Societal effects of food

What are the societal effects of the food we eat? Now it’s possible to calculate it with a new model made by True Price and Wageningen Economic Research, on behalf of the ministry of Economic Affairs. We held a symposium on January 12th to present the results of a research project that shows positive and negative societal effects of food in a transparent and comparable way.

We can differentiate 37 impact categories for food, divided over six ‘capitals’: financial, produced, intellectual, natural, social and human. With financial, produced and intellectual capital there are mostly positive effects of food, such as employment, contributing to the economy and knowledge production. With natural capital we see mostly negative environment impacts. With social capital we take into account animal welfare for example, and positive and negative health impacts with human capital. The researchers can determine the average effects of food, but also zoom in on specific products. Furthermore, they can show the scores per product in relation to the average.

WUR-researcher Willy Baltussen and director of True Price, Adrian de Groot Ruiz, presented the first results of the model with very Dutch products: potato, green bean, milk and minced meat. The results showed that the societal effects of the potato and the green bean were very similar. Baltussen: “Both (products) deliver average financial positive effects (contribution to the economy, lower natural negative effects (which have little influence on the environment) and a lot of positive effects on health). Milk has more natural negative effects (water, air, climate), more social negative effects (underpayment of farmers due to low prices). The human capital scores of milk are both positive (nutrition) and negative (fat). Minced meat has a similar score to milk.”

“The goal of the model is to give insight to governments and nutrition companies to the positive and negative impacts of nutrition, so that the positive effects can be increased and the negative impacts can be diminished’, says Adrian de Groot Ruiz of True Price. “The outcomes make it possible to have a discussion with stakeholders in the food sector. For example, about underpayment of African cocoa farmers for the production of chocolate, but also about low wages of Dutch dairy- and pig farmers.”

May the best farmer win!

How does the true price of organic agriculture differ from conventional agriculture?

Adrian de Groot Ruiz gave an interview about organic versus conventional agriculture on Business News Radio (in Dutch). You can listen to the whole interview, in response to a statement of Louise Fresco, the President of Wageningen University and Research. (His part starts at 22 minutes) here.

Read a summary of the questions and answers below:

Interview on BNR Duurzaam

Adrian de Groot Ruiz as an expert on this statement:
“Organic agriculture is less productive than conventional agriculture”

Journalist Frederique Mol is the interviewer.

The real costs are not included in the price consumers pay. Who pays for these?
Society pays. For example, when CO2 emissions go up, there will be more floods. We will need to build more dams and the productivity of agriculture will go down. These are costs which are real, but the person enjoying the piece of chocolate does not pay for it.

Which information do you need to judge the statement?
Environment is the most interesting, because the advantage is that organic agriculture is better per hectare. There is less use of pesticides and herbicides, there is less loss of soil quality and less CO2 emissions per hectare. The disadvantage is there is less produce per hectare.

How do you calculate the real price?
Multiply the costs per hectare with efficiency. With the use of pesticides and herbicides, you determine the loss of species and value the different species. With CO2 you take the societal costs. We calculate 110 euros for a ton of CO2.

Does organic agriculture perform better than conventional agriculture?
The most leading studies show that the yield is about 20 percent lower.

That sounds like bad news for organic agriculture. Can we put a price on it?
No, and that is the interesting part. This is what we should measure, but it differs per continent and per product. To be fair, we don’t know. So it’s important that everyone measures and reports their true price. For example, an organic trader, Eosta, reports their costs per hectare, but we would like to see the costs per product and then: may the best farmer win!

What are the societal costs and benefits of your food during the holidays?

Do you know the societal costs and benefits of your plate of food during this festive season? For instance, how much water is used to produce your meatball, how much income does the dairy farmer receive, what is the CO2 emitted during the transport of your beans?

To start the new year with a blast, True Price will organize a symposium on the social cost and benefit of food, together with Wageningen Economic Research on behalf of the Ministry of Economic Affairs. We will present the results of a research project that shows positive and negative societal effects of food in a transparent and comparable way. The project focused on these products: potatoes, green beans, minced beef, milk and chocolate. The symposium will be held on the 12th of January from 12-14 hrs at the location ‘Green.DNA’ in Spijkenisse, the Netherlands.

If you are interested to join, find more information and the registration form here (in Dutch; UPDATE: subscription is no longer possible). The language during the event will be Dutch. Due to the limited seats available, your registration will have to be confirmed.

The circle is closed – speech by Herman Mulder




The OECD Guidelines for Multi-national Enterprises: “doing no harm”

Article 1 of the (2011) OECD Guidelines for Multinational Companies states: “The Guidelines aim to ensure that the operations of these enterprises are in harmony with government policies, to strengthen the basis for mutual confidence between enterprises and the societies in which they operate, to help improve the foreign investment climate and to enhance the contribution to sustainable development made by multinational enterprises”.

The Guidelines are focusing on responsible business conduct by Multi-National Enterprises (MNE’s) in their entire value chain. The Guidelines are an example of “soft law” by the (46) governments as they are voluntary, yet not non-committal: governments may attach certain sanctions to non-compliance and, moreover, there is “no law-free zone” as the Guidelines reflect good business practice.
The Guidelines are comprehensive, as they include human rights, employment & industrial relations, environment, disclosure, corruption/bribery, consumer interest, taxation, science & technology, competition. Central themes are: initial and ongoing due diligence on own risks and on actual or possible adverse impacts on stakeholders and society-at-large; scoping the nature of responsibility of the MNE’s in their entire value chain (“cause, contribute or directly linked” to impacts); leverage (alone or with others) to prevent, reduce, mitigate adverse impacts.
The Guidelines offer the opportunity for affected people to seek remedy through the mediation process by the National Contact Point (NCP in each of the OECD (34) member and (12) adhering countries. This process also offers the opportunity for forward looking learning: “from accidental pain in the valuechain to systemic gain”, by improving practices and policies.
The Guidelines have been drafted and the performance thereon are being monitored on a multi-stakeholder basis, i.e. governments, business (BIAC), trade unions (TUAC), NGO’s (OECD Watch).
The Dutch Sector Covenant Process, initiated by the government for a number of high impact business sectors, lead by business, with active involvement of civil society organisations is based on the Guidelines (as well as on the UN Guiding Principles for Business & Human Rights).

The UN Sustainable Development Goals: “doing good”

The Sustainable Developments Goals (SDGs) were adopted by the UN General Assembly in 2015. With its 17 Goals it offers a wide-ranging aspiration (and commitment by governments) to create a more sustainable, inclusive and fair world by 2030.
Its scope is global (adopted by 198 countries), universal (setting national and international targets), with a range of (169) targets and (230) indicators for governments to act upon, and to report periodically in the UN fora.
The issues addressed in the Goals include: poverty, food security/nutrition, health, education, gender, water/sanitation, sustainable energy, economic growth & employment, inequality, cities, sustainable consumption and production, climate change, natural stewardship, institution building and, importantly, (multi-stakeholder) partnerships.
Although this is an agenda set by governments, it is recognised that the private sector must play a key role in the implementation of the SDGs. Some leading businesses have already committed to embrace the SDGs in their corporate strategies (and performance reporting), focusing in particular on a few Goals of their own, yet considering the other Goals as well. In the Netherlands already a number of (multi-stakeholder) private sector initiatives and solution partnerships have been taken, for instance the SDG Charter Coalition.

The Theory of Change: “a Shared Strategy for the Commons”

With the OECD Guidelines as normative baseline for business and the SDGs as aspiration (“for all, by all”), we now have a catalytic Agenda to address “the tragedy of the commons” by implementing together, through partnerships by public and private sectors, “the strategy for the commons”.
The combined, complementary frameworks will assist us in developing coherent and consistent supportive legislation and government policies; for business to sharpen their “purpose” in society, their governance and to “sustainabilise” and stabilise their value chains; for innovation in technology(-sharing) and business models by all, using i.a. better data and metrics; for civil society organisations to be more constructively engaged in government and business interventions.
Goal #17 is particularly important: “getting farther by going together”, with shared outcomes on all other 16 Goals. Matching the broad societal agenda with business objectives to realise shared outcomes will be our key challenge.
Also, the SDGs offer an opportunity to restore the core capital for government and business: societal trust

The role of Government: “stepping up to the plate as convener and facilitator”

Government has a key facilitating role to play in realising our 2015-2030 Agenda towards a better world. It should amend its more reactive “additionality-“ approach (acting when markets are failing) to a more pro-active catalysing “complementary” role, at least during the next 5-7 years, to create a pro-SDG environment for itself, business and civil society.

More specifically it should:
1. strengthen the “do no harm”- Guidelines, by introducing selective legislation, such as on mandatory due diligence in the valuechain, human rights (such as the UK Modern Slavery Act), greenhouse gas emissions;
2. change existing legislation, regulations, policies, subsidies which are counter-productive to the SDGs;
3. improve the effectiveness of the Guidelines by applying it to all businesses (including SME), including the government in its role as “market actor”; also, access to remedy need to be strengthened (adding a voluntary “tribunal” process);
4. strengthen the OECD Guidelines process through much improved functional equivalence among countries, more coherence on policies and outcomes, guidance papers and linkage papers on topical issues;
5. develop, in cooperation with business, new coherent and consistent enabling policies and instruments to “crowd in” business into the SDG Agenda, provided business adheres to the Guidelines’ framework.

The role of Business: “no planet, no people: no profit”

Business should recognise that it should redefine its role in society through redefining its purpose: create value for customers, wealth for investors, long term value for its stakeholders, while adopting ethical standards, doing no harm to social wellbeing, natural ecosystems and biodiversity, climate. Its governance structure and public accountability processes should reflect this approach.
“Nothing is impossible, particularly when it is inevitable”: reading the signs on the wall and take early action is part of effective leadership.
It should also consider that preventing potential costs of conflict with stakeholders, the arising of new societal liabilities, “stranding” of assets, the loss of reputation/brand/value are important business case factors.

More specifically it should:
1. explicitly adopt the OECD MNE Guidelines framework as baseline and the SDGs as important factors in its strategy, and report thereon (eg. by applying GRI Standards and Compass);
2. measure, monetise and effectively address all material externalities (both negative impacts and positive effects, without undue “netting”) in its value chain: true pricing, true Profit & Loss;
3. enter into “solution partnerships” to realise SDGs;
4. stimulate consumers to buy “sustainably and responsibly”.
5. actively participate in national and international sector-/theme- “tables”.

The role of Civil Society Organisations: “activism & constructivism”

NGO’s and trade unions should recognise that, notwithstanding serious negative impacts for which case-specific “naming & shaming” is justified, the concept of “knowing & showing and, even, joining” the broader Agenda (as described herein) in a diverse and dynamic world in which no one is perfect, deserves a fair chance and a constructive approach. Civil society organisations play an even more important role in keeping the normative baseline during the implementation of the SDG “promise” with speed and scale.

The special role of the Financial Sector: “restoring trust by embracing the societal agenda”

Next to adopting the roles of business mentioned above the financial sector should play, in serving society, a particularly important role as “gate-keeper” of high standards, and as ambitious and responsible “enabler” by its capital-mobilisation role.

More specifically it should:
1. pro-actively engage with its business relationships in its valuechain on adopting the OECD Guidelines and embracing the SDGs;
2. contributing to “making markets fit for sustainable and responsible purpose” by raising the disclosure standards of its business relationship;
3. consider impact investing “the new normal”, rather than a new asset class.

Where is the Consumer: “the hidden change-maker”?
The Consumer is the big absentee in the Agenda. Through his conscious choices he may make major contributions. He needs to be more aware of the intrinsic value of products (or, rather, the lack thereof).

More specifically he should:
1. require more information about origin, externalities embedded in a product
2. make informed and responsible decisions, including paying a higher “true price”

Closing Comment
Our mission is now well defined: we have “do no harm”-framework (through the 2011 OECD MNE Guidelines) and a “doing good”-agenda (through the 2015-2030 SDGs). Collective action with ambition is now of the essence. We have no excuse anymore not to adopt, embrace and act upon this.

The Circle is closed!

Kick-starting the implementation of the Sustainable Development Goals in the Netherlands

Last Friday 2nd of October DSM, True Price, Worldconnectors, the Dutch Ministry of Foreign Affairs and Major Alliance Netherlands hosted a successful high-level meeting: Kick-starting the implementation of the Sustainable Development Goals (SDGs) in the Netherlands. The meeting was a great success; representatives from more than 100 organizations participated and showed their readiness to start to collaborate on achieving the SDGs.

Worldconnector Herman Mulder opened the floor to the welcoming words by Bernard Wientjes on behalf of the Rijksmuseum. After that, Adrian de Groot Ruiz of True Price and co-founder of the SDG Charter zoomed in on the SDG Charter’s vision that solution partnerships and innovation are essential for achieving the Sustainable Development Goals. Concrete solution partnerships are already taking shape as presented by Jan-Willem Scheijgrond of Philips in the form of their active engagement with Charter signatories Bioneedle, Hospitainer and World Vision on the topic of Health. Next, André Veneman explained how AkzoNobel is actively building on a partnership for Human Cities, together with a.o. Arcadis and the Human Cities Coalition. Thereafter, Steven van Eijck explained the focus SDG themes the Major Alliance Netherlands will center their efforts on in the coming years.

Minister for Foreign Trade and Development Lilianne Ploumen pointed out the uniqueness of the SDG Charter, bringing together so many organizations for one purpose. We can surely be a bit proud of this achievement, which targets a wider context of Global Goals, whilst building on the unique capacities of the Netherlands. As Feike Sijbesma, CEO of Royal DSM, indicated this is especially valuable since the pressing global issues require everyone to work together which is why cross-sector partnerships are essential to reaching the SDGs. Building on that notion, Steven van Eijck highlighted the importance of bringing in the perspective of philanthropy in achieving the SDGs.

Fokko Wientjes, Vice-President Sustainability & Partnerships at DSM and co-founder of the SDG Charter, concluded the meeting with underlining the three ‘A’s that are central to the next steps of the SDG Charter: aspiration, ambition and ‘aanhaken’ (joining).

What’s next?

In follow up to a successful meeting, we are extending a call for another ‘A’: Action. The SDG Charter and Major Alliance Netherlands will:

– Work on a plan, including the results we want to have achieved in a year and the roadmap to it.

– Engage more organizations to form concrete SDG solution partnerships and institutionalize the actions undertaken so far.

– Inform you about upcoming events related to the SDGs.

We are ready for action, are you? Please do not hesitate to get in touch with us in case you have any questions or would like to discuss opportunities for collaboration.

Looking forward to working on further shaping the SDGs!