Nestlé tailors CSR approach

24 March 2011

VEVEY, Switzerland: Nestlé, the food manufacturer, is focusing on corporate social responsibility programmes which "create shared value", rather than prioritising pure philanthropy.

Speaking to Reuters, Peter Brabeck-Letmathe, the firm's chairman, suggested schemes offering positive results for brand owners and consumers promise the greatest efficacy.

"Creating shared value has a big attractiveness because it really takes into consideration the interests of both sides," he said.

"We have integrated this now into the purpose of our company."

This principle may cover a range of areas, from augmenting the nutritional credentials of products to meeting sustainability goals regarding carbon emissions, and supporting rural development.

"Philanthropy basically is doing good for no other reason that doing good," Brabeck added.

"This you can do with your own money but I don't think you can use the money of your shareholders to do philanthropy, to do good."

At present, around 600,000 farmers in poor communities work solely for the Swiss operator, which has assisted them in delivering better yields and enhanced produce quality, cut environmental footprints and increased income levels.

A majority of the organisation's 443 plants are in the developing world, and many are located in rural markets.

In these regions, the maker of Nespresso and Kit Kat has rolled out training and education initiatives, as well as seeking to provide clean drinking water, and improving infrastructure.

Brabeck, however, was realistic about the fact tackling issues like child labour requires a long-term commitment, instead of a short-term fix.

"If they have the access to good schooling, then the child labour as such if it is helping the fathers in the field and helping with the harvesting, I don't think this is a problem," he said.

"The problem is when you use the children only for that and don't allow them to go to school."

To coordinate its activity, Nestlé has formed a Creating Shared Value Advisory Board, which first met in April 2009.

Alongside senior Nestlé staff, this unit includes third-party experts, for example Michael Porter, of the Harvard Business School's Institute for Strategy and Competitiveness.

"It was always difficult to justify the spending of an important amount of money when you had this old concept of corporate social responsibility," said Brabeck.

"Should the company get into a nonprofit situation and do it as a business purpose? I don't think my shareholders have given me money to do this."

Data sourced from Reuters; additional content by Warc staff