The report aims to analyze the present social issues in accounting and also evaluating the impact on the stakeholders. Some of the main discourse of the study has included the present state of sustainability reporting for Nestlé. It has included the key details about current issues and practices which has explained the implications for various stakeholder in relation to financial decision-making. The key performance indicators of Nestlé comprise of measuring and reporting standards which are based on based on “creating shared value (CSV), sustainability and compliance”. In order to provide transparency to the stakeholders, the company has indicated several correlations between our KPIs and commitments along with “global reporting initiative (GRI)” indicators. The sustainability reporting of the company is measured with several parameters such as nutritional, rural development, water usage, environment sustainability, consideration of people, human rights and compliance indicators (Nestle.com, 2018).
Current performance of sustainability reporting for Nestlé
The present indications as per compliance of the sustainability reporting with GRI guidelines have shown significant improvement in all the “Creating Shared Value key performance” indicators in compared to 2015 achievements.
Nutrition
In terms of nutrition, the company has improved in sections such as renovation of products for nutrition or health considerations, products with reduction of sodium, sugar, Trans fat, total fat, artificial colorings or calories (Garcia, Netto, and Miraglia, 2016).Figure: CSV performance for nutrition- comparison of 2015 and 2016
(Source: Nestle.com, 2018)
Rural development
Nestlé has shown a slightly negative trend in terms of training the farmers through capacity building programmes. There is a slight improvement in markets covered under “sustainable agriculture initiative at Nestlé (SAIN)”, however there is significant decrease in percentage of purchase volume compliant with the “Nestlé supplier code” (Sierra, 2017).Figure: CSV performance for rural development- comparison of 2015 and 2016
(Source: Nestle.com, 2018)
Water
The total water withdrawal has slightly decrease from 2000 to 2016. This is seen as a positive change as the company has been able to continue its operations even with lower consumption of water.
Figure: CSV performance for water withdrawal- comparison of 2015 and 2016
(Source: Nestle.com, 2018)
Environment Sustainability
Based on the significant depictions of environmental sustainability, the company has shown significant improvement in reducing the on-site energy consumption. However, there has been significant drawbacks related to packaging source optimization and materials used for packaging purposes. In terms of other parameters such as biodiversity, emission effluents and wastes the company has been stagnant in most of the sub- parameters in both the years (Miah, et., 2015).Figure: CSV performance for water withdrawal- comparison of 2015 and 2016
(Source: Nestle.com, 2018)
Human Rights and Compliance
The human rights and compliance have shown significant decline in terms of more number of cases for product recalls and incidence of non-compliance.Consideration for people
The comparison based on the performance of consideration of people, it has been found there has been less reporting of injuries and illness rate in 2016 compared to the previous year. In addition to this, the total number of fatalities on “site for employees, on-site contractors and on-site members of public”, have significantly reduced from 10 in 2015 to 4 in 2016. Nestlé has emphasized woman empowerment in the recent years with a significant improvement of leadership positions held by women from 34% in 2015 to 35.4% in 2016 (Jones, Comfort and Hillier, 2016).Figure: CSV performance for people- comparison of 2015 and 2016
(Source: Nestle.com, 2018)
Present issues in sustainability reporting of Nestlé and practices by Nestlé
The reporting of the sustainability has used “GRI G4” guidelines and indicators which have considered the material issues. These issues are in line with engagement of stakeholder and conducive in shaping the public commitments. The issues associated to human rights is understood by the company by millions of people being negatively affected by human rights abuses (Flower, 2015). “The refugee crisis, and the resulting surge in migrant labour, remains a major challenge, and a root cause of key issues such as child and forced labour in the agricultural sector”. Nestlé faces an extensive range of intricacies associated to obesity child labour to climate change and it is not possible for the company to tackle these problems on its own (Isaksson, 2017).
The materiality analysis has been conducive in anticipating the various types of consumer trends including the legal challenges and thereby ensuring consumer expectation of sustainable behavior. Some of the latest matrix for this has depicted the issues such as over and underrun water and responsible marketing which are key factors to the business strategy. Besides this, factors such as responsible marketing hasn’t considered as key focus for delivery of business objectives. At the same time, climate change and human rights are pivotal for success of the business (Lee and Vachon, 2016).
Based on the creating shared Value report, the investors have been able to get an insight of performance of various types of issues by outlining the commitments, targets and progress annually. The company has been further designed to integrate the CSV and SDG’S in order to trace with material issues associated to the SDG to assist in the mapping process. Based on the sustainability report published by Nestlé in 2017 and the company has remained on track to meet the objectives set for 2020. The overall actions for the issues in the valuation of the company has been segregated into three stages which includes material issues pertaining to agricultural Supply chain, manufacturing, retail and consumers (Cohen, 2017).
Stage I Agricultural Supply chain
The main material issues identified in agricultural Supply chain is depicted with rural development, poverty alleviation, food and nutrition security, human rights, animal welfare, responsible sourcing and traceability. In this stage, the company works with the farmers and partners around the world in order to build a resilient and responsible supply chain.
Stage II Manufacturing
The key material issues pertaining to manufacturing has been focused with water stewardship, climate change, water, sanitation and hygiene, business ethics, resource efficiency, natural resource stewardship, women’s empowerment, employee safety health and wellness, fair employment and youth employability. Nestlé strives to offer fair employment and integrity in the work by maintaining openness and respect for people. The operations of the company continually aim to utilize less energy and fewer resources thereby generating less waste and creating fewer source of emissions.
Stage III Retail and consumers
Some of the key material issues in the retail and consumer division is depicted in terms of overall undernutrition, food and product safety, responsible marketing and influence. Nestlé is committed towards its consumers and ensures that they follow an active lifestyle, eat well and consume the products in a sustainable manner.Figure: Key issues in sustainability reporting and actions taken by Nestlé
Source: Nestle.com, 2018)
Partnerships and collaborations
EpiGen Global Research Consortium (EpiGen)
This type of partnership for the company is identified as one of the largest “public-private partnerships” which has emphasized on impact of nutrition and lifestyle on infant and maternal health is a part of the main goal of “EpiGen Global Research Consortium (EpiGen)”.
International Federation of Red Cross and Red Crescent Societies (IFRC)
Nestlé has an imminent history of working with are you foresee for more than 15 years in order to support its sanitation and global water initiatives for improved access to sanitation and safe water for 30 million people by 2030. The main efforts of the company have laid on existing the rural communities and population especially in the book were growing regions of “Côte d’Ivoire and Ghana”. In a more recent activity, the community is around the bottled water factories in Ethiopia has helped the company in gaining better access to clean water and sanitation.
Working with the United Nations Global Compact
The “United Nations Global Compact (UNGC)” is identified as strategy policy initiative by Nestlé, which is aligned with the strategies and operations in more than 10 universally accepted principles covering the environment, human rights, labour and anticorruption. The corporate business principle incorporates the 10 UNGC principles which reflects the concepts associated to honesty, respect and fairness for people and environment at large (Levy, Reinecke and Manning, 2016).
Conclusion and recommendation
Based on the discourse of the learnings, the current performance the company has improved in sections such as renovation of products for nutrition or health considerations, products with reduction of sodium, sugar, Trans fat, total fat, artificial colorings or calories. Moreover, Nestlé has been depicted with a negative trend for training the farmers through capacity building programmes. There is a slight improvement in markets covered under “sustainable agriculture initiative at Nestlé (SAIN)”, however there is significant decrease in percentage of purchase volume compliant with the “Nestlé supplier code”. Environmental sustainability, the company has shown significant improvement in reducing the on-site energy consumption. Some of the many initiatives taken by the company, needs to focus on Optimization of packaging materials used, improving quality compliance to reduce the total number of product recalls and incidences of non-compliance. There needs to be significant improvement made by the company in terms of biodiversity, emission effluents and wastes Management.
References
Cohen, E., 2017. Sustainability Reporting for SMEs: Competitive Advantage Through Transparency. Routledge.
Flower, J., 2015. The international integrated reporting council: a story of failure. Critical Perspectives on Accounting, 27, pp.1-17.
Garcia, L.G.A., Netto, C.C. and Miraglia, S.G.E.K., 2016. Sustainability in the Chemical Industry in Brazil. SBIJOURNAL, (62).
Isaksson, R., 2017, December. Assessing sustainability reports based on Quality Management principles–a preliminary review. In Toulon-Verona Conference” Excellence in Services”.
Jones, P., Comfort, D. and Hillier, D., 2016. Water stewardship and North America’s food and beverage companies: a case study in corporate sustainability. International Journal of Corporate Strategy and Social Responsibility, 1(1), pp.26-43.
Lee, K.H. and Vachon, S., 2016. Carbon Management in the Supply Network: Measurement and Reporting. In Business Value and Sustainability (pp. 135-170). Palgrave Macmillan, London.
Levy, D., Reinecke, J. and Manning, S., 2016. The political dynamics of sustainable coffee: Contested value regimes and the transformation of sustainability. Journal of Management Studies, 53(3), pp.364-401.
Miah, J.H., Griffiths, A., McNeill, R., Poonaji, I., Martin, R., Morse, S., Yang, A. and Sadhukhan, J., 2015. Creating an environmentally sustainable food factory: a case study of the Lighthouse project at Nestlé. Procedia Cirp, 26.
Nestle.com. (2018). [online]
Sierra, J.P., 2017. The Behavioral Effects of Sustainability Reporting (Doctoral dissertation, Appalachian State University).
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