Case study of Nestle

Doing better by the environment

1) How can the removal of the inner plastic sleeve from Kit Kat
Bumper packs be seen as a move towards sustainability?
When utilizing natural resources, companies tend to be more responsible being
environmental friendly, along with product efficiency and effectiveness. Nestle,
which is the 3rd largest food processing company in the world is well known for its
responsibility towards environmental, social and economic concerns. Nestle
continuously monitors their packaging and where possible, they try to reduce the
amount being used. This package monitoring and evaluation process helped
them to remove the inner plastic sleeve from Kit Kat Bumper packs. This
particular removal saves 160 tons of plastic per year and is seen as a movement
towards sustainability.

2) Why are International Treaties like Rio and Kyoto important in

encouraging sustainable business practice?
It was seen, that during the early 1990s there was a considerable pressure for
governments to create agreements concerning the environment and its
protection.
By the year 1992, The United Nations conference on Environmental and
development (UNCED) was held in Rio de Janeiro. The main outcome of this
particular conference was Agenda 21, which marked an important landmark in
the sustainable development fight, and inter country cooperation.
The Kyoto Conference on Climate Change (1999) has meant that the UK and
many other Governments have entered into a legally binding agreement to
reduce greenhouse gases. Also, the Government has set a unilateral target of
20% reduction of carbon dioxide by 2010 from 1990 levels.
A new global commitment towards sustainable development was represented by
those conferences. They marked the start of global cooperation, which was
needed to deal with many issues, including concerns for the environment, a
working plan which countries would follow.

3) Give one other example of how Nestle has developed business

practice in line with Agenda 21s seven point plan for business.
Agenda 21 was the main document signed at the conference. It was over
800 pages long, and represented a new global commitment to sustainable
development. It was not a legally binding document, but was devised as a
working plan which countries would follow. Agenda 21 lays out a seven
point plan for businesses to start changing values and perceptions. An
example of how Nestle has developed business practice in line with
Agenda 21s seven point plan for business id given below,

Nestle is dedicated to providing consumers with the best food throughout

their lives. The primary role of the Company is the transformation of
natural resources into finished products that meet consumers
expectations for safety, quality, convenience and value. Nestl is
committed to sustainable development and environmentally sound
business practices.
Nestle fully supports the United Nations Global Compacts three guiding
principles on environment. The key drivers for Nestls worldwide
environmental approach are,

Integrates environmental policies, programs and practices

into each business as an element of management in all its
functions.
Develops, designs and operates facilities and conducts its
activities taking into consideration 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.
Respects and complies with existing laws and regulations in
local markets concerning environmental issues.
Applies Nestle internal standards suitable to local conditions
in those regions where specific environmental legislation is
non- existent or insufficient.
Improves environmental protection relevant to its activities
on a continuous basis.
Provides appropriate information, communication and
training to build internal and external understanding about its
environmental commitment and action.
Supports professional associations such as the International
Chamber of Commerce in their work relative to
environmental protection, as well as efforts to set up
environmental
management
guidelines
improves
environmental protection relevant to its activities on a
continuous basis.
Provides appropriate information, communication and
training to build internal and external understanding about its
environmental commitment and action.
Supports professional associations such as the International
Chamber of Commerce in their work relative to
environmental protection, as well as efforts to set up
environmental management guidelines.
Establishes environmental objectives, monitors progress,
checks results and defines future actions. This activity,
carried out by Nestle specialists, ensures the continuous
improvement of environmental performance throughout the
supply chain, from producing and purchasing of raw
materials, to manufacturing, packaging, distribution and
finally to the consumer.

4) Why is it important for organizations like Nestle to show

leadership in developing sustainable business practice?
Nestl is committed to the following Business Principles in all countries,
taking into account local legislation, cultural and religious practices:
Nestls business objective, and that of management and
employees at all levels, is to manufacture and market the
Companys products in such a way as to create value that can be
sustained over the long term for shareholders, employees,
consumers, business partners and the large number of national
economies in which Nestl operates.
Nestle does not favor short-term profit at the expense of successful
long-term business development, but recognizes the need to
generate a healthy profit each year in order to maintain the support
of our shareholders and the financial markets, and to finance
investments.
Nestle recognizes that its consumers have a sincere and legitimate
interest in the behavior, beliefs and actions of the Company behind
brands in which they place their trust, and that without its
consumers the Company would not exist.
Nestle believes that, as a general rule, legislation is the most
effective safeguard of responsible conduct, although in certain
areas, additional guidance to staff in the form of voluntary business
principles is beneficial in order to ensure that the highest standards
are met throughout the organization.
Nestle is conscious of the fact that the success of a corporation is a
reflection of the professionalism, conduct and the responsible
attitude of its management and employees. Therefore recruitment
of the right people and ongoing training and development are
crucial.
Nestle operates in many countries and in many cultures throughout
the world. This rich diversity is an invaluable source for leadership.
No single document can capture every legal obligation that may be
required in each of these countries. Indeed, there may be conflicting
legal requirements. Nestl continues to maintain its commitment to
follow and respect all applicable local laws in each of its markets.

The given Business Principles of Nestle are necessary to develop

sustainable business practice, as Nestle has established these principles
and performs its business activities according to these principles, surely it
is important for Nestle to show leadership in developing sustainable
business practice.

5) What further
sustainability?

steps

could

Nestle

take

in

contributing

to

1. Research and Development

Nestle can build Research and Development centers which will have two
primary objectives: to create new products and processes and to improve
those that already exist.
In order to have environmental sustainability being more and more built
into products, Nestle can build Sustainability by Design Program to
systematically assess and optimize the environmental performance across
the entire value chain at the earliest stage in the development of new and
renovated products.
2. Sourcing of Raw Materials
Nestl can source its raw materials either directly from farmers or from
primary processors or traders. Nestle can foster environmental
sustainability in the supply chain through,
Responsible Sourcing Audit Program
Which will request key vendors to demonstrate compliance with
Nestls environmental standards through independent third party
audits; if corrective actions are required Nestl, together with
auditors, will guide vendors in upgrading their practices.
Responsible Sourcing Traceability Program
Which will promote transparency in extended supply chains back to
the farm or feedstock, implementing our commitments on nodeforestation, responsible use of water, sustainable fisheries and
animal welfare, and addressing other specific environmental
aspects.
Farmer Connect Program
Which will support the farming communities where Nestle can
source agricultural raw materials, and provides technical assistance
on sustainable production methods.

3. Manufacturing
Manufacturing comprises all processes that are necessary to transform
perishable raw materials into safe and value-added food products for
consumers. Nestle aims to do more with less by eliminating all types of
waste, with a key focus on what is valuable for both the environment and
consumers. Thus can improve overall efficiency, quality and environmental
performance.
Nestle aims to use the most efficient technologies and apply best
practices in order to further optimize energy and water consumption,
minimize waste generation, utilize sustainably- managed renewable
energy sources, recover value from by-products and control and eliminate
emissions, including greenhouse gases.
4. Packaging
The packaging of the companys products is crucial to prevent food
waste, guarantee high quality standards and inform consumers.
Nestle can try to optimize the weight and volume of packaging.
It can lead the development and use of materials from sustainablymanaged renewable resources considering packaging and product
performance requirements.
It can support initiatives to recycle or recover energy from used
packaging.
It can use recycled materials where there is an environmental
benefit and it is appropriate.
5. Distribution
Delivering the products in highest quality and on time from the factory to
customer is a vital part of business. To continuously enhance efficiency
and environmental performance in distribution, Nestle can,
Optimize distribution networks and route planning across all
operations.
Explore opportunities to improve transportation, e.g. use sea and
rail instead of road.
Expand driver training both from a safety and environmental
efficiency perspective, use telematics and latest technology on
vehicles where practical, and recommend the same to suppliers.
6. Marketing & Consumer Communication
Marketings most fundamental commitment is to delight consumers every
day, everywhere, thereby building trust. As part of building trust, Nestle
can,
Integrate environmental sustainability into products, and brand
communication where applicable.
Help consumers make informed choices through credible,
substantiated communication.
Leverage relevant contact points (e.g. digital, packaging and pointof-sale) to inform consumers of environmental improvements, as

well as action they can take when using products and handling used
packaging.
Support
and
shape
the
development
of
environmental
communication best practices and standards, working in
collaboration with industry, government and public forums.
7. Human Resources
Nestle can educate all employees to live by the Nestle corporate business
principle on environmental sustainability. Therefore, Nestle can,
Train all employees on this policy.
Create conducive workplace conditions that help all employees take
personal responsibility for protecting the environment by promoting
application of this policy to day-to-day activities at the workplace as
well as at home.
Ensure environmental sustainability is covered as part of relevant
training, workshops and meetings to raise commitment of
employees, suppliers, business partners and the community at
large.
Promote corporate and personal responsible behavior towards the
environment through publishing success stories and recognizing
positive initiatives to embed these practices within Nestl and the
local community.

8. Regulation
Nestle should further carefully monitor, evaluate and communicate
regulatory developments so that they are reflected in strategies. To
promote an effective regulatory system with respect to environmental
sustainability, Nestle can,
Engage with regulators and other relevant stakeholders to foster
environmentally efficient and effective laws and regulations.
Support internationally recognized standards and voluntary
initiatives designed to protect the environment.
Oppose discriminatory measures.
Favor the harmonization of environmental laws, regulations and
standards in order to develop trade and help consumers
understanding.