The marketing of Breast Milk Substitutes (BMS), particularly in developing countries, has been an ethical concern since the 1970s with dubious marketing practices being widely viewed as having an impact on, or contributing to, infant mortality where water impurities may have led to illness and early death.
The preamble to the World Health Organisation International Code of Marketing of Breast Milk Substitutes (1981) states: “For many years [the WHO and UNICEF have] emphasized the importance of maintaining the practice of breast-feeding—and of reviving the practice where it is in decline—as a way to improve the health and nutrition of infants and young children. Efforts to promote breast-feeding and to overcome problems that might discourage it are a part of the overall nutrition and maternal and child health programmes of both organizations and are a key element of primary health care as a means of achieving health for all by the year 2000”.
As a result of the WHO commitment, priority was given to preventing malnutrition in infants and young children by supporting and promoting breast feeding, by inter alia regulating inappropriate sales promotion of infant foods that can be used to replace breast feeding.
The CFB fully subscribes to the principles contained within the International Code of Marketing of Breast Milk Substitutes, and that wherever possible priority should be given to natural feeding.
The main points contained within the Code are that:
Whilst the Code is designed to be implemented globally, in certain circumstances, the use of breast milk substitutes may be deemed necessary, desirable or a matter of choice, the key principle being that the Code is nevertheless applied and upheld in the host country. Breast milk substitutes are therefore viewed as legitimate products, and that their sale is not viewed as inherently unethical. An investment exclusion policy based on their manufacture and sale is therefore not appropriate. The Code defines a range of products that constitute ‘breast milk substitutes’. BMS applies to infants of 0-4 months, and also includes complementary breast milk substitutes for young children normally between 4-6 months.
There have been regular allegations of violations of the WHO Code over a number of years, and CFB has regularly engaged with manufacturers and NGOs on allegations regarding breaches to the Code, as well as its interpretation.
Following a period of due diligence, and based on considerable constructive engagement, JACEI advised CFB that it found no ethical impediment to allowing investment in Nestlé (BMS constitutes c2% of global sales), and an investment was subsequently made.
Since that time JACEI has been regularly briefed on the issue of BMS and ongoing engagement with Nestlé. JACEI was careful to advise that the CFB should not apply different standards to Nestlé than it would to other companies. The same principles therefore apply in the selection, retention or disposal of any investment with exposure to BMS products. The issue has regularly exercised the attention and concern of Conference and in 2015 a paper on Nestlé and BMS was debated and the existing position affirmed, but with a significant vote against.
Part of the due diligence framework CFB applies in reviewing BMS companies is the FTSE4Good BMS process, which it publicly supports. As part of the process to gain entry to the family of FTSE4Good indices, BMS manufacturers are required to undergo further performance hurdles, especially in ‘high-risk’ countries (defined as high child mortality or malnutrition and where applying the Code is viewed as potentially weak). Companies fulfilling the requirements for inclusion are then required to submit to external verification via country audits. The results of these audits are shared with the company and made public. An annual workshop brings the company together with investors and NGOs to discuss the results. CFB views this as adding considerable integrity and robustness to an area that continues to incite controversy and dissent.
Overall the CFB has articulated its approach and position on BMS manufacturers thus: