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The FACT Index Summary & Findings

OVERVIEW

The world’s largest food and agriculture corporations have enormous power and control over virtually every aspect of our food system—and the rules that govern it. Big Food wields this power in the political arena to its advantage using a variety of tactics—from lobbying policymakers and funding political campaigns to funding research and nonprofit organizations to support their policy agendas—and they do so opaquely and with little oversight. This lack of transparency means that corporations can sell us a family-, worker-, and environmentally-friendly image even as they spend heavily to block policies that would improve public health, cut down on inequality and poverty, and help prevent the climate breakdown. It’s why we at Feed the Truth developed the Food and Agriculture Corporate Transparency (FACT) Index, a tool to prompt greater sunlight on the food industry’s political giving, in all the forms it takes.

But the lack of transparency around corporations’ political activities isn’t just bad for democracy, people, and the planet; it’s bad for business. Perhaps no sector depends more on the trust and loyalty of those who purchase its products than food. Just as the public is increasingly demanding to know what’s in their food, they are also asking more and more critical questions about the corporations behind the cereal, soda, and hamburgers they buy.  Investors are also taking note. Political spending that conflicts with corporations’ stated values or publicly-held positions endanger brand reputations, putting their investor’s money at risk. As one of the world’s largest investors, Vanguard, recently cautioned, poor governance of corporate political activity, coupled with…a lack of transparency about the activity, can manifest into financial, legal, and reputational risks that can affect long-term value.”

With the world’s largest corporations, including some of the largest food and agriculture corporations, suspending and/or reviewing their political giving in the wake of the white supremacist riot at the Capitol and ensuing U.S. Republican party attacks on voting rightsgrowing shareholder support for greater transparency…and mounting critiques of the corporate capture of global food policy through the 2021 United Nations Food Systems Summit, the moment is now for Big Food’s political giving to step out of the shadows.   


METHODOLOGY

The FACT Index analyzed the political spending disclosures of the 10 largest global food production and processing corporations by revenue, including both publicly traded and privately-owned enterprises. The analysis centered on these corporations because their size enables them to spend significant sums to shape policy and political agendas across the world. These corporations, incidentally, also have their political spending to thank for their size and market dominance, as it has ensured the rules are written to favor their growth versus incentivizing greater market competition.

The FACT Index examines four dimensions of political giving that are used most heavily by food and agriculture corporations to block, shape, and control policy and policymaking: (1) lobbying; (2) spending on elections, political campaigns, and ballot measures; (3) funding of scientific research; and (4) philanthropic contributions. Corporations were assessed on a scale of zero to 100 based on the extent of what they publicly disclose of their spending and activity across these four dimensions. This multidimensional view and the global scope of the analysis help to provide a broader, if not all-encompassing, picture of these corporations’ political transparency. It builds upon the well-regarded Center for Political Accountability-Zicklin Index, which looks more narrowly at S&P 500 corporations’ spending to influence U.S. elections.

Our researchers discerned each corporation’s score by answering the questions in this survey based on information made publicly available through the corporations’ websites. The corporations featured were given the opportunity to reply to the survey in advance of the FACT Index’s launch. Though for purposes of measuring sincere commitment to full and public disclosure of political giving, we did not score corporations on the basis of disclosures made through third parties or through other less publicly accessible means.

48 points were allocated for disclosing election-related spending, also referred to as electioneering, 28 for lobbying spending, 16 for corporate-funded research, and eight for charitable contributions. These allocations aim to reflect the multiple dimensions of direct political spending (e.g. electioneering and lobbying), as well as its greater direct bearing on public policy. Greater weight was also given for disclosures in the U.S., given the significance of the country’s rules and regulations to the global political conduct of these corporations.

The electioneering category accounts for close to half of the FACT score. It includes corporate spending to influence electoral outcomes, such as the election of public officials and voting on ballot measures. Disclosure of this spending, which includes political campaign contributions, offers a window into how food corporations not only influence policy decisions, but ensures decision makers will consistently align to their prerogatives. For example, U.S. Senate Minority Leader Mitch McConnell, House Minority Leader Kevin McCarthy, and former Chair of the House Committee on Agriculture, Collin Peterson, are among the top recipients of contributions from the food industry and a reliable vote for its lobby. It also provides a view of how corporations and wealthy donors can bypass candidate spending limits and use plebiscite to instead accomplish its aims. One example: Coca-Cola and its primary trade group, the American Beverage Association, bankrolling ballot initiatives in the state of Washington and Oregon to preempt locales from adopting soda taxes

The lobbying category, accounting for roughly a third of the FACT score, refers to any activity to directly or indirectly influence the decision or action of government officials, legislators, or regulatory agencies. These disclosures ideally provide a view of which people (individual lobbyists, paid experts, etc.) and institutions (lobby firms, trade groups, etc.) are paid to persuade public officials in what ways and on which specific policies. For instance, stronger lobbying disclosure could have provided an earlier and more complete view of how Cargill, JBS, and the larger agribusiness sector spent $2.5 billion in lobbying since 2000, while dedicating a substantial portion of this spending to block climate policy. Further, corporate disclosure around trade group membership and giving can provide a better picture of when corporations are saying one thing with respect to, say, voting rights, while their proxies, like the U.S. Chamber of Commerce, are counteracting these claims

The science category refers to disclosure of any spending to influence scientific studies or institutions and accounts for 16 percent of the score. Corporate scientific activities are designed to manufacture and influence an evidence base which is used to create a favorable regulatory environment for corporations and their products. For instance, Cargill, Unilever, Pepsi, and Coca-Cola have all funded the global industry lobby group ILSI (International Life Sciences Institute) to produce research that has helped slow, or stall altogether, public health policy from India to Mexico, China to Brazil. Through this category we can also see how food corporations attempt to mislead public discourse to secure more favorable policy outcomes.

Lastly, the charity category refers to disclosure of donations to charitable organizations. This can provide a view of what food corporations are doing to purchase favor from potential critics, such as when Coca-Cola is deemed the world’s top plastic polluter in the same year it makes large gifts to the Nature Conservancy and other environmental causes. Economists recently estimated that as much as $1 billion a year of corporate philanthropy is used to sway congressional representatives in the U.S.; more than double the amount spent on contributions from political action committees (PAC). Researchers concluded that, “[a]bsent of disclosure requirements, charitable giving may be a form of corporate political influence undetected by voters and subsidized by taxpayers.” Charity is also a means for corporations to create a halo around their brand(s), obscure their liabilities, and otherwise deflect regulation. But one example of this is Tyson’s claim that its corporate grantmaking addresses the most important risks facing the communities it operates in as it faces allegations that it knowingly risked the health and lives of employees working in its plants.

KEY FINDINGS

Global food and agriculture corporations… 

…have an alarmingly low level of political giving disclosure. Even the highest ranking corporation, Coca-Cola, received only 41 on a 100 point scale for transparency, thanks in part to its robust reporting in the U.S. (one of 200 countries it operates in). St. Louis-based Bunge was the worst with a 2/100.

…could take the greatest strides by globalizing electioneering and lobbying disclosures. While Bunge and Tyson failed to make any public disclosures on campaign contributions, the remaining at least made partial disclosures, with Coca-Cola leading thanks exclusively to its U.S. disclosures.

…score particularly poorly in disclosing their spending on science. Pepsi, Unilever, ADM, JBS, Tyson, Bunge, and Mars all failed to disclose any of their corporate scientific spending. Nestlé ranked most highly by meeting only half of the FACT disclosure requirements, with only three other corporations disclosing anything of their funding for corporate science.

 

WHAT DO THE FINDINGS TELL US?

The extremely low level of political transparency on the part of Big Food corporations is a cause for concern. There can be no food system transformation without greater sunlight and visibility into how giant food and agriculture transnationals are using their money and power to influence, and ultimately distort, policymaking.  Much of what these corporations spend to gain political advantage is hidden from view—and it appears, based on current levels of disclosure, that corporate executives and boards want to keep it that way.   

The FACT Index provides a multidimensional view of how the little disclosure that does exist so often results from stakeholder pressure, particularly from media and investors. For instance, Coca-Cola’s transparency journey was animated by media stories such as those around its funding of the Global Energy Balance Network; a now defunct non-profit organization dedicated to redirecting blame for diet-related disease causation from diet to physical inactivity. 

Most importantly, political disclosure stems from policy requirements. The FACT Index illustrates the type of variance you get in lieu of countries requiring disclosure. Only 18 countries, in fact, require any disclosure on lobbyists and lobbying activities, with the disclosures often being very limited in scope. And it’s no coincidence that disclosures are strongest where some of the stronger, global sunshine laws exist. For example, in the U.S., corporations may not be required to disclose giving to trade groups, state or local political action committees (PACs), scientific institutions, and more, but at least their direct spending on federal candidates through corporate PACs is a matter of public record. These limited requirements provide more of a jumping-off point for voluntary corporate disclosures than the lack thereof.

In all, the findings make it hard for food industry giants to claim that they are champions of transparency or fully accountable to their stakeholders. It’d be very hard to be without being far more open and honest with them about something so fundamental to business as their political involvement.

If food and agriculture corporations are to convince the public that disclosure is of a more altruistic nature, it would do well to disclose before being compelled by bad press, investor pressure, or public policy. What’s more, transparency should not be construed as synonymous with good behavior, though it is indicative of a corporate culture more ready and willing to align political giving to stated values and a professed value proposition.

RECOMMENDATIONS

Governments should…

…issue rules through the U.S. Securities Exchange Commission (SEC) and its equivalencies requiring political giving disclosures—including lobbying, charity, science, and indirect spending—across the jurisdictions in which these corporations do business.

…adopt campaign finance laws at every level of government requiring full disclosure of political giving, including indirect spending through intermediaries.

…in the case of the U.S. Congress, remove a budget rider that in recent years has prevented the SEC from issuing a rule requiring public corporations to disclose their political spending.

…pass legislation that would heighten campaign finance transparency by requiring increased disclosure of organization and campaign donors as well as shine a light on dark money avenues for campaign funding. If passed, the bill would ensure transparency of corporate political spending, prevent the laundering of campaign funds through front organizations, and even clamp down on coordination between candidates and super PACs. 

…adopt measures in line with Article 5.3 of the Framework Convention on Tobacco Control to require disclosure and govern the interactions of food and agriculture corporations with governmental bodies.

…pass laws requiring disclosure of scientific funding from food corporations on any study and academic or research institution.

Corporations should…

…post disclosures annually on their website that bring their FACT score to 100.

…adopt policies prohibiting political giving.

Investors should…

…introduce and vote for resolutions that call for these corporations to conduct annual reporting of political disclosures so as to give them a 100 FACT score.

…reintroduce and vote for resolutions to compel major strides on the FACT scale such as one before Tyson Foods that received a majority of independent investor support this February, including the two largest institutional investors: BlackRock and Vanguard.

 

MOMENTUM FOR HEIGHTENED TRANSPARENCY

There is already incredible momentum for global food and agriculture corporations to open their books and go even further to ensure their political spendings aligns to their values. Political transparency resolutions proliferated in the wake of the U.S. Supreme Court Citizens United ruling in 2010 that loosened corporate political spending requirements. But now, with many corporations, including Pepsi, Tyson Foods, Coca-Cola, Cargill, ADM, and JBS temporarily suspending and/or reviewing their political spending in the wake of the white supremacist insurrection at the Capitol, the call for political transparency is only accelerating. Close to a quarter of political disclosure resolutions voted on thru mid-May of 2021 received a majority vote; a far greater success rate than during the same period for any year going back to 2014.

What’s more, the food and agriculture sector doesn’t need to look beyond this list to appreciate that disclosure is eminently doable. Coca-Cola has proven as much in spite of its current reticence to globalize its disclosures. What’s more, global corporations hailing from all corners of the industry like ConAgra, General Mills, and Kellog’s, already perform as well as, if not better than, Coca-Cola in terms of their U.S. political disclosures. And corporations can improve both rapidly and with ease, as evidenced by Monster Beverage Corporation’s leap from a zero to an 86 on the CPA-Zicklin Index in one year.

In all, political transparency is becoming accepted as part of the social contract corporations have with their stakeholders to operate. Global food and agriculture corporations will do well to honor that contract for the sake not only of their enterprise’s viability, but that of the planet.