Sustainability Strategy and Corporate Performance

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From:Joanna Zeng, Senior Vice President for Sustainability at Nestlé To: CEO and the board of directors, Nestlé
Subject:Implementing a sustainability strategy to improve corporate performance Date:April 18, 2013

Recommended Action:
The task was to develop a sustainability strategy that Nestlé ought to implement to improve our corporate and environmental performance. And we recommend adopting “eco-efficiency” programs which focus on lowering costs and optimize organizational processes. In particular, we propose reducing waste from manufacturing and setting targets for improved performance, and introducing systems to track, measure and enforce those targets. By replacing the carbon intensive materials with recycled materials to lower Nestlé’s carbon footprint and reduce manufacturing and distribution costs, as well as to build brand loyalty and competitive edge.

Issues:
We studied the Competitive Environmental Strategies: When Does it Pay to be Green? conducted by the California Management Review. The objective of this research is to assess how and when environmental management practices impact environmental and corporate performance. Strategic management theory connects management practices with corporate performance through two avenues: cost reduction and value creation. Studies shows the top 50 global “green” thought leaders still have limited understanding what defines sustainability, have difficulties to argue for the business case for sustainability and design executable sustainability strategy. In conjunction with this sustainability management pressure, Nestlé’s CEO, asked us to draw from the lessons of this article and create an aggressive plan for sustainability. Not only these solutions we propose below have been adopted as the best practices in the industry (proven by Unilever, Proctor & Gamble, and Johnson & Johnson etc.), but they also align our specific financial and environmental goals, as well as possible mitigations of the...
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