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The FACT Index Methodology

OVERVIEW

The Food and Agriculture Corporate Transparency (FACT) Index tracks the political disclosure of the world’s largest food and agricultural corporations. The corporations featured in the Index were selected based on reported 2020 revenue, and include both privately-owned and publicly-traded corporations. The types of spending disclosure we assessed were electioneering, lobbying, charitable, and scientific because this spending is a primary means of influencing public policy.

The FACT Index is an original piece of research, but it is inspired by the pioneering work of other researchers and institutions. In particular, the CPA-Zicklin Index, created by the Center for Political Accountability (CPA), analyzes the political activities of Fortune 500 corporations within the United States. The conceptual basis of our research was inspired by CPA’s work, though the FACT Index focuses specifically on food and agriculture corporations and examines a broader range of political giving (electioneering, lobbying, science, and charity) as prevalent means by which corporations influence policy. Secondly, we also wish to acknowledge the work of the Access to Nutrition Initiative (ATNI) for its work on the Global Access to Nutrition Index, which has inspired some aspects of this work, including the organization of subcategories and the presentation of the results.

To index the political giving of corporations, we generated questions for the categories of giving aforementioned. Corporations received points for partial or full disclosure on each question, with a range of points awarded, depending on the extent to which they disclosed their activity, for a total of 100 possible points. The presence of a publicly-available policy prohibiting giving under one of the four categories, such as an express prohibition on making donations to political candidates, resulted in a corporation receiving full points for disclosure in that realm. The reasoning here: such a policy not only affords a safeguard against the corporation’s harmful interference in policy, but makes disclosure moot. 

This survey, communicated to corporations in advance of the FACT Index release, contains the questions asked for each category and the total number of possible points that correspond to each question. Each of the numbers in the legend corresponds to the numbers in the scoring table for each of the questions. The total score for each section reflects the degree to which a corporation discloses information about its spending in that category (electioneering, lobbying, charity, and science). A high score reflects a significant amount of disclosure and a low score reflects a low level of disclosure.

The four categories, again, are as follows:

  • Electioneering, including activities to influence electoral outcomes, such as the election of public officials and ballot measures, e.g. a donation to a political candidate’s campaign.
  • Lobbying, including any activity to directly or indirectly influence the decision or action of government officials, legislators, or regulatory agencies, such as hiring a lobbyist to engage policymakers about a proposed regulation.
  • Charity, specifically any donation to a charitable organization, directly from the corporation or the connected corporate foundation, if applicable.
  • Science, including any activities that may influence scientific studies, academic or research institutions, or professional associations, particularly those relevant to a corporation’s products.

To compile this list, we compiled a list of the largest food and agriculture corporations in the world based on annual reports for publicly-traded corporations and self-reports for private corporations. For purposes of this inaugural index, we focused specifically on corporations whose primary business is food production or processing—whether grains and seeds or processed food products like soda and snacks. We saw production versus retail and service as a natural starting point for inquiry. We anticipate expanding our analysis to include the largest actors in other segments of the industry in the future.    

 

REVIEWING DISCLOSURE

To identify corporate disclosure, we reviewed the corporate websites and conducted internet searches for the following:

  • Policies, including, political engagement policies, lobbying policies, trade and policy organization policies, charitable spending policies, and scientific funding policies;
  • And disclosure documents, including files or web pages which fully or partially disclose a corporation’s political, lobbying, charitable, and scientific activities.
  • These were also cross-checked with publicly available reports, such as Senate lobbying filings, SEC filings, Opensecrets.org profiles, and European Transparency Register filings. While these did not alter scores, they did confirm corporations’ engagement in political activities and self-reporting statements.

 

RESEARCH METHODS

Our research used the following search methods:

  • Exploring corporate and corporate investor websites (the U.S. and other country websites) to directly discover corporate disclosures, including utilizing corporate sitemaps.
  • Reviewing annual reports and annual sustainability reports for any mention of political, scientific, or charitable activities.
  • Using related search terms to identify disclosure activities for the corporation using Google and other search engines.
    • For example, for Coca-Cola, we used search terms such as:
      • political “…spending”, “…contributions, “…donations”, “…disclosure”, “policy”
      • charitable “…spending”, “…contributions, “…donations”, “…disclosure”, “policy”
      • lobbying “…spending”, “…activities”, “…disclosure”, 
      • scientific and science “…spending”, “…contributions, “…donations”, “…disclosure”, “…studies”
      • trade association “…contributions”, “…membership”, “…disclosure”
  • Google site (e.g. “site:coca-colacompany.com political activity”) and corporate site searches for the above terms.

Only information that was publicly disclosed by the corporation on its website was counted as disclosure (e.g. Coca-Cola’s political disclosures), rather than information disclosures on external websites, such as GRI reports, news articles, or government databases, the last of which is especially difficult for people to find and analyze, so is not an accurate reflection of transparency. However, external disclosures, when discovered, were utilized to support research conclusions.