Thursday, May 2, 2019

Integrating Corporate Responsibility into Business: Nestlé Shows How It Is Done

When I talk with senior corporate responsibility (CR) and sustainability leaders one of the most frequent challenges they talk about is driving CR and sustainability out of their stand-alone CR departments and into the day-to-day commercial operations of their business. This is the nirvana, the holy grail, the goal post, the bull’s eye – you get the picture – for CR professionals, but often, in the privacy of their offices, they are beating their heads on the wall when faced with commercial colleagues who just don’t seem to understand the business value of CR.

But there are some companies whose commercial leaders have gotten it. One company is Nestle.

With the world’s population facing unprecedented levels of under-nutrition and obesity, the issue has taken on global urgency. Nestlé’s senior management has acted by creating a global Nutrition, Health & Wellness (NH&W) strategy. As part of its strategy, it has made the public commitment, aligned with UN Sustainability Development Goal #2 (No Hunger) and #3 (Good Health and Well-Being), to transform its product line by offering healthier choices. Specifically, it has pledged to: 
·       Launch more foods and beverages that are nutritious, especially for mothers-to-be, new mothers,  and infants and children
·       Further decrease sugars, sodium and saturated fat
·       Increase vegetables, fiber-rich grains, pulses, nuts and seeds in its foods and beverages
·       Simplify its ingredient lists and remove artificial colors, and
·       Address under-nutrition through micronutrient fortification
Their strategy has won them the coveted #1 spot on the 2018 Global Access to Nutrition Index, which assesses the world’s largest food and beverage manufacturers on their nutrition-related commitments, practices and performance globally. (Read more about the Index in my previous blog.)

It’s also won them financial returns. Earlier this year Nestlé announced that its 2018 net profit rose to 10.1 billion Swiss francs ($10.03 billion), with sales rising 2.1 percent.

As the company states in its most recent Annual Review, “Winning with consumers is the source of our sustainable financial performance and our way to earning trust and maintain our market leadership. Based on a compelling Nutrition, Health and Wellness strategy, our company delivers sustainable value over the short term and the long term."

To find out how Nestlé is integrating its NH&W strategy into its business, I spoke with Wendy
Wendy Johnson
Johnson, Director, Public Policy and Public Affairs. She is part of the Nestlé team that works closely on the company’s NH&W strategy in the United States. 

MK: Congratulations for being named #1 on the 2018 global Access to Nutrition Index. What does this mean for Nestlé?

WJ: It is a point of pride because it confirms that we are headed in the right direction. It’s always sweet when a third-party recognizes your success, especially given that industry is so often demonized. To get credit from the Access to Nutrition Foundation,  a respected third party, was sobering and confirmatory because it is external validation that our efforts are valued.
MK: Nestlé clearly sees this issue as a core part of its business strategy – not just an area to be addressed in the philanthropic space. How is Nestlé able to integrate the issue of nutrition and align the UN Sustainable Development Goals into its day-to-day commercial business?

WJ: The discussion starts at the top with our global CEO, Mark Schneider. We know that as a food business we can’t ignore the statistics on obesity and under-nutrition. We knew early on that we had to make changes where we could that could help mitigate  the obesity crisis and help address the challenges of under-nutrition where it is a concern. This has been and continues to be part and parcel of our senior leadership’s strategic thinking.  No one wants the prospect of a generation that will not live as long of their parents because of their diets. This is not good for society and it is not good for business.

One important way we have integrated this into our business is by embedding the development and governance of this strategy within our Executive Board. Each public commitment within our “Creating Shared Value” platform is ultimately championed and led by a member of our Executive Board, which drives fulfilment of our commitments across the commercial businesses. Specifically, the Board works to: 

·       Ensure all activities and work streams align with Nestlé’s positioning in society
·       Assess and draw appropriate conclusions from societal developments affecting Nestlé, and
·       Further strengthen our credentials in corporate Shared Value, environmental sustainability and compliance.

As part of Nestlé’s nutrition strategy, the Board approved a comprehensive set of nutrition-related targets directly linked to the SDGs. These targets are measured at a country level and are reported up to global leadership, which includes the Executive Board.

MK: How are the U.S. operations of Nestlé doing on these targets?

WJ: The global targets are cascaded to countries, which are then expected to incorporate those most applicable to their local area.  In the U.S., we have made quite a bit of headway especially in the reduction of sodium and sugar in our foods. This requires working closely with the business on reformulation, consumer testing, and then working with our retail partners to get the products in the hands of our consumers.

We have been very forthcoming with our support of the FDA’s voluntary sodium restrictions and continue to push this agenda forward because we understand that heart disease is still the #1 killer in the U.S. of both men and women.  What’s holding us back from pushing further, faster with some of our targets is the lack of technology and the lack of consumer acceptance. For example, sodium in foods does many other things than just season; it has other functional capabilities and you can’t just take it out without having a detrimental effect on the product. From a food science perspective, we must ensure that whatever substitute we introduce has the same capabilities.  While all our efforts are important, none of it will have an impact if consumers do not accept the product. 
MK: You launched Nestlé for Healthier Kids last year.  How is it doing?
WJ: Globally, we launched Nestlé for Healthier Kids as one of our Creating Shared Value programs to help 50 million children lead healthier lives by 2030.

In the U.S., our focus has been on educating parents on the importance of nutrition early in childhood (birth to 4 years). We took learnings from leading nutrition experts as well as learnings from our Feeding Infants and Toddlers Study, a Nestlé study of what young children eat, and developed a peer-reviewed, unbranded curriculum that we are piloting in six New Jersey locations. We are partnering in several communities with the YWCA to offer a series of classes to parents on topics such as the importance of breakfast, the introduction of solid foods, how to handle picky eating, increasing fruit and veggies, and transitioning to table food. We are working with Rutgers University to conduct pre- and post-testing to see how much parents have learned and are also identifying parents who have gone through the classes who can become peer educators and deliver the program further into their communities.

We will look at the results from these pilots and decide how to scale up the program, including looking at options to reach a broader audience through digital platforms.

MK: Why is the obesity crisis important to Nestlé?

WJ: Nestlé has been in business for more than 150 years and looks forward to being in business for 150 years more. Our company’s purpose is enhancing quality of life and contributing to a healthier future. That is among the reasons why we are so keenly focused on helping address challenges around nutrition and wellness, including obesity, faced by our consumers and employees. For our business to succeed, we need to ensure the future health of our employees and consumers. We need to see longevity in our communities to ensure the longevity of our business.

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