A commentary on Nestlé's Corporate Social Responsibility

ACADEMIA | Letters A commentary on Nestlé's Corporate Social Responsibility Edgar Cambaza Introduction Corporate Social Responsibility (CSR) is a management model prioritizing the betterment of society, the environment, or both (Singh et al., 2016). CSR is imperative for any company in the world (Srivastava et al., 2019), particularly multinational corporations (Chou, 2014; Singh et al., 2016), as it strategically benefits a company by enhancing its visibility and spreading respect when stakeholders see the selfless contribution to the community (Sekhon & Kathuria, 2019). Thus, it provides a competitive edge to the company and increases its market share (Chou, 2014; Humayun & Pervez, 2010). Such fact is particularly relevant in developing countries, where most companies have emerging CSR programs with a more philanthropic if compared to the more integrated operations in developed countries (Humayun & Pervez, 2010). Nestlé has a well-established reputation for its high-quality food and profitability (Humayun & Pervez, 2010), operating in 83 countries, with 461 factories and 33 thousand employees. The company has among the most robust CSR programs globally as an integral part of the business policies (known as "Creating Shared Value," or CSV) (Amirudin, 2014), being the leader in the food industry and adding value to the company over competitors (Chou, 2014; Humayun & Pervez, 2010). Nestlé establishes a constructive relationship with the community to implement the CSV program directly or through partners (Amirudin, 2014). The program aims to create value for shareholders by operating with policies addressing global and local nutrition, water, and rural development (Chou, 2014; Putra, 2012). Through CSV, Nestlé promotes empowerment, synergies, and sustainability (Chou, 2014; Yoga et al., 2018). This brief discussion will critically address some aspects of the company's CSR and leave some comments on what the company should do next. Materials and methods Bibliometric analysis A bibliometric analysis allowed the visualization of the scholarly "publication landscape" of Nestlé's CSR. Such analysis can indicate the overall interest in a specific topic and, in this case, it reflects the scholars' attention towards Nestlé's CSR. Data was collected in the Dimensions database (Digital Science & Research Solutions Inc., 2018, London, United Kingdom) by searching the term "Nestlé AND Corporate Social Responsibility" and generating downloading a comma-separated values (CSV) spreadsheet with the metadata shown on the page. The page already shows useful analyses such as the number of publications, authors, years, and the leading scientific areas in which most papers covered the topic. Further analysis to see the authors' countries Academia Letters, June 2022 ©2022 by the authors – Open Access – Distributed under CC BY 4.0 Corresponding Author: Edgar Manuel Cambaza, [email protected] Citation: Cambaza, E.M. (2022). A Commentary on Nestlé's Corporate Social Responsibility. Academia Letters, Article 5619. https://doi.org/10.20935/AL5619 1 was performed on VOSviwer using the CSV file. Article search, selection, and analysis By its practicality, Google Scholar was the tool of choice for article search and selection. The search terms were "allintitle: Nestlé Corporate Social Responsibility," which showed all articles with the desired words in the title. This search strategy assumes that titles of academic documents frequently present their keywords. The method allowed the retrieval of 5 articles, and more was added during the analytical phase to complement the information. The software Atlas.ti allowed a content analysis. For such, the codes, adapted from the framework by Candeloro (2019), were "societal influence," "environmental commitment," "openness and transparency," "ethical behavior," and "employee well-being." Results Bibliometric analysis According to the bibliometric analysis, 33 non-gray publications (journal articles and book chapters) mentioned "Nestlé" and "Corporate Social Responsibility" in the title, abstract, or both. The oldest is from 1985 and the newest from 2021, and there was at least one publication on the topic every year, but they never surpassed four (Figure 1). One could argue that researchers have little interest in the topic, but the low number of publications seems to be due to how specific the matter is. Figure 1. The number of publications on Nestlé's CSR since 2013. Graph generated on Dimension app through the search "Nestlé and Corporate Social Responsibility." According to a VOSviwer analysis, most documents are from the UK, US, Ghana, Peru, and Finland. The topic is primarily covered in business and management journals, but some occur in journals related to social sciences, sustainability, and the environment. Most articles (20) are in paid journals, but a considerable number (13) is accessible through open access journals of different degrees (gold, green, hybrid, and bronze). Even though there are few publications on the topic, there were 224 citations, which seems high considering a universe of 33 papers. Academia Letters, June 2022 ©2022 by the authors – Open Access – Distributed under CC BY 4.0 Corresponding Author: Edgar Manuel Cambaza, [email protected] Citation: Cambaza, E.M. (2022). A Commentary on Nestlé's Corporate Social Responsibility. Academia Letters, Article 5619. https://doi.org/10.20935/AL5619 2 Table 1. The main articles analyzed in this study and their findings. Source Document type Study area's country Amirudin (2014) Journal article Indonesia Chou (2014) Thesis China Humayun and Pervez (2010) Dissertation Pakistan Putra (2012) Journal article Indonesia Rani (2020) Dissertation Indonesia Sekhon and Kathuria (2019) Journal article India Singh et al. (2016) Journal article India Srivastava et al. (2019) Journal article India Yoga et al. (2018) Journal article Indonesia Main focus and finding Two-way communication strategies to improve the relationship between Nestlé's stakeholders. To be effective, there must be transparency and accountability. Motivations and impact of Nestlé's CSR in China. CSR adds value to the firm and improves suppliers' livelihoods. Stakeholder's views on how CSR adds value to Nestlé and multinationals in general in Pakistan and other developing countries. CSR adds values, but it must take a philanthropic approach rather than using "green" or efficient operations. Applicability of Nestlé's CSR as a model to develop guidelines for other companies. The results confirmed this possibility. Contribution of Nestlé's CSR in schools. There are several educational activities, particularly nutrition, environment, and physical activities. Description of Nestlé's CSR in Punjab and people's views. The company built a strong relationship with the local community due to health, sanitation, and women empowerment contributions. These authors analyze the CSR of three companies: Nestlé, TATA Group, and ITC Limited. The companies mainly use CSR to build their brand and enhance profitability rather than support the communities. How Nestlé India and ITC Limited communicate their CSR activities on social media. Nestlé adopted two-way communication, answering to doubts and fears of consumers. There should be more engagement. Implementing Nestlé's CSR in coffee farming communities and impacting shareholders' welfare. They manifested satisfaction with profitability, societal empowerment, strong partnership, and sustainability. Academia Letters, June 2022 ©2022 by the authors – Open Access – Distributed under CC BY 4.0 Corresponding Author: Edgar Manuel Cambaza, [email protected] Citation: Cambaza, E.M. (2022). A Commentary on Nestlé's Corporate Social Responsibility. Academia Letters, Article 5619. https://doi.org/10.20935/AL5619 3 Essential information from the literature The sources included in this study (Table 1) show Nestlé has significantly invested in CSR activities in highly populated developing countries in South and Southeast Asia, particularly India and Indonesia. It might also reflect the area's predominant research on such activities. Nestlé is an established multinational, and it is not surprising that most authors report the effectiveness of CSR activities or a high level of stakeholders' positive feedback. One must admit the possibility of bias, as Nestlé might be funding some of these studies, but a reasonable analyst should expect the effectiveness of such a large company's CSR. Positive societal influence Nestlé's investment in the community contributes to a higher competitivity of developing countries in the international arena (Chou, 2014), as nearly half of the company's plants are located in developing countries (Singh et al., 2016). Nestlé's products tend to be healthy and affordable, which also benefits many communities (Chou, 2014), particularly in periods of crisis. Besides initiatives to improve health and sanitation, Nestlé promotes gender equality (Humayun & Pervez, 2010; Sekhon & Kathuria, 2019). The company has long-lasting partnerships with farmers, frequently providing support such as education on production techniques to improve productivity (Humayun & Pervez, 2010; Sekhon & Kathuria, 2019), access to quality inputs, and a solid foundation customer base (Chou, 2014). This practice creates loyalty and smooth collaboration with the local communities and assures the quality of the products, making them more nutritious (Humayun & Pervez, 2010). By purchasing raw materials directly from farmers, Nestlé shortens the supply chain, making its products more affordable (e.g., dairy) (Putra, 2012). Nestlé is engaged in community marketing and philanthropic activities, always in a sustainable way (Yoga et al., 2018). For instance, Nestlé promotes and teaches nutrition and physical activities in schools through the "Healthy Kids Program" (Chou, 2014; Rani, 2020). The company has four R&D centers in China, aiming to produce highly nutritious and fortified foods (Chou, 2014). Environmental commitment Nestlé's CSR focuses on the environment, particularly the efforts to promote efficient water usage in places where it is scarce (Chou, 2014; Rani, 2020). According to Chou (2014), the company established 1992 an Agriculture Technical Assistance Service in China to support coffee farmers, and the methods implemented reduced water usage by over 80%. The company's goals include promoting effective water policies and encouraging water suppliers to join such efforts (Singh et al., 2016). Regarding other environmental CSR goals besides the water-related, Nestlé aims to make operations more resource-efficient, actively participate in the climate change response, integrate environmentally friendly packaging, minimize its environmental impact, promote environmental awareness, and preserve natural resources (Singh et al., 2016). Openness and transparency Nestlé's CSR strategies are harmonized with the business and its operations (Chou, 2014). By being consumer-focused, and, as already mentioned, the company developed a sense of trust and reliability, providing high-quality, healthy, and nutritious Academia Letters, June 2022 ©2022 by the authors – Open Access – Distributed under CC BY 4.0 Corresponding Author: Edgar Manuel Cambaza, [email protected] Citation: Cambaza, E.M. (2022). A Commentary on Nestlé's Corporate Social Responsibility. Academia Letters, Article 5619. https://doi.org/10.20935/AL5619 4 food and beverage products (Humayun & Pervez, 2010). Employees receive training on business ethics, nutrition, and sustainability (Singh et al., 2016). A clear supplier code following the motto "Creating Shared Value" is based on high ethical standards, and the partners must abide as requisite to establish and maintain the bond with the company (Chou, 2014). An anonymous hotline allows anyone to report violations of the supplier code. Throughout the company's operations and the supply chain, there is constant surveillance of potential human rights violations (Singh et al., 2016), and Nestlé informs all stakeholders on its brands and company's performance (Humayun & Pervez, 2010). For instance, the company promptly communicates with customers through Facebook and Twitter on several issues, including customer dissatisfaction, such as a high-profile incident with the brand Maggi (Srivastava et al., 2019). Ethical behavior According to Chou (2014), Nestlé openly manifests its concern for sustainability, abidance to the law of all host countries and regulations, and its "Supplier Code," followed by 89.5% of its suppliers in 2015, has four non-negotiable pillars: respect for human rights, health, and safety, environmental sustainability, and business integrity. The author adds that Nestlé complies with the United Nations Global Compact, Water Mandate, Sustainable Development Goals, Universal Declaration of Human Rights, International Labor Organization conventions, and OECD Global Principles. The company also has guidelines for sourcing several natural foods and beverages, preventing child labor, and working against corruption and bribery (Chou, 2014; Singh et al., 2016). The abidance to several standards ensures that all Nestlé products are manufactured ethically and responsibly throughout the supply chain (Chou, 2014), making the company entitled to claim the trust of customers and stakeholders (Singh et al., 2016). Fairness and employee well-being There are some allegations of Nestlé's unfair salaries and hostility towards labor unions (Singh et al., 2016), but the company offers opportunities for personal development and has a global youth initiative (Humayun & Pervez, 2010; Singh et al., 2016), besides the policy for gender balance in the workforce (Chou, 2014). In Pakistan, for instance, the CSR policies promote good working conditions, satisfy the employees and attract candidates (Humayun & Pervez, 2010). Nestlé's policies ensure that employees and stakeholders can easily report unethical activities, and there is a certified safety and health management system. Final comments Nestlé has a solid CSR program, creating a positive public perception of its operations, quality, and goodwill through the halo effect. The current analysis did not explore the controversies surrounding the company, well explained by the Company Man (2022) and others, because that was not the goal, but such information would be a good supplement for a more concise understanding of Nestlé's public perception. It seems important to stress that Nestlé's CSR and overall public relations (PR) activities effectively overshadow a wave of backlash against some unpopular business decisions in developing countries. For instance, the company contributes to water scarcity in some areas, and the CEO once said that water should not be a human Academia Letters, June 2022 ©2022 by the authors – Open Access – Distributed under CC BY 4.0 Corresponding Author: Edgar Manuel Cambaza, [email protected] Citation: Cambaza, E.M. (2022). A Commentary on Nestlé's Corporate Social Responsibility. Academia Letters, Article 5619. https://doi.org/10.20935/AL5619 5 right (Company Man, 2018). Thus, Nestlé should strengthen its CSR strategy further for this reason and because Nestlé is facing CSR competition for the best reputation, as Sekhon and Kathuria (2019) explained in the case of Nestlé in India. References Amirudin, Z. (2014). Pengembangan Model Corporate Social Responsibility Berbasis Two Way Communication Dalam Rangka Meningkatkan Mutu Community Relation (Studi Pada PT. Nestle Kejayan Pasuruan Dan Masyarakat Sekitar Perusahaan). Jurnal Humanity, 9(2). Candeloro, A. P. (2019). Testing the Shared Value Business Model as a Driver of Change in Financial Institutions: Insights from Banks Listed on the Brazilian Sustainability Index/ISE. In C. Stehr, N. Dziatzko, & F. Struve (Eds.), Corporate Social Responsibility in Brazil: The Future is Now (pp. 103-127). Springer. https://doi.org/10.1007/978-3-319-90605-8 Chou, A. (2014). How and Why Multinational Corporations Pursue CSR Strategies: The Case of Nestle in China [Dissertation, Rutgers University]. 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Kontribusi Corporate Social Responsibility (CSR) PT Nestle Srengsem Bandar Lampung pada pendidikan di sdn i srengsem Bandar Lampung [Dissertation, Universitas Islam Negeri Raden Intan Lampung]. Bandar Lampung, Indonesia. Sekhon, A. K., & Kathuria, L. M. (2019). Undertaking Corporate Social Responsibility through Creating Shared Value Approach: A Case of Nestle India Limited in Punjab. BHUManagement Review, 65. Singh, S., Bawa, J., & Sharma, G. D. (2016). A case study on Corporate Social Responsibility in Nestlé, TATA, ITC. J. Adv. Res. HR Organ. Mqmt. , 3(4), 1-17. Srivastava, A. K., Jonjua, M., & Rana, R. (2019). Status of Communicating CSR to Stakeholders on Social Media-A Case Study on ITC Limited & Nestle India. Journal of Content, Community & Communication, 9, 81-91. https://doi.org/10.31620/JCCC.06.19/13 Yoga, K. D. P., Sunaryo, & Wardani, Y. K. (2018). Implementasi Konsep Creating Shared Value (Csv) Sebagai Program Corporate Social Responsibility (Csr) Dalam Peningkatan Kesejahteraan Stakeholder (Studi pada PT. Nestle Indonesia Panjang Factory). Pactum Law Journal, 1(3), 258-271. Academia Letters, June 2022 ©2022 by the authors – Open Access – Distributed under CC BY 4.0 Corresponding Author: Edgar Manuel Cambaza, [email protected] Citation: Cambaza, E.M. (2022). A Commentary on Nestlé's Corporate Social Responsibility. Academia Letters, Article 5619. https://doi.org/10.20935/AL5619 6