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"Breast is Best" - but countries need to do more

By Neville White, Head of SRI Policy & Research at EdenTree
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The marketing of Breast Milk Substitutes (BMS) has long been a thorny and controversial issue for responsible investors. Over many decades manufacturers have faced significant challenge to the way these products are sold and promoted. The largest manufacturer, Nestlé, has been subject to frequent product boycotts and protests.

Whilst still controversial, we sense that the issue may perhaps have turned a corner in terms of the way some companies have worked hard to build trust and best practice commitments.

The context is over 800,000 premature infant deaths a year that could be prevented with affirmative action around natural feeding. Early initiation of breastfeeding could prevent about one fifth of neo-natal deaths. In 1974, the sharp decline in natural feeding led the World Health Assembly to call for urgent checks on the way substitute products are sold in order to support mothers to breast feed.

The World Health Organisation International Code of Marketing of Breast Milk Substitutes followed in 1981. The Code lays down a set of recommendations to regulate the marketing of breast milk substitutes, feeding bottles and teats. The Code recognised that although legitimate, breast milk substitutes are not like ‘other products’ and their aggressive promotion in preference to natural feeding should be prevented. The Code recommends exclusive natural feeding for the first six months of life, and that this should continue, ideally, for the first 24 months of life.

Although supported by subsequent World Health Assembly Resolutions, the Code has not been substantively reviewed since 1981, and, here’s the rub, has only been adopted in full by 37 out of 199 countries; just 69 countries prohibit advertising of BMS products.

Whilst the Code sets a ‘gold standard’ for marketing behaviour, its poor uptake has allowed the continuation of practices in contravention of the Code – especially in countries where regulatory enforcement is poor. As a way of moving the debate forward FTSE4Good the ethical index tracker introduced specific and detailed criteria manufacturers would have to meet in order to be included in the FTSE4Good Indices. These criteria draw on the Code, but introduced a phased approach that would focus on ‘high-risk’ countries; those with the highest instances of child mortality and mal-nutrition. Although the Code is universal, this pragmatic approach sought to focus corporate behaviour in areas of need and impact. Once companies had met the criteria, they would have to commit to ‘in-country’ verification of their risk management systems to ensure continued compliance with FTSE criteria.

After five years, just two BMS manufacturers have successfully met the tough FTSE criteria; Nestlé in 2011 and Danone in 2017. The companies are not perfect but they have shown leadership and drive in raising standards in infant nutrition. The Access to Nutrition Index (ATNI) – to which EIM is a supporting signatory, has recognised these outcomes in their own BMS assessment which placed Nestlé and Danone first and second in BMS manufacturer rankings.

There is still much to do, but I was privileged to attend the annual BMS stakeholder workshop facilitated by FTSE Russell which brings Nestlé and Danone together with interested civil society stakeholders such as Save the Children and UNICEF for a robust dialogue around their commitments and performance. Such a meeting could not have taken place 10 years ago owing to the levels of mistrust between NGOs and the corporate world. Enormous progress has been made in ensuring the message that ‘breast is best’ is heard loud and clear.

At EIM we know that this is a sensitive and controversial issue for many, and it is one we have been engaged with for many years. For selection into the Amity Funds a BMS manufacturer would need to be able to demonstrate the highest standards in marketing behaviour and to commit to being part of the FTSE4Good process. They would need to be ‘improving’ as rated by ATNI. We will continue to ensure that a dialogue supporting the core Code principles forms part of our own investment due diligence process where it concerns breast milk substitute manufacturers. 

The author serves in an independent capacity as a Member of the FTSE4Good BMS Marketing Committee.

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