The Challenges of Corporate CSR Reporting: Nestle's "Creating Shared Value" - True CSR or Just Good PR?
The Challenges of Corporate CSR Reporting Nestle’s Creating Shared Value – True CSR or Just Good PR?Leading global corporations are subject to mounting external pressures to publish detailedcorporate social responsibility reports. Shareholder groups and civil society organizations arepressing firms to divulge exactly how they are performing in an increasing number of areas.Companies are also increasingly finding that taking CSR initiatives can do a great deal to boosttheir own reputation, which is why programs such as those promoted by the United NationsGlobal Compact, Business for Social Responsibility and the Global Reporting Initiative aregaining in popularity and respect.But as each new glossy and ever-more detailed CSR report is published, so the questionconstantly surfaces: are these credible and accurate reports, or little more than public relationsexercises?Many organizations have tried to track trends in sustainability reporting and objectively rankcompanies on how well they report (see EthicsWorld CSR Surveys and Trends). Thesepublications do help to sift through some of the fluff, but evaluating whether a company does whata company says remains a daunting task.Nestle, the giant global food company headquartered in Switzerland, has released its CSRreport Creating Shared Value.The report takes on a wide variety of issues developed by a company that works with leadingorganizations like SustainAbility and AccountAbility. Nestle was one of the first food companies tohelp the Global Reporting Initiative develop a global reporting standard and indicators onsustainability in the food sector. It participates in such initiatives as the UN framework to tackleclimate change and the International Cocoa Initiative. But despite Nestle’s positive credentials,advocacy groups like Baby Milk Action and Corporate Watch continue to be critics and challengethe credibility of the company’s reporting.Nestle’s report covers four areas it deems to be the most important – Manufacturing andEnvironmental Footprint, People, Agriculture and Rural Development, and Products andConsumers. There is a description of current projects and accomplishments in each area, alongwith a “key challenge” to which Nestle then responds with its objective.Manufacturing and Environmental Footprint 18% of its factories have been certified, and its goal is to have 100% certified by 2010. 84% of its factories are audited by an external network, called CARE. Since 1998, water usage was reduced by 28% and a goal was set to reduce water 2-3% over the next five years.Key Challenge – Sustainable water useResponse – Nestle is increasingly trying to improve water management outside its directoperations.People The company is working towards external certification of all of its factories. Nestle complies with International Labor Organization conventions, but it regrets that in 2007 there were 15 work related fatalities Developing talent is a major initiative to bring in order to maintain a competitive workforce
Key Challenge – Empowering high performing teamsResponse - Nestlé continuously promotes a culture of engagement and performance to increasecustomer satisfaction and reduce absenteeism.Agriculture and Rural Development Milk production factories are growing. There is a renewed focus on sustainable productivity in the coffee and cocoa areas. Nestlé will receive Common Code for the Coffee Community (4C)-verified coffee in 6 of its coffee factories by the end of the first quarter of 2008.Key Challenge – BiofuelsResponse - Nestlé believes that decisions about energy sources must be based on cost–benefitand life-cycle analysis, and should consider their full social and environmental impact, includingthe effects on food prices and water.Key Challenge – Water management in agricultureResponse - Nestlé is a vocal public advocate for access to clean drinking water, and has madeconsiderable efforts to share knowledge and best practice on agricultural water use andprotection.Products and Consumers Major focus on nutrition in food products, which has been a source of higher profits Nestle is starting programs in countries such as Brazil to provide affordable, nutritional products to low-income consumers It is the largest single baby food market worldwide.Key Challenge – Tackling obesityResponse – Nestle lays out six-pronged response as a strategic approach to this healthworldwide health problem.Nestle’s accomplishments in its key CSR areas are detailed in the report, but the text falls shortwhen it comes to admitting problems and difficulties in meeting goals. Articles from outsidesources, notably advocacy NGOs, highlight the shortcomings, but these too raise questions aboutobjectivity at times and so makes the challenge of determining the reliability of corporate reportsall the more complex.An article from Baby Milk Action, for example, criticizes Nestle for aggressively marketing babyfoods, trade union busting, failing to act on child slavery in its cocoa supply chain, depleting waterresources, among other concerns. The group’s primary allegation is that Nestle has violated thebaby food marketing requirements adopted by the World Health Assembly and conducts faultyaudits. It has been critical of Nestle for many years.An article in the Sydney Morning Herald expressed the same concerns over Nestle’s“aggressive marketing tactics.” According to the article, “under an agreement by theManufacturers of Australian Infant Formula, companies may not advertise formula for childrenunder 12 months as it has been shown to reduce breastfeeding rates.”Corporate Watch has highlighted Nestle’s questionable marketing schemes in promoting itsbottled water and the company’s impact on public water sources.
EthicsWorld seeks to assist companies and organizations to better understand the challenges ofCSR reporting and continues to highlight reports by major firms and comments by leading NGOs.Keep monitoring our site for analysis on how companies are addressing this sticky issue.