Nestl?: Corporate Citizenship and the Value Chain
Monday, May 15, 2006
Nestl? is traveling its own road with a proposed new corporate social responsibility model.
By Ken Stier
Nestl?’s recently unveiled Latin America corporate social responsibility report is the food giant’s bear-hug attempt to understand its operational impacts across a vast sourcing, production and distribution chain.
It is also a stab at defining a new corporate responsibility model, one that sits more comfortably with the firm’s defiantly unapologetic corporate culture.
The company’s operational reach or “footprint” is huge, involving sourcing from close to 275,000 farmers (for its three principal raw materials — 218,000 coffee farmers, 35,000 milk farmers and 22,000 other farmers), who supply some 4 billion Swiss francs (?1.8 billion) worth of goods and services, for 72 factories domiciled in South America. These have more than 38,000 workers, producing products for more than 400 million consumers in the region. Nestl?s milk-producing district in Brazil alone is larger than Switzerland.
[…] ?Creating Shared Value is a very different approach to CSR, because it is not focused on meeting a set of standard external criteria, or on philanthropy; the idea of winners and losers does not fit this model of CSR,? said FSG?s Kramer, a colleague of Porter?s at Harvard.
So far, though, corporate responsibility experts are not exactly won over. London School of Business professor Craig Smith said the approach was ?not especially innovative? but nonetheless an ?appropriate way to look at Nestl?.?
?The more important issue in the 21st century may be one of value-sharing, i.e., how will the benefits of wealth creation to be shared with the stakeholders?? he said.
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