nestle social report
TRANSCRIPT
Learning, Practice, Results. In Good Company
Nestlé Shares Its Story of Creating Shared ValueOne in a series of case studies on social reporting
Institute for Responsible Investment
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Boston College Center for Corporate Citizenship
Social Reporting case studies
Project overviewThis case study is one of a series published in 2009 by the Boston College Center for Corporate Citizenship through its affiliate, the Institute for Responsible Investment, on the topic of social reporting. Companies participating in the project were Nestlé, Baxter International Inc., Gap Inc., Novo Nordisk, Seventh Generation, State Street, and Telefónica. These companies provided funding for the project as well as access to individuals involved in their reporting process. In the case studies, Center researchers explore how and why companies prepare social reports, where the challenges lie, how they are overcome and where the true value is in the report and reporting process for a group of leading companies.
By Belinda (Hoff ) Richards
and Seema Bharwani
Contents2 AboutNestlé
3 ChallengesNestléfacesinreporting
6 HistoryofsocialreportingatNestlé
10Decidingonthecontentofthereports
14Processforpreparingthereport
16Distributionofthereports
18Conclusion
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Over the past eight years social reporting at Nestlé
has evolved from issue specific reports responding
to current debate to a more holistic report that
attempts to “communicate about the interdependent
relationship of Nestlé with the people of the
countries where [it] operates.” This case study
describes why and how Nestlé has evolved its
reports, the challenges of communicating “shared
value creation” and how a commitment to greater
transparency is helping Nestlé to reinforce its
company values and create a “platform for dialogue”
with internal and external stakeholders.
Evolution of reporting at Nestlé
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About NestléNestléistheworld’slargestfoodandbeveragecompany.Salesofmorethanus$80billionandnetprofitofaboutus$8billionin2007makeNestlélargerthanitsnexttwocompetitors,KraftandUnilever,combined.Itsglobalworkforcecomprisesroughly275,000employeesandithasfactoriesoroperationsinalmosteverycountryintheworld.
Everydayabout2billionNestléproductsaresoldwith50percentof thoseproductsbearingtheNestlétrademark.Thecompanyisoperatedinarelativelydecentralizedmanner,accordingtogeographiczonesandmarkets.Nestléalsooperatessomeofitsbusiness,suchasNestléWaters,throughaseparatestructure.
ThisdecentralizedstructurereflectsthenatureofNestlé’svaluechain,whichinmostcasesinvolvesagriculturalsourcing,manufacturingandconsumptionoccurringinthesamecountryorregion.NestléuseskeydocumentssuchastheNestlécorporatebusinessprinciplestoconveyacommoncorporatecultureacrossitsdecentralizedstructureandstrivestoachieveconsistentqualitystandardsacrossitsoperations.Firstadoptedin1998,Nestlé’sbusinessprincipleshavesincebeenexpandedtoincorporatethefirstnineprinciplesoftheU.N.GlobalCompactin2002andagainin2004toincludefurtherbusinessprinciplesonconsumercommunicationsandcontributionsaswellasthe10thprincipleoftheUNGConanti-corruption.
Nestlé’sleadershippositionmeansthatitissubjecttothescrutinyofNGOs,consumersandemployeesaroundtheworld.AsInvestorRelationsVicePresidentRoddyChild-
Villiersexplained,thelinkbetweencorporatereputationandbrandposesrealbusinessriskforNestléifitisnotproperlymanaged.Basedonexternalcommentary,thekeyreputationalissuesNestlécurrentlyfacesincludelingeringcontroversysurroundingitsinfantformulaproducts(whichdatetothe1970s),NGOcampaignsaboutFairTradeandgeneticallymodifiedcrops,andcommunityconcernsaboutbottledwater.Despitethis,NestléisincreasinglygainingrecognitionforitspositivecontributioninrankingssuchasAccountAbility’sglobalrating,Innovest’srankingoftheworld’s100mostsustainablecompanies,andtheawardofaGoldStandardforitssectorinthe2007DowJonesSustainabilityIndex.
AccordingtoNestlé’sChairman,PeterBrabeck,corporatecitizenshipandsustainabilityare“ausefulsetofprinciplesandpractices”whichcancontributetothecompany’sgreatergoalofcreatingvalueforsocietyoverthelongterm.Unlikemanyofitspeers,foralongtime,Nestléchosenottopublishanannualreportoncorporatecitizenship.Instead,itreportedonsocialandenvironmentalinformationthroughannualmanagementreportsandissuespecificreports,publishedannuallyanddistributedtoshareholders.
Thisapproachallowedthecompanytoinformshareholdersandotherstakeholdersabouthowitwasapproachingparticularissuesandtocreateaplatformfordialoguearoundissueswithinthecompany’ssphereofinfluence.However,thisapproachalsolimitedNestlé’sabilitytodemonstratethewaythatitsbusiness“createssharedvalue”forsocietyandshareholdersmorebroadly.
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About this case studyTo prepare this report, Boston College Center researchers visited Nestlé’s corporate headquarters in Vevey, Switzerland, and interviewed the following people, each of whom is involved in preparing or using information on social and environmental performance:
José Lopez, executive vice president, Corporate OperationsJean-Marc Duvoisin, senior vice president, Human Resources Roddy Child-Villiers, vice president, Investor RelationsHans Joehr, assistant vice president, Corporate AgricultureHilary Parsons, manager, Public AffairsPascal Greverath, manager, Corporate Safety, Health and EnvironmentJohn Bee, communications manager, Public Affairs
Information in this case study was obtained during the interviews, and from Nestlé’s publicly available reports, which can be accessed at the company’s web site. Reports from Nestle’s subsidiary companies around the world were also provided during the interviews.
AsystemforsocialreportingcreatedbyMarkKramerandtheFSGSocialImpactAdvisorsisenablingNestléto:
• Strengthenthelinkbetweenstrategyandcorporatecitizenship;
• Demonstratethatexamplesofgoodpracticeareembeddedinthebusinessratherthanexcellent“oneoff”examples;
• Buildpartnershipstotacklesocietalissues;• Focusinternalresourcesoneffective
execution;and• Engagemoreeffectivelywithstakeholders.
Thesesteps,identifiedinFSG’sReport:“TheNestléConceptofCorporateResponsibilityasimplementedinLatinAmerica,”reflectthedevelopmentalframeworksetoutintheBostonCollegeCenter’s“StagesofCorporateCitizenship.”
ThiscasestudywaspreparedasNestlé’sapproachtosocialreportingevolvedfromissuespecificreportstoacomprehensivecorporatesocialresponsibilityreport,whichwaspublishedinMarch2008.IthighlightshowNestléhastransferredthelessonslearnedfromitsformerapproachtoreportingandhowithasdevelopedasystemforsocialreporting.AsNestleExecutiveVicePresidentforCorporateOperationsJosé Lopezstated:“ThereportishowNestléshowsitsfacetoallstakeholders,includingemployeesandtheoutsideworld.Ithastobelinkedwiththekeycorporateobjectivesandcorevaluesandprinciples.Thereportisthefaceofthecompany.”
Challenges Nestlé faces in reporting
Creating a platform for engagement and
dialogue with stakeholders
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ProtectingcorporatereputationisakeypriorityforNestlé,giventheexposureoftheNestlébrandonitsproducts.BuildingtrustintheNestlétrademarkgoesbeyondbuildingtrustinabrand.Italsorequiresbuildingtrustinthecompanybehindthebrand.FindingawaytoeffectivelycommunicatehowNestlé’sbusiness“createssharedvalue”iscriticalforthecompanytomaintaintheconfidenceofinternalaudiencessuchasmanagementandemployees,andexternalaudiences,includingsuppliers,customers,governments,localcommunitiesand,mostimportantly,consumers.Partofthischallengeinvolvesdevelopingamorerobustframeworkforstakeholderengagement.Nestléwasranked25thinthe2007AccountAbilityratingsandscoredimpressivelyrelativetoitspeersinallareasexceptforstakeholderengagement.AsBrabecknotedinaninterviewwithKramerin2005:
“Wemustlearntohandlegenuineconcernsinapositive,forward-lookingwaythatisconsistentwithourcorebusinessprinciples.WemustalsodoabetterjobofinformingpeopleaboutNestlésothatconsumersunderstandthewaythatsharedvaluecreationandcorporateresponsibilityareembeddedinourbrands.”
Nestléhasbeenprogressivelybuildingitsprocessesforstakeholderengagementaroundkeyissues,startingthroughthepreparationofitsissuespecificreports.ThisengagementhasallowedNestlétobetterunderstandthecontextoftheissuescoveredinthereportsfromawiderperspective.AsNestlémovestoitsnewapproachtoreporting,itistakingtheopportunitytostrengthenitsstakeholderengagementprocessandcreateamoresystematicapproachtoengagement.
IssuespecificreportshavehelpedNestlécreatewhatPublicAffairsCommunicationsManagerJohnBeedescribedasa“platformfordialogue,”providingopportunitiestoparticipateindebatesratherthanbeingthetopicofdebate.ExtendingthescopeofitsreportswillallowNestlétowidentherangeofissuesitcanengage.TheobjectiveofgreatertransparencyistohelpNestlébeapartnerinsolutionsandhelpshifttheemphasistowardtherolebusinesscanplayinaddressingissuessuchasthewatercrisis,sustainabledevelopmentandglobalpoverty.Thisinturnwillrespondtothegrowingdemandthatconsumersmusttrustnotjustabrand,butalsothecompanybehindabrand.
ChallengesremaininidentifyingthemosteffectivewaytopresentinformationaboutCreatingSharedValueandtocreatefeedbackloopsamongawidergroupofstakeholderswhichensureNestlécanleveragethereportingprocesstoidentifyfutureissuesandreinforcecurrentstrategywithexternalsupport.
Communicating Creating Shared ValueThescaleofitsactivitiesandthefamiliarityofitsbrandaffordNestléthecapacitytoachievelarge-scaleimpactthroughitsactionsupanddownthevaluechain.DuringinterviewstheNestléexecutivesrepeatedlystressedthatthecompany’sfundamentalcorporatebusinessprincipleis:“investmentsmustbegoodforthecompanyandgoodforthecountrieswhereNestléoperates.”However,whileNestléhaslongadvocatedthisbroaderviewoftheroleofbusinessandtheconceptofcorporatecitizenship,itisonlyjuststartingtoidentifyeffectivewaystodemonstratewhatthismeansinpractice.TheLatinAmericaReportpublishedin2006markedafirststep
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towardprovidingmetricsandexamplestosupportthisposition.
IntheLatinAmericaReport,Kramer’steamatFSGrecommendedthattostrengthenthelinkbetweenstrategyandcorporatecitizenship,Nestléshouldadoptamoreholisticsetofindicatorstodemonstratehowitcreatessharedvalue,andbemoreexplicitaboutdesiredsocialimpacts.AsNestlémovestothebiennialpublicationofaCreating
SharedValueReport,identifyingindicatorsthatdemonstratethisconceptposesthefollowingchallenges:
• Ensuring thattheselectedindicatorsdriveperformanceinareasthatmattergiventhenatureofNestlé’svaluechainanditsbusiness;
• Findingwaystoquantifythe“indirect”impactsNestlecanmakethroughitsbusiness,wherethoseimpactsarenotonlyrelatedtoitsmanufacturingprocessesandproducts,butalsotointeractionswithsuppliersandconsumerhabits.
Using the report to drive performance but
not prioritiesWhileNestléacknowledgesinitsrecentreportthat“externalreportingofinitiativesandkeyperformanceindicatorscanhelpdriveimprovedperformanceinternally,”executivesexpressedconcernsduringinterviewsthatthegoalofreportingshouldnotbeallowedtodisplaceNestlé’sfocusonlong-termvaluecreation.NestléistakingstepstoparticipateininitiativessuchastheGlobalReportingInitiativeSectorSupplementforthefoodprocessingsector,amovewhichwillallowittocontributetothedevelopmentofmoreappropriateindicatorsforthesector.ThiswillpermitNestlétofocusbothitsreportingandmanagementonissuesrelatedtoitsindustryandtofacilitatecreationofbenchmarksamongitspeercompanies.
ReportingoncommonindicatorswillnotonlyhelpexternalaudiencesbetterassesswhereNestléstandsrelativetoitspeers,itwillalsoprovideincentivestosupportNestlé’scultureofcontinuousimprovement.
Creating Shared Value –
Nestlé milk districtsThrough Creating Shared Value, Nestlé links its operations to long-term value both for its business and for society as a whole, and defines its success in terms of internal financial returns and external social and economic results.
www.nestle.com/SharedValueCSR/Overview.com
An example of what Creating Shared Value means is Nestlé’s milk districts. By building “milk districts” in rural areas of developing countries, Nestlé helps foster local economic development in a manner that is sustainable for farmers and for the business. Nestlé is able to access reliable sources of milk that meet its quality standards, while farmers receive the technical assistance to improve their milk quality and farm economies, as well as gaining a reliable customer.
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History of social reporting at NestléAscanbeseenfromthefollowingtimeline,socialreportinghasbeendrivenbyanumberofobjectivesatNestlé,bothinternalandexternal.Someofthoseidentifiedininterviewswere:
• Informingshareholdersofpoliciesandprioritiesrelatedtoenvironmentalandsocialissuesasadoptedbytheboardandseniormanagement;
• Beingpartofcurrentdebatearoundsocialandenvironmentalissuesthataffectthecompany’sbusiness;
• UpholdingcommitmentstoinitiativessuchastheUnitedNationsGlobalCompactbyprovidingreportsonprogress;
• Takingopportunitiestodemonstrateleadershiponissuesofimportancetothecompanyandseniormanagementsuchassustainabledevelopment,waterandthemeaningofcorporatesocialresponsibility.
Nestlé’s Annual Report to ShareholdersCorporateSafety,HealthandEnvironmentManagerPascalGreverathexplainedthatsocialreportingbeganatNestlein1990whentheannualmanagementreportnotedtheappointmentofasupervisorofenvironmentalmattersforthecompany.AccordingtoGreverath,thisinformationwasprovidedtoshareholdersbecausedescribingthestepsthecompanywastakingtoaddressenvironmentalriskwasdeemedmaterialbyNestlé’sboardandseniormanagement.Consistentwiththis,Nestléhascontinuedtoreporttoshareholdersonhowitismanagingenvironmentalrisksincludinginformationondevelopmentofanenvironmentalpolicy,adoptionoftheNestléEnvironmentalManagementSystem(NEMS)andperformanceagainstinternalindicators.
Overtime,theinformationintheannualreporthasgrownfromenvironmentalprogress,todiscussionofsustainabledevelopmentin2003toabroaderconceptof“corporateresponsibility”in2004.Nestlé’srecognitionoftheimportanceofnonfinancialissuesisalsoreflectedintheevolutionofthecompany’scorporatebusinessprinciples,whichwerefirstadoptedin1998,shortlyafterBrabecktookoverasNestlé’sCEO.AsHumanResourcesSeniorVicePresidentJeanMarcDuvoisinrecalled,ratherthanbeingasignofanewculture,theprinciplesputNestlé’slong-standingcultureintowriting,somethingthatwasimportantasthegroup’soperationsgrewglobally.Theprincipleswereexpandedin2001and2004toreflectNestlé’scommitmenttotheUnitedNations’GlobalCompact.UpholdingitscommitmenttoreportonprogressaspartoftheU.N.GlobalCompactwasnotedasoneofthedriversforstartingtoreportexternally.
InformingshareholdersabouthowNestléisachievingitsbusinessgoalscontinuestobeareasonforreporting.RoddyChild-VilliersnotedthatinvestorrelationsincludeslidesoncreatingsharedvalueinallkeyfinancialpresentationsbecauseitisacentralpartofhowNestlérunsitsbusiness.However,theresponsefromshareholdersismixed.WhileNestlé’sretailshareholderbaseisconcernedthatNestléupholditsstatusasaSwissicon,itisnotyetclearthatNestlé’sbroaderinstitutionalshareholderbaseconsidersnonfinancialmatterswhenevaluatingthecompany.Despitethisattitude,investorrelationsrecognizesitsroleineducatingshareholdersaboutwhythesoundmanagementofenvironmentalandsocialissuesaddsvaluetothecompany,
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andcontinuestobringinformationaboutthistoNestléshareholders.AsChild-Villiersdescribedit:“ReportingatNestleisnotareactivepieceofcommunication.Itdoesnotrespondtoinvestorconcerns,butinsteaditisusedtomakestrongstatementsaboutwhatisimportanttothebusiness,whatinvestorsoughttocareabout.”
Nestlé’s issue specific reportsInadditiontoreportingonitsprogressintheAnnualManagementReport,since2000Nestléhaspublishedaseriesofreportsaimedatengagingwithabroadergroupofstakeholders.Thetopicscoveredare:
• 2001–EnvironmentalManagementReport
• 2002–NestléSustainabilityReview• 2003–NestléPeopleDevelopmentReview• 2003–NestléandWater–Sustainability,
Protection,Stewardship• 2004–FacesofCoffeeReport• 2005–NestlécommitmenttoAfrica• 2006–TheNestléconceptofCSRas
implementedinLatinAmerica• 2007–NestléWaterManagementReport• 2008–NestléSharedValueCreation
Report
Thefirsttwoofthesereportswerepublishedwhenthesocialreportingwasstillanascentfield.Nestlé’s2001EnvironmentalManagementReportdocumentedthe“continuousimprovement”NestléhadmadeinapplyingtheNEMSinmoredetailthanhadpreviouslybeenprovidedintheannualreport.Inthissense,thepublishingoftheEnvironmentProgressReportwasnotanobjectiveinitselfforNestlé,butratherameansofcommunicatingprogressto
shareholdersandservingasaleadershipexampletootherstakeholders.Similarly,the2002SustainabilityReview,whichwasNestlé’sfirstattempttoproduceamorecomprehensivesocialreport,wastimedtocoincidewiththeUnitedNationsEnvironmentProgramme’s2002WorldSummitonSustainableDevelopment.The
purposeofthereportwastoallowNestlétocommunicatethewaybusinesscouldcontributetosustainabledevelopment.
Nestléthenfocusedonproducingissuespecificreports,whichprovidedtheflexibilitytodeeplyconsiderissuesfacingitsbusinessorsociety,withoutthespaceconstraintsoftheAnnualReport.AccordingtoBee,issuesaddressedinthereportshavebeeninareaswhereNestléfeelstheperceptionofits
“Reporting at Nestle is
not a reactive piece of
communication. The report
is used to make strong
statements about what is
important to the business,
what investors ought to care
about.”
– Roddy Child-Villiers, Vice
President Investor Relations
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activitiesdoesnotmatchthereality.
Beedescribedthesereportsasa”platformfordialogue,”providingameansofpubliclyaddressingissuesthatbothaffectNestlé’sbusinessandarewithinitssphereofinfluence.ThisreflectedaninternalshifttowardincreasedtransparencyaboutNestlé’sbusinessandagreaterwillingnesstoparticipateindialogues.Thesubjectsof
thereportswereselectedtoaddressissueswhereNestléfelttherewasanimbalanceinwhatwasbeingsaidaboutitsactivitiesandwhatitsawwashappeningontheground.Forexample,BeenotedthattheCoffeeReportrespondedtoconcernsraisedduringtheinternationalcoffeecrisis,causedbytheglobalslumpincoffeeprices.Similarly,theAfricaReportwaspublishedin2005,ayearwhentheinternationalcommunity,ledbytheGroupof8,wasfocusedonthecontinent.AtforumsincludingtheBBC’sAfrica2015conference,thereportgaveNestléavoiceinthedialogueontheissueofdevelopmentinthatcontinent.ThereportwasthefoundationusedbyNestlétocommunicatethepositiveroletheprivatesectorcanplayinAfrica.
Overtime,thepurposeofthesereportshasexpanded.Ratherthanbeingseen
primarilyasameansofcommunicatingNestlé’sperspectiveoncurrenttopics,thereportsarenowalsoameansforNestlétobetterunderstandissuesfromdifferentperspectives.Assetoutinthe2007WaterManagementReport,thepurposeofthereportwas:
• TounderstandhowsocialandenvironmentalissueswillaffectNestlé’s
abilitytoconductitsoperationsandproducequalityproductsforconsumers;
• TodocumenttheactionsNestléhastakentocontributetosolutionsbothdirectlythroughitsoperationsandindirectlythroughcommunitysupport;
• ToobtainstakeholderinputandexplorefuturedirectionsthatNestlécantaketocontributetoimprovements.
Internally,theissuespecificreportshelpNestlétocommunicatethecompany’spositiononvariousissuesacrossthemanycountrieswhereNestléoperates.Thishelpstoensureconsistentpracticesandvaluesthroughoutthegroup.Forexample,JoséLopeznotedthereports“bringNestlé’scorporatebusinessprinciplestolife”foremployeesbygivingexamplesofthe
“Nestlé intends to publish a comprehensive report on
Creating Shared Value on a biennial basis, complemented by
the continued publication of issue specific reports and up-
to-date information on the company’s web site.”
– Peter Brabeck, Chairman
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principlesinaction.Thisinturnhelpstoreinforceacommoncorporateculturewithinthecompany.
AnexampleofthiswasthepublicationofreportsrelatedtosustainabledevelopmentbyNestléColombiaand“sharedvaluecreation”byNestléMexico.JeanMarcDuvoisin,thengrouphead,NestléMexico,recalledthatpublicationofthegrouplevelLatinAmericaReportemphasizing“creatingsharedvalue”asNestlé’sdefinitionofcorporatecitizenshipledhimtorevisetheMexicoreport.Ratherthanusingthelanguageofcorporatecitizenship,whichhadbeenintheinitialdrafts,hewasabletoalignthereportwiththelanguageusedintheLatinAmericaReport.AstheNestléMexicoreportwasmoredirectedtothelocalaudienceofemployeesandthecommunity,thisextendedthereachandstrengthenedthemessagefromcorporateheadquarters.BytranslatingtheconcepttotheMexicancontext,therewasanopportunityforheadquarterstounderstandtheaffectsofitspolicyindifferentlocales.Thisexamplehighlightsthevaluablerolereportscanplayincreatinginternalfeedbackloopstoreinforcecorporateculture.
Outsidethecompany,thereportshaveallowedNestlétotakealeadershippositionontheissuesdealtwithinthereportbycreatinga“platformfordialogue.”Thesedialoguesincludethoseconductedataninternationalorgovernmentlevel.BeereferredtoNestlé’sparticipationintheEuropeanCommission’sinquiryintoresponsiblecompetitiveness,whileDuvoisinnotedthatpublishingtheNestléMexicoReportallowedNestléMexicotohelpshapediscussionaroundcorporatecitizenshipinMexicofromphilanthropyto
abroaderconceptmorealignedwithsharedvaluecreation.
ThereportshavealsoallowedNestlétoreinforceitsongoingdialoguewithsuppliersaroundsustainableagriculturalpractices.Nestlégetsapproximately35percentofthecommoditiesitusesinproductiondirectlyfromfarmers.HansJoehr,whoisresponsibleformanagingNestlé’sdirectagriculturalsourcing,describedusingtheWaterManagementReportonavisittoChinatostresstheimportanceofsustainablewateruse.WhendealingwithfarmersandotherstakeholdersinChina,JoehrfoundthereportreinforcedhismessagebyprovidinggreatercontexttotheissueathanddemonstratingNestlé’stoplevelcommitmenttowaterasseenthroughtheCEO’smessage.
WhileissuespecificreportshaveprovidedusefultoolsforcommunicatingNestlé’spositionandapproach,theirabilitytodemonstrateprogressondealingwithissuesislimitedbythefactdifferentissuesareconsideredeachyear.Thisalsomeanscertainissuesmaynotbetrackedasrigorouslyatacountrylevel,asthereisnoannualprocessordeadlineforcollectinginformation
InMarch2008,NestlépublishedacomprehensivereportonCreatingSharedValue.ThisreportisafirstattempttocreateaseriesofkeyperformanceindicatorsagainstwhichNestléwillreportbienniallywiththedualgoalofmeasuringcontinuousimprovementinternallyandcreatinggreateraccountabilityforperformancethroughexternalpublicationofresults.TodeveloptheseKPIs,Nestléhasdrawnonitsinternalpolicies,referencedexternalstandardssuch
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astheGlobalReportingInitiativeGuidelines,andconvenedexternalstakeholderstoidentifytheissuesviewedasimportantforthecompany.InternalconsultationhasalsooccurredwithrepresentativesfromacrossNestlé’sbusiness,includingmanyofthepeopleinterviewedforthiscasestudy.
AtthelaunchofNestlé’s2007report,PeterBrabecknotedNestléreceivedalukewarmresponsetothe2002SustainabilityReview.Inparticular,thereportwascriticizedforthelackofdetailedglobalinformationitcontained:aproblemcreatedbothbyNestlé’sdecentralizedstructureandtheabsence,atthattime,ofacommoninformationmanagementtool.Today,Nestlécandrawonitsnewinformationmanagementsystem“GLOBE,”whichwill,accordingtoBrabeck:“Allowustoprogressivelyprovidemoreinformationforbettermanagementandexternalreporting. NestléintendstopublishacomprehensivereportonCreatingSharedValueonabiennialbasis,complementedbythecontinuedpublicationofissuespecificreportsanduptodateinformationonthecompany’swebsite.”
Deciding on the content of the reportsAkeyprioritywhichemergedarounddiscussionsaboutthecontentoftheissuespecificreportsandtheselectionofperformanceindicatorsisNestlé’sdesiretofocusonissuesthatmattertoitsbusinessandonwhichitcanhaveaninfluence.Inthepast,Nestléhaschosenthetopicsofitsissuespecificreportstocoincidewithglobaldebateandinterest.However,nowthatNestléintendstopublishamorecomprehensivesocialreportonabiennialbasis,itmustconsiderthescopeoftheindicatorsagainst
The Nestlé water management reportThe Water Report, published in 2007, has allowed Nestlé to take a leadership position on an issue which affects both its business and society: and one which is becoming increasingly controversial in many countries. It has proved to be an effective platform from which to enter debates surrounding this issue and was also a valuable process for identifying the gravity of the issue for Nestlé. For this report, Nestlé engaged with a range of stakeholders including academics, NGOs and others so that it could better understand the problem and the expectations of Nestlé’s role. The involvement of stakeholders helped to evolve Nestlé’s thinking about the issue.
Market and country level managers have adapted the Water Report for use in publications directed to their local stakeholders. For example, Nestlé Nigeria included an extract of the Nestlé Water Report, supplemented with local examples, in its staff magazine “Nestlé News”.
Peter Brabeck recently referred to the Water Report in a panel at the World Economic Forum, during which he and fellow panelists, including Ban Ki Moon, the current U.N .Secretary General, discussed the importance of addressing the growing global water crisis.
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whichtoreport.InterviewsmadeitclearthatindicatorsandpoliciesareadoptedbyNestléwheretheyhelpthecompanymanageitsperformance,notjusttoprepareareport.AsLopezcautioned,“reportsarenotaninputtotheprocessofcontinuousimprovement.Rather,theprocessofcontinuousimprovementisaninputintothereport.Thereportissimplyaphotograph,asnapshotintime,toshowwhatisbeingachieved.”
GreverathexplainedthatforNestlé’ssafety,healthandenvironmentteam(SH&E),theannualpublicationofenvironmentalindicatorsacrossthegrouphelpedcreategreaterdisciplineintheaccuracyandtimelinessofresults.ItalsoallowedNestlétofindoutmoreaboutlocalinitiativesbeing
takenacrossthegroup,creatingaprocessforfeedbackloops.Althoughthereasonforcollectingtheindicatorswastomanageenvironmentalmatters,reportinghelpedsupportrequestsfordataonperformanceandreinforcedtheimportanceofprovidingaccurateinformation.GreverathnotedNestlé’sinternalauditteam,whichalsomonitorsfinancialresults,alreadyauditsenvironmentalresults.AsNestléstartstoreportonabroadersetofindicatorsonanannualbasis,ithastheopportunitytofurtherstrengthenthecommitmenttocontinuousimprovementacrossthegrouponawiderrangeofissuesasithasdonewithSH&E.
ThediagramaboverepresentshowNestlé’senvironmentalperformanceindicatorswere
Issue IdentifiedBoard creates position of
manager of environment in 1991, building on prior recognition of
the importance of environmental issues
• Principles on the environment published in 1992 • Principles revised as appropriate
• Environmental performance indicators linked to NEMS
priorities measured across group
• Report on progress against environmental goals (1995)
• Environmental performance indicators published in annual
report to share holders from 2002-present
• Nestlé Sustainability Review (2002)
Develop and Refine Principles Develop and Refine Strategy Measure Progress
Com
mun
icat
e Pe
rfor
man
ce
R
evise
Ta
rgets
and Improve
• NEMS adopted in 1993 to implement the principles across the group• Strategy expanded as needed
Cycle for developing environmental policy and managing performance
• Internal targets and performance reviewed in an ongoing cycle
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developed.Seenhere,reportingispartoftheprocessofperformancemanagementandcontinuousimprovement,butnotthedriverformanagingenvironmentalissues.ThedriveristherecognitionoftheissueasmaterialtoNestlé’sbusinessandsomethingthecompanyshouldcommunicateabout.ThisreflectsNestlé’sconcernthatthereportisaboutcommunicatingtheconclusionsthecompanyhasmadethroughitsactions,notactinginordertobeabletoreport.“Globalenvironmentalperformanceindicatorsarefirstandforemostinternalmanagementtools,”Greverathremarked.“Reportingthemexternallyisanadd-ontoinforminterestedpartiesonprogressachieved.”
ThisprocesshasallowedNestlétodevelopandrefineitsenvironmentalindicatorsbasedontheNEMSandenvironmentalpolicy.AsNestlébroadensthefocusofitsreportstotheconceptofsharedvaluecreation,however,itmustalsodevelopamoreholisticsetofindicatorstodemonstratehowthisappliestoitsbusiness.OneoftherecommendationsmadebyBureauVeritas,auditorofNestlé’s2008report,wasthatNestlé“considerhowtofurtherdevelopmeaningfulindicatorsthatwilldemonstrateimplementationofitslong-termCSVstrategy.”
Nestlé’sissuespecificreportswillprovideasolidstartingpointforidentifyingthematerialquestionsacrossitsbusiness.TheLatinAmericaReportinparticularexaminedtherelationshipbetweenNestlé’sbusinessandsocietyacrossitsvaluechainfromsourcing,tomanufacturingandthensales/distribution.TheGlobalReportingInitiativeGuidelines,astheonlyexistingsocialreportingstandard,haveprovedto
beoflimitedusetoNestléasitdevelopsindicatorstodemonstrate“sharedvaluecreation.”Beeputsthisdowntotwofactors:first,theGRIindicatorswerenotdevelopedwiththeoperationsofafoodcompanyinmindandarebettersuitedforcompaniesinotherindustries,suchastheminingandextractivessectors;andsecond,theGRIfocusesondemonstratinghowcompanies“donoharm”ratherthanprovidingatoolfordemonstratinghowcompaniescancreatepositiveimpact.Nestléhasrecentlybecomeoneofthefirstcompaniestojoinaworkinggrouptoproducea“sectorsupplement”totheGRIforthefoodsector.ForNestléthisrepresentsanopportunitytosharelessonslearnedandcreateconsensusonthekeyimpacts–positiveandnegative–forthefoodsectorthroughamulti-stakeholderprocess.
AsNestléisabletoexploreabroadersetofnon-financialissuesinmoredetailthroughitsCreatingSharedValueReports,itwillbeinterestingtoseehowthecompanyevolvesitsindicators.Already,throughtheprocessofpreparingitsissuespecificreports,Nestléhasbeenabletobetterunderstandthewaythatdifferentissuesareaffectedbyandaffectitsbusiness.AsHilaryParsonsnoted,“throughreporting,Nestledoesabitofbothcapturingwhatitalreadyknowsandalsoabitofexploringoftheissues.”TheissueidentificationprocessfacilitatedbythereportingprocessprovidesNestléwiththeopportunitytoidentifyfutureissuesthatmaywarrantconsiderationinternallytodeterminewhetheradditionalactionmustbetakentoensure,whentheissuearises,itisdealtwithinamannerconsistentwiththecompany’scorporatebusinessprinciples.
AdrawbacktoNestlé’spriorapproachto
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reportingwasthattheissuespecificreportsprovidedonlyasnapshotoftheissueathand.AsFSGobservedintheLatinAmericareport,thismeantitwasdifficultforexternalaudiencestoknowwhethertheexamplesusedintheissuespecificreportswere“trulyrepresentativeofbusinesscultureatNestlé,ormerelyexcellentone-offexamples.”Byreportingonperformanceagainstabroadersetofindicatorsonamoreregularbasis,Nestléwillbeabletocreategreaterconfidencethatitismanagingarangeofissuescontinuously,notjustwhenforcedthroughexternalpressureorcircumstances.
AnothertensionNestléwillfaceasitrefinesitsapproachtoreportingisthequestionofreportingoninternalgoalsandtargets.Externally,thisisincreasinglyseenasanbestpracticeinCSRReportingasanindicationcompaniesaremanagingsocialandenvironmentalissuesstrategically.However,publishinggoalsandtargetspresentsaconflictwithNestlé’sinternalpolicies.Thisconflictisnotduetoanabsenceofinternalgoals.Rather,asChild-Villiersexplained,Nestlédoesnotpublishfinancialtargets–eventhoughthereisastrongdemandforthisinformationfromanalysts–becausedoingsomayshiftthefocusofmanagementtoshorttermperformanceratherthancreationoflongtermvalueforthebusiness.Brabeckreiteratedthispolicyatthelaunchofthe2008reportstressingthattheimportanceofalongtermviewappliestofinancialandnon-financialaspectsofNestlé’sbusiness.
Goingforward,Nestléisadoptingasetofmoreholisticindicatorsacrossitsbusinesstoidentifywhetheritismovingtowarditsgoalofsharedvaluecreation.Todothis,NestléworkedwithbothSustainAbilityand
AccountAbility.SustainAbilityassistedNestléinconductingamaterialityassessmenttoidentifyrelevantissuesfrompublicdebateandcommentary.NestléthenworkedwithAccountAbilitytoexploretheseissuesinmoredetailataseriesofstakeholderforums.WhileNestléremainscommittedtoensuringthattheindicatorsagainstwhichitreportsare
2008: The Nestlé Creating
Shared Value ReportThis report is Nestlé’s first attempt to provide details of how it creates value for both its shareholders and for society across its value chain. The report is divided into the following sections based on Nestlé’s value chain:
• Manufacturing and our environmental footprint;
• Our people;• Agriculture and rural development; • Products and consumers
The report also provides information about business principles and strategy, support of the UN GC and Millennium Development Goals, stakeholder engagement and independent assurance.
At the beginning of the report, a performance summary is provided, which references the GRI where used. Nestlé uses a combination of GRI indicators and its own metrics to assess performance.
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meaningfulforthepurposeofperformancemanagement,thisincreasedengagementreflectsthenatureofwhatNestléistryingtomeasure,namely“creatingsharedvalue.”Inordertoproperlymeasurewhetheritisachievingthisobjective,Nestlémustconsidertheimpactofitsactivitiesfromdifferentperspectives.
thetoolspublicaffairsusestocommunicateonsocialandenvironmentalissues.
Nestlébeginspreparationofthereportapproximatelyayearpriortopublication.Todate,theissuespecificreportshavebeenpublishedanddistributedwiththeAnnualManagementReportforshareholders.Insomeyearsthishasbeenmorecoincidental
“Switzerland is the world’s oldest democracy and decisions
about the report reflect this. We have a collaborative process
to discuss the content of the report at a series of meetings
where we ask questions: What information can Nestlé
feasibly provide? Does it make sense to do so? Where can
Nestlé make an impact?”
– Hans Joehr, assistant VP, Corporate Agriculture.
thandeliberatebutgoingforward,Beenoted,Nestléaimstopublishitssustainabilityreportwiththemanagementreport.Whetherornottheissuespecificreportsarepublishedpriortothemanagementreport,theydoinformthediscussionofcorporatecitizenship/sustainabledevelopmentintheAnnualManagementReport,sotheyneedtobeconceptualizedandapprovedforinclusioninthereportonthesametimeline.
IssuesandinitialthinkingaboutthecontentofthereportcommencesinMay.InOctober,publicaffairsmakesitsinitialconceptualpresentationtothekeyissueownersacross
Process for preparing the reportNestlédoesnothaveadedicatedcorporatecitizenshipdepartment,asitviewscorporatecitizenship(orCSV)assomethingthatcutsacrossallareasofitsbusiness.Similarly,itdoesnothaveaspecificsocialreportingdepartment,sothereportingprocessisledbyPublicAffairs.Allinall,productionanddisseminationofthereporttakesupabout70percentofthetimeofBee,Nestlé’spublicaffairscommunicationsmanager.Inaddition,thereisalargeteamofspecialistcontributorstothereportacrossthecompanyandregularinputfromothermembersofthepublicaffairsteam.Thereportisseenasjustoneof
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thecompanyincludinginvestorrelations,operations,corporatehealthsafetyandenvironment,andhumanresources.IssuesarethenrefinedthroughwhatHansJoehr,assistantvicepresidentCorporateAgriculture,describedasademocraticprocess–inkeepingwithNestlé’sSwissroots.InvolvingmanagersfromacrossthecompanyinthisprocessalsobringstobeartheirdifferentperspectiveonthemosteffectivewaytocommunicateelementsofNestlé’sperformance.
Fortheissuespecificreports,Nestléengageswithexternalstakeholderstobetterunderstandtheissues.Inparticular,fortheLatinAmericaReportandtheWaterReport,Nestléhasbegunreachingouttogroupstogetabetterunderstandingofthecontextinwhichanissueisbeingexamined.AsPublicAffairsManagerHilaryParsons
noted,Nestlé’sstakeholderengagementprocessbecamemore“systematic”duringthepreparationofthe2007CreatingSharedValueReport.ThisprocesswasfacilitatedbyAccountAbility,withthreeconveningstakingplaceinNorthAmerica,AsiaandEurope.Thereweretwostepsinpreparingfortheconvenings.Thefirststepidentifiedkeyissuesfromthecompany’sperspectivethroughdeskresearchandinternalcomments.Next,issueexpertsineachofthelocaleswerebroughttogethersoNestlécouldbenefitfromtheirperspectiveofwhatthekeyissueswereinthedifferentregions.InParsons’words,“Nestle’srolewastojustlistentowhatstakeholdersthinkareissuesforNestleandhowNestleshouldbeinvolvedintheseissues.”
AmorecompletedraftofthereportispresentedinDecember,withthefinal
Experts consulted during the preparation of the Latin America ReportTo properly understand how the concept of shared value creation operated in Nestlé’s Latin American operations, the company consulted with the following experts:
• Mark Kramer, senior fellow at Harvard’s Kennedy School of Government and Foundation Strategy Group.
• Felipe Larraín, Pontificia Universidad Católica de Chile – economic growth and development in Latin America.
• Alfredo Zamarripa, INIFAP Institute, Chiapas, Mexico.• Ignacio Loyola Vera, federal attorney general of environmental protection, Mexico• Hugo Lavados, ProChile director• Didier Lebret, former sustainable agriculture initiative platform manager.• José Luis Calderón, environment educator, State of Aguascalientes.
2FSG. 2005. The Nestlé concept of corporate social responsibility as implemented in Latin America. p. 44
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documentreceivingsign-offinJanuary.Thisallowspublicaffairstodealwiththepracticalelementsofpublishingthereportincludingphotography,filmcrews,producinginformationaboutthereportinalternativemediasuchasCDs,DVDsandslideshows,acorrespondingWebsiteandtalkingpointsforseniormanagers.ThereportthengoestoBrabeckforfinalcommentandsign-off.
Dataonenvironmentalperformanceiscollectedusinganonlinemanagementsystem.Thesystemrequiresmanagersatamarketleveltoinputthedataonperformanceoftheirfacility.Toensurethisinformationisaccurate,trainingisconductedonthemeaningofdifferentindicatorsandinternalauditsaredonetoensureconsistency.Nestléusesthesameinternalauditteamtoverifyitsfinancialandenvironmentalperformancefigures.Nestléalsoconductsexternalauditsparticularoffacilitiesorprogramswherethereislocalconcernaboutaproject.Forexample,BureauVeritasauditedNestlé’sSãoLourençospringinBrazilinresponsetolocalconcernsaboutthepotentiallynegativeimpactofNestléWaters’operations.2Similarly,Nestléhasalong-standingprocessinplacetoaudititscompliancewiththeWorldHealthOrganizationCodeofMarketingBreastmilkSubstitutes,whichincludesinternalandexternalverification.AsNestlémovestoitsmoreholisticapproachtoreporting,itisalsoexpandingtheextentofexternalassuranceoftheinformationincludedinitsreport.
In2008,BureauVeritasprovidedanassurancestatementfortheCreatingSharedValueReport,whichincludedrecommendationsonhowNestlécan
improveitsreportincomingyears.Therecommendationsmadeincluded:
• DevelopingmeaningfulindicatorstodemonstratetheimplementationofNestlé’ssharedvaluecreationstrategy;
• PresentingNestlé’spositionandperformanceinthemostbalancedmanner;
• IncludingmoreinformationonNestlé’sinternalsystemsaroundgovernance,accountabilityandmanagementstructures,andhowtheserelatetomanagementofkeycorporatecitizenshipissues.
Distribution of the reportsNestlédoesaprintrunof60,000foritsissuespecificreports,andpublishesthereportonlineasaPDF.Thereportistranslatedintofourlanguages:English,French,GermanandSpanish.CopiesofthereportsareincludedintheannualmanagementpackforshareholdersanddistributedtothoseinNestlé’s14,000strongdatabasewhohaveindicatedaninterestinthecompany’ssocialandenvironmentalperformance.Asidefromthisinitialdistribution,Nestléhasotherchannelsthatareusedtodistributethereportduringtheyear,suchasconveningsaroundthespecificissuescoveredinthereportsandpresentationsmadetoshareholders.Nestlealsoreliesoncountryandmarketlevelmanagerstodistributethereportsandtheinformationtheycontainasappropriatefortheirlocalaudiences.
Forexample,in2007Nestléconvenedmorethan30eventsaroundtheissueofwater.Theseconveningsinvolved
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presentationsfromseniormanagement,includingthechairman,theCEOandchieffinancialofficer,toaudiencesthatincludedinvestors,academics,localgovernmentofficials,representativesfrominternationalinstitutionssuchasU.N.agenciesandthemedia.ThepurposeoftheseforumswastoraiseawarenessoftheimportanceoftheissueforNestlé’sbusinessandforsocietyasawhole.Particularlyinthefinancialsphere,Child-Villiersnoted,Nestléusesthereportsasaproactivewaytodemonstratewhyissuesareimportantforthebusinessandwhyshareholdersinthecompanyoughttocareaboutthem.
Thereportisnottheonlytoolpublicaffairsusestorespondtoconcernsraisedbystakeholders,andindeed,asParsonsacknowledged,areportisnotalwaysthemostappropriatetoolforrespondingtourgentandspecificconcerns.Nestlérecognizesthatforsomestakeholders,thereportswillnotcontainenoughin-depthinformation,whileforotherstheywillcovertoobroadarangeoftopics.Further,thetimeittakestopreparethereportsmeanstheyarenotalwaysameanstorespondtoanimmediateconcernraisedbystakeholders.However,thereportsdoallowNestlétobemoreproactiveaboutcommunicatingonissuesandcreatestartingpointsfordiscussingissuesanddemonstratingNestlémanagementhasrecognizedtheimportanceoftheissuescoveredinthereports.
Thereportisalsoincludedinthecommunicationstoolkitforpublicaffairsandcommunicationsmanagersaroundtheworldandcanbeorderedinternally.OvertimeNestléhasfoundmarketsadaptthe
contentofthereportintoaformatthatismostrelevantfortheirlocalstakeholders,usingstaffmagazines,publishingcountryspecificreportsandincludingsummariesinlocallanguagetohighlightkeyissuesforthecountry.ThisalsohelpsNestléidentifytheissuesthatareimportantfordifferentlocales,byobservinghowtheinformationisadaptedtolocalaudiences.Insomecases,Nestléhasbeensurprisedbytheinterestindifferentissuesaroundtheworld.Forexample,BeerecalledtherewasanunexpectedlystronginterestintheAfricaReportinJapan.ThisfurtherhighlightstherolereportscanplayincreatingfeedbackloopsforNestlé.
TheinterviewsrevealedthateventhoughNestléuseswidechannelstodistributethereport,thecompanyhasfounditdifficulttoobtaininformationaboutwhoreadsthereportandwhy.Nestléincludesacardthatallowsreaderstosendfeedbacktothecompanyaboutthereports,butitreceivesveryfewcomments.Inrespecttoitsinternalaudiences,Nestléhassomeindicationsofwhichregionsmostactivelyusethereports,suchastheuseofextractsinlocalpublications.Butthereispotentialforgeneratinggreaterbenefitfromthereportsinternallybygettingmoredetailaboutwhichgroupsofemployeesrefertothereportandwhattheytakeawayfromit.Bydoingthis,Nestlécanfurtherleveragethepotentialforthereportstoprovideinsightsintothe“next”issuefacingthecompanyandprovideopportunitiesforcloserengagementorpartnershipswithdifferentaudiences.
Identifyingthemosteffectiveformatfordistributingtheissuespecificreportsisanotherconcern.Althoughprintedreports
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haveprovedusefultoanextent,Nestléhasreceivedlittlefeedbackonthepreferredformatofpublicationandisconcernedprintmaynotbethemosteffective.OneoptionBeesaidNestléisconsideringistohousethegranulardetailaboutthecompany’sperformanceonlineandlimitingtheprintedreporttoanoverviewofNestlé’sactivitiesandimpact.Thiswouldallowthosestakeholderswhoareinterestedinmorespecificinformationtoaccessit,whileatthesametimeallowingNestlétoreachouttoabroaderaudience.Nestléisnotaloneinattemptingtoidentifytherightbalancebetweendetailandaccessibilityinitsreports.Asmorecompaniescontinuetopublishinformationontheircorporatecitizenshipactivitiesandstakeholdersbetterunderstandwhatthisinformationmeans,it’sexpectedtherewillbeagreaterconsensusaroundthemosteffectiveformatandmannerofprovidingdifferenttypesofinformation.
Conclusion
Where was the value in the reports and the
reporting process?TheevolutionofNestlé’sapproachtoreportingandinterviewswithNestleexecutivessuggestedthecompanyderivedanumberofbenefitsfromreporting.Ashighlightedinthiscase,thereportsdidservetheirobjectiveofcreatinganeffectivecommunicationtoolforNestléby:
• AllowingNestlétobemoresystematicinactingonitsdesiretobemoreopenwithexternalstakeholdersandinthewayitengagesaroundkeyissues;
• CreatingaplatformfromwhichNestlécouldbemoreproactivesettingtheagenda
andframingthedialogueonsocialandenvironmentalissues,insteadofbeingreactive;
• GivingNestléanditsleadersastrongervoiceindialoguesaboutfindingsolutionstoproblemsthroughapubliclystatedcommitmentandposition;
• HelpingtoreinforceNestlé’scorporateculturearounditscorporatebusinessprinciplesbyprovidingclearillustrationsoftheprinciplesinaction.
InadditiontothesupportthereportprovidedtoNestlé’scommunicationstrategy,thefollowingadditionalbenefitscanbeidentifiedasarisingfromthereportingprocess:
ThereportshelpheadquarterstoleadandalignthinkingonsocialandenvironmentalissuesacrossNestlé’sdecentralizedgroupstructurebyprovidingglobalexamplesofhowissuesarebeingaddressed.Forexample,NestléMexicoandNestléNigeriahaveextractedexamplesfromthesereportstoadaptthemessagetotheneedsoftheirlocalaudiences.
Establishingprocessesforcollectingandpresentinginformationacrossthegrouphascreatedfeedbackloops,whichpromptmoreinformationtocomefromdifferentregions,marketsandcountries.Thisinturnmeanscorporateheadquartershasagreaterunderstandingofwhatishappeningonthegroundandcountrylevelmanagersunderstandthecontextoftheirachievements.Thisalsoprovidesopportunitiesforhead–quartersandlocalmanagerstolearnfrominnovationandbestpracticeinotherplaces.
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Havingareportingschedulehasreinforcedinternaldisciplinearoundthequality,reliabilityandspeedatwhichdataisgatheredacrossthegroup.ForSH&Einparticular,thishasbeenatoolthathashelpedsupportperformancemanagementobjectivesandmadeiteasiertomonitorperformancebecauseofafixeddeadlineforfinalinformation.
HavingapublicexplanationofwhyissuesareapriorityforNestléhasstrengthenedthelegitimacyofmanagersseekingsupportfrominternalandexternalpartners.Examplesofenhancedpartnershipinclude:workingwithbusinesspartnerstoimplementmoresustainableagriculturaltechniques;demonstratingNestlé’sCorporateBusinessPrinciplesinactiontoNGOpartnerssuchastheInternationalRedCross;andworkingwithpeerstoresolvecommonproblemssuchasthewatercrisisinsettingssuchastheWorldEconomicForum.
Thiscasehighlightstherolereportscanplayinsupportingalignmentofatrulyglobalcompanyaroundacommonsetoffundamentalbusinessprinciples.BycreatingfeedbackloopsthatsupportNestlé’sclearlyarticulatedprinciples,thereportscancreateinternalandexternaldemonstrationsofwhattheseprinciplesmeaninpractice.Theyalsopermitthecompanytobenefitfromgreaterdialogueandpartnershipwithinternalstakeholders,suchasemployees,andexternalstakeholders.
ChallengesremainforNestleinthereportingprocess,inparticular,identifyingindicatorsthatmeasureandcommunicate
howNestlé“createssharedvalue”acrossitsglobaloperationsandbuildingasystemforcapturingperformanceinformation.TheprocessofexaminingissuesindetailthroughitsissuespecificreportsgivesNestléastartingpointforidentifyinghowtomeasureitsimpactmorebroadlyandtobeginengagingandlearningwithstakeholders.Workingwithexternalgroups,suchastheGRIFoodSectorSupplement,canhelpNestlébuildonthisfoundationanddemonstrateleadershipbysharingitsexperiencewithothersintheindustry.
Overall,systematizingitsapproachtotransparencyarounditsbusinessimpactcreatesopportunitiesforNestlétotakealeadershippositiononissuesfromwhichitwouldotherwisebeexcluded.Ratherthanbeinganoutsider,Nestlécantakestepstowardbeingapartnerandlendingitssupporttoissuessuchasthewatercrisisandglobalclimatechange.Mostimportantly,thereportscreateamechanismtoreinforcethecommoncorporateculturethatNestléaspirestomaintainacrossitsglobalbusiness.AsNestlécontinuestodevelopindicatorsthatbetterreflecttheimpactofitsvaluesinactionandidentifiesmoreeffectivewaysofcommunicatingthisimpact,itstandstofostergreaterinternalunderstandingof“creatingsharedvalue,”which,inturn,willhelpNestléaddressitsgoalofbuildingtrustandconfidenceinbothitsbrand,andthecompanybehindthebrand.
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“The report is how Nestlé shows its face to all
stakeholders, including employees and the outside
world. It has to be linked with the key corporate
objectives and core values and principles. The report
is the face of the company.”
– José Lopez, Executive Vice President for Corporate
Operations
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Other publications in this series of case studies on social reporting
Gap Inc. Fashions a Revealing Look
Nestlé Shares Its Story Of Creating Shared Value
Novo Nordisk Takes Strides To Integrate Triple Bottom Line
State Street Accounts For Shareholder’s Needs
Seventh Generation Seeks to Sustain Essence Amid Change
Telefónica Makes Connections Local and Long Distance
The Value of Social Reporting Examination of the experiences and practices of seven companies formed the basis of case studies and an overview report, “The Value of Social Reporting”. The research focused not on the social reports themselves, but rather on the process and outcomes of reporting: How companies prepare the reports, the effects of reporting on management practices, the changes companies expect to make in the future, and the lessons they have learned along the way.
The Institute for Responsible Investment, a project of the Boston College Center for Corporate Citizenship, provides a platform for dialogue on fundamental issues and theories underlying responsible investing. Our work is meant to identify and promote market structures and investment activity that can best create long-term wealth creation for investors and society alike.
Learning, Practice, Results. In Good Company
The Value of Social Reporting Lessons learned from a series of case studies documenting
the evolution of social reporting at seven companies
Learning, Practice, Results.
In Good Company.
The Boston College Center for Corporate Citizenship is a membership-
based research organization associated with the Carroll School of
Management. It is committed to helping business leverage its social,
economic and human assets to ensure both its success and a more
just and sustainable world. As a leading resource on corporate
citizenship, the Center works with global corporations to help them
define, plan and operationalize their corporate citizenship. Through
the power of research, management and leadership programs, and
the insights of its 350 corporate members, the Center creates
knowledge, value, and demand for corporate citizenship.
www.BCCorporateCitizenship.org
Boston College Center for Corporate Citizenship 55 Lee Road, Chestnut Hill, MA 02467
Phone 617-552-4545 Fax 617-552-8499 Email [email protected] Web site www.BCCorporateCitizenship.org