Page 1: Introduction
[pic]Nestlé is the world’s leading nutrition, health and wellness company. It employs around 330,000 people and has 461 factories in 83 countries around the world; almost half of these are in developing countries. In the UK, Nestlé employs more than 7,000 people across 19 sites. The company is one of the UK and Ireland’s major exporters, exporting over £300 million worth of products every year to over 50 countries around the world. Nestlé is a household name within the UK, producing some of Britain’s most popular brands such as KIT KAT®, NESCAFÉ®, SMARTIES®, GO CAT® and SHREDDIES®. Over one billion KIT KATs are produced in the UK every year.
Nestlé has a series of corporate business principles designed to guide the way in which the organisation and its employees operate. These principles are at the basis of Nestlé’s culture and aim to protect the trust of its consumers and other stakeholders. The principles and their associated policies are concerned with activities related to: 1. consumers
2. human rights and labour practices
4. suppliers and customers
5. the environment.
[pic]Nestlé works within the secondary sector of industry, creating and supplying products to customers. It converts raw materials into finished goods for consumers to enjoy. Raw materials used in many of Nestlé’s products are sourced from the primary sector. For example, Nestlé brands such as KIT KAT, AERO® and SMARTIES contain cocoa sourced from cocoa farmers around the world. Nestlé works with cocoa farmers in order to help them run profitable farms and eliminate child labour, whilst developing a sustainable supply of cocoa for Nestlé products. This case study looks at the importance of applying the principles of corporate social responsibility to a business’ activities. It will demonstrate how Nestlé creates shared value within its cocoa supply chain to enhance the lives of cocoa farmers whilst also improving the quality of its products for consumers.
Page 2: Corporate Social Responsibility
[pic]In Business Studies curriculum terms, Corporate Social Responsibility (CSR) involves the business taking a broad view of its activities, looking beyond profits for shareholders and focusing on other stakeholders. A stakeholder is anyone that has an interest in or may affect the decisions and actions of a business. Stakeholders can be internal or external to the business. Internal stakeholders include employees and shareholders. External stakeholders include suppliers, customers, the communities in which the business operates and the environment. For companies like Nestlé, which work with suppliers from a range of countries, many in poorer regions of the world, it is becoming increasingly important to take a wider view of responsibilities. Nestlé believes for a company to be successful in the long term and create value for its shareholders, it must also create value for society. It calls this Creating Shared Value.
Creating Shared Value
Creating Shared Value has become an integral part of the way in which Nestlé does business. It is based on compliance with international laws and codes of conduct and the company’s business principles, and a focus on environmental sustainability. However, Creating Shared Value goes beyond compliance and sustainability. It aims to create new and greater value for society and shareholders in the areas where the company can have the biggest impact – nutrition, water and rural development. These are core to its business activities and vital for its value chain: • [pic]Water: because the ongoing quality and availability of it is critical to life, to the production of food and to Nestlé’s operations. • Rural development: because the overall well-being of farmers, rural communities, workers and small businesses and suppliers is intrinsic to the long-term success of Nestlé’s business. • Nutrition: because food and nutrition are the...
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