Creating Shared Value at Nestlé
Nestlé, a Humanitarian Beginning
Our founder, Henri Nestlé was a Swiss pharmacist who developed the world’s first milk food for infants in 1867 in his efforts to save the life of a neighbor’s child, a premature infant who was unable to tolerate his mother’s milk or any of the usual substitutes. His ultimate goal was to combat the problem of infant mortality due to malnutrition. This new product, Farine Lactée Nestlé, saved the life of an infant who could not be breastfed. Soon, people began to recognise the value of this product and it was marketed in much of Europe. Thus, began a legacy of creating shared value which is embedded within our values and corporate business principles. This legacy remains to be our pride and continues to drive us more than 140 years on. From its humble beginnings, Nestlé is committed towards building a business as the world’s leading Nutrition, Health and Wellness company, based on sound human values and principles.
CSV – The Concept
Creating Shared Value (CSV) is a fundamental part of Nestlé’s way of doing business that focuses on specific areas of the Company’s core business activities where value can best be created both for society and shareholders. Creating Shared Value says that for our business to be successful in the long run, it must consider the needs of two primary stakeholders at the same time: the people in the countries where we operate and our shareholders. Any business that thinks long‑term and follows sound business principles creates value for society and shareholders through its activities, e.g. in terms of jobs for workers, taxes to support public services, and economic activity in general. But Creating Shared Value goes one step further. A company consciously identifies areas of focus, where shareholders’ interest and society’s interest strongly intersect, and where value creation can be optimised for both. As a result, the company invests resources, both in terms of talent and capital, in those areas where the potential for joint value creation is the greatest, and seeks collaborative action with relevant stakeholders in society.
CSV Focus Areas
At Nestlé, we have analyzed our value chain and determined that the areas of greatest potential for joint value optimisation with society are Nutrition, Water and Rural Development. These activities are core to our business strategy and operations, and vital to the welfare of the people in the countries where we operate.
We actively seek engagement and partnerships with outside stake holders that optimises positive impact in these areas of focus. However, Creating Shared Value is not about philanthropy. It is about leveraging core activities and partnerships for the joint benefit of the people in the countries where we operate and of our shareholders. We have joint programmes with over 100 organisations around the world in these three areas:
- Nutrition: because food and nutrition are the basis of health and of our business – it’s the reason why we exist.
- Water: because the ongoing quality and availability of it is critical to life, the production of food and to our operations.
- Rural development: because the overall wellbeing of the farmers, rural communities, workers, small entrepreneurs and suppliers are intrinsic to our ability to continue to do business in the future.
These three areas are fundamental to our overall business goal, which is “To become the recognised leader in Nutrition, Health, and Wellness, trusted by all stakeholders”.
Creating Shared Value is open for all companies to apply. While we at Nestlé have adopted a Creating Shared Value approach to our business, we make no proprietary claim, and Creating Shared Value is a way of thinking which is available to any company which wants to utilize it.
Creating Shared Value should also not be confused with compliance or sustainability. Creating Shared Value is built on the foundation of a strong compliance culture and commitment to sustainability. But Creating Shared Value goes beyond compliance and sustainability, and aims to create new and greater value for society and our shareholders within the areas of focus.
In doing so, Nestlé maintains a very long term perspective on business development and welcomes dialogue with external stakeholders who are committed to principled behavior and constructive engagement. This includes government and regulatory authorities, intergovernmental organizations, non-governmental organizations, academic and professional bodies, and local communities.
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