The document provides an overview and analysis of Nestle's 2013 Corporate Social Responsibility report. Some key points: - Nestle is the largest food and beverage company in the world but has faced criticism over its business practices. - The report discusses Nestle's efforts around sustainability, sourcing, water stewardship, and addressing past issues like marketing of baby formula. - While Nestle has made commitments to improve, some argue the response has been delayed and full accountability is still needed to address impacts on communities and resources.

1. Nestlé CSR, 2013
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Corporate Social Responsibility Reporting – Nestlé Company
BSC-402
Financing Organizations
Autumn, 2014
City University, Seattle

2. Abstract
Nestlé CSR, 2013
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Many people possess a vision of a company, based on what they
have learned about that
company from media, the news, advertising, and word of mouth.
Typically, the average
consumer does not take a great deal of time to understand a
company’s merits based on how that
company interacts with the world. For most of the last 80
years, from the end of World War II to
current, people have learned about products and companies
through marketing.
Beginning in the 1960’s advertisers and media began to be
challenged about the
reliability of the statements that were being made. Quotes like
“I don’t care what you say about
me, just make sure you spell my name right” have been around
since the early 20th Century
(Turney, 2012), and the attitude is that people remember what
they want to about a person or a

3. company. Most people remember a product and whether it
worked for them, more than they
remember details about the company. If a skin cream makes
your skin soft, then the company
must be doing a good job. Companies and advertisers began to
take advantage of the consumer’s
willingness to trust them, and advertising and gimmicks became
common on Radio and
Television as a way of promoting products. In May, 1958 the
game show “Dotto” was found to
be rigging their outcomes and shortly after that the popular
“$64,000 Challenge” was also
accused of coaching contestants (PBS.org, 1999). This began
an era where people started to ask
about the truth and viability of corporate practices.
It is ultimately up to the consumer to know about what they are
buying and how a
company or organization does business. Since the first United
Nations convening of Global
Responsibility and Global Reporting initiatives, consumers have
had increasing information on
how a company operates (UN, United Nations Document
Retention, 2014). The outcome of the

4. reporting will vary based on the amount and quality of the data,
and on how frank a company is
about the context of the reporting.
Nestlé CSR, 2013
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The Nestle Company is a global brand, producing and
distributing a myriad number of
products. Nestle has reported Sustainability or CSR Reports
since 2002 (Nestle, 2013). Nestle
has been given awards for their reporting of their global
activities, and yet Nestle is also under
fire with environmental and human rights groups for misuse of
resources and for using their
global financial resources to control precious natural resources
such as water (Matera, 2013).
It seems impossible for a large corporation to monitor and
manage the activities of
thousands of employees around the globe, no matter how good
their systems. In this discussion
the focus will be on Nestle and the quality and accuracy of the
Nestle CSR Report for the year

5. 2013, as it relates to the Nestle Company’s product line and
their ability to maintain the
Company Mission through their global activities.
Nestle
Many people in the United States think first of a candy bar or
hot cocoa when they think
of Nestle, yet the Nestle range of brands begins with Carnation,
Inc. and goes as far as Perrier
and other water products. Nestlé’s first product was an infant
baby food called “Farina Lactée”,
invented by the company founder Henri Nestle.
Today, Nestle is the largest provider and seller of food and
beverage in the world, with
global revenues in 2013 of over $104 Billion (Nestle, 2013).
Nestle is also one of the largest
employers in the world, with more than 300,000 employees
working in 196 countries around the
Earth (Nestle, 2013).
As noted earlier, the Nestle product line includes a wide range
of brands and products,
including food, beverage, health and wellness products, and a
variety of consumer goods ranging
from cat food to bottled water. Nestle products are in nearly

6. every home and business in the
civilized world.
Nestlé CSR, 2013
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Nestle has become a leading brand through acquisition of other
companies, as well as
through development of new products. The Carnation company
and Ralston Purina are two large
companies that were acquired by Nestle in the last 15 years.
These two companies gave Nestle
significant presence in key consumer goods areas of pet food,
dairy products and baby food.
Nestle is now a global leader in the production of baby food and
formula and has come under fire
since the 1970’s for inappropriate distribution of, and quality
issues with their infant formulas.
The complaints in the 1970’s were focused on distribution of
infant formula in impoverished
areas of the world where infant breastfeeding was more
appropriate and safer for babies.
(Krasny, 2012).

7. More recently Nestle has become the focus of many complaints
and accusations around
the damaging effects of their bottled water programs (Lohan,
2007) (Thomasson, 2012).
Organizations have accused Nestle of hoarding water in
developing countries, while others
complain of the immense waste issues associated with packaged
water products. Further, Nestle
has been criticized in the US for packaging products represented
as spring water, that are nothing
more than tap water that has been filtered (Matera, 2013).
The complaints and criticisms of the Nestle Company would
seem to be at odds with the
company’s stated Mission of “Good Food, Good Life”, yet
Nestle continues to be a large and
successful enterprise globally. Even as these negative reviews
come in, the company discusses
the ongoing merits of the community work, corporate
initiatives, and resource management
(Nestle, 2013). Nestle employees are allegedly out in the world
taking control of water rights,
selling products that are not needed, and duping consumers with
products that are sub-par or not

8. needed. It would seem that the Nestle employees are out to take
over the world and mislead the
consumer, despite all of the efforts of the company.
Nestlé CSR, 2013
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Global Transparency
A key area of the CSR Reporting initiative is the Standard
Disclosures of each reporting
company, where performance is discussed in the key
foundations of the Global Reporting
Initiative. The Standard Disclosures in the Nestle CSR include
Sourcing, Economic, Social:
Labor Practices, Social: Human Rights, Social: Society, Social:
Product Responsibility, and
Animal Welfare. In these reviews Nestle discusses both
accomplishments and legal and social
complaints, how those issues have been addressed and whether
the infractions have been
corrected, or are in process or under review.
It can be expected by a reviewer of the Nestle CSR Report that
these disclosures will be

9. consistent with statements made in other areas of the CSR
Report around Ethics, Corporate
Governance and Corporate Mission and Values. The 2013 CSR
Report by Nestle is increasingly
focused on improving global resonance for Nestle programs,
and thus improving stockholder
value as the company continues to work toward long-term
sustainable, growth.
Animal Welfare
The Nestle Company uses sizeable amounts of dairy, meats and
animal bi-products in the
development and preparation of their products. While infant
foods and chocolates have been a
rich part of the Nestle products, only in the last year has Nestle
begun to implement strict focus
on the use of hormones and other production techniques by their
vendors (Nestle, 2013, p. 158).
While Nestle is now part of an extensive ISO Technical
Specification initiative in Europe, the
reader might wonder how producers have been monitored in the
past. There is notable effort in
place to improve awareness and training of farmers who
contribute to the Nestle product line,

10. including large training farms in Pakistan and China.
Dairy
Nestlé CSR, 2013
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As noted above, dairy is a critical element in the product line
of the Nestle Company.
Dairy accounted for 18.83% of total revenue, with $19.7 Billion
in 2013, with a profit margin of
15.2% or $2.99 Billion (Press Release, 2014). In 2013, Nestle
sourced dairy products from over
400,000 farmers world-wide (Nestle, 2013, p. 146). The Nestle
spend on farmer assistance and
training in 2013 was over $50 million. Nestle has begun to
advance the training and certification
of their dairy products since 2009, with inspections and
standards being implemented in Spain,
Mexico and other countries. The focus of these efforts are to
reduce greenhouse gas emissions
as well as consolidate production facilities to limit energy use.
Prior to 2009 it would seem that
Nestle was satisfied with allowing producers to set their own

11. standards for production and
transport of products.
Deforestation
Many would argue that the need for palm oil is limited, as it is
not only a difficult
resource to obtain sustainably, but palm oil is also not really
very good for you. Still, there is a
sizeable global demand for this product and Nestle is a key user
in its product line. Additionally,
Nestle products include soya which impacts forests in several
countries like Brazil, and Nestle
packaging is one of the largest users of paper goods in the
world. Beginning in 2010 Nestle has
stated publicly that they are taking a “No Deforestation”
approach to their business practices.
This goes as far as managing traceability of palm oil sources,
and holding suppliers accountable
for acceptable forest practices and recycling around paper goods
(Nestle, 2013, p. 144). It seems
that Nestle has taken this area seriously in the last few years,
and is working to be a good
corporate citizen moving forward.
General Sourcing

12. Nestlé CSR, 2013
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Since 2009 Nestle has begun to audit Tier 1 producers and
suppliers, with about 65% of
their suppliers now being audited globally. Nestle is now
holding suppliers accountable for
producing standards, and a lack of action will result in the
elimination of that supplier from the
company’s procurement plans. Nestle efforts around sourcing
and monitoring of methods and
activities by suppliers is now a key company initiative (Nestle,
2013, p. 131). This responsible
sourcing initiative includes Nestle focus on twelve key
commodities; palm oil, soya, sugar, paper
and board, coffee, cocoa, dairy, fish and seafood, shea, vanilla,
hazelnuts, and meat, poultry and
eggs. While these efforts to improve the awareness of sourcing
are commendable, currently
Nestle discloses that only 17% of all commodities used by the
company are traceable (Nestle,
2013, p. 385). One of Nestlé’s largest volume products is also

13. not mentioned in this review of
sourcing, and that is water. If water is one of the company’s
largest volume products, it would
seem to be necessary to track that as part of the sourcing
programs. However, Nestle has listed
water as an entirely separate area in their CSR Report.
Water
Nestle Waters is the largest producer and distributor of water
world-wide (Nestle-Waters,
2014). This resource is seen as a critical element to the Nestle
business, generating nearly $8
billion in revenues and over $800 million in profit in 2013
(Press Release, 2014). Water is also a
key area of concern for Nestle, both to the company and to their
consumers and the community.
Nestle notes both water challenges and water initiatives in their
report, highlighting the
challenges as a separate awareness area, which includes the fact
that 36% of the Nestle
manufacturing facilities are located in water stressed areas of
the world (Nestle, 2013, p. 170).
Nestle also discusses in this portion of their report the recycling
and reduction of water use in

14. water extraction and product development and manufacturing of
other products. In both cases
Nestlé CSR, 2013
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Nestle points out that they have reduced their impact on the
world water supply by sizeable
percentages.
In the case of managing water as a resource and contributing to
the development of water
supplies, Nestle has taken responsibility for the management of
water as a resource by creating a
global Operations Water Task Force, which is part of the
Operations Sustainability Council
(Nestle, 2013, p. 178). The Water Task Force monitors water
risk and stress through site
measurement based on ISO 14001:2004 guidelines and
improvement of performance against
those guidelines.
Nestle also participates in the creation of new standards through
internal commitments
stated as the Nestle W.A.T.E.R. commitment. This commitment

15. is broken into 5 key areas:
age with suppliers, especially those in agriculture
These above noted commitments are part of a CEO water
mandate adopted in 2013 as part of the
Nestle Commitment on Water Stewardship. These efforts
demonstrate a recent effort on the part
of Nestle to the wellbeing of the planet, and are part of a larger
sustainability initiative that many
would say has been a long time coming for a company the size
of Nestle.
Criticism
As noted earlier, many organizations and individuals have
found fault with Nestle around
their conduct as a world leader in the procurement and selling
of food and beverage and
Nestlé CSR, 2013

16. 9
consumer goods. Among the criticisms of the Nestle company
are the previously mentioned
issues of baby formula and water. Both of these areas have
been reviewed and responded to by
Nestle on numerous occasions with recent commitments already
noted in this discussion. As
mentioned previously, palm oil is listed as one of Nestlé’s most
watched commodities due to its
presence in Nestle confections and other consumer products.
Palm oil has been identified as a
major contributor to deforestation and rain forest destruction.
On a broader scale, is the ongoing challenge to Nestlé’s right
to procure public resources
for their operations. Most notably, water is an ongoing area of
challenge in the United States and
around the world (Matera, 2013). The outrage over Nestlé’s
right toward water resources has
even been featured in the movie “Tapped” which discusses not
only the misuse of water
resources, but also the impact of huge amounts of plastic bottles
on the planet (Atlas, 2014).

17. Further, Nestle has delayed its response to many criticisms
over the years, by delaying
transparent reporting and limiting global improvement
commitments until recent years. Most
Nestle responses to public pressure have been authored and
implemented in the last 4 years, led
by the Nestle response to the direct pressure on its palm oil
processes.
The assumption that Nestle may buy any resources they wish, is
becoming more
increasingly challenged around the globe. Global sentiment and
ongoing challenge in the courts
and the community will limit the freedom of the Nestle
Company to grow in the future. Nestle
stockholders, board, and management have moved forward
together in the last 5 years to begin to
respond to global pressures, as noted in the 2013 CSR Report.
Conclusion
Nestle has noted in the last few years that increasing public
pressure on governance and
policy has required a strong response to protect market share
and stockholder value (Nestle,

18. Nestlé CSR, 2013
10
2013, p. 6). As Nestle moves forward in its ongoing
commitment to more sustainable and
globally focused practices, a major challenge will be to not only
deliver on commitments, but
also to be more public about the accountability of the company
to the community. This effort
will include being a leader in training and developing more pro-
active processes with vendors
and business partners.
Nestle business practices in the past have seen the company
painted as a global bad-guy
in many ways (Matera, 2013) (Krasny, 2012). Undoing the
damage noted in the press and in the
courts will be a major challenge that management must step
toward. Stockholder value in the
coming years will depend not on quick profits, but on long-term
generation of value.

19. References
Atlas, Films. (2014). Tapped the Movie. Retrieved from
tappedthemovie.com:
http://www.tappedthemovie.com/
Nestlé CSR, 2013
11
Krasny, J. (2012). Business Insider. Retrieved from
BusinessInsider.com:
http://www.businessinsider.com/nestles-infant-formula-scandal-
2012-6?op=1
Lohan, T. (2007). AlterNet. Retrieved from Alternet.org:
http://www.alternet.org/story/52526/rural_communities_exploit
ed_by_nestle_for_your_b
ottled_water
Matera, P. (2013). Corporate Research Project. Retrieved from
corp-research.org:

20. http://www.corp-research.org/nestle
Nestle. (2013). Neste, Creating Shared Value. Retrieved from
Nestle.com:
http://www.nestle.com/asset-
library/Documents/Library/Documents/Corporate_Social_Respo
nsibility/nestle-csv-full-
report-2013-en.pdf
Nestle-Waters. (2014). Nestle Waters. Retrieved from Nestle-
waters.com: http://www.nestle-
waters.com/aboutus
PBS.org. (1999). PBS "The American Experience". Retrieved
2014, from PBS.org:
http://www.pbs.org/wgbh/amex/quizshow/peopleevents/pande06
.html
Press Release, N. P.-2. (2014). Nestle 2013 Performance Press
Release. Retrieved from
Nestle.com: http://www.nestle.com/asset-
library/documents/library/events/2013-full-
year-results/press_release_en.pdf
Thomasson, E. (2012). Reuters. Retrieved from reuters.com:
http://www.reuters.com/article/2012/10/26/us-nestle-online-
water-

21. idusbre89p07s20121026
Turney, M. (2012). Northern Kentucky University, PR Dept.
Retrieved 2014, from NKU.edu:
http://www.nku.edu/~turney/prclass/readings/3eras1x.html
Nestlé CSR, 2013
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UN. (2014). UN Global. Retrieved 2014, from
http://www.unglobalcompact.org/
UN. (2014). United Nations Document Retention. Retrieved
2014, from UN_Documtents.net:
http://www.un-documents.net/ocf-09.htm
UNEP. (2014). UNEP.org. Retrieved 2014, from UNEP.org:
http://www.unep.org/resourceefficiency/Business/Sustainablean
dResponsibleBusiness/Pa
rtnershipBuilding/GlobalReportingInitiativeGRI/tabid/78936/De
fault.aspx
UNESCO. (2013). unesco.org. Retrieved 2013, from Ocean
facts:
http://www.unesco.org/new/en/natural-sciences/ioc-
oceans/priority-areas/rio-20-

22. ocean/blueprint-for-the-future-we-want/marine-pollution/facts-
and-figures-on-marine-
pollution/
Corporate Social Responsibility (CSR) Reporting Assignment
Goal
Students will select a publically traded company that reports a
triple bottom line (economic
viability, social responsibility, and environmental
responsibility), and evaluate the
transparency and effectiveness of the corporate entity's efforts
with regards to social
responsibility and environmental responsibility (not economic
viability).
Assignment
Students will analyze the corporate social responsibility (CSR)
report and conduct further

23. investigation to determine whether the purported benefits are
fairly stated, whether the CSR
program is effective or simply “greenwashing,” and whether
CSR report is useful for gleaning
a full picture of that entity's impact on the environment and
society. Outside research will be
conducted to help assess the CSR program and report. The
analysis should be at least 2,000
words long.
This Assignment is due in Week 9, NO LATER than midnight
on Sunday.
Grading Rubric
The below rubric explains in detail how your assignment will be

24. assessed.
Grading Components % of
Grade
Below Standard Approaching Standard At Standard Exceeds
Standard
Assessment of CRS Report
and Program
85 A detailed assessment of the
CSR report and program is
not provided. Little effort
was made to affirm or
disprove key statements
made in the CSR report. If
student provided an opinion
as to whether the CSR
reporting and program are
effective or simply
greenwashing, that opinion
was not justified by a

25. vigorous argument
supported by facts.
A limited assessment of the CSR
report and program is provided.
Some effort was made to
investigate key statements made
in the CSR report and either
affirmed or disproved, with
supporting evidence. The student
has provided an opinion as to
whether the CSR reporting and
program are effective or simply
greenwashing, yet that opinion is
backed by an incomplete
argument, only partially
supported by facts.
A detailed assessment of the CSR
report and program is provided.

26. To the extent possible, key
statements made in the CSR
report have been investigated
and either affirmed or disproved,
with supporting evidence
presented. The student has
provided an opinion as to
whether the CSR reporting and
program are effective or simply
greenwashing, and that opinion
has been justified by a vigorous
argument supported by facts.
An exhaustive assessment
of the CSR report and
program is provided. An
extraordinary effort was
made to investigate key
statements made in the CSR

27. report. Statements were
either affirmed or
disproved, with support
each decision. The student
has provided an opinion as
to whether the CSR
reporting and program are
effective or simply
greenwashing, and that
opinion has been justified
by a vigorous and
comprehensive argument
supported by substantially
all relevant facts.
Style and Mechanics 15 • Spelling, punctuation,
and/or grammatical errors
make understanding difficult
• Contains numerous
awkward or ungrammatical

28. sentences, and sentence
structure is simple or
monotonous • Frequently
misuses words or uses words
that are abstract or informal
for the topic
• Many spelling, punctuation,
and/or grammatical errors may
temporarily confuse the reader
or impede the overall
understanding • Sentence
structure generally correct but
may be wordy, unfocused,
repetitive, or confusing •
Sometimes uses abstract or
informal words and/or misuses
words
• Spelling, punctuation, and/or

29. grammatical errors are minimal
and do not impede understanding
• Sentences generally clear, well
structured, and focused • Uses
words accurately and effectively
• Almost entirely free of
spelling, punctuation, and/or
grammatical errors •
Sentences are varied, clearly
structured, carefully
focused, and fit
assignment’s purpose and
audience • Chooses
accurate, effective and
appropriately specific words
for their precise meaning