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This blog provides environmental, social and governance (ESG) performance metrics for seven companies that are among the top U.S. based processed food companies based on revenue. The companies are Conagra (NYSE:CAG), Campbell Soup (NYSE:CPB), General Mills (NYSE:GIS), Hershey (NYSE:HSY), JM Smucker (NYSE:SJM), Kellogg (NYSE:K), and Kraft Foods (KRFT). Of these seven companies, three of them - Conagra, Hershey, and JM Smucker – have recently received recent positive financial assessments by Seeking Alpha analysts.

For investors like me, once I know a company meets my financial risk profile, I want to know how well the company operates and manages a range of internal and external issues. My contribution to Seeking Alpha readers is to provide analytics that go beyond financial metrics, to evaluate how well the companies perform on comparable environmental, social and governance – or ESG – metrics. Companies, through annual reports such as the 10K and the corporate social responsibility (NYSE:CSR) report, release corporate ESG data. Our primary source for ESG data is Bloomberg’s Professional Finance and ESG database (Bloomberg). Since 2009, corporate ESG data has been available through Bloomberg. If a company sees an error in their public ESG data, it should have a corporate representative contact Bloomberg and get it corrected, as it would with public financial data.

Table 1 provides a basic due diligence screen of the seven companies on several key environmental metrics compared to several top peers. Column 1 provides an aggregate ESG disclosure score for each company calculated by Bloomberg, which provides a quick read on how well a company makes ESG disclosures on a comparative basis. ESG disclosure scores also provide a quick read on how accountable and transparent a company chooses to be when it comes to sustainability performance. Bloomberg assigns to each company based upon a company’s full range of ESG disclosures. ESG scores range between 0 (no disclosure) and 100 (full disclosure).

Table 1: A Snapshot of Key Environmental Performance Indicators

PROCESSED FOOD COMPANIES (7)

ESG Disc Score

GHG Emissions

Energy Consump

Total Water Use

Total Waste

$ Invest in Operational Sustainability

CAMPBELL SOUP

48

769

3

24,820

0

$16,000,000.00

CONAGRA FOODS

48

1924

6

49,697

1

NA

GENERAL MILLS

42

1011

3

16,200

0

NA

HERSHEY

36

326

NA

6,473

0

NA

JM SMUCKER

26

NA

NA

NA

NA

NA

KELLOGG

26

NA

NA

NA

NA

NA

KRAFT FOODS

19

NA

NA

NA

NA

NA

Source: Bloomberg Professional Finance and ESG Platform July 2014

Between Conagra, Hershey’s and JM Smuckers, Conagra leads in ESG disclosures with a score of 48. Conagra has disclosed key environmental metrics for greenhouse gas (GHG) emissions, energy consumption (Col 4), water usage, or waste. Hershey has less ESG disclosures than Conagra, and JM Smucker has the fewest of the three. None of the three companies disclosed their Total Investment in Operational Sustainability. This ESG data point informs an investor about how much a company has spent in the prior year to increase operational or energy efficiencies, processes, or safety or other improvements that help implement sustainability goals for operations. By not providing this metric, companies (perhaps unintentionally) communicate a lack of financial commitment to continual improvement in sustainable operations.

Table 2: A Snapshot of Key Social And Governance Performance Indicators

PROCESSED FOODS (7)

% Women Emp

% Women Mgt

% Women on Bd

Commun Spend

% Indep Directors

CAMPBELL SOUP

45

36

33

$ 52,600,000.00

93

CONAGRA FOODS

40

30

18

$41,284,124.00

91

GENERAL MILLS

NA

NA

31

$153,000,000.00

92

HERSHEY

NA

20

9

$9,400,000.00

91

JM SMUCKER

NA

NA

23

NA

62

KELLOGG

NA

NA

27

$61,000,000.00

82

KRAFT FOODS

NA

NA

27

NA

82

Source: Bloomberg Professional Finance and ESG Platform July 2014

Table 2 shows that between Conagra, Hershey and JM Smucker, only Conagra has disclosed the percentage of women employed in its workforce, in management and on the board. Conagra has nearly 45% women in its workforce, which is nearly gender parity, but only 18% women on the board. This raises the question of whether Conagra values gender diversity in leadership and, if so, what it is doing to improve this metric. It is also interesting to note that four of the seven companies have about 30% representation of women on their boards, which is higher than other industries.

When it comes to governance and board independence, Conagra outperforms Hershey and JM Smucker, and the other companies except for Campbell Soup. For this specific benchmark, I noticed that companies’ ESG disclosures scores (Col 1) seem to correlate with having a higher percentage of board independence (Col 6), with JM Smucker being the exception.

Further to our analysis of governance is the Community Investment metric (Col 5), which is a proxy that measures companies’ financial commitment to the communities where they are located. Conagra, Hershey and JM Smucker all have Community Investment metrics that are in the bottom half of this top peer grouping when contrasted with General Mills, which stands out with a community investment metric of $153 million. Kellogg is next with $61 million community investment. Two key issues to consider with evaluating a public company’s community investment budget are: (1) whether its community spending priorities align and drive the company’s sustainability priorities; and (2) is corporate governance sufficiently independent to insure that community spending dollars are not being allocated primarily for pet projects or marketing campaigns.

The food industry is getting increased attention from investors who seek investments that support feeding a world population of 9 billion by 2050, if such projections come true. Experts state that feeding a growing world population in a global economy that increasingly competes for natural resources – especially water – will have its challenges. Up until now, the food industry has largely escaped the spotlight investors have shined on the oil & gas, chemical, high tech, healthcare, finance and other sectors. However, beginning on August 6th, the Sustainability Accounting Standards Board (SASB), together with top U.S. food companies, institutional investors and public advocates, will begin work to develop a floor ESG accounting standard for public companies in the food sector reporting to the SEC. From what I understand, there is considerable participation by companies in this sector to develop a standard that will guide future reporting.

Who values this data? Investors seeking long-term investments in maturely positioned companies to absorb identifiable risks and opportunities value the data. Other stakeholders – such as future and current employees and customers – value ESG data, too. If you want a deeper explanation of this megatrend towards corporate disclosures, here is a PowerPoint on the subject.

Disclosure: The author does not hold a position in any of the stocks mentioned in this article, and has no plans to change that position within the next 72 hours.