Nestle Social Report

Learning, Practice, Results. In Good Company

Nestlé Shares Its Story of Creating Shared ValueOne in a series of case studies on social reporting

Institute for Responsible Investment

www.BCCorporateCitizenship.org

Boston College Center for Corporate Citizenship

Social Reporting case studies

Project overviewThis case study is one of a series published in 2009 by the Boston College Center for Corporate Citizenship through its affiliate, the Institute for Responsible Investment, on the topic of social reporting. Companies participating in the project were Nestlé, Baxter International Inc., Gap Inc., Novo Nordisk, Seventh Generation, State Street, and Telefónica. These companies provided funding for the project as well as access to individuals involved in their reporting process. In the case studies, Center researchers explore how and why companies prepare social reports, where the challenges lie, how they are overcome and where the true value is in the report and reporting process for a group of leading companies.

By Belinda (Hoff ) Richards

and Seema Bharwani

Contents2 AboutNestlé

3 ChallengesNestléfacesinreporting

6 HistoryofsocialreportingatNestlé

10Decidingonthecontentofthereports

14Processforpreparingthereport

16Distributionofthereports

18Conclusion



Social Reporting case studies 1

Over the past eight years social reporting at Nestlé

has evolved from issue specific reports responding

to current debate to a more holistic report that

attempts to “communicate about the interdependent

relationship of Nestlé with the people of the

countries where [it] operates.” This case study

describes why and how Nestlé has evolved its

reports, the challenges of communicating “shared

value creation” and how a commitment to greater

transparency is helping Nestlé to reinforce its

company values and create a “platform for dialogue”

with internal and external stakeholders.

Evolution of reporting at Nestlé



2 Social Reporting case studies

About NestléNestléistheworld’slargestfoodandbeveragecompany.Salesofmorethanus$80billionandnetprofitofaboutus$8billionin2007makeNestlélargerthanitsnexttwocompetitors,KraftandUnilever,combined.Itsglobalworkforcecomprisesroughly275,000employeesandithasfactoriesoroperationsinalmosteverycountryintheworld.

Everydayabout2billionNestléproductsaresoldwith50percentof thoseproductsbearingtheNestlétrademark.Thecompanyisoperatedinarelativelydecentralizedmanner,accordingtogeographiczonesandmarkets.Nestléalsooperatessomeofitsbusiness,suchasNestléWaters,throughaseparatestructure.

ThisdecentralizedstructurereflectsthenatureofNestlé’svaluechain,whichinmostcasesinvolvesagriculturalsourcing,manufacturingandconsumptionoccurringinthesamecountryorregion.NestléuseskeydocumentssuchastheNestlécorporatebusinessprinciplestoconveyacommoncorporatecultureacrossitsdecentralizedstructureandstrivestoachieveconsistentqualitystandardsacrossitsoperations.Firstadoptedin1998,Nestlé’sbusinessprincipleshavesincebeenexpandedtoincorporatethefirstnineprinciplesoftheU.N.GlobalCompactin2002andagainin2004toincludefurtherbusinessprinciplesonconsumercommunicationsandcontributionsaswellasthe10thprincipleoftheUNGConanti-corruption.

Nestlé’sleadershippositionmeansthatitissubjecttothescrutinyofNGOs,consumersandemployeesaroundtheworld.AsInvestorRelationsVicePresidentRoddyChild-

Villiersexplained,thelinkbetweencorporatereputationandbrandposesrealbusinessriskforNestléifitisnotproperlymanaged.Basedonexternalcommentary,thekeyreputationalissuesNestlécurrentlyfacesincludelingeringcontroversysurroundingitsinfantformulaproducts(whichdatetothe1970s),NGOcampaignsaboutFairTradeandgeneticallymodifiedcrops,andcommunityconcernsaboutbottledwater.Despitethis,NestléisincreasinglygainingrecognitionforitspositivecontributioninrankingssuchasAccountAbility’sglobalrating,Innovest’srankingoftheworld’s100mostsustainablecompanies,andtheawardofaGoldStandardforitssectorinthe2007DowJonesSustainabilityIndex.

AccordingtoNestlé’sChairman,PeterBrabeck,corporatecitizenshipandsustainabilityare“ausefulsetofprinciplesandpractices”whichcancontributetothecompany’sgreatergoalofcreatingvalueforsocietyoverthelongterm.Unlikemanyofitspeers,foralongtime,Nestléchosenottopublishanannualreportoncorporatecitizenship.Instead,itreportedonsocialandenvironmentalinformationthroughannualmanagementreportsandissuespecificreports,publishedannuallyanddistributedtoshareholders.

Thisapproachallowedthecompanytoinformshareholdersandotherstakeholdersabouthowitwasapproachingparticularissuesandtocreateaplatformfordialoguearoundissueswithinthecompany’ssphereofinfluence.However,thisapproachalsolimitedNestlé’sabilitytodemonstratethewaythatitsbusiness“createssharedvalue”forsocietyandshareholdersmorebroadly.




About this case studyTo prepare this report, Boston College Center researchers visited Nestlé’s corporate headquarters in Vevey, Switzerland, and interviewed the following people, each of whom is involved in preparing or using information on social and environmental performance:

José Lopez, executive vice president, Corporate OperationsJean-Marc Duvoisin, senior vice president, Human Resources Roddy Child-Villiers, vice president, Investor RelationsHans Joehr, assistant vice president, Corporate AgricultureHilary Parsons, manager, Public AffairsPascal Greverath, manager, Corporate Safety, Health and EnvironmentJohn Bee, communications manager, Public Affairs

Information in this case study was obtained during the interviews, and from Nestlé’s publicly available reports, which can be accessed at the company’s web site. Reports from Nestle’s subsidiary companies around the world were also provided during the interviews.

AsystemforsocialreportingcreatedbyMarkKramerandtheFSGSocialImpactAdvisorsisenablingNestléto:

• Strengthenthelinkbetweenstrategyandcorporatecitizenship;

• Demonstratethatexamplesofgoodpracticeareembeddedinthebusinessratherthanexcellent“oneoff”examples;

• Buildpartnershipstotacklesocietalissues;• Focusinternalresourcesoneffective

execution;and• Engagemoreeffectivelywithstakeholders.

Thesesteps,identifiedinFSG’sReport:“TheNestléConceptofCorporateResponsibilityasimplementedinLatinAmerica,”reflectthedevelopmentalframeworksetoutintheBostonCollegeCenter’s“StagesofCorporateCitizenship.”

ThiscasestudywaspreparedasNestlé’sapproachtosocialreportingevolvedfromissuespecificreportstoacomprehensivecorporatesocialresponsibilityreport,whichwaspublishedinMarch2008.IthighlightshowNestléhastransferredthelessonslearnedfromitsformerapproachtoreportingandhowithasdevelopedasystemforsocialreporting.AsNestleExecutiveVicePresidentforCorporateOperationsJosé Lopezstated:“ThereportishowNestléshowsitsfacetoallstakeholders,includingemployeesandtheoutsideworld.Ithastobelinkedwiththekeycorporateobjectivesandcorevaluesandprinciples.Thereportisthefaceofthecompany.”

Challenges Nestlé faces in reporting

Creating a platform for engagement and

dialogue with stakeholders




ProtectingcorporatereputationisakeypriorityforNestlé,giventheexposureoftheNestlébrandonitsproducts.BuildingtrustintheNestlétrademarkgoesbeyondbuildingtrustinabrand.Italsorequiresbuildingtrustinthecompanybehindthebrand.FindingawaytoeffectivelycommunicatehowNestlé’sbusiness“createssharedvalue”iscriticalforthecompanytomaintaintheconfidenceofinternalaudiencessuchasmanagementandemployees,andexternalaudiences,includingsuppliers,customers,governments,localcommunitiesand,mostimportantly,consumers.Partofthischallengeinvolvesdevelopingamorerobustframeworkforstakeholderengagement.Nestléwasranked25thinthe2007AccountAbilityratingsandscoredimpressivelyrelativetoitspeersinallareasexceptforstakeholderengagement.AsBrabecknotedinaninterviewwithKramerin2005:

“Wemustlearntohandlegenuineconcernsinapositive,forward-lookingwaythatisconsistentwithourcorebusinessprinciples.WemustalsodoabetterjobofinformingpeopleaboutNestlésothatconsumersunderstandthewaythatsharedvaluecreationandcorporateresponsibilityareembeddedinourbrands.”

Nestléhasbeenprogressivelybuildingitsprocessesforstakeholderengagementaroundkeyissues,startingthroughthepreparationofitsissuespecificreports.ThisengagementhasallowedNestlétobetterunderstandthecontextoftheissuescoveredinthereportsfromawiderperspective.AsNestlémovestoitsnewapproachtoreporting,itistakingtheopportunitytostrengthenitsstakeholderengagementprocessandcreateamoresystematicapproachtoengagement.

IssuespecificreportshavehelpedNestlécreatewhatPublicAffairsCommunicationsManagerJohnBeedescribedasa“platformfordialogue,”providingopportunitiestoparticipateindebatesratherthanbeingthetopicofdebate.ExtendingthescopeofitsreportswillallowNestlétowidentherangeofissuesitcanengage.TheobjectiveofgreatertransparencyistohelpNestlébeapartnerinsolutionsandhelpshifttheemphasistowardtherolebusinesscanplayinaddressingissuessuchasthewatercrisis,sustainabledevelopmentandglobalpoverty.Thisinturnwillrespondtothegrowingdemandthatconsumersmusttrustnotjustabrand,butalsothecompanybehindabrand.

ChallengesremaininidentifyingthemosteffectivewaytopresentinformationaboutCreatingSharedValueandtocreatefeedbackloopsamongawidergroupofstakeholderswhichensureNestlécanleveragethereportingprocesstoidentifyfutureissuesandreinforcecurrentstrategywithexternalsupport.

Communicating Creating Shared ValueThescaleofitsactivitiesandthefamiliarityofitsbrandaffordNestléthecapacitytoachievelarge-scaleimpactthroughitsactionsupanddownthevaluechain.DuringinterviewstheNestléexecutivesrepeatedlystressedthatthecompany’sfundamentalcorporatebusinessprincipleis:“investmentsmustbegoodforthecompanyandgoodforthecountrieswhereNestléoperates.”However,whileNestléhaslongadvocatedthisbroaderviewoftheroleofbusinessandtheconceptofcorporatecitizenship,itisonlyjuststartingtoidentifyeffectivewaystodemonstratewhatthismeansinpractice.TheLatinAmericaReportpublishedin2006markedafirststep




towardprovidingmetricsandexamplestosupportthisposition.

IntheLatinAmericaReport,Kramer’steamatFSGrecommendedthattostrengthenthelinkbetweenstrategyandcorporatecitizenship,Nestléshouldadoptamoreholisticsetofindicatorstodemonstratehowitcreatessharedvalue,andbemoreexplicitaboutdesiredsocialimpacts.AsNestlémovestothebiennialpublicationofaCreating

SharedValueReport,identifyingindicatorsthatdemonstratethisconceptposesthefollowingchallenges:

• Ensuring thattheselectedindicatorsdriveperformanceinareasthatmattergiventhenatureofNestlé’svaluechainanditsbusiness;

• Findingwaystoquantifythe“indirect”impactsNestlecanmakethroughitsbusiness,wherethoseimpactsarenotonlyrelatedtoitsmanufacturingprocessesandproducts,butalsotointeractionswithsuppliersandconsumerhabits.

Using the report to drive performance but

not prioritiesWhileNestléacknowledgesinitsrecentreportthat“externalreportingofinitiativesandkeyperformanceindicatorscanhelpdriveimprovedperformanceinternally,”executivesexpressedconcernsduringinterviewsthatthegoalofreportingshouldnotbeallowedtodisplaceNestlé’sfocusonlong-termvaluecreation.NestléistakingstepstoparticipateininitiativessuchastheGlobalReportingInitiativeSectorSupplementforthefoodprocessingsector,amovewhichwillallowittocontributetothedevelopmentofmoreappropriateindicatorsforthesector.ThiswillpermitNestlétofocusbothitsreportingandmanagementonissuesrelatedtoitsindustryandtofacilitatecreationofbenchmarksamongitspeercompanies.

ReportingoncommonindicatorswillnotonlyhelpexternalaudiencesbetterassesswhereNestléstandsrelativetoitspeers,itwillalsoprovideincentivestosupportNestlé’scultureofcontinuousimprovement.

Creating Shared Value –

Nestlé milk districtsThrough Creating Shared Value, Nestlé links its operations to long-term value both for its business and for society as a whole, and defines its success in terms of internal financial returns and external social and economic results.

www.nestle.com/SharedValueCSR/Overview.com

An example of what Creating Shared Value means is Nestlé’s milk districts. By building “milk districts” in rural areas of developing countries, Nestlé helps foster local economic development in a manner that is sustainable for farmers and for the business. Nestlé is able to access reliable sources of milk that meet its quality standards, while farmers receive the technical assistance to improve their milk quality and farm economies, as well as gaining a reliable customer.




History of social reporting at NestléAscanbeseenfromthefollowingtimeline,socialreportinghasbeendrivenbyanumberofobjectivesatNestlé,bothinternalandexternal.Someofthoseidentifiedininterviewswere:

• Informingshareholdersofpoliciesandprioritiesrelatedtoenvironmentalandsocialissuesasadoptedbytheboardandseniormanagement;

• Beingpartofcurrentdebatearoundsocialandenvironmentalissuesthataffectthecompany’sbusiness;

• UpholdingcommitmentstoinitiativessuchastheUnitedNationsGlobalCompactbyprovidingreportsonprogress;

• Takingopportunitiestodemonstrateleadershiponissuesofimportancetothecompanyandseniormanagementsuchassustainabledevelopment,waterandthemeaningofcorporatesocialresponsibility.

Nestlé’s Annual Report to ShareholdersCorporateSafety,HealthandEnvironmentManagerPascalGreverathexplainedthatsocialreportingbeganatNestlein1990whentheannualmanagementreportnotedtheappointmentofasupervisorofenvironmentalmattersforthecompany.AccordingtoGreverath,thisinformationwasprovidedtoshareholdersbecausedescribingthestepsthecompanywastakingtoaddressenvironmentalriskwasdeemedmaterialbyNestlé’sboardandseniormanagement.Consistentwiththis,Nestléhascontinuedtoreporttoshareholdersonhowitismanagingenvironmentalrisksincludinginformationondevelopmentofanenvironmentalpolicy,adoptionoftheNestléEnvironmentalManagementSystem(NEMS)andperformanceagainstinternalindicators.

Overtime,theinformationintheannualreporthasgrownfromenvironmentalprogress,todiscussionofsustainabledevelopmentin2003toabroaderconceptof“corporateresponsibility”in2004.Nestlé’srecognitionoftheimportanceofnonfinancialissuesisalsoreflectedintheevolutionofthecompany’scorporatebusinessprinciples,whichwerefirstadoptedin1998,shortlyafterBrabecktookoverasNestlé’sCEO.AsHumanResourcesSeniorVicePresidentJeanMarcDuvoisinrecalled,ratherthanbeingasignofanewculture,theprinciplesputNestlé’slong-standingcultureintowriting,somethingthatwasimportantasthegroup’soperationsgrewglobally.Theprincipleswereexpandedin2001and2004toreflectNestlé’scommitmenttotheUnitedNations’GlobalCompact.UpholdingitscommitmenttoreportonprogressaspartoftheU.N.GlobalCompactwasnotedasoneofthedriversforstartingtoreportexternally.

InformingshareholdersabouthowNestléisachievingitsbusinessgoalscontinuestobeareasonforreporting.RoddyChild-VilliersnotedthatinvestorrelationsincludeslidesoncreatingsharedvalueinallkeyfinancialpresentationsbecauseitisacentralpartofhowNestlérunsitsbusiness.However,theresponsefromshareholdersismixed.WhileNestlé’sretailshareholderbaseisconcernedthatNestléupholditsstatusasaSwissicon,itisnotyetclearthatNestlé’sbroaderinstitutionalshareholderbaseconsidersnonfinancialmatterswhenevaluatingthecompany.Despitethisattitude,investorrelationsrecognizesitsroleineducatingshareholdersaboutwhythesoundmanagementofenvironmentalandsocialissuesaddsvaluetothecompany,




andcontinuestobringinformationaboutthistoNestléshareholders.AsChild-Villiersdescribedit:“ReportingatNestleisnotareactivepieceofcommunication.Itdoesnotrespondtoinvestorconcerns,butinsteaditisusedtomakestrongstatementsaboutwhatisimportanttothebusiness,whatinvestorsoughttocareabout.”

Nestlé’s issue specific reportsInadditiontoreportingonitsprogressintheAnnualManagementReport,since2000Nestléhaspublishedaseriesofreportsaimedatengagingwithabroadergroupofstakeholders.Thetopicscoveredare:

• 2001–EnvironmentalManagementReport

• 2002–NestléSustainabilityReview• 2003–NestléPeopleDevelopmentReview• 2003–NestléandWater–Sustainability,

Protection,Stewardship• 2004–FacesofCoffeeReport• 2005–NestlécommitmenttoAfrica• 2006–TheNestléconceptofCSRas

implementedinLatinAmerica• 2007–NestléWaterManagementReport• 2008–NestléSharedValueCreation

Report

Thefirsttwoofthesereportswerepublishedwhenthesocialreportingwasstillanascentfield.Nestlé’s2001EnvironmentalManagementReportdocumentedthe“continuousimprovement”NestléhadmadeinapplyingtheNEMSinmoredetailthanhadpreviouslybeenprovidedintheannualreport.Inthissense,thepublishingoftheEnvironmentProgressReportwasnotanobjectiveinitselfforNestlé,butratherameansofcommunicatingprogressto

shareholdersandservingasaleadershipexampletootherstakeholders.Similarly,the2002SustainabilityReview,whichwasNestlé’sfirstattempttoproduceamorecomprehensivesocialreport,wastimedtocoincidewiththeUnitedNationsEnvironmentProgramme’s2002WorldSummitonSustainableDevelopment.The

purposeofthereportwastoallowNestlétocommunicatethewaybusinesscouldcontributetosustainabledevelopment.

Nestléthenfocusedonproducingissuespecificreports,whichprovidedtheflexibilitytodeeplyconsiderissuesfacingitsbusinessorsociety,withoutthespaceconstraintsoftheAnnualReport.AccordingtoBee,issuesaddressedinthereportshavebeeninareaswhereNestléfeelstheperceptionofits

“Reporting at Nestle is

not a reactive piece of

communication. The report

is used to make strong

statements about what is

important to the business,

what investors ought to care

about.”

– Roddy Child-Villiers, Vice

President Investor Relations




activitiesdoesnotmatchthereality.

Beedescribedthesereportsasa”platformfordialogue,”providingameansofpubliclyaddressingissuesthatbothaffectNestlé’sbusinessandarewithinitssphereofinfluence.ThisreflectedaninternalshifttowardincreasedtransparencyaboutNestlé’sbusinessandagreaterwillingnesstoparticipateindialogues.Thesubjectsof

thereportswereselectedtoaddressissueswhereNestléfelttherewasanimbalanceinwhatwasbeingsaidaboutitsactivitiesandwhatitsawwashappeningontheground.Forexample,BeenotedthattheCoffeeReportrespondedtoconcernsraisedduringtheinternationalcoffeecrisis,causedbytheglobalslumpincoffeeprices.Similarly,theAfricaReportwaspublishedin2005,ayearwhentheinternationalcommunity,ledbytheGroupof8,wasfocusedonthecontinent.AtforumsincludingtheBBC’sAfrica2015conference,thereportgaveNestléavoiceinthedialogueontheissueofdevelopmentinthatcontinent.ThereportwasthefoundationusedbyNestlétocommunicatethepositiveroletheprivatesectorcanplayinAfrica.

Overtime,thepurposeofthesereportshasexpanded.Ratherthanbeingseen

primarilyasameansofcommunicatingNestlé’sperspectiveoncurrenttopics,thereportsarenowalsoameansforNestlétobetterunderstandissuesfromdifferentperspectives.Assetoutinthe2007WaterManagementReport,thepurposeofthereportwas:

• TounderstandhowsocialandenvironmentalissueswillaffectNestlé’s

abilitytoconductitsoperationsandproducequalityproductsforconsumers;

• TodocumenttheactionsNestléhastakentocontributetosolutionsbothdirectlythroughitsoperationsandindirectlythroughcommunitysupport;

• ToobtainstakeholderinputandexplorefuturedirectionsthatNestlécantaketocontributetoimprovements.

Internally,theissuespecificreportshelpNestlétocommunicatethecompany’spositiononvariousissuesacrossthemanycountrieswhereNestléoperates.Thishelpstoensureconsistentpracticesandvaluesthroughoutthegroup.Forexample,JoséLopeznotedthereports“bringNestlé’scorporatebusinessprinciplestolife”foremployeesbygivingexamplesofthe

“Nestlé intends to publish a comprehensive report on

Creating Shared Value on a biennial basis, complemented by

the continued publication of issue specific reports and up-

to-date information on the company’s web site.”

– Peter Brabeck, Chairman




principlesinaction.Thisinturnhelpstoreinforceacommoncorporateculturewithinthecompany.

AnexampleofthiswasthepublicationofreportsrelatedtosustainabledevelopmentbyNestléColombiaand“sharedvaluecreation”byNestléMexico.JeanMarcDuvoisin,thengrouphead,NestléMexico,recalledthatpublicationofthegrouplevelLatinAmericaReportemphasizing“creatingsharedvalue”asNestlé’sdefinitionofcorporatecitizenshipledhimtorevisetheMexicoreport.Ratherthanusingthelanguageofcorporatecitizenship,whichhadbeenintheinitialdrafts,hewasabletoalignthereportwiththelanguageusedintheLatinAmericaReport.AstheNestléMexicoreportwasmoredirectedtothelocalaudienceofemployeesandthecommunity,thisextendedthereachandstrengthenedthemessagefromcorporateheadquarters.BytranslatingtheconcepttotheMexicancontext,therewasanopportunityforheadquarterstounderstandtheaffectsofitspolicyindifferentlocales.Thisexamplehighlightsthevaluablerolereportscanplayincreatinginternalfeedbackloopstoreinforcecorporateculture.

Outsidethecompany,thereportshaveallowedNestlétotakealeadershippositionontheissuesdealtwithinthereportbycreatinga“platformfordialogue.”Thesedialoguesincludethoseconductedataninternationalorgovernmentlevel.BeereferredtoNestlé’sparticipationintheEuropeanCommission’sinquiryintoresponsiblecompetitiveness,whileDuvoisinnotedthatpublishingtheNestléMexicoReportallowedNestléMexicotohelpshapediscussionaroundcorporatecitizenshipinMexicofromphilanthropyto

abroaderconceptmorealignedwithsharedvaluecreation.

ThereportshavealsoallowedNestlétoreinforceitsongoingdialoguewithsuppliersaroundsustainableagriculturalpractices.Nestlégetsapproximately35percentofthecommoditiesitusesinproductiondirectlyfromfarmers.HansJoehr,whoisresponsibleformanagingNestlé’sdirectagriculturalsourcing,describedusingtheWaterManagementReportonavisittoChinatostresstheimportanceofsustainablewateruse.WhendealingwithfarmersandotherstakeholdersinChina,JoehrfoundthereportreinforcedhismessagebyprovidinggreatercontexttotheissueathanddemonstratingNestlé’stoplevelcommitmenttowaterasseenthroughtheCEO’smessage.

WhileissuespecificreportshaveprovidedusefultoolsforcommunicatingNestlé’spositionandapproach,theirabilitytodemonstrateprogressondealingwithissuesislimitedbythefactdifferentissuesareconsideredeachyear.Thisalsomeanscertainissuesmaynotbetrackedasrigorouslyatacountrylevel,asthereisnoannualprocessordeadlineforcollectinginformation

InMarch2008,NestlépublishedacomprehensivereportonCreatingSharedValue.ThisreportisafirstattempttocreateaseriesofkeyperformanceindicatorsagainstwhichNestléwillreportbienniallywiththedualgoalofmeasuringcontinuousimprovementinternallyandcreatinggreateraccountabilityforperformancethroughexternalpublicationofresults.TodeveloptheseKPIs,Nestléhasdrawnonitsinternalpolicies,referencedexternalstandardssuch




astheGlobalReportingInitiativeGuidelines,andconvenedexternalstakeholderstoidentifytheissuesviewedasimportantforthecompany.InternalconsultationhasalsooccurredwithrepresentativesfromacrossNestlé’sbusiness,includingmanyofthepeopleinterviewedforthiscasestudy.

AtthelaunchofNestlé’s2007report,PeterBrabecknotedNestléreceivedalukewarmresponsetothe2002SustainabilityReview.Inparticular,thereportwascriticizedforthelackofdetailedglobalinformationitcontained:aproblemcreatedbothbyNestlé’sdecentralizedstructureandtheabsence,atthattime,ofacommoninformationmanagementtool.Today,Nestlécandrawonitsnewinformationmanagementsystem“GLOBE,”whichwill,accordingtoBrabeck:“Allowustoprogressivelyprovidemoreinformationforbettermanagementandexternalreporting. NestléintendstopublishacomprehensivereportonCreatingSharedValueonabiennialbasis,complementedbythecontinuedpublicationofissuespecificreportsanduptodateinformationonthecompany’swebsite.”

Deciding on the content of the reportsAkeyprioritywhichemergedarounddiscussionsaboutthecontentoftheissuespecificreportsandtheselectionofperformanceindicatorsisNestlé’sdesiretofocusonissuesthatmattertoitsbusinessandonwhichitcanhaveaninfluence.Inthepast,Nestléhaschosenthetopicsofitsissuespecificreportstocoincidewithglobaldebateandinterest.However,nowthatNestléintendstopublishamorecomprehensivesocialreportonabiennialbasis,itmustconsiderthescopeoftheindicatorsagainst

The Nestlé water management reportThe Water Report, published in 2007, has allowed Nestlé to take a leadership position on an issue which affects both its business and society: and one which is becoming increasingly controversial in many countries. It has proved to be an effective platform from which to enter debates surrounding this issue and was also a valuable process for identifying the gravity of the issue for Nestlé. For this report, Nestlé engaged with a range of stakeholders including academics, NGOs and others so that it could better understand the problem and the expectations of Nestlé’s role. The involvement of stakeholders helped to evolve Nestlé’s thinking about the issue.

Market and country level managers have adapted the Water Report for use in publications directed to their local stakeholders. For example, Nestlé Nigeria included an extract of the Nestlé Water Report, supplemented with local examples, in its staff magazine “Nestlé News”.

Peter Brabeck recently referred to the Water Report in a panel at the World Economic Forum, during which he and fellow panelists, including Ban Ki Moon, the current U.N .Secretary General, discussed the importance of addressing the growing global water crisis.

www.BCCorporateCitizenship.org Social Reporting case studies 11

whichtoreport.InterviewsmadeitclearthatindicatorsandpoliciesareadoptedbyNestléwheretheyhelpthecompanymanageitsperformance,notjusttoprepareareport.AsLopezcautioned,“reportsarenotaninputtotheprocessofcontinuousimprovement.Rather,theprocessofcontinuousimprovementisaninputintothereport.Thereportissimplyaphotograph,asnapshotintime,toshowwhatisbeingachieved.”

GreverathexplainedthatforNestlé’ssafety,healthandenvironmentteam(SH&E),theannualpublicationofenvironmentalindicatorsacrossthegrouphelpedcreategreaterdisciplineintheaccuracyandtimelinessofresults.ItalsoallowedNestlétofindoutmoreaboutlocalinitiativesbeing

takenacrossthegroup,creatingaprocessforfeedbackloops.Althoughthereasonforcollectingtheindicatorswastomanageenvironmentalmatters,reportinghelpedsupportrequestsfordataonperformanceandreinforcedtheimportanceofprovidingaccurateinformation.GreverathnotedNestlé’sinternalauditteam,whichalsomonitorsfinancialresults,alreadyauditsenvironmentalresults.AsNestléstartstoreportonabroadersetofindicatorsonanannualbasis,ithastheopportunitytofurtherstrengthenthecommitmenttocontinuousimprovementacrossthegrouponawiderrangeofissuesasithasdonewithSH&E.

ThediagramaboverepresentshowNestlé’senvironmentalperformanceindicatorswere

Issue IdentifiedBoard creates position of

manager of environment in 1991, building on prior recognition of

the importance of environmental issues

• Principles on the environment published in 1992 • Principles revised as appropriate

• Environmental performance indicators linked to NEMS

priorities measured across group

• Report on progress against environmental goals (1995)

• Environmental performance indicators published in annual

report to share holders from 2002-present

• Nestlé Sustainability Review (2002)

Develop and Refine Principles Develop and Refine Strategy Measure Progress

Com

mun

icat

e Pe

rfor

man

ce

R

evise

Ta

rgets

and Improve

• NEMS adopted in 1993 to implement the principles across the group• Strategy expanded as needed

Cycle for developing environmental policy and managing performance

• Internal targets and performance reviewed in an ongoing cycle




developed.Seenhere,reportingispartoftheprocessofperformancemanagementandcontinuousimprovement,butnotthedriverformanagingenvironmentalissues.ThedriveristherecognitionoftheissueasmaterialtoNestlé’sbusinessandsomethingthecompanyshouldcommunicateabout.ThisreflectsNestlé’sconcernthatthereportisaboutcommunicatingtheconclusionsthecompanyhasmadethroughitsactions,notactinginordertobeabletoreport.“Globalenvironmentalperformanceindicatorsarefirstandforemostinternalmanagementtools,”Greverathremarked.“Reportingthemexternallyisanadd-ontoinforminterestedpartiesonprogressachieved.”

ThisprocesshasallowedNestlétodevelopandrefineitsenvironmentalindicatorsbasedontheNEMSandenvironmentalpolicy.AsNestlébroadensthefocusofitsreportstotheconceptofsharedvaluecreation,however,itmustalsodevelopamoreholisticsetofindicatorstodemonstratehowthisappliestoitsbusiness.OneoftherecommendationsmadebyBureauVeritas,auditorofNestlé’s2008report,wasthatNestlé“considerhowtofurtherdevelopmeaningfulindicatorsthatwilldemonstrateimplementationofitslong-termCSVstrategy.”

Nestlé’sissuespecificreportswillprovideasolidstartingpointforidentifyingthematerialquestionsacrossitsbusiness.TheLatinAmericaReportinparticularexaminedtherelationshipbetweenNestlé’sbusinessandsocietyacrossitsvaluechainfromsourcing,tomanufacturingandthensales/distribution.TheGlobalReportingInitiativeGuidelines,astheonlyexistingsocialreportingstandard,haveprovedto

beoflimitedusetoNestléasitdevelopsindicatorstodemonstrate“sharedvaluecreation.”Beeputsthisdowntotwofactors:first,theGRIindicatorswerenotdevelopedwiththeoperationsofafoodcompanyinmindandarebettersuitedforcompaniesinotherindustries,suchastheminingandextractivessectors;andsecond,theGRIfocusesondemonstratinghowcompanies“donoharm”ratherthanprovidingatoolfordemonstratinghowcompaniescancreatepositiveimpact.Nestléhasrecentlybecomeoneofthefirstcompaniestojoinaworkinggrouptoproducea“sectorsupplement”totheGRIforthefoodsector.ForNestléthisrepresentsanopportunitytosharelessonslearnedandcreateconsensusonthekeyimpacts–positiveandnegative–forthefoodsectorthroughamulti-stakeholderprocess.

AsNestléisabletoexploreabroadersetofnon-financialissuesinmoredetailthroughitsCreatingSharedValueReports,itwillbeinterestingtoseehowthecompanyevolvesitsindicators.Already,throughtheprocessofpreparingitsissuespecificreports,Nestléhasbeenabletobetterunderstandthewaythatdifferentissuesareaffectedbyandaffectitsbusiness.AsHilaryParsonsnoted,“throughreporting,Nestledoesabitofbothcapturingwhatitalreadyknowsandalsoabitofexploringoftheissues.”TheissueidentificationprocessfacilitatedbythereportingprocessprovidesNestléwiththeopportunitytoidentifyfutureissuesthatmaywarrantconsiderationinternallytodeterminewhetheradditionalactionmustbetakentoensure,whentheissuearises,itisdealtwithinamannerconsistentwiththecompany’scorporatebusinessprinciples.

AdrawbacktoNestlé’spriorapproachto




reportingwasthattheissuespecificreportsprovidedonlyasnapshotoftheissueathand.AsFSGobservedintheLatinAmericareport,thismeantitwasdifficultforexternalaudiencestoknowwhethertheexamplesusedintheissuespecificreportswere“trulyrepresentativeofbusinesscultureatNestlé,ormerelyexcellentone-offexamples.”Byreportingonperformanceagainstabroadersetofindicatorsonamoreregularbasis,Nestléwillbeabletocreategreaterconfidencethatitismanagingarangeofissuescontinuously,notjustwhenforcedthroughexternalpressureorcircumstances.

AnothertensionNestléwillfaceasitrefinesitsapproachtoreportingisthequestionofreportingoninternalgoalsandtargets.Externally,thisisincreasinglyseenasanbestpracticeinCSRReportingasanindicationcompaniesaremanagingsocialandenvironmentalissuesstrategically.However,publishinggoalsandtargetspresentsaconflictwithNestlé’sinternalpolicies.Thisconflictisnotduetoanabsenceofinternalgoals.Rather,asChild-Villiersexplained,Nestlédoesnotpublishfinancialtargets–eventhoughthereisastrongdemandforthisinformationfromanalysts–becausedoingsomayshiftthefocusofmanagementtoshorttermperformanceratherthancreationoflongtermvalueforthebusiness.Brabeckreiteratedthispolicyatthelaunchofthe2008reportstressingthattheimportanceofalongtermviewappliestofinancialandnon-financialaspectsofNestlé’sbusiness.

Goingforward,Nestléisadoptingasetofmoreholisticindicatorsacrossitsbusinesstoidentifywhetheritismovingtowarditsgoalofsharedvaluecreation.Todothis,NestléworkedwithbothSustainAbilityand

AccountAbility.SustainAbilityassistedNestléinconductingamaterialityassessmenttoidentifyrelevantissuesfrompublicdebateandcommentary.NestléthenworkedwithAccountAbilitytoexploretheseissuesinmoredetailataseriesofstakeholderforums.WhileNestléremainscommittedtoensuringthattheindicatorsagainstwhichitreportsare

2008: The Nestlé Creating

Shared Value ReportThis report is Nestlé’s first attempt to provide details of how it creates value for both its shareholders and for society across its value chain. The report is divided into the following sections based on Nestlé’s value chain:

• Manufacturing and our environmental footprint;

• Our people;• Agriculture and rural development; • Products and consumers

The report also provides information about business principles and strategy, support of the UN GC and Millennium Development Goals, stakeholder engagement and independent assurance.

At the beginning of the report, a performance summary is provided, which references the GRI where used. Nestlé uses a combination of GRI indicators and its own metrics to assess performance.




meaningfulforthepurposeofperformancemanagement,thisincreasedengagementreflectsthenatureofwhatNestléistryingtomeasure,namely“creatingsharedvalue.”Inordertoproperlymeasurewhetheritisachievingthisobjective,Nestlémustconsidertheimpactofitsactivitiesfromdifferentperspectives.

thetoolspublicaffairsusestocommunicateonsocialandenvironmentalissues.

Nestlébeginspreparationofthereportapproximatelyayearpriortopublication.Todate,theissuespecificreportshavebeenpublishedanddistributedwiththeAnnualManagementReportforshareholders.Insomeyearsthishasbeenmorecoincidental

“Switzerland is the world’s oldest democracy and decisions

about the report reflect this. We have a collaborative process

to discuss the content of the report at a series of meetings

where we ask questions: What information can Nestlé

feasibly provide? Does it make sense to do so? Where can

Nestlé make an impact?”

– Hans Joehr, assistant VP, Corporate Agriculture.

thandeliberatebutgoingforward,Beenoted,Nestléaimstopublishitssustainabilityreportwiththemanagementreport.Whetherornottheissuespecificreportsarepublishedpriortothemanagementreport,theydoinformthediscussionofcorporatecitizenship/sustainabledevelopmentintheAnnualManagementReport,sotheyneedtobeconceptualizedandapprovedforinclusioninthereportonthesametimeline.

IssuesandinitialthinkingaboutthecontentofthereportcommencesinMay.InOctober,publicaffairsmakesitsinitialconceptualpresentationtothekeyissueownersacross

Process for preparing the reportNestlédoesnothaveadedicatedcorporatecitizenshipdepartment,asitviewscorporatecitizenship(orCSV)assomethingthatcutsacrossallareasofitsbusiness.Similarly,itdoesnothaveaspecificsocialreportingdepartment,sothereportingprocessisledbyPublicAffairs.Allinall,productionanddisseminationofthereporttakesupabout70percentofthetimeofBee,Nestlé’spublicaffairscommunicationsmanager.Inaddition,thereisalargeteamofspecialistcontributorstothereportacrossthecompanyandregularinputfromothermembersofthepublicaffairsteam.Thereportisseenasjustoneof




thecompanyincludinginvestorrelations,operations,corporatehealthsafetyandenvironment,andhumanresources.IssuesarethenrefinedthroughwhatHansJoehr,assistantvicepresidentCorporateAgriculture,describedasademocraticprocess–inkeepingwithNestlé’sSwissroots.InvolvingmanagersfromacrossthecompanyinthisprocessalsobringstobeartheirdifferentperspectiveonthemosteffectivewaytocommunicateelementsofNestlé’sperformance.

Fortheissuespecificreports,Nestléengageswithexternalstakeholderstobetterunderstandtheissues.Inparticular,fortheLatinAmericaReportandtheWaterReport,Nestléhasbegunreachingouttogroupstogetabetterunderstandingofthecontextinwhichanissueisbeingexamined.AsPublicAffairsManagerHilaryParsons

noted,Nestlé’sstakeholderengagementprocessbecamemore“systematic”duringthepreparationofthe2007CreatingSharedValueReport.ThisprocesswasfacilitatedbyAccountAbility,withthreeconveningstakingplaceinNorthAmerica,AsiaandEurope.Thereweretwostepsinpreparingfortheconvenings.Thefirststepidentifiedkeyissuesfromthecompany’sperspectivethroughdeskresearchandinternalcomments.Next,issueexpertsineachofthelocaleswerebroughttogethersoNestlécouldbenefitfromtheirperspectiveofwhatthekeyissueswereinthedifferentregions.InParsons’words,“Nestle’srolewastojustlistentowhatstakeholdersthinkareissuesforNestleandhowNestleshouldbeinvolvedintheseissues.”

AmorecompletedraftofthereportispresentedinDecember,withthefinal

Experts consulted during the preparation of the Latin America ReportTo properly understand how the concept of shared value creation operated in Nestlé’s Latin American operations, the company consulted with the following experts:

• Mark Kramer, senior fellow at Harvard’s Kennedy School of Government and Foundation Strategy Group.

• Felipe Larraín, Pontificia Universidad Católica de Chile – economic growth and development in Latin America.

• Alfredo Zamarripa, INIFAP Institute, Chiapas, Mexico.• Ignacio Loyola Vera, federal attorney general of environmental protection, Mexico• Hugo Lavados, ProChile director• Didier Lebret, former sustainable agriculture initiative platform manager.• José Luis Calderón, environment educator, State of Aguascalientes.

2FSG. 2005. The Nestlé concept of corporate social responsibility as implemented in Latin America. p. 44




documentreceivingsign-offinJanuary.Thisallowspublicaffairstodealwiththepracticalelementsofpublishingthereportincludingphotography,filmcrews,producinginformationaboutthereportinalternativemediasuchasCDs,DVDsandslideshows,acorrespondingWebsiteandtalkingpointsforseniormanagers.ThereportthengoestoBrabeckforfinalcommentandsign-off.

Dataonenvironmentalperformanceiscollectedusinganonlinemanagementsystem.Thesystemrequiresmanagersatamarketleveltoinputthedataonperformanceoftheirfacility.Toensurethisinformationisaccurate,trainingisconductedonthemeaningofdifferentindicatorsandinternalauditsaredonetoensureconsistency.Nestléusesthesameinternalauditteamtoverifyitsfinancialandenvironmentalperformancefigures.Nestléalsoconductsexternalauditsparticularoffacilitiesorprogramswherethereislocalconcernaboutaproject.Forexample,BureauVeritasauditedNestlé’sSãoLourençospringinBrazilinresponsetolocalconcernsaboutthepotentiallynegativeimpactofNestléWaters’operations.2Similarly,Nestléhasalong-standingprocessinplacetoaudititscompliancewiththeWorldHealthOrganizationCodeofMarketingBreastmilkSubstitutes,whichincludesinternalandexternalverification.AsNestlémovestoitsmoreholisticapproachtoreporting,itisalsoexpandingtheextentofexternalassuranceoftheinformationincludedinitsreport.

In2008,BureauVeritasprovidedanassurancestatementfortheCreatingSharedValueReport,whichincludedrecommendationsonhowNestlécan

improveitsreportincomingyears.Therecommendationsmadeincluded:

• DevelopingmeaningfulindicatorstodemonstratetheimplementationofNestlé’ssharedvaluecreationstrategy;

• PresentingNestlé’spositionandperformanceinthemostbalancedmanner;

• IncludingmoreinformationonNestlé’sinternalsystemsaroundgovernance,accountabilityandmanagementstructures,andhowtheserelatetomanagementofkeycorporatecitizenshipissues.

Distribution of the reportsNestlédoesaprintrunof60,000foritsissuespecificreports,andpublishesthereportonlineasaPDF.Thereportistranslatedintofourlanguages:English,French,GermanandSpanish.CopiesofthereportsareincludedintheannualmanagementpackforshareholdersanddistributedtothoseinNestlé’s14,000strongdatabasewhohaveindicatedaninterestinthecompany’ssocialandenvironmentalperformance.Asidefromthisinitialdistribution,Nestléhasotherchannelsthatareusedtodistributethereportduringtheyear,suchasconveningsaroundthespecificissuescoveredinthereportsandpresentationsmadetoshareholders.Nestlealsoreliesoncountryandmarketlevelmanagerstodistributethereportsandtheinformationtheycontainasappropriatefortheirlocalaudiences.

Forexample,in2007Nestléconvenedmorethan30eventsaroundtheissueofwater.Theseconveningsinvolved




presentationsfromseniormanagement,includingthechairman,theCEOandchieffinancialofficer,toaudiencesthatincludedinvestors,academics,localgovernmentofficials,representativesfrominternationalinstitutionssuchasU.N.agenciesandthemedia.ThepurposeoftheseforumswastoraiseawarenessoftheimportanceoftheissueforNestlé’sbusinessandforsocietyasawhole.Particularlyinthefinancialsphere,Child-Villiersnoted,Nestléusesthereportsasaproactivewaytodemonstratewhyissuesareimportantforthebusinessandwhyshareholdersinthecompanyoughttocareaboutthem.

Thereportisnottheonlytoolpublicaffairsusestorespondtoconcernsraisedbystakeholders,andindeed,asParsonsacknowledged,areportisnotalwaysthemostappropriatetoolforrespondingtourgentandspecificconcerns.Nestlérecognizesthatforsomestakeholders,thereportswillnotcontainenoughin-depthinformation,whileforotherstheywillcovertoobroadarangeoftopics.Further,thetimeittakestopreparethereportsmeanstheyarenotalwaysameanstorespondtoanimmediateconcernraisedbystakeholders.However,thereportsdoallowNestlétobemoreproactiveaboutcommunicatingonissuesandcreatestartingpointsfordiscussingissuesanddemonstratingNestlémanagementhasrecognizedtheimportanceoftheissuescoveredinthereports.

Thereportisalsoincludedinthecommunicationstoolkitforpublicaffairsandcommunicationsmanagersaroundtheworldandcanbeorderedinternally.OvertimeNestléhasfoundmarketsadaptthe

contentofthereportintoaformatthatismostrelevantfortheirlocalstakeholders,usingstaffmagazines,publishingcountryspecificreportsandincludingsummariesinlocallanguagetohighlightkeyissuesforthecountry.ThisalsohelpsNestléidentifytheissuesthatareimportantfordifferentlocales,byobservinghowtheinformationisadaptedtolocalaudiences.Insomecases,Nestléhasbeensurprisedbytheinterestindifferentissuesaroundtheworld.Forexample,BeerecalledtherewasanunexpectedlystronginterestintheAfricaReportinJapan.ThisfurtherhighlightstherolereportscanplayincreatingfeedbackloopsforNestlé.

TheinterviewsrevealedthateventhoughNestléuseswidechannelstodistributethereport,thecompanyhasfounditdifficulttoobtaininformationaboutwhoreadsthereportandwhy.Nestléincludesacardthatallowsreaderstosendfeedbacktothecompanyaboutthereports,butitreceivesveryfewcomments.Inrespecttoitsinternalaudiences,Nestléhassomeindicationsofwhichregionsmostactivelyusethereports,suchastheuseofextractsinlocalpublications.Butthereispotentialforgeneratinggreaterbenefitfromthereportsinternallybygettingmoredetailaboutwhichgroupsofemployeesrefertothereportandwhattheytakeawayfromit.Bydoingthis,Nestlécanfurtherleveragethepotentialforthereportstoprovideinsightsintothe“next”issuefacingthecompanyandprovideopportunitiesforcloserengagementorpartnershipswithdifferentaudiences.

Identifyingthemosteffectiveformatfordistributingtheissuespecificreportsisanotherconcern.Althoughprintedreports




haveprovedusefultoanextent,Nestléhasreceivedlittlefeedbackonthepreferredformatofpublicationandisconcernedprintmaynotbethemosteffective.OneoptionBeesaidNestléisconsideringistohousethegranulardetailaboutthecompany’sperformanceonlineandlimitingtheprintedreporttoanoverviewofNestlé’sactivitiesandimpact.Thiswouldallowthosestakeholderswhoareinterestedinmorespecificinformationtoaccessit,whileatthesametimeallowingNestlétoreachouttoabroaderaudience.Nestléisnotaloneinattemptingtoidentifytherightbalancebetweendetailandaccessibilityinitsreports.Asmorecompaniescontinuetopublishinformationontheircorporatecitizenshipactivitiesandstakeholdersbetterunderstandwhatthisinformationmeans,it’sexpectedtherewillbeagreaterconsensusaroundthemosteffectiveformatandmannerofprovidingdifferenttypesofinformation.

Conclusion

Where was the value in the reports and the

reporting process?TheevolutionofNestlé’sapproachtoreportingandinterviewswithNestleexecutivessuggestedthecompanyderivedanumberofbenefitsfromreporting.Ashighlightedinthiscase,thereportsdidservetheirobjectiveofcreatinganeffectivecommunicationtoolforNestléby:

• AllowingNestlétobemoresystematicinactingonitsdesiretobemoreopenwithexternalstakeholdersandinthewayitengagesaroundkeyissues;

• CreatingaplatformfromwhichNestlécouldbemoreproactivesettingtheagenda

andframingthedialogueonsocialandenvironmentalissues,insteadofbeingreactive;

• GivingNestléanditsleadersastrongervoiceindialoguesaboutfindingsolutionstoproblemsthroughapubliclystatedcommitmentandposition;

• HelpingtoreinforceNestlé’scorporateculturearounditscorporatebusinessprinciplesbyprovidingclearillustrationsoftheprinciplesinaction.

InadditiontothesupportthereportprovidedtoNestlé’scommunicationstrategy,thefollowingadditionalbenefitscanbeidentifiedasarisingfromthereportingprocess:

ThereportshelpheadquarterstoleadandalignthinkingonsocialandenvironmentalissuesacrossNestlé’sdecentralizedgroupstructurebyprovidingglobalexamplesofhowissuesarebeingaddressed.Forexample,NestléMexicoandNestléNigeriahaveextractedexamplesfromthesereportstoadaptthemessagetotheneedsoftheirlocalaudiences.

Establishingprocessesforcollectingandpresentinginformationacrossthegrouphascreatedfeedbackloops,whichpromptmoreinformationtocomefromdifferentregions,marketsandcountries.Thisinturnmeanscorporateheadquartershasagreaterunderstandingofwhatishappeningonthegroundandcountrylevelmanagersunderstandthecontextoftheirachievements.Thisalsoprovidesopportunitiesforhead–quartersandlocalmanagerstolearnfrominnovationandbestpracticeinotherplaces.




Havingareportingschedulehasreinforcedinternaldisciplinearoundthequality,reliabilityandspeedatwhichdataisgatheredacrossthegroup.ForSH&Einparticular,thishasbeenatoolthathashelpedsupportperformancemanagementobjectivesandmadeiteasiertomonitorperformancebecauseofafixeddeadlineforfinalinformation.

HavingapublicexplanationofwhyissuesareapriorityforNestléhasstrengthenedthelegitimacyofmanagersseekingsupportfrominternalandexternalpartners.Examplesofenhancedpartnershipinclude:workingwithbusinesspartnerstoimplementmoresustainableagriculturaltechniques;demonstratingNestlé’sCorporateBusinessPrinciplesinactiontoNGOpartnerssuchastheInternationalRedCross;andworkingwithpeerstoresolvecommonproblemssuchasthewatercrisisinsettingssuchastheWorldEconomicForum.

Thiscasehighlightstherolereportscanplayinsupportingalignmentofatrulyglobalcompanyaroundacommonsetoffundamentalbusinessprinciples.BycreatingfeedbackloopsthatsupportNestlé’sclearlyarticulatedprinciples,thereportscancreateinternalandexternaldemonstrationsofwhattheseprinciplesmeaninpractice.Theyalsopermitthecompanytobenefitfromgreaterdialogueandpartnershipwithinternalstakeholders,suchasemployees,andexternalstakeholders.

ChallengesremainforNestleinthereportingprocess,inparticular,identifyingindicatorsthatmeasureandcommunicate

howNestlé“createssharedvalue”acrossitsglobaloperationsandbuildingasystemforcapturingperformanceinformation.TheprocessofexaminingissuesindetailthroughitsissuespecificreportsgivesNestléastartingpointforidentifyinghowtomeasureitsimpactmorebroadlyandtobeginengagingandlearningwithstakeholders.Workingwithexternalgroups,suchastheGRIFoodSectorSupplement,canhelpNestlébuildonthisfoundationanddemonstrateleadershipbysharingitsexperiencewithothersintheindustry.

Overall,systematizingitsapproachtotransparencyarounditsbusinessimpactcreatesopportunitiesforNestlétotakealeadershippositiononissuesfromwhichitwouldotherwisebeexcluded.Ratherthanbeinganoutsider,Nestlécantakestepstowardbeingapartnerandlendingitssupporttoissuessuchasthewatercrisisandglobalclimatechange.Mostimportantly,thereportscreateamechanismtoreinforcethecommoncorporateculturethatNestléaspirestomaintainacrossitsglobalbusiness.AsNestlécontinuestodevelopindicatorsthatbetterreflecttheimpactofitsvaluesinactionandidentifiesmoreeffectivewaysofcommunicatingthisimpact,itstandstofostergreaterinternalunderstandingof“creatingsharedvalue,”which,inturn,willhelpNestléaddressitsgoalofbuildingtrustandconfidenceinbothitsbrand,andthecompanybehindthebrand.




“The report is how Nestlé shows its face to all

stakeholders, including employees and the outside

world. It has to be linked with the key corporate

objectives and core values and principles. The report

is the face of the company.”

– José Lopez, Executive Vice President for Corporate

Operations




Other publications in this series of case studies on social reporting

Gap Inc. Fashions a Revealing Look

Nestlé Shares Its Story Of Creating Shared Value

Novo Nordisk Takes Strides To Integrate Triple Bottom Line

State Street Accounts For Shareholder’s Needs

Seventh Generation Seeks to Sustain Essence Amid Change

Telefónica Makes Connections Local and Long Distance

The Value of Social Reporting Examination of the experiences and practices of seven companies formed the basis of case studies and an overview report, “The Value of Social Reporting”. The research focused not on the social reports themselves, but rather on the process and outcomes of reporting: How companies prepare the reports, the effects of reporting on management practices, the changes companies expect to make in the future, and the lessons they have learned along the way.

The Institute for Responsible Investment, a project of the Boston College Center for Corporate Citizenship, provides a platform for dialogue on fundamental issues and theories underlying responsible investing. Our work is meant to identify and promote market structures and investment activity that can best create long-term wealth creation for investors and society alike.


The Value of Social Reporting Lessons learned from a series of case studies documenting

the evolution of social reporting at seven companies

Learning, Practice, Results.

In Good Company.

The Boston College Center for Corporate Citizenship is a membership-

based research organization associated with the Carroll School of

Management. It is committed to helping business leverage its social,

economic and human assets to ensure both its success and a more

just and sustainable world. As a leading resource on corporate

citizenship, the Center works with global corporations to help them

define, plan and operationalize their corporate citizenship. Through

the power of research, management and leadership programs, and

the insights of its 350 corporate members, the Center creates

knowledge, value, and demand for corporate citizenship.


Boston College Center for Corporate Citizenship 55 Lee Road, Chestnut Hill, MA 02467

Phone 617-552-4545 Fax 617-552-8499 Email [email protected] Web site www.BCCorporateCitizenship.org

Documents

Nestle Social Report