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OXFORD BROOKES UNIVERSITY RAP I
OXFORD BROOKES UNIVERSITY
BSC IN APPLIED ACCOUNTING
Research and analysis project (RAP)
TOPIC. 20
AN ORGANIZATION’S CORPORATE SOCIAL
RESPONSIBILTY POLICIES, INCLUDING
BUSINESS ETHICS AND THEIR IMPACT ON
BUSINESS PRACTICE AND KEY
STAKEHOLDERS.
“NESTLE PAKISTAN”
RAP WORD COUNT; 6475
PRESENTED BY; NOOR UL AIN NASEEM
ACCA REGISTRATION NO; 1582293
NESTLE PAKISTAN

OXFORD BROOKES UNIVERSITY RAP II
I DEDICATE THIS HUMBLE EFFORT
TO MY CHILDHOOD FRIENDS WHO
HAVE STOOD BY ME THROUGH
THICK AND THIN.
“But if the while I think on thee, dear friend,
All losses are restored and sorrows end.”
(William Shakespeare)
NESTLE PAKISTAN

OXFORD BROOKES UNIVERSITY RAP III
TABLE OF CONTENTS
NESTLE PAKISTAN

OXFORD BROOKES UNIVERSITY RAP 1
PART I (PROJECT OBJECTIVES AND APPROACH)
1. PROJECT TOPIC
1.1 Topic Selection
My RAP to oxford Brookes university is based on topic 20.’ an organization’s
corporate social responsibility policies, including business ethics, and their
impact on business practice and key stakeholders’. The reason for choosing this
topic for my project is the recent outrage of ethical and social concerns for
corporates globally and its impact on an organization’s repute, its operations, and
philosophy, and to ascertain as to what extent a corporate would invest in society
and how practical it is in actual long term. Moreover, the thorough study and
extensive research needed for this project would help me understand and
develop knowledge about business ethics and CSR, and targeting a certain
company I will be able to witness the more practical side of these terms. As a
student of ACCA paper P1 and P3, I feel it will help me with my exam results as
well.
1.2 Organization Selection
I have chosen Nestle Pakistan for research project purpose. Nestlé is Pakistan's
largest consumer goods company with sales of around CHF 500 million in 2006.1
Nestlé has been serving Pakistani consumers since 1988, when its parent
company, the Switzerland-based Nestlé SA, first acquired a share in Milkpak Ltd.
In 1990 its Shiekupura factory started production of NIDO milk powder and
cereals they also acquired a milk plant in Kabirwala Punjab. Nestlé Pakistan
opened the largest milk plant of Asia and also the largest milk reception among
Nestlé World at Kabirwala on March 16, 2007. There brands available in
Pakistan consist of dairy, milk, beverages, baby food, bottled water, breakfast
cereals, chocolates and confectionary. Products are manufactured in five
facilities scattered around the country, from Islamabad in the north, to Karachi in
the south.2
1.3 Reason for Selection
Nestle Pakistan was chosen as the particular organization for several reasons.
Due to global presence of nestle SA it is one of the forerunners to comply with
ethical and social concerns as a corporate in Pakistan , moreover its target
consumer is common man , due to which society at large is where it finds itself
accountable ultimately. Being listed at the Karachi stock exchange, and
matchless presence in market its operations and business is debatable in diverse
1
www.nestle.com
2
www.nestle.pk
NESTLE PAKISTAN

forums within country. The issue of CSR has been addressed promptly at their
official website and seems like one of the main concern of the organization and
its unprecedented presence in Pakistani market indicates the success of this
social investment. Another reason on my behalf was my personal keen interest in
analyzing how a global corporate like nestle would implement its CSR and
business ethics policy to Pakistan.
2.0 RESEARCH OBJECTIVES
“Essentially, CSR is the deliberate inclusion of public interest into corporate
decision-making, and the honoring of a triple bottom line: People, Planet, and
Profit.” 3
 To understand term CSR and business ethics in practical terms, while
targeting nestle Pakistan, applying all relevant knowledge and information
to analyze company’s approach and achievement of relevant results.
 Reviewing company’s corporate social responsibility policies, and several
areas of CSR covered by it.
 Identified areas covered by company while addressing CSR related
issues, their communication to relevant stakeholders.
 While opting a stance on CSR what particular issues relating business
ethics are covered by company and how it relates to key stakeholders.
“CSR is the continuing commitment by business to behave ethically and
contribute to economic development while improving the quality Of life of the
workforce and their families as well as of the local community and society at
large”4
 How far the company has gone creating shared value for its stakeholders
and what aspects of CSR it explores in doing so.
 Evaluating how the company has adopted environment friendly and
sustainable business practice.
“The shared value model is based on the idea that corporate success and social
welfare are interdependent Taking responsibility for its impact on society means
in the first instance that a company accounts for its actions.”5
3
www.wikipedia.com
4
Making good business sense, issued by world business council for sustainable development in Jan 2000,
from phill watts and Richard holme . page . available at
http://www.wbcsd.org/web/publications/csr2000.pdf
5
www.wikipedia.com
NESTLE PAKISTAN

3.0 RESEARCH QUESTIONS
To approach the RAP effectively, I have designed the following research
questions, to identify the main areas of concern relating the topic. And also by
appropriately answering each one of them I will be able to cover enough ground,
for my RAP to accomplish its objectives.
 How does the company identify with corporate philanthropy?
 What is the effect of environmental stewardship and sustainability policy
on nestle Pakistan’s business operations and processes?
 What is nestle Pakistan’s stance on ethical business conduct, and what
key stakeholders it identifies while addressing the issue?
 What conclusions the research on above questions has formed?
4.0 RESEARCH APPROACH
In order to cover the topic chosen for the RAP especially in context of nestle
Pakistan, I had to form an approach allowing me to reach my project objectives,
while answering individual research questions. My research was based on
gathered information about the terms CSR and business ethics, from academic
and business sources. Company data in the form of reports, brochures, press
releases, and figures issued in this regard were gathered, at nestle Pakistan and
also at group level. This mass of quantitative and qualitative data, from
secondary sources had to be filtered to get the most reliable and relevant out of
it. Review and analysis done , on this data as presented while answering the
research question in terms of firm’s philanthropic and environmental efforts and
its commitment towards ethical business practices was the base of any
conclusions reached. Also any of the company’s projected and communicated
stance on this issue were analyzed to be supported by facts like awards and
acknowledgements, the magnitude of thus captured market and goodwill of
company. Its reports on shared value and performance indicators were also
focused.
5.0 INFORMATION GATHERING
The information used and referenced while preparing this RAP came from
several sources.
 The website of nestle Pakistan ‘www.nestle.pk’, and nestle SA
www.nestle.com.
 To understand the terms business ethics and CSR, key stakeholders I
have consulted Wikipedia as a source of general knowledge on these
terms.
 A working paper issued by world council for sustainable business
development ‘making good business sense’ was also helpful.
 A shared value report issued by nestle.
 Several internally generated documents ;
Nestle corporate business principles
NESTLE PAKISTAN

Nestle business conduct code
Nestle policy on environmental sustainability.
Consolidated nestle environmental indicators.
 News sites of financial times, daily times, and business reporter were also
searched for related articles and columns.
 Academic journals of financial times. ‘Strategic management journal’ and
‘journal of business ethics’ were consulted. Business journal of Mckinsey
and co. ‘Mckinsey quarterly’ was also a source.
 Material from books written on the topic and excerpts taken from them,
columns, discussions on web, debates, conferences attended by nestle
and press releases from the company in such regards were also studied.
 Policies adopted and supported by nestle Pakistan. Like UNO global
compact, international labor organization conventions, OECD guidelines
for multi national enterprises, and ICC business charter of sustainable
development.
 Reports issued by nestle on particular issues such as; water management,
industrial refrigeration, water sustainability, environment progress were
also studied and consulted.
 ACCA paper P1, and P3 BPP books were also a source of information on
CSR and business ethics.
5.1 Limitations of information gathering
The information required for this RAP came from several sources, but almost all
of it was searched for on the internet, which due to frequent electricity
breakdowns in Pakistan, turned out to be nuisance. Moreover, material on the
internet from general sources like blogs and discussions was mostly
unreferenced and thus unreliable. While working with information in electronic
form issues like loss of data and requirement of IT skills to work with information
and present it aptly were also initially problematic. To cover the topic from
various angles I tried to get maximum material issued in form of reports by
nestle, although many reports were available on internet, some brochures
ordered by post , still haven’t found there way to me .
NESTLE PAKISTAN

PART II (ANALYSIS AND REVIEW)
PART II A
6.0 HOW DOES THE COMPANY IDENTIFY WITH CORPORATE
PHILANTHROPY?
“Philanthropy is the effort or inclination to increase the well-being of humankind,
as by charitable aid or donations”.6
The concept of philanthropic contributions by a company can be derived from
two principles;
 Charity principle; aiding the society voluntarily, more fortunate or able
members of society helping the less fortunate or disable people of the
society.
 Stewardship principle; business and wealthy people to see themselves as
caretakers or stewards .should consider the interest of all affected by
them.7
Nestle Pakistan recognizing itself a corporate citizen explores various aspects of
CSR, corporate philanthropy being one of them. A few of many barriers in
implementing a CSR policy have been identified as lack of leadership
involvement and vision that reaches much less then long term goals , while
focusing too much on short term gains. Moreover the inability of management to
recognize CSR issues as opportunities, and developing a strong case in favor of
social investments.
“Discretionary social responsibility includes corporate philanthropy and
involvement in efforts that benefit society. A company's social responsiveness is
expected to reflect top management's philosophy.8
”
Even this dimension of CSR, philanthropy can be a tool for business to build trust
and mutuality among its stakeholders. This contribution to the society can fairly
be seen as long term investment in society from where the business derives its
resource in all forms.
6
www.wikipedia.com
7
http://www.scribd.com/doc/6895666/ethics-csr
8
The Moderating Effect of Environmental Munificence and Dynamism on the Relationship
between Discretionary Social Responsibility and Firm Performance
Author(s): Irene Goll and Abdul A. Rasheed. Journal of Business Ethics, Vol. 49, No. 1 (Jan., 2004), page
43.
NESTLE PAKISTAN

6.1 Nestle Pakistan Philanthropic Efforts
Nestle Pakistan has invested through various channels is Pakistani society and
corporate philanthropy principle is apparently explored a little further then
traditional concept of the term, by the company.
“Good corporate philanthropy incorporates both business interest and societal
needs”9
6.1.1 Providing Earthquake Relief
In October 2005, a devastating earthquake hit Pakistan. The magnitude of
calamity was overwhelming and is till date the biggest natural disaster the
country has seen. Nestle Pakistan made contributions in form of food and
beverage items. The issue is addresses further;
“Within two days, we had established a crisis committee under the supervision of
our Managing Director. The same day, the management team left to visit the
affected areas, and by 11 October, the first six Nestlé trucks left our factories,
bearing bottled water, powdered and UHT milk and ready-to-cook MAGGI
noodles. Instead of burdening the government and relief agencies, we
aggressively reactivated our own shattered distribution channels to bring supplies
to the people who needed them most and established six camps to distribute
relief goods.”10
According to nestle Pakistan; due to their shared efforts with air force and
volunteering with other agencies and company’s swift response, 80 trucks of
goods worth Rs. 20 million. Two 10-ton trucks of drinking water were dispatched
to Muzaffarabad Hospitals.
“Every company needs to shape its philanthropic vision, mission and values.
Every corporate philanthropist needs to craft annual objectives that serve the firm
and the public interest. Appropriate variations of these articulated needs find
there ways to grant guidelines.”11
The company also took part in rehabilitation of the area;
 Contributions from employees and other nestle markets, worth rupees 20
million was used to adopt and reconstruct a model village in Azad
Kashmir.
 Compensation to employees, distributors whose homes were destroyed
amounted to Rs. 4.1 million.
9
a candid account of corporate philanthropy ‘give and take’ by reynold levy. Harvard business school
press. Introduction Page 20.
10
www.nestle.pk
11
a candid account of corporate philanthropy ‘give and take’by reynold levy. Harvard business press.
Page 25.
NESTLE PAKISTAN

 Nestle SA contributed additional Rs 16 million for reconstruction and
rehabilitation purpose.
 Nestle employee donations from their own salaries amounted Rs 3.3
million.
 Working with students of King Edward medical college Lahore medicines
worth Rs. 175000 were collected.12
0
2
4
6
8
10
12
14
16
18
20
Million Rs.
CONTRIBUTIONS MADE
For Model Village
For Rehabilitation
For Employees
Destroyed
Homes
For Medicines
6.1.2 Development of the Rural Population of Pakistan
Nestle Pakistan has undertaken tube well and hand pump installation schemes in
selected areas. Their first project was completed in 2002 in a village of 3000
inhabitants in Tehsil Dunyapur, Khanewal. So was commissioned in 2005 near
Chishtian. Since then 300 hand pumps have been installed in desert area of Thar
and Cholistan. The residents of villages which host milk reception for nestle can
make use of water pumps.13
“According to carol, these are (philanthropic efforts) desired rather
than being required of companies. They include charitable donations,
contributions to local communities and providing employees with the chances to
improve their own lives.”14
12
www.nestle.pk
13
www.nestle.pk
14
ACCA paper P 1, professional accountant .BPP.page 57.
NESTLE PAKISTAN

Nestle Pakistan is also encouraging capacity building for women in rural areas
working with UNDP. 800 people are impacted by this joint initiative. The goal of
project is to enhance income and employment generation of rural women through
livestock skills development, improved livelihoods and food security at the
household and community level. Trainees are given a month long, hands-on
training in basic animal healthcare.15
6.1.3 Contributing in Education Sector of Pakistan
In an effort to improve education in rural areas of Pakistan, nestle has
undertaken the rehabilitation of several primary and middle schools, focusing on
schools for girls.
“In 2004, in partnership with an NGO, we adopted a school in Pindi Dhallon,
Sheikhupura, and achieved such an improvement of educational facilities,
including teaching aids and teacher training, that school attendance doubled.”16
Donations in form of computers were also given to rehabilitated schools of poor
and rural communities in 2004-5.
The business journal of Mckinsey and Company ‘Mckinsey Quarterly’ conducted
a survey on corporate philanthropy;
“The vast majority of companies, according to the results of a recent McKinsey
survey believe that economic growth in developing markets is important to the
success of their business strategies. And more than two-thirds of those
companies are engaged in various programs to encourage that growth, whether
through education or private-sector development or technological
advancement”17
.
Nestle Pakistan in the same mind set states “in the 21st century, no country can
hope to progress without a strong commitment to scientific training and
research.”18
While putting this in Practicality Company has invested in Pakistan’s
long term future, by committing to help set up a school of science and
engineering at the Lahore University of Management Sciences (LUMS).
15
www.nestle.com
16
www.nestle.pk
17
www.mckinseyquarterly.com
18
www.nestle.pk
NESTLE PAKISTAN

6.1.4 Nestle Pakistan Acknowledged Through Philanthropy Award
While working on CSR, world business council for sustainable development,
issued paper ‘making good business sense’ a dialogue on community
involvement by companies was held.
“Philanthropy and charity were mentioned frequently, but many participants
emphasized their preference for collaborative projects and placed greater stress
on mutuality than on simply giving. Companies may feel as if they are part of the
community but until the rest of the community accepts them, there is much work
to be done19
.”
In acknowledgement of the companies continuous efforts nestle Pakistan has
been awarded a corporate philanthropy award.
“Karachi: Nestlé Pakistan has been awarded the Corporate Philanthropy Award
by the Pakistan Centre for Philanthropy (PCP) at a dignified ceremony in
Karachi, in recognition of its Corporate Social Responsibility Programs for the
community. The Awards applaud and recognize the contributions made by
corporate sector of the country for social development programs. Nestlé Pakistan
has been very active in social development programs in the country through
various integrated multi dimensional community development programs and
accords. Staff report”20
19
Making good business sense, issued by world business council for sustainable development in Jan 2000,
from Phill watts and Richard Holme. page 7.available at
http://www.wbcsd.org/web/publications/csr2000.pdf
20
www.dailytimes.com.pk
NESTLE PAKISTAN

PART II B
7.0 WHAT IS THE EFFECT OF ENVIROMENATL STEWARDSHIP AND
SUSTAINABILTY POLICY ON NESTLE PAKISTAN’S BUSINESS
OPERATIONS AND PROCESSES?
“Stewardship is an ethic that embodies cooperative planning and management of
environmental resources with organizations, communities and others to actively
engage in the prevention of loss of habitat and facilitate its recovery in the
interest of long-term sustainability”21
7.1 Environmental Stewardship Recognized as Policy
The policy adopted by nestle Pakistan in terms of environmental issues has been
addressed in ‘nestle corporate business principles’ an internally generated
document issued by nestle to provide a guideline for nestle management
worldwide.
Within the above mentioned document Nestlé’s policy is covered by a principle
namely;
“Protection of environment: Since its early days Nestlé has been committed to
environmentally sound business practices throughout the world and continues to
make substantial environmental investments.22
”
While covering the issue nestle pledges to integrate such policies that will let
designing and operating of its activities in efficient and sustainable way. This is
leading to minimization of adverse environmental impact, and waste generation.
Also it maintains a policy of ensuring continuous improvement of environmental
performance throughout its supply chain.
“For organizations, sustainability involves developing strategies so that the
organization only uses resources at a rate that allows them to be replenished. At
the same time emission of waste are confined to levels that do not exceed the
capacity of environment to absorb them”23
.
21
www.wikipedia.com
22
Nestle corporate business principles. Page 16.
23
ACCA paper P1 Professional Accountant. BPP. Page 301.
NESTLE PAKISTAN

7.2 Nestle Pakistan Adherence to Global Principles
In order to form a business policy, reaffirming an environmental stand in terms of
operations carried out by the business, several aspects need to be considered. In
case of manufacturing this might even start from raw material stage, the seed
and pesticide used although nestle doesn’t involve in agricultural production it
addresses ecological aspects of farming by its suppliers in its policy. Operations
and processes designing are also of prime importance as they directly affect
material consumption, pollution emission, waste generation and sustainability of
any resource thus consumed. In order to form a policy that covers multi
dimensions of environmental concerns for the firm, nestle has adhered and
advocated policies adopted globally by firms.
Nestle adheres to United Nations global compact’s “three guiding principles on
environment”,
Principles; 7, 8 and 9 of the compact;
 “Supports a precautionary approach to environmental challenges
 Undertakes initiatives to promote greater environmental responsibility
 Encourages the development and diffusion of environmentally friendly
technologies”24
Nestle also adheres to international chamber of commerce business charter for
sustainable development.
Three and eight of all sixteen principles state respectively
Principle; 3 Process of improvement
To continue to improve corporate policies, programs and environmental
performance taking into account technical developments, scientific
understanding, consumer needs and community expectations, with legal
regulations as a starting point, and to apply the same environmental criteria
internationally.
Principle; 8 Facilities and operations
To develop, design and operate facilities and conduct activities taking into
consideration the efficient use of energy and materials, the sustainable use of
renewable resources, the minimization of adverse environmental impacts of
waste generation, and the safe and responsible disposal of residual wastes.25
Nestle Pakistan implementing this strategy complies with environmental act
(1997) and states;
24
The UN Global Compact's ten principles. Available at
http://www.unglobalcompact.org/aboutthegc/thetenprinciples/index.html
25
ICC business charter for sustainable business development; available at
http://www.bsdglobal.com/tools/principles_icc.asp
NESTLE PAKISTAN

“We try to ensure that every stage of our operations, the environment impact is
minimal, at the raw material stage, we support sustainable agriculture and dairy
farming practices, including environmental protection.”26
Nestle Pakistan has three main factories operating in Pakistan, located in
Shiekhupura, Kabirwala and Islamabad .To keep its operations environmental
friendly nestle Pakistan addresses issues like ‘maximizing co efficiency
,minimization of resource consumption, waste and air emissions . Quitting of
heavy fuel oil usage to eliminate air pollution and has brought its emissions way
below legal limits’. 27
0.00
5.00
10.00
15.00
20.00
25.00
1K Tonnes
SOx
Equivalents
2007 2008 2009
Years
Air Acidification Potential
28
The above chart shows consolidated data from nestle environmental indicators
issued at group level. Covering nestle business worldwide. Above mentioned
document also states greenhouse gasses emission lowered in 2008-09 by 15.8%
and ozone depleting substances by 90.0%per tone of product.
7.3 The Nestle Policy on Water as Resource
Water happens to be one of the essential elements forming human body that
comprises about 60% of body weight. 97.5% of the world’s water is in the form of
salt water in our seas and oceans. 70% of the remaining 2.5% of fresh water is
frozen in polar icebergs and glaciers. Fresh water that is available for both
human and environmental needs represents barely 1% of the earth’s total water
mass. Water apart from Nestlé’s bottled water, is one of the main raw materials
used in manufacturing of all products.29
Nestlé recognizes that responsible management of world-wide water resources is
an absolute necessity. The ‘nestle water policy’ covers several key areas of
26
www.nestle.pk
27
www.nestle.pk
28
2009 Consolidated Nestlé Environmental Performance Indicators .available at http://www.nestle.com
29
nestle and water. Sustainability , protection, stewardship. Available at http://www.nestle.com
NESTLE PAKISTAN

performance in water usage, waste generation, water reservoirs, water
withdrawal etc.
Following are included in policy.
 “Protection of springs and their surroundings is of primary importance in
this Endeavour.
 innovation and renovation of its products and processes, including manu-
facturing methods that minimize water consumption and waste water
generation;
 Fresh water use is reduced as much as possible and, wherever feasible,
water is reused and recycled used water is treated and returned to the
environment according to local legislation; where none exists, internal
Nestlé standards are applied”. 30
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
Meter
Cube Per
Tonne
Product
2007 2008 2009
Years
Total Water Withdrawl
31
The above mentioned graph is based on consolidated environmental indicators
issued by nestle SA. According to this document % decrease in water discharge
in 2008-09 was 64.5% meter cube per ton of product.
Implementing this nestle Pakistan addresses:
“Our Shiekhupura and Kabirwala factories have elaborate water treatment
systems to prevent wastewater from polluting the environment; we are
continually reducing our consumption of raw water per ton of production”32
30
Nestle and water. sustainability, protection, stewardship. Page 13.available at http://www.nestle.com
31
2009 Consolidated Nestlé Environmental Performance Indicators; http://www.nestle.com
32
www.nestle.pk
NESTLE PAKISTAN

7.4 Nestlé Exploring Environmental Sustainability
Nestle further addresses environment, while identified as priority area;
“During the manufacturing and distribution of our products, we use efficient
technologies and apply best practices to;
 Recycle or recover energy from by-products. The packaging of our
products is critical to guarantee our high quality standards, to prevent food
waste and to inform consumers.
We strive to:
 lead the development and use of materials from sustainably-managed
renewable resources;
 Support initiatives to recycle or recover energy from used packaging; use
recycled materials.”33
0
0.2
0.4
0.6
0.8
1
1.2
1.4
Million
tonnes
2007 2008 2009
Years
By Products For Recovery
34
Above graph is indicating figures in consolidated environmental indicators issued
by parent company. Also waste for disposal is decreased in 2008-09 by 54% per
ton of product.
Nestle in its corporate business principles covers;
“The efficient and sustainable use of renewable resources, the
minimization of adverse environmental impact and waste generation, and the
safe and responsible disposal of residual wastes”35
Nestle Pakistan implements the policy by working on packaging and recycling, by
working on packaging solutions that use minimum weight and volume and can be
recycled. It has a collection system for used packaging. Solid waste is collected
for either recycling or environment friendly disposal.36
7.5 Nestle implementing an Environmental Management System
33
The nestle policy on environmental sustainability. Page 2 available at http://www.nestle.com
34
2009 Consolidated Nestlé Environmental Performance Indicators
35
Nestle corporate business principles pg 16.
36
www.nestle.pk
NESTLE PAKISTAN

While adopting a policy on environmental sustainability it is of utmost importance
that it is implanted from the planning stage, not only to incorporate the stance in
operations but also to shun from any adverse situation that might result in loss of
goodwill or even cancellation of license.
“In 1996 the Nestlé Environmental Management System (NEMS) was created to
pull together all in-company environmental activities and measures. NEMS has
since been implemented throughout the company”.37
The Nestle environmental management system designed and illustrated in the
‘Nestle policy on environmental sustainability’, addresses issues such as
environmental policy, management review, and planning with environmental
aspects in mind. Communication and documentation of operations, awareness
and training, dealing with emergency and responsiveness are parts of this
system. Careful monitoring and evaluation is also part of the process. The
system is addressed in Nestle policy on environmental sustainability.
Through this environmental concerns are addressed at the planning stage, and
are kept in relevance through out operational stage with constant checking and
management review.
Nestle Pakistan states;
“Our factories have environment committees to manage routine environment
issues and review performance. Environmental impact assessment is done in
advance for every new project and measures are adopted to minimize adverse
impacts on the environment.”38
It seems as if nestle has environmental issues sorted out, as one of the most
sought after CSR issues addressed by it. It has clearly been committed not only
in implementing Nestlé’s policies in such regards but also communicate the issue
to stakeholders.
7.6 Recognition of Nestle Pakistan’s Environmental Efforts
Nestle Pakistan in 2007 was also awarded “annual environment excellence
award”, in acknowledgment of its efforts.
“Mr. A. Hassan, HSE Manager at Nestlé Pakistan Ltd, pictured far right,
was presented the award by Dr S. Ahmed, Minister of the Environment on July 4,
2007 at a ceremony held in Karachi, Pakistan. The panel of judges voted
unanimously to award Nestlé Pakistan Ltd for their environmental policy and
vision, local activities for the protection of the environment and their contributions
to community welfare. NFEH is affiliated with the United Nations Environmental
37
Nestle sustainability review available at http://www.nestle.com
38
www.nestle.pk
NESTLE PAKISTAN

Program (UNEP) and is supported by the Ministry of Environment of the
Government of Pakistan. The Annual Environment Excellence Awards are
designed to recognize and promote the organizations which make an outstanding
contribution to sustainable development”.39
39
www.nestle.com .
NESTLE PAKISTAN

PART II C
8.0 WHAT IS NESTLE PAKISTAN’S STANCE ON ETHICAL BUSINESS
CONDUCT, AND WHAT KEY STAKEHOLDERS IT IDENTIFIES WHILE
ADRESSING THE ISSUE?
“Business ethics is a form of applied ethics or professional ethics that examines
ethical principles and moral or ethical problems that arise in a business
environment. It applies to all aspects of business conduct and is relevant to the
conduct of individuals and business organizations as a whole. Businesses can
often attain short-term gains by acting in an unethical fashion; however, such
behaviors tend to undermine the economy over time.”40
While taking an ethical stance on business conduct, a company operating
globally can shield itself from various angles exposing it to risks like bad publicity,
loss of goodwill, government sanctions etc. It might though win through proper
communication of its stance prolong customer loyalty and brand image that in
today’s competitive market requires more than product marketing.
“It is often said by those who practice good business ethics that they do not
violate their moral duties or obligations. Unlike many who engage in deceit,
corruption and ruthless regards of others rights in their business dealings, those
who practice business ethics have a respect for moral duty and live their lives
accordingly” 41
Nestle through its ‘corporate business principles’ and ‘code of business conduct’,
addresses several related issues concerning ethics in business covering different
stakeholders. These documents serve as Nestlé’s ethical conduct guidelines, for
nestle management worldwide. While operating globally the company is open to
several risks and threats depending upon cultural, ethnic, religious and social
diversity it faces. A code of conduct by any means can mitigate the exposure
-without negating the fact that it is not possible without management commitment
and proper communication- for the very purpose nestle maintains legal and
compliance function. Moreover, it is yet another challenge to incorporate a
common code to national and local markets that nestle operates in.
“Ethical codes aim to reduce the occurrence of incidents, to improve the extent
to which stakeholder expectations are realized, to boost stakeholder confidence
in the company and to encourage the authorities to relax regulations and control.
In addition to articulating stakeholder interests, a code can also communicate
and elaborate on the principles the company upholds. Stakeholder principles are
40
www.wikipedia.com
41
business ethics , critical perspectives on business and management ,edited by Alan Malachowski ,
published by Routledge Pg 233
NESTLE PAKISTAN

General requirements for company and employee conduct: they govern the
relationship between company and stakeholders”.42
In its document ‘leadership and management principles’ nestle takes the stand of
respecting cultures and traditions of its various spread markets and pursues the
goal of integrating itself as much as possible in those cultures . It also identifies
the long term benefit of company to lie in benefiting community.
“A corporate stakeholder is a party that can affect or be affected by the actions of
the business as a whole. The word "stakeholder" has become more commonly
used to mean a person or organization that has a legitimate interest in a project
or entity”.43
Keeping in mind the relevant stakeholder preferences, the consequences of
actions with a rather long term approach in mind can compel any management to
take ethical decisions as this is the only realistic way of not only sustaining the
business practice but hold a ground for business to grow.
8.1 Stakeholders Identified and Ethical Concerns Addressed by Nestle
“Ethics are a good business investment, essentially because they entail positive
externalities. They are a prerequisite-site for building trust with various inside and
outside stakeholders. Such trust, in turn, is a prerequisite for loyal and innovative
long-term cooperation. Synergies are only possible through cooperation, and in
areas where actions of others are difficult to supervise, trust built on long-term
ethical behavior becomes the only practical way to capture such synergies”44
While addressing various issues relating to business ethics, nestle satisfies a
variety of stakeholder concerns.
“Key stakeholders are a subset of stakeholders who have power to prevent the
project from achieving its full set of objectives and potentially may cause the
project to fail”45
.
42
Business Codes of Multinational Firms: What Do They Say? Author(s): Muel Kaptein Source: Journal of
Business Ethics, Vol. 50, No. 1 (Mar., 2004), pp. 13-31 Published by: Springer; pages 14 ,21.
43
www.wikipedia.com
44
A Note on Ethics and Strategy: Do Good Ethics Always Make for Good Business?Author(s): Bernhard
Schwab Source: Strategic Management Journal, Vol. 17, No. 6 (Jun., 1996), pp. 499-500 Published by:
John Wiley & Sons, Pg 499
45
www.stakeholder-management.com
NESTLE PAKISTAN

8.1.1 Managers and Employees; (possible ethical concerns identified)
Compliance
with Law
and
Regulations.
Fair
Dealing
Awareness and
Communication
Human
Rights
Equal
Opportunity
Managers
and
Employee
Adherence to
local laws
Respect of
cultural
norms
UNO and
OECD
guidelines.
Conflict of
interest
addresse
d
Nestle
reputation
defense.
Liberation to join
trade unions
Encouraging
trust and respect
in org culture
Sound
workplace
environmen
t
Abolition of
child labour
Eliminate all
forms of
compulsory
labour
Fair
employment
Career
opportunities
Racial,
linguistic and
ethnic bias
discouraged
In its corporate business policy and business conduct code. Nestle identifies
workforce rights and manager and personnel obligations towards ethical
business conduct, complying with local laws and regulations, and respecting
local norms. It is outlined in nestle management and leadership principles that
respect of local culture and tradition is management’s commitment and benefiting
locality is in turn beneficial to nestle. Addressing conflict of interest and outside
activities in business conduct code proper disclosure and uncompromised nestle
interest are addressed as priorities.
“Corporations are increasingly paying attention to ethics in the conduct of
employees at all levels of the organization. The corporate ethics movement
addresses the need to guide individual decision making and to develop an ethical
workplace environment”46
.
Organizational culture indicates a firm’s commitment and building values in
individuals that are after all what formulate the company and influence its
Practices. HR issues of equal opportunities, indiscriminate environment, health
and safety are also addressed.
46
Social Responsibility and Ethics: Clarifying the Concepts Author(s): Josie Fisher Source: Journal of
Business Ethics, Vol. 52, No. 4 (Jul., 2004), pp. 391-400 Published by: Springer page 393.
NESTLE PAKISTAN

78000
80000
82000
84000
86000
88000
90000
92000
94000
Number Of
Eployees
2008 2009
Years
Employees Receiving Formal Classroom
Training In Developing Countries
47
Above graph is from key performance indicators issued by nestle group in terms
of CSR.
Joining trade unions at free will to encourage dialogue, continuous improvement
in employee training and skills are also addressed. Nestlé favors fair
remuneration structures and attractive compensation package.48
Abolition of child
and all form of compulsory labour is also covered by nestle.
“The average salary of a factory worker is more than double the average wage of
the milk processing industry, and four times that of the informal sector.”49
“A structure which assures operational speed and personal responsibility, with
strong focus on results, reducing bureaucracy as much as possible”50
Is defined
as desired by nestle.
47
Creating Shared Value Summary Report 2009 Available at www.nestle.com
48
Nestle human resource policy. Available at www.nestle.com
49
http://www.nestle.com/CSV/CSVinAction/AllCaseStudies/DairySectorPakistan.htm
50
The Nestlé Management and Leadership Principles, page 12. available at www.nestle.com
NESTLE PAKISTAN

8.1.2 Consumer; (ethical business and communication)
“Ethical behavior only obtains value when it is visible to others, and any 'ethical'
action should be milked for all it is worth through wide publicity. Essentially,
ethics becomes an exercise in public relations.” 51
Quality
Assurance
Health and
Awareness
Sound
Advertising
Consumers
Compliance with
relevant laws
Quality
management
system
Developing
sound dietary
Habits
Creating
awareness on
health and
balanced diet
issues
Encouraging
energetic
pursuits,
discouraging
violence or
exploiting
behavior
Respect cultural,
social religious
matters of
concerned
groups.
While addressing consumer issues, in policy nestle focuses on consumer need
for nutrition, enjoyment and quality. Building consumer trust through
communication and sound products nestle discourages heavy snacking or over
eating and keeping a balanced diet. For the purpose nestle Pakistan its website
addresses dietary concerns for infants, elderly, women and youngsters. The site
covers balanced diet recipes, body weight, and exercising.
“By sourcing its milk directly, testing the quality of the milk, and using cooling
stations and collection points, Nestlé has helped to prevent adulteration and
unhygienic milk handling.”52
Following graph shows renovation in product range, for nutritious diet.
51
A Note on Ethics and Strategy: Do Good Ethics Always Make for Good Business? Author(s): Bernhard
Schwab Source: Strategic Management Journal, Vol. 17, No. 6 (Jun., 1996), pp. 499-500 Published by:
John Wiley & Sons, page 500.
52
http://www.nestle.com/CSV/CSVinAction/AllCaseStudies/DairySectorPakistan.htm
NESTLE PAKISTAN

renovated
for nutrition
and health
inc in
essential
nutrients
reduction of
sodium,
sugars ,fats
2008
2009
0
1000
2000
3000
4000
5000
6000
7000
8000
Number of
Products
Years
Nutritions
53
“The content of consumer communications must reflect good taste and social
responsibility in accordance with each country’s laws and regulations and
voluntary codes and standards .Although standards will vary from country to
country”.54
Offending any ethnic or religious group is prohibited. Advertisements must abide
by ethical limits like, not misleading users into potential benefits of products,
overstating them. Authority of parents must not be shown undermined,
advertisements mustn’t depict violence, or anxiety are included in nestle
communication to consumer policy in 2007.
“Beyond ethical considerations, consumer criticism of perceived CSR
deficiencies can be extremely detrimental to corporate profitability and market
share.”55
Nestle Pakistan was also awarded for year 2005 the coveted excellence award in
marketing for its sound marketing techniques. “We're proud to be among the only
companies in Pakistan to venture outside the commercial mode of
communication, offering programs catering to better child nutrition and good
parenting.”56
53
Creating Shared Value Summary Report 2009 ; Creating Shared Value Key Performance Indicators.
(nutrition )Available at www.nestle.com
54
Nestle communication principles. Page .1 available at www.nestle.com
55
Corporate Social Responsibility in the Supply Chain: An Application in the Food Industry
Author(s):Michael J. Maloni and Michael E. Brown Source: Journal of Business Ethics, Vol. 68, No. 1
(Sep., 2006), pp. 35-52 Published by: Springer .introduction, page 35.
56
www.nestle.pk
NESTLE PAKISTAN

8.1.3 Supplier (ethical transactions and business dealings)
Nestle Pakistan at Kabirwala has Asia’s largest milk reception. In Punjab it has
developed a milk district. Hundreds of thousands of small farmers live over an
area of 100,000 square kilometers in central Punjab. More than 900,000 farmers
and their dependants have been directly affected by our milk purchases.57
“The premise of fair trade is that food retailers should support prices to the
suppliers that allow these suppliers to not only avoid poverty but also sustain
business longevity.”58
Regulations Fair Dealing Quality
Assurance
Suppliers
Condemning of
bribery and
corruption
Confidential info
Gifts and meals
Fair price
Supplier audit
Quality tests
Nestle directs its employees in improper financial or other advantage, with public
or private third party. This could otherwise result in criminal charges or
disciplinary procedures. Nestle adheres to OECD’s recommendations of fighting
corruption. On the issue of dealing with confidential information of suppliers
nestle code states it to be treated as if it was Nestlé’s confidential information.
“Nestlé insists on honesty, integrity and fairness in all aspects of its business and
expects the same in its relationships with all suppliers of materials, goods and
services”.59
.It also endorses international chamber of commerce revised rules of extortion
and bribery in international transactions. Endorsement to ICC charter by nestle
leads to several issues raised by ICC. In principle 11 of ICC business charter for
sustainable development supplier issues are thus addressed.
Principle # 11 - Contractors and suppliers: To promote the adoption of these
principles by contractors acting on behalf of the enterprise, encouraging and,
where appropriate, requiring improvements in their practices to make them
consistent with those of the enterprise; and to encourage the wider adoption of
these principles by suppliers.60
57
www.nestle.pk
58
Corporate Social Responsibility in the Supply Chain: An Application in the Food Industry Author(s):
Michael J. Maloni and Michael E. Brown Source: Journal of Business Ethics, Vol. 68, No. 1 (Sep., 2006),
pp. 35-52 Published by: Springer, Page 41.
59
Nestlé’s principles of purchasing, pg 15
60
ICC business charter of sustainable development. Principle 11.
NESTLE PAKISTAN

Nestle maintains a ‘supplier code’ along with ‘guiding principles on procurement’.
“Food companies may feel that they cannot afford to devote additional financial
and employee resources to seemingly indirect issues such as supply chain CSR.
Such low margins offer little financial insulation, however, for these companies to
endure any serious public campaigns or protests. Thus, ignoring supply chain
CSR issues may present a greater risk.”61
Any sort of favors received to influence employees must not be taken. In case of
doubt guidance is to be taken form line manager or legal and compliance
function. Suppliers dealing in terms of pricing and negotiations should also be
unbiased, under free trading principles.
“A complex network of collection centers ensures that no farmer has to go far to
deliver his daily produce. His payment is prompt and transparent”.62
Auditing of supplier for safe and sound raw and packaging material is also
addressed in Nestlé’s ‘principles of purchasing’.
3100
3200
3300
3400
3500
3600
3700
3800
3900
2008 2009
Suppliers Audited for Food Saftey, Quality And
Processing
63
Nestle Pakistan integrates check and proper storage at all levels, where nestle
has installed 100 milk tanks to assure proper storage according to quality and
health standards. Nestle also stresses on selection of skilful and trained
personnel for procurement purpose in ‘nestle principles of purchasing’.
8.1.4 Competitors (following competition laws and fair play)
Competition against other players for all resource, publicity, or market share is
natural. But in order to regulate this competition to avoid any dirty business
61
Corporate Social Responsibility in the Supply Chain: An Application in the Food Industry. Author(s):
Michael J. Maloni and Michael E. Brown. Page 45.
62
www.nestle.pk
63
Creating Shared Value Summary Report 2009 ; Creating Shared Value Key Performance Indicators.
(suppliers)Available at www.nestle.com
NESTLE PAKISTAN

practices and exploitation of consumer or new entrants certain regulations must
be in place. Competition commission of Pakistan regulates the competition in
Pakistani market (established on 2nd October; 2007 under the Competition
Ordinance, 2007). Major aim of this Ordinance is to provide for a legal framework
to create a business environment based on healthy competition towards
improving economic efficiency, developing competitiveness and protecting
consumers from anti-competitive practices.
Nestle supports free enterprise and other company’s equal rights .And supports
development of competition laws.
Pricing Fair competition Marketing
Competitor
Collusion with
competitor
condemned
Allocation of
customers and
products
Mergers and
acquisitions
Abiding
competition laws
Targeting
competitor
product
Nestle in its corporate principles states that nestle have its commercial policy set
independently and do not fix prices in agreement or collusion with competitor.
Allocation of customer and territories, markets in agreement with competitor is
also prohibited .And deals with supplier and customer in relevance to competitor
laws.
Mergers and acquisitions will be used as a means to improve business rather
than restrict competition.
“Advertising should not name competitors directly, portray competitive products
inaccurately, nor denigrate them”64
.
64
Nestle consumer communication principles. Page 1, available at ww.nestle.com.
NESTLE PAKISTAN

8.1.5 Business partners (collaboration and combined efforts)
“Business partner is a term used to denote a commercial entity with which
another commercial entity has some form of alliance. This relationship may be a
highly contractual, exclusive bond in which both entities commit not to ally with
third parties. Alternatively, it may be a very loose arrangement designed largely
to impress customers and competitors with the size of the network the business
partners belong to”65
.
Nestle in its corporate business principles, identify several possible business
partners.
Business
partner
Authorities Academic and
Professional
Bodies
Financial
Community
Local
Communities
Ethical
Concerns
Supporting
dialogue
Promotion and
implementation
of legislation
Communication
and
cooperation
Updating
knowledge for
mutual benefit
Information
sharing
No insider
trading
Personal
involvement
Develop long
term relations
“Bronn and Bronn (2003: 291) suggest that "Organizations are undergoing
dramatic changes as stakeholder groups exert an ever-increasing influence on
the place and responsibilities of organizations in society.”66
“The net effect of Nestlé Pakistan’s activities in the dairy sector amounts to more
than 80 000 jobs, equivalent to 35 indirect jobs for each Nestlé employee.”67
In its corporate business principles nestle pledges to support ongoing dialogue
between all industry sectors. Working with governmental laws and regulatory
authorities, and protecting rights of consumer. Business relations are to be based
on fairness and mutual trust in context of free market. Encouraging improvement
of group products, policies and services it fosters a constructive update of
knowledge and mutual benefit with academic and professional bodies, leading to
open and direct communication of information to general public and financial
community. Being listed at Karachi stock exchange it also has to abide by
65
www.wikipedia.com
66
The Role of Strategic Conversations with Stakeholders in the Formation of Corporate
SocialResponsibility Strategy, Author(s): Morgan P. Miles, Linda S. Munilla, Jenny Darroch Source:
Journal of Business Ethics, Vol. 69, No. 2 (Dec., 2006), pp. 195-205 Published by: Springer ,page 201.
67
www.netsle.com
NESTLE PAKISTAN

corporate governance code. Disclosure and transparency are listed as principles
followed by the company. Nestle also prohibits purchase and sale of nestle
securities and shares on basis of information not yet public and abides by insider
trading rules. While working with the local communities it operates in nestle
Pakistan focuses on building long term relations through building partnerships,
creating jobs, benifiting surrounding community.
“The environmental production conditions within the milk districts are superior to
non-milk districts, and school enrolment among the daughters of smallholders
within the milk district has increased.”68
“Nestlé is also convinced that it is the people who form the strength of the
Company and that nothing can be achieved without their commitment and their
energy, which makes people its most important asset”69
68
www.nestle.com
69
Nestle management and leadership principles.
NESTLE PAKISTAN

PART III
9 CONCLUSION
In light of research done, and the review and analysis undertaken several areas
of successfully pursued CSR policy, by nestle Pakistan are identified by me. Not
only are the firm’s practices in line with nestle group’s policy , but also the firm’s
adaptation to local markets of Pakistan and its recognition of cultural and
economic environment are reflected in translation of CSR principles. Following
can be concluded thus;
 CSR activities of firm stretch from education, earthquake relief, and rural
population development showing commitment towards social welfare.
 In its environmental stewardship efforts, the efficient use off resource,
minimization of environmental footprint, enhancement and improvement of
environmental friendly operation and policies are reflected.
 Through people commitment Nestle Pakistan has achieved positive
image, and work quality while promptly reporting relevant issues to
stakeholders.
 Incorporation of ethics, in business conduct has been reflected in multiple
aspects of business. Has the biggest market share in its industry, working
with government and international organizations (UNO) towards CSR. Has
an ethical code to abide by, shows that the company has been successful
in exhibiting ethics in its operations, dealings and impact on society at
large.
 The idea of shared value creation by group has been followed by Nestle
Pakistan. Creation of mil district, working with UNDP, helping farmers and
suppliers, consumer health are examples of value creation created by
company for Pakistani society.
NESTLE PAKISTAN

SKILLS AND LEARNING STATEMENT
QUESTION #1: what did you learn from the meetings with your project
mentor, including the presentation that you gave to your project mentor?
ANSWER: before the first meeting with my project mentor, Mr. Ikram-ul-Haque
Syed I was quite blank and undetermined. The fact that I am also taking my
ACCA paper P3 from him made me feel convenient to put everything on the
table. He briefed me on OBU criteria and I learned about requirements like ethics
module, project deadline and topic selection while focusing on single
organization. He advised me to select topic not only on personal interest but also
current study relation .the organization selection according to presence, topic
relation, information availability etc was also stressed by him. I left with a realistic
view on getting what I want to be the topic and organization.
“Most important principle I have learned in the field of interpersonal, it would be
this: Seek First to Understand, Then to Be Understood. This principle is the key
to effective interpersonal communication”70
The general information helped me to gather the required energy and plan the
work. After taking my time and finally selecting topic 20 and Nestle Pakistan as
the organization. I got down to collect information as I guessed the focus of the
next meeting to be on discussing research question designing , and research
approach for RAP. During the second meeting I decided to;
 Present gathered data on topic and company.
 Discuss my understanding of drafting the RAP made by reading RAP
preparation guide.
 Show the initial stages of RAP like topic selection and research objectives
prepared by me.

I felt relieved that he was pleased with gathered information. A discussion on
research work and information used, helped me to understand usage of relevant
and reliable information in RAP. Using already published work of others with
proper referencing was also stressed by him, giving them the credit and also
being ethical in research work. While discussing apt RAP preparation, mentor
cleared several issues like planning the work within time limit, Scheduling
meetings around drafting of work to get feedback in time, Draft SLS along with
the RAP to properly reflect experience and learning process while overcoming
thresholds during research. Student accountant article on SLS preparation turned
to be helpful and I understood the importance of using secondary information in
research work. A review of my work done braced me with the knowledge of using
70
The seven habits of highly effective people, by Stephen R. covey pg 120 .
NESTLE PAKISTAN

information in RAP, referencing it, differentiating between primary and secondary
data, and importance of relating qualitative and quantitative data. Also working
with constraints like time limit, loss of direction and communication gaps was
discussed. Through this encounter I was made aware of work remained.
Reassurance about quality required and present progress were also given .this
assessment helped me in drafting SLS having several self assessment questions
and I was able to reflect myself better. I now felt more confident in fulfilling OBU
criteria, designing research questions covering my topic, giving an in depth view
of research work done, Possible ways of addressing them. Improvements in my
proposed research approach were also made.
The third meeting was focused around presentation on power point slides, and
finalizing completed project. I was concerned about the layout and discussed it
with peers and mentor. The presentation prepared by me was followed by
question and answer session, I was a bit confused from the start but tried to hold
my ground, it was now that I realized I am being able to handle Questions and
left feeling rather satisfied about my efforts on RAP.
QUESTION# 2: how well do you think you have answered your research
questions?
ANSWER: while formulating research questions I kept in mind my RAP
objectives and the topic, I wanted both to cover the issue of CSR including
business ethics from various angles and also not to get carried away with my
research and loose my way while actually trying to connect the issue with
stakeholders and impact on business practice. This was intriguing, as issue like
environmental friendly business policies and corporate philanthropy in application
have various related goals and consequences, then what we read in a book
once. Gathering data most of which due the nature of topic came in qualitative
form, was one thing interrelating it, connecting it with quantitative data and
making an analysis that would reflect the extent of research done and reflect the
direction and reason of research was yet another. Referencing of information that
came from both academic and business sources was also challenging. This
although was thoroughly provoking, but gave me an opportunity to apply gained
knowledge .One issue while working on CSR and business ethics was the still
evolving and relevant nature and application of these terms. In practical context,
differentiating them from mere advertisement, implications of social investments
in long term and interrelation of society and business, I found to be very
debatable topics. The deep cultural and societal impacts, religious and economic
conditions and legal environment of business strongly compliment CSR policies.
My idea of effectively answering the questions was designing them so that they
might cover various dimensions like economic, ethical, philanthropic and social
issues relating CSR and while answering these relate the facts and company
information. With shedding light on stakeholders covered by policies and affected
by business operations. Reports and figures released by the company and
NESTLE PAKISTAN

pursued policies were extremely helpful while analyzing company’s performance
towards CSR in relation to group’s with a global presence. While learning about
CSR and business ethics the academic material like books and journals, I was
left with no proper sense of direction, coming back to company information and
facts , and form an approach that would not end me up in getting lost in
translation, took some time. I kept a simple approach of drafting my RAP even if
it seemed scattered and presented without sequence, and later redraft it as this
will take less time than to linger it altogether. While addressing each question I
would collect information, and cut it short in most relevant, related, and
authentic ,while the company’s clear and communicated stance on the topic ,
required thorough study for the purpose of review and application of knowledge
to analyze the consequences and effects of business policy in terms of CSR
,referencing from books , journals, news ,global compacts etc, to support any
conclusions or results reached was also stressed in order to form a solid base for
my RAP to reach its objectives. Use of tables and quantitative data to increase
understanding and support conclusions reached was also stressed.
QUESTION#3: How have you demonstrated your interpersonal and
communication skills during this project work?
ANSWER: Undertaking this RAP was my own decision; my first task was to
convince my family on the importance of this for me in my future study and
career. I knew that I might come across several barriers but, did it with an intent
to learn and explore. The fact that I have no practical experience relating my
ACCA studies till date lacking certain communication skills is quite natural for me.
From initial briefing about RAP by the mentor, I felt I had several general
knowledge questions, some of them were answered by my mentor and some
were addressed by the RAP preparation guide on ACCA global. While gathering
information for my project I felt that there was no obvious need for primary data
due to the overwhelming information I found about nestle. Once I started
designing research questions there were certain issues raised in my mind like
proper presentation of work, covering my topic from several angles and also
review company policies I found it difficult to explain this all to my mentor.
Scheduling with the mentor, due to his busy schedule at times also was an issue.
During the meetings the presence of unnecessary noise from surrounding people
and interruption was also distracting. I however learned that I must not let any of
this affect my concentration, taking notes and timing the meetings was helpful.
While answering research questions I found that I have several issues resolved
while trying to answer them in the best possible way and in this way I was being
able to cover the RAP, show my mentor practically what I have done, and also
my limitations in research and proper drafting can be communicated properly,
increasing the visibility of both my strengths and weaknesses. Discussing
research work projects, with my friends in universities learned that confusion,
delay, and most off all communication gaps are pretty much a part of the game.
NESTLE PAKISTAN

“When you communicate synergistically, you are simply opening your mind and
heart and expressions to new possibilities, new alternatives, and new options”71
Sometimes while raising queries and briefing my mentor on my work I felt I am
not being able to explain myself and my mentor did complain about this to me.
I on the other hand felt that at several occasions while discussing options for
RAP to turn out at its best, I and my mentor were not speaking the same
language. Through this I gained confidence to present my work and the
composure to face criticism, prioritizing effective questioning and communication
over my natural shy nature. Thus I gained useful information and experience to
work and interact with people.
QUESTION# 4: how has undertaking the RAP helped you in your
accountancy studies and current employment role?
ANSWER: the topic selection for RAP was done carefully by me not only
reflecting my personal interest but also expanding my current knowledge base on
CSR and business ethics, both of whom will be examinable in ACCA paper P1.
Undertaking the RAP was a distinct experience, through which I learned while
researching and drafting the project, how to find and collect relevant information
on the internet: the importance of thorough reading for strong knowledge base, to
support ongoing research work. I also learned how to present and sequence
information making it presentable in a meaningful way. Connecting issues and
most of all, finding a direction through a rather haphazard path of research work.
Tolerating delay, meeting deadlines, and working with constraints like lack of
information availability, electricity breakdowns. Developing certain IT skills
working with Power Point and Excel sheets also was a new experience to me.
Handling frustration, due to the burden of being individual in undertaking the task
and consequences. Although I am not currently employed, but all of the above
mentioned experiences must come in handy and I hopefully will feel less amateur
in work environment and pressures.
“The experiences you have as you carry out your decisions take on quality and
meaning in the context of your life as a whole.”72
Moreover while working on a company whose group has global presence,
business ethics relating employees, operations, decisions, management,
supplier, consumer etc have been viewed with increased visibility and better
understanding .and I feel that there is a lot that can be applied during my work
experience as ethical concerns being a professional have to be one of my
71
The seven habits of highly effective people by stephen R.covey pg134.
72
The seven habits of highly effective people by Stephen R. covey . pg 63.
NESTLE PAKISTAN

primary concerns. Overcoming communication barriers as mentioned in above
question, and working with others is also a learning experience. The ACCA exam
papers of professional level expect a certain level of practicality reflected while
answering the exam questions, as I learn from past papers I feel that while
working on nestle Pakistan I not only gained valuable knowledge on CSR in firm
perspective and also the academic and business material gone through other
then issued by the firm I feel much more enlightened about CSR and business
ethics in application. Connecting management philosophy and strategy, its
integrity and commitment within business practices .the importance of
stakeholder interests addressed , use of proper communication , and the idea of
creating a shared value for business and stakeholders as claimed by nestle ,
aligning both party interests will certainly become handy while sitting for P3 exam
‘business analysis’.
NESTLE PAKISTAN

LIST OF REFRENCES AND BIBLIOGRAPHY
1. Phill watts Richard Holme, (Jan 2000) Making good business sense, issued
by world business council for sustainable development.
2. Irene Goll and Abdul A. Rasheed (Jan., 2004), ‘The Moderating Effect of
Environmental Munificence and Dynamism on the Relationship between
Discretionary Social Responsibility and Firm Performance’ Journal of
Business Ethics, Vol. 49, No. 1
3. Reynold levy. (n.d.), a candid account of corporate philanthropy ‘give and
take’, Harvard business school press.
4. Stephen R. covey; The seven habits of highly effective people
5. ACCA paper P 1, professional accountant .BPP.
6. Alan Malachowski (editor),(n.d.) business ethics , critical perspectives on
business and management , published by Routledge.
7. Muel Kaptein, (Mar., 2004), ‘Business Codes of Multinational Firms: What
Do They Say?’ Journal of Business Ethics, Vol. 50, No. 1 pp. 13-31
published by Springer.
8. Bernhard Schwab (Jun., 1996), ‘A Note on Ethics and Strategy: Do Good
Ethics Always Make for Good Business ‘Strategic Management Journal,
Vol. 17, No. 6 pp. 499-500 Published by: John Wiley & Sons,
9. Josie Fisher (Jul., 2004),’Social Responsibility and Ethics: Clarifying the
Concepts’ Journal of Business Ethics, Vol. 52, No. 4, pp. 391-400 Published
by: Springer
10. Michael J. Maloni and Michael E. Brown (Sep., 2006), ‘Corporate Social
Responsibility in the Supply Chain: An Application in the Food Industry’
Journal of Business Ethics, Vol. 68, No. 1 pp. 35-52 Published by: Sprin
11. Morgan P. Miles, et al ‘(Dec., 2006), The Role of Strategic Conversations
with Stakeholders in the Formation of Corporate SocialResponsibility
Strategy’, Journal of Business Ethics, Vol. 69, No. 2 pp. 195-205 Published
by: Springer.
12. the UN global compact available at ;
http://www.unglobalcompact.org/aboutthegc/thetenprinciples/index.html
13.ICC business charter for sustainable business development; available at
http://www.bsdglobal.com/tools/principles_icc.asp
14.www.nestle.pk
15. www.wikipedia.com
16.www.mckinseyquarterly.com
17. www.dailytimes.com.pk
18. www.stakeholder-management.com http://www.stakeholder-
management.com/blog/?p=16
NESTLE PAKISTAN

19.http://www.scribd.com/doc/6895666/ethics-csr
20. www.nestle.com;
21. http://www.nestle.com/InvestorRelations/Reports
22. http://www.nestle.com/InvestorRelations/Reports/OtherReports/Environment
.htm
23. http://www.nestle.com/InvestorRelations/Reports/OtherReports/People.htm
24.http://www.nestle.com/InvestorRelations/Reports/OtherReports/OtherTopics
.htm
25. Nestlé Report on principles of purchasing.
26. Nestle report on communication principles.
27. Nestle (2009) Creating Shared Value Summary Report; Creating Shared
Value Key Performance Indicators.
28. Nestlé port on Management and Leadership Principles
http://www.nestle.com/AllAbout/Governance/BusinessPrinciples/BusinessPri
nciples.htm
29. Nestle human resource policy.
30. Nestle sustainability review.
31. Nestle corporate business principles.
32. Nestle code of business conduct.
33. Nestle policy on environmental sustainability.
34. Nestlé (2009) Consolidated Environmental Performance Indicators;
35. Nestle report on Nestle and water. Sustainability, protection, stewardship.
NESTLE PAKISTAN

APPENDIX ( A )
NESTLE ENVIROMENTAL PERFORMANCE
The following figures and chart is excerpt from “2009 Consolidated Nestlé Environmental
Performance Indicators”
Indicator Units
2000 % Change GRI
Reference
Year 2005 2006 2007 2008 2009
2008-
09
2005-
09
2000-
09
Refer-
ence
Total water
withdrawal
106
M3
per year 213 159 155 157 147 143 -3.2% -10.2% -33.0% EN8
M3
per tonne
product 8.42 4.37 4.05 3.82 3.59 3.47 -3.5% -20.7% -58.8% *
Outputs
Total water
discharge
106
M3
per year 158 123 118 101 96 91 -5.0% -25.6% -42.2% EN21
M3
per tonne
product
6.24 3.38 3.09 2.46 2.34 2.22 -5.3% -34.3% -64.5%
*
103
tonnes
COD per year N/A N/A N/A N/A 9.17 8.29 -9.6% - - EN21
Water
discharge
quality
Average mg
COD / l N/A N/A N/A N/A 95 90.78 -4.4% - - *
% of COD
removed N/A N/A N/A N/A 96% 97% 1.0% - - *
Greenhouse
gases emission
(direct),
scope 1
106
tonnes CO2
per year 4.72 4.31 4.05 4.13 4.10 3.98 -3.1% -7.6% -15.8% EN16
kg CO2 per
tonne product 186 118 106 101 100 97 -3.4% -18.4% -48.2% *
Greenhouse
gases emission
(indirect), scope
2
106
tonnes CO2
per year N/A N/A N/A 3.1 3.0 3.0 -0.1% - - EN16
kg CO2 per
tonne product N/A N/A N/A 75 73 73 -0.4% - - *
NESTLE PAKISTAN

Indicator Units
2000 % Change GRI
Reference
Year 2005 2006 2007 2008 2009
2008-
09
2005-
09
2000-
09
Refer-
ence
Air acidification
potential
103
tonnes
SOx equiv. per
year 28.2 18.4 19.0 21.4 18.11 16.64 -8.1% -9.7% -41.0% EN20
kg SOx equiv.
per tonne
product 1.11 0.51 0.50 0.52 0.44 0.40 -8.4% -20.3% -63.7% *
Emissions of
ozone-depleting
substances
tonnes R-11
equivalents
per year 29.69 10.19 8.93 8.82 5.02 4.85 -3.2% -52.4% -83.7% EN19
GR-11 equiv.
per tonne
product
1.17 0.28 0.23 0.21 0.12 0.12 -3.5% -58.0% -90.0%
*
By-products
(for recovery)
106
tonnes per
year 1.28 1.48 1.20 1.07 1.11 1.35 22.0% -8.7% 5.5% EN22
kg per tonne
product 50.57 40.7 31.4 26.0 26.95 32.79 21.7% -19.4% -35.2% *
Waste (for
disposal)
106
tonnes per
year 0.48 0.44 0.40 0.37 0.41 0.36 -12.4%-17.8% -25.2% EN22
kg per tonne
product 18.96 12.0 10.5 9.1 9.98 8.72 -12.7%-27.4% -54.0% *
* Nestlé specific indicators that are not
required by GRI.
Total water withdrawal (EN8)
The sum of water used by Nestlé factories from all sources, including purchases
from suppliers as well as surface, ground and rain water sources. This includes
water that may be treated through industrial services (such as softening and
demineralising), non-contact cooling water, water used for cleaning and water
used by itself as a raw material (e.g. for bottled waters) but does not include
NESTLE PAKISTAN

water contained in raw materials (e.g. from milk).
Over the last ten years, both absolute total water withdrawal and water
withdrawal rate per tonne of product decreased.
This decrease is the result of extensive efforts by Nestlé engineers and
environmental professionals to improve water efficiency in our operations. It is
also influenced by changes in the relative tonnage of each product category
(volume change) and acquisitions and divestitures.
The following chart shows the contribution of these three components.
Total water discharge (EN21)
The sum of all water effluents discharged from Nestlé factories. Water effluents
are generated in manufacturing from processing, cleaning and some cooling
processes.
Over the last ten years absolute total water discharge decreased by 42.2% as
well as the total water discharge per tonne of product, which decreased over this
time period by 64.5%.
Water discharge quality (EN21)
The water quality is expressed by the Chemical Oxygen Demand (COD),
commonly used to measure the amount of organic compounds in water. A
decrease in COD represents improvement of water quality.
Greenhouse gas emission (direct) (EN16)
The sum of all on-site greenhouse gas emissions at Nestlé factories which arise
from combustion processes used to manufacture products as well as the CO2
equivalents from refrigerants. These greenhouse gas emissions can result from
burning of fuels in boilers, roasters, dryers, electric generators and from
refrigerants losses (CO2 eq). Not included are greenhouse gases arising from
transportation and business travel. This indicator corresponds to Scope 1 of the
WRI/WBCSD GHG Protocol.
Over the last ten years absolute greenhouse gas emission (direct) decreased by
15.8%.The greenhouse gas emission (direct) rate per tonne of product also
decreased by 48.2%.These reductions have been achieved through energy
savings and fuel-switching projects where fuels such as coal and heavy fuel oil
were replaced by cleaner-burning fuels such as natural gas.
Greenhouse gas emission (indirect) (EN16)
These are greenhouse gas emissions arising from the generation of electricity,
hot water and steam which is purchased by Nestlé or otherwise brought into our
organizational boundary. The emissions physically occur at the facility where the
electricity is generated. Typically publicly available country-specific default
factors are used to calculate this from the purchased energy qualities. This
NESTLE PAKISTAN

indicator corresponds to Scope 2 of the WRI/WBCSD GHG Protocol.
NESTLE PAKISTAN

Air acidification potential (EN20)
The sum of all SOx and NOx gas emissions at Nestlé factories resulting from the
total on site energy consumption, converted into SOx equivalents.
Over the last ten years absolute air acidification potential decreased as well as
the air acidification potential rate per tonne of product, also decreased over this
time period. These reductions have been achieved through energy savings and
fuel-switching projects where fuels such as coal and heavy fuel oil were replaced
by cleaner-burning fuels such as natural gas.
Emissions of ozone-depleting substances (EN19)
The sum of substances emitted from Nestlé factories which have been shown to
contribute to the depletion of the ozone layer, that is, having an ozone depletion
potential. The common unit of measurement is R-11 equivalents. R-11 is one
type of refrigerant, which has been assigned an ozone depleting potential of one,
with all other ozone depleting substances being assigned relative values. The
ozone depletion potential of each substance is determined using conversion
factors commonly agreed by relevant authorities. These substances are primarily
refrigerants in equipment used to cool or freeze products.
Both absolute ozone depletion potential and ozone depletion potential rate per
tonne of product decreased over the last ten years.
By-product (for recovery) (EN22)
Any materials that are generated during the manufacture of a product that leave
the factory and is destined for reuse or recovery, including recycling, composting
and incineration with heat recovery. They are not limited just to the product
manufactured; they include all materials used to support the manufacture.
In 2009, the by-products figure increased due partly to the newly acquired Nestlé
Nutrition factory which generated approximately 5% of the total Nestlé by-
products.
Waste (for disposal) (EN22)
Waste is any material, which arises during the manufacture or distribution stage
of a product at a factory site that is destined for final disposal to off site landfill or
to incineration without heat recovery. Not included are extraordinary wastes
generated on a non-routine basis, such as construction and demolition waste,
contaminated soils, etc.
Over the last ten years absolute waste quantity decreased by 25.2%.The waste
rate per tonne of product also decreased over this time period by 54%.
NESTLE PAKISTAN

APPENDIX ( B )
NESTLE KEY PERFORMANCE INDICATORS FOR YEAR 2009
The following figures and chart is excerpt from “Creating Shared Value Summary
Report 2009”
Creating Shared Value Key Performance Indicators GRI 2008 2009
Economic
Total Group sales (CHF million)
•
109908 107618
Net profit (CHF million)
•
18039 10428
Nutrition
Nestlé Nutrition business (sales volume, CHF million) 10375 9963
Products meeting or exceeding Nutritional Foundation profiling criteria (% of
total sales)(a)
67 71
Renovated products for nutrition or health considerations(b)
6254 7252
Products with increase in nutritious ingredients or essential nutrients (b)
3068 3878
Products with reduction of sodium, sugars, TFAs, total fat or artificial colourings(b)
3186 3374
Products analysed and improved or confirmed via 60/40+ programme (sales volume,
CHF billion) 13.6 16.8
Products containing Branded Active Benefits (sales volume, CHF million) 5072 5045
Products featuring Nestlé Nutritional Compass labelling (% of sales worldwide)(c)
• 98 98
Nestlé television advertising to children under six in compliance with policies on
responsible marketing (%) • n/a 99.9
Infant formula marketing staff in developing countries trained in the WHO Code (% of
staff) n/a 100
NESTLE PAKISTAN

Creating Shared Value Key Performance Indicators GRI 2008 2009
Safety, health and environment governance
ISO 14001/OHSAS 18001-certified sites (number of certificates) 455 807
Packaging
Total packaging materials (million tonnes) • 4.00 4.17
Packaging weight reduction (tonnes) n/a 58995
Reduction of packaging weight (per l of product) – Nestlé Waters, over 5 years (%) 20.0 21.8
Suppliers
Suppliers audited for food safety, quality and processing 3417 3864
Suppliers who received Nestlé Supplier Code 165000 165497
Suppliers who acknowledged Nestlé Supplier Code 120000 165497
Our people
Total workforce (number of employees) 282887 278165
Key Business Positions • 970 1319
Lost time injuries among employees and contractors (per million hours worked) 2.8 2.0
Total injury rate among employees and contractors (per million hours worked)
•
6.1 5.1
Fatalities of employees and contractors
•
13 4
Employees receiving formal classroom training in developing countries
•
83928 93146
Leadership positions held by women (%)
•
25 27
Local Management Committee members native to country in developing countries
(%) • 42 42
• KPI corresponds in full to a GRI G3 indicator.
• KPI corresponds in part to a GRI G3 indicator.
(a) 2009 assessment scope: 66% total food and beverages sales volume.
(b) based on reports of approximately 75% of worldwide product development
teams.
(c) Excludes petcare and Dreyer’s.
(d)Excludes plain coffee, tea and water, products for Nestlé Professional, gifting
chocolate, petcare, and Nestlé Nutrition.
(e) Based on internal and external audits.
NESTLE PAKISTAN

APPENDIX ( C ) GLOSSARY OF TERMS
ACCA: association of certified chartered accountants
CHF: Swiss frank (ISO currency code.)
RAP: research and analysis project
CSR: corporate social responsibility
NESTLE SA: Switzerland based nestle. Parent company of nestle Pakistan
UNO: United Nations organization
OECD: organization for economic cooperation and development
ICC: the international chamber of commerce
UHT: ultra high temperature processing
RS: Pakistani rupees.
NGO: non governmental organization
UNDP: United nations development programme
NESTLE PAKISTAN

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