By Janet Voûte
At Nestlé we believe we can make an important contribution to society, not only through corporate social responsibility programmes but by going a step further to create value both for our shareholders and for the communities in which we operate.
This approach, first developed by Harvard University’s Professor Michael Porter and Mark Kramer, is called Creating Shared Value or CSV.
They argue that the role of the corporation should be re-invented to focus more heavily on the connection between business and societal needs.
Six years ago, we became the first company to apply the CSV concept throughout the organisation, to embed it firmly into our strategic roadmap and to report regularly (pdf, 34.7Kb) on our success in applying it.
CSV means that we systematically take actions that produce value for the business and directly benefit consumers, employees and suppliers, their families and their communities.
We have set ourselves three priority areas for creating shared value: nutrition, water and rural development.
We are the world’s leading nutrition, health and wellness company, so it is right that nutrition is a key driver of our work in CSV.
Good food and nutrition are the basic building blocks for good health.
Another key driver is water, essential for life, wherever you are in the world.
Our Chairman Peter Brabeck-Letmathe is a passionate advocate for more careful use of this precious resource, leading discussion and debate in different forums including his water blog.
We also focus on rural development. Helping the farmers, rural communities, and suppliers we work with is the best way to guarantee our business can grow sustainably in the years ahead.
Impact on business and society
Six years after we formally defined our CSV approach, you can find evidence throughout the company of how it works in practice.
We sell affordable micronutrient-fortified products to help meet the needs of consumers in emerging markets who are at risk of malnutrition.
We work in partnership with governments and non-governmental organisations to provide school-age children in 60 countries with nutrition education and opportunities for physical activity through our Nestlé Healthy Kids Global programmes.
We also create shared value by providing training and microfinance to help farmers become more productive while also investing in their communities.
Today, we maintain direct relationships with more than 680,000 farmers worldwide.
We are continuing to drive our operations to the highest standards of performance in environmental sustainability and compliance.
Each year we become more efficient at using water, producing more products with less.
We achieve this by focusing on water efficiency in our own factories, while at the same time, encouraging collective action at a watershed level.
This year our efforts to cut carbon emissions have been recognised by the Carbon Disclosure Project, which ranked us top among ‘Global 500’ companies.
These initiatives are not easy to implement. For Nestlé though the commitment to Creating Shared Value, Sustainability and Compliance is non-negotiable.
Today, Creating Shared Value guides our business decisions and influences how we conduct ourselves across the globe.
It also means we are transparent about all of our commitments in nutrition, water and rural development, to environmental sustainability and compliance.
Stakeholders can see how we measure up to the standards we have set ourselves.
In 2011, we met the A+ requirements of the Global Reporting Initiative (GRI) for our annual report on Creating Shared Value (pdf, 34.7Kb), becoming the first global food company to achieve that for a worldwide sustainability report.
Continue the momentum
Nestlé is proud to be a pioneer in Creating Shared Value, and pleased the concept is now getting wider recognition.
We welcome the new ‘Shared Value Initiative’ – a sharing of CSV best practices recognised this week at the Clinton Global Initiative.
By bringing together leaders from companies like Nestlé, from civil society and from governments this new forum should help build a wider base for CSV implementation.
And our own Creating Shared Value Global Forum in New Delhi, India, on November 5, 2012, will be an opportunity to encourage conversation globally about nutrition, water, rural development and the role of business in society.
You can join the discussion online, and question panellists at all the sessions via a live webcast.
Creating Shared Value is not just for Nestlé and we want you to have your say.
Janet Voûte is Nestlé's Global Head of Public Affairs.