Part A
Nestle is a multinational company and the world’s largest food group in terms of sales, product range, and geographical range. It is a household name in most countries, producing popular brands that are in use in most homes. The company works with suppliers from different countries, which makes corporate social responsibility increasingly essential to maintain its profits. CSR and ethics are becoming a necessary part of success for any company in today’s world, defining the inclusion of public interest into corporate decision-making to benefit them and ensure sustainability. 1 The corporate social responsibility involves participating in initiatives that help the society including environmental considerations, ethical labor practices, and philanthropy activities.
Nestle has been dealing with CSR initiatives towards the society and environment which can be seen in their partnerships with the stakeholders around the world. The company’s social responsibility has been coming from its strategy, investors and shareholder beliefs that long-term profit is value brought to society. Nestle believes its success lies in creating value for its stakeholders and the society as a whole and uses CSR strategies to fulfil stakeholder expectations. Nestle’s CSR program is known as creating shared value that aims at creating higher value for community and stakeholders focusing on nutrition, water, and rural development. 2 The company has adopted the corporate shared value as an initiative and uses it in creating sustainable value to the society.
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The company’s CSR project entails working directly with farmers producing raw materials in rural areas by training them on better agricultural practice. The company also provides training as one way of encouraging sustainable production for its stakeholders. The initiative focuses on empowering high performing teams to meet the quality and gain profits. 3 Nestle company has concentrated on cooperation and supporting agricultural activities of its suppliers such as teaching farmers better farming methods that can meet the standards of the company. It works with farmers to obtain greater effectiveness in production while supporting economic progress
Through the creating shared value concept, nestle company has managed to bring benefits to stakeholders that include farmers, shareholders, and consumers. The initiatives help farmers in three core areas of running profitable farms, protecting the environment as well as achieving a better quality of life. It also ensures sustainable and high-quality raw materials for the company. The corporation is therefore committed to creating shared value by helping farmers with improved techniques on the farm to improve quality and yield that benefits both the farmer and company. 4 In the long run, it gets a reliable supply of high-quality beans while farmers earn higher income from the premium products.
Creating value, this enabled Nestle to adopt a broader focus to its responsibilities in the community where it operates. Through the CSR programs, nestle has proactively addressed and resolved most of the reputation issues. Nestle has made commitments to achieve zero waste for disposal within factories, reduce greenhouse gas emissions and reduce water usage in their operations. Since sustainable water use is a significant challenge for its stakeholders, Nestle took an initiative to improve water management outside its direct operations. The company has run water-saving projects in its factories around the world by emphasizing water conservation and recycling. 5
Part B
Sustainable operation poses many challenges to any business. Nestle as a multinational corporation faces several challenges when creating the shared value strategy of CSR. The company has been criticized continuously for depleting water resources during its. Nestle is America’s largest seller of bottled water and has been implementing efforts to be the most efficient use of water. The company extracts water from the ground and transports it through pipelines to its water bottling factories before selling to consumers. 6 This has led to concerns over future water shortage that affects communities and stakeholders since a depleted water supply affects the operations of Nestle as it reduces the raw materials needed to produce bottled water.
At the same time, some people have criticized Nestle for commoditizing water and turning the fundamental human right to a sellable product. The company is hugely criticized for its marketing policy concerning some of its products, which has led to its struggle trying to balance conserving water and maintaining a level of control and access to water supply. The issue of corporations-controlled water supply has also been rocking the company affecting its CSR initiatives. Critics have blamed Nestle for appropriating natural resources belonging to the local population and selling to them for a profit. 7 This has seen some environmentalists pushing to prevent the company from accessing the water until it is determined to be sustainable. Such issues have been bringing negative publicity to the company and harm its brand despite the numerous CSR initiatives. The issue regarding the public right to water has been affecting the CSR projects of Nestle.
The company needs to implement several initiatives that can improve water efficiency across the entire business, which includes recycling of wastewater, reducing the use of groundwater in the operations and introducing zero water technology. It also needs to recognize the management of water resources as an absolute necessity and put in place water policy that covers areas of water usage. This can entail ensuring water supplies are sustainable by measuring and managing the amount of water they take from the ground to sell compared to what is being replenished. The company can use science to understand the availability of renewable water supplies and determine the ecological sustainability of its water use. Water as a resource depends on the local context for sustainable management, and the corporation should target water use based on the basin level within the region. 8
At the same time, the corporation can deal with this issue by coming up with initiatives to address climate change, such as making its operations efficient and drive change outside the organization. It can generate positive press and demonstrate to the public that its commitment to taking climate change seriously and concerned with the depletion of water supply. The focus is to reduce the negative implications associated with selling bottled water by engaging stakeholders inside and outside the company in identifying and reducing shared water challenges. 9 The company can reduce water-related business risk by consulting and collaborating with local stakeholders from relevant industries. It must make an environmental commitment part of the corporate culture. Before utilizing the CSR, model focusing on water and environment, nestle company needs to encourage its employees on the importance of practicing efficiency in water and energy usage. It is supposed to show ethics and real social responsibility. 10
Reflective essay
Many businesses and brands are engaging in responsible business practice and CSR activities as part of the company’s policy. Since companies benefit from the area of work such as recruiting talent and putting pressure on social amenities, they need to give back to society and maintain a sustainable culture. CSR is when a company or business commits to behave ethically and conduct itself in a manner that fulfils the obligations of stakeholders without causing harm. Its aim is to extend benefits to the society, environment and humanity. 11 During CSR initiatives, companies take a broad view of their activities by looking beyond profits and focusing on shareholders. The CSR activities affect brand reputation and corporate profitability since all businesses exist to maximize profits and revenue and take CSR initiatives improves the status of a company.
One of the issues that emerge when discussing corporate social responsibility is whether a business should prioritize profits over society or whether doing well to the community enables the company to perform well. There are different points of view on the primary objective of corporate social responsibility, whether to maximize value or satisfy the stakeholder needs. The shareholder value theory of corporate social responsibility argues that a company exists to maximize profits and generate value to its shareholders while stakeholder theory suggests that a company should not only make profits but also create value to stakeholders such as customers, suppliers, employees and the society at large. 12 Furthermore, a discussion on CSR activities entails whether the objective of these initiatives is to better the corporate image of a company or if they are kind action done with societal concern over global issues. Many critics argue that corporations engage in CSR initiatives mainly to build a reputation rather than support the community as a whole.
I believe that organizations should engage in CSR initiatives as part of their responsibility to give back to the community and not necessarily to build a brand name. I think the concept of corporate social value is more suitable for corporations that is more than philanthropy or charity donations society for PR purposes. This concept focuses on helping stakeholders succeed which in turn reinforces the success of a company. Multinational corporations have the responsibility to care for the environment and the society at large besides making a profit. 13 They should look towards creating a balance between profit and giving back to the community by protecting the environment and providing value. Corporate social responsibility should entail activities that are relevant to the social, ethical and legal environment. Businesses have the responsibility to go beyond making profits by offering initiatives that can benefit society as a whole.
In this regard, businesses need to embed both profits and responsibility in their operation and focus on protecting the environment and give back to the community. The topic of corporate social responsibility emphasizes the role of business in society and the idea of creating value for its shareholders and society. 14 It covers a wide range of issues affecting business, such as corporate ethics, eco-efficiency, environmental conservation and protection of human rights.
References
Béthoux, Élodie, Claude Didry, and Arnaud Mias. "What codes of conduct tell us: corporate social responsibility and the nature of the multinational corporation." Corporate Governance: An International Review 15, no. 1 (2007): 77-90.
Biswas, Asit K., Cecilia Tortajada, Andrea Biswas-Tortajada, Yugal K. Joshi, and Aishvarya Gupta. Creating Shared Value: Impacts of Nestlé in Moga, India . Springer Science & Business Media, 2013.
Griseri, Paul, and Nina Seppala. Business ethics and corporate social responsibility . Cengage Learning, 2010.
Horrigan, Bryan. Corporate social responsibility in the 21st century: Debates, models and practices across government, law and business . Edward Elgar Publishing, 2010.
Morris, Regan. "Nestle: Bottling water in drought-hit California." BBC News 3 (2016): 2.
Porter, Michael E., and Mark R. Kramer. "Creating shared value." In Managing sustainable business , pp. 323-346. Springer, Dordrecht, 2019.
Rangan, Kash, Lisa A. Chase, and Sohel Karim. "Why every company needs a CSR strategy and how to build it." (2012).
1 Paul Griseri and Nina Seppala. Business ethics and corporate social responsibility (Cengage Learning, 2010).
2 Michael Porter and Mark Kramer. Creating shared value." In Managing sustainable business (Springer, 2019) .
3 Kash Rangan, Lisa Chase, and Sohel Karim. Why every company needs a CSR strategy and how to build it (2012).
4 Michael Porter and Mark Kramer. Creating shared value." In Managing sustainable business (Springer, 2019) .
5 Michael Porter and Mark Kramer. Creating shared value." In Managing sustainable business (Springer, 2019) .
6 Regan Morris. Nestle: Bottling water in drought-hit California ( BBC News , 2016): 2.
7 Morris. Nestle: Bottling water in drought-hit California , 2016: 2.
8 Kash Rangan, Lisa Chase, and Sohel Karim. Why every company needs a CSR strategy and how to build it (2012).
9 Regan Morris. Nestle: Bottling water in drought-hit California ( BBC News , 2016): 2.
10 Griseri and Seppala. Business ethics and corporate social responsibility , 2010.
11 Bryan Horrigan. Corporate social responsibility in the 21st century: Debates, models and practices across government, law and business (Edward Elgar Publishing, 2010).
12 Horrigan. Corporate social responsibility in the 21st century: Debates, models and practices across government, law and business , 2010).
13 Élodie bethoux, Claude Didry, and Arnaud Mias. What codes of conduct tell us: corporate social responsibility and the nature of the multinational corporation ( Corporate Governance: An International Review , 2007): 77-90
14 Griseri and Seppala. Business ethics and corporate social responsibility , 2010.
