danone scored:
2/10 for its land policies - Danone scored very poorly on land. The company had not committed to zero tolerance for land grabs and didn’t require suppliers to consider how land affects lives. One bright spot was that it now recognised the principle of FPIC in its palm oil policy.

2/10 for policies on women – Danone made some improvements in the recent update with a new women’s empowerment commitment. While this is a good sign of improvements it is now important to track what that translates into as actual progress for women farmers.

3/10 for policies on farmers - While Danone is showing increased understanding of its supply chains, it does too little to address the hardships these vulnerable suppliers encounter in producing the commodities that form the basis of Danone’s business.

3/10 for policies regarding workers - A disappointing lack of information means Danone, which has signed up to international labor conventions, doesn’t actually know how many people are in its supply chains. Its recent agreement with the main union for food and agriculture workers globally is a solid step in the right direction.

6/10 for policies on climate change - Danone has notable climate commitments in their palm oil supply chain and on achieving zero deforestation across commodities. But the company has a way to go in making their targets for reducing greenhouse gas emissions more ambitious and in providing support for farmers affected by climate impacts across their supply chains.

5/10 for transparency: Danone lists details about sourcing volumes and where it sources. It is the only company who discloses the soy volumes used for its dairy production. It also scores highest (together with Nestle) in disclosing its Audit procedures and results. But it has made no improvements since last year and continues to fail to provide names of suppliers.

4/10 on water: The owner of Evian and Volvic resumed reporting key information on water to the public. But big gaps in the company’s approach to water remain - including official recognition of the human right to water.

Due to the fact Danone had not received ‘good’ in any of the categories it lost half a mark in Ethical Consumer's Climate Change, Human Rights and Workers’ Rights categories.

Reference:

Behind the Brands April 2016 scorecard (19 April 2016)

In January 2020 Ethical Consumer viewed Groupe Danone's family tree on the corporate information website, www.hoovers.com. It stated that the company had operations in the following countries: Turkey, Mexico, Egypt and China.

At the time of writing Ethical Consumer considered each country listed to be governed by an oppressive regime.

Reference:

Generic Hoovers ref (2020)

In February 2019 Ethical Consumer viewed the 2018 ‘Know the Chain’ report which had assessed 38 Food & Beverage companies' to capture the key areas where companies need to take action to eradicate forced labour from their supply chains.

Danone was one of the companies assessed. The report stated that Know The Chain chose to benchmark the largest (publicly traded) global companies in several at-risk sectors, as these companies have a large workforce in their supply chains, as well as significant leverage.

The report stated:
“Danone S.A. (Danone)... ranks 11th out of 38 companies, disclosing more information on its forced labor policies and practices than its peers on all themes except worker voice and remedy. Compared to 2016, the company improved its score by ten points. This is because the company discloses stakeholder engagement on forced labor, a forced labor risks assessment and some outcomes, a supplier code which prohibits worker-paid recruitment fees and requires suppliers to cascade the standard, and the expansion of its grievance mechanism to include human rights related grievances. Notably, the company discloses that the Social Responsibility Committee of its board will have regular meetings on human rights due diligence and forced labor beginning in 2018. Additional steps the company could take to address forced labor risks in its supply chains include disclosing policies and practices on the themes of recruitment, worker voice, and remedy."

The company scored the following in the report's themed scores:
Commitment and Governance 65 out of 100
Traceability and Risk Assessment 44 out of 100
Purchasing Practices 53 out of 100
Recruitment 25 out of 100
Worker Voice 8 out of 100
Monitoring 45 out of 100
Remedy 25 out of 100

As the company did not score more than 70/100, it lost half a mark under the Workers’ Rights category.

Reference:

KnowTheChain 2018 food and beverage ranking (2018)