Welcome to The Presentation of Case Studies of Nestlé & Anglo American

Prepared By

Fariha Ahmad

ID-10111101092

Intake-23rd (03)

Program-BBA

Bangladesh University of Business & Technology

Case Study of Nestlé: Doing Better by

the Environment

Question 01: How can the removal of the inner plastic sleeve from Kit Kat

Bumper packs be seen as a move towards sustainability?

Answer: Companies with good business sense try to be environmentally

friendly by improving efficiency and effectiveness in using natural resources in

a more responsible way. Nestle, the world’s largest food company is known for

its responsibility towards environmental, social, economic concerns. Nestle

continuously reviews packaging and where possible, reduces the amount

used, it has established a set of criteria for evaluating packaging. Through this

evaluation, Nestle has been removing the inner plastic sleeve from Kit Kat

Bumper packs. This step is seen as a move towards sustainability, as the

removal saves 160 tons of plastic per year.

Question 02: Why are International Treaties like Rio and Kyoto

important in encouraging sustainable business practice?

Answer: By the early 1990s there was considerable pressure for

governments to create agreements concerning the environment and

its protection.

In 1992 the United Nations Conference on Environmental and

Development (UNCED) was held in Rio de Janeiro. The main outcome

of the conference was Agenda 21, which marked an important

landmark in the sustainable development fight, and inter country co-operation.

The Kyoto Conference on Climate Change (1999) has meant that the

UK and many other Governments have entered into a legally binding

agreement to reduce greenhouse gases. In addition, the Government

has set a unilateral target of 20% reduction of carbon dioxide by 2010 from 1990 levels.

These conferences represented a new global commitment to

sustainable development. The conferences marked the start of global

co-operation, which was needed to deal with the many issues,

including concern for the environment, a working plan which countries

would follow.

Question 03: Give one other example of how Nestle has developed

business practice in line with Agenda 21’s seven point for business?

Answer: Agenda 21 was the main document signed at the

conference. It was over 800 pages long, and represented a new

global commitment to sustainable development. It was not a legally

binding document, but was devised as a working plan which countries

would follow. Agenda 21 lays out a seven point plan for businesses to start changing values and perceptions. An example of how Nestle has

developed business practice in line with Agenda 21’s seven point plan

for business id given below:

Nestlé is dedicated to providing consumers with the best food

throughout their lives. The primary role of the Company is the

transformation of natural resources into finished products that meet

consumers’ expectations for safety, quality, convenience and value. Nestlé is committed to sustainable development and environmentally

sound business practices.

Nestlé fully supports the United Nations Global Compact’s three

guiding principles on environment. The key drivers for Nestlé’s

worldwide environmental approach are :

– integrates environmental policies, programs and practices into each business as an element of management in all its functions

– develops, designs and operates facilities and conducts its activities

taking into consideration the efficient and sustainable use of

renewable resources, the minimization of adverse environmental

impact and waste generation, and the safe and responsible disposal

of residual wastes

– respects and complies with existing laws and regulations in local

markets concerning environmental issues

– applies Nestlé internal standards suitable to local conditions in those

regions where specific environmental legislation is non- existent or

insufficient

– improves environmental protection relevant to its activities on a continuous basis

– provides appropriate information, communication and training to

build internal and external understanding about its environmental

commitment and action

– supports professional associations such as the International Chamber

of Commerce in their work relative to environmental protection, as

well as efforts to set up environmental management guidelines–

improves environmental protection relevant to its activities on a

continuous basis

– provides appropriate information, communication and training to

build internal and external understanding about its environmental

commitment and action

– supports professional associations such as the International Chamber

of Commerce in their work relative to environmental protection, as

well as efforts to set up environmental management guidelines

– establishes environmental objectives, monitors progress, checks

results and defines future actions. This activity, carried out by Nestlé

specialists, ensures the continuous improvement of environmental

performance throughout the supply chain, from producing and

purchasing of raw materials, to manufacturing, packaging, distribution and finally to the consumer.

Question 04: Why is it important for organizations like Nestle to show

leadership in developing sustainable business practice?

Answer: Nestlé is committed to the following Business Principles in all

countries, taking into account local legislation, cultural and religious

practices:

– Nestlé’s business objective, and that of management and employees at all levels, is to manufacture and market the Company’s

products in such a way as to create value that can be sustained over

the long term for shareholders, employees, consumers, business

partners and the large number of national economies in which Nestlé

operates;

– Nestlé does not favor short-term profit at the expense of successful

long-term business development, but recognizes the need to generate

a healthy profit each year in order to maintain the support of our

shareholders and the financial markets, and to finance investments;

– Nestlé recognizes that its consumers have a sincere and legitimate

interest in the

behavior, beliefs and actions of the Company behind brands in which

they place their trust, and that without its consumers the Company

would not exist;

– Nestlé believes that, as a general rule, legislation is the most effective

safeguard of responsible conduct, although in certain areas,

additional guidance to staff in the form of voluntary business principles

is beneficial in order to ensure that the highest standards are met

throughout the organization;

– Nestlé is conscious of the fact that the success of a corporation is a

reflection of the professionalism, conduct and the responsible attitude

of its management and employees. Therefore recruitment of the right

people and ongoing training and development are crucial;

– Nestlé operates in many countries and in many cultures throughout

the world. This rich diversity is an invaluable source for leadership. No

single document can capture every legal obligation that may be required in each of these countries. Indeed, there may be conflicting

legal requirements. Nestlé continues to maintain its commitment to

follow and respect all applicable local laws in each of its markets.

The given Business Principles of Nestle are necessary to develop

sustainable business practice, as Nestle has established these principles

and performs its business activities according to these principles, surely

it is important for Nestle to show leadership in developing sustainable

business practice.

Question 05: What further steps could Nestle take in contributing to

sustainability?

Answer:

1. Research and Development:

Nestlé can build Research and Development centers which will have

two primary objectives: to create new products and processes and to

improve those that already exist.

In order to have environmental sustainability being more and more

built into products, Nestle can build Sustainability by Design Program to

systematically assess and optimize the environmental performance

across the entire value chain at the earliest stage in the development of new and renovated products.

2. Sourcing of Raw Materials:

Nestlé can source its raw materials either directly from farmers or from

primary processors or traders. Nestle can foster environmental

sustainability in the supply chain through:

•Responsible Sourcing Audit Program:

Which will request key vendors to demonstrate compliance with

Nestlé’s environmental standards through independent third party audits; if corrective actions are required Nestlé, together with auditors,

will guide vendors in upgrading their practices;

•Responsible Sourcing Traceability Program:

Which will promote transparency in extended supply chains back to

the farm or feedstock, implementing our commitments on no-

deforestation, responsible use of water, sustainable fisheries and

animal welfare, and addressing other specific environmental aspects;

•Farmer Connect Program:

Which will support the farming communities where Nestle can source

agricultural raw materials, and provides technical assistance on

sustainable production methods;

3. Manufacturing:

Manufacturing comprises all processes that are necessary to transform

perishable raw materials into safe and value-added food products for

consumers. Nestle aims to do more with less by eliminating all types of

waste, with a key focus on what is valuable for both the environment

and consumers. Thus can improve overall efficiency, quality and

environmental performance.

Nestle aims to use the most efficient technologies and apply best practices in order to further optimize energy and water consumption,

minimize waste generation, utilize sustainably- managed renewable

energy sources, recover value from by-products and control and

eliminate emissions, including greenhouse gases.

4. Packaging:

The packaging of the company’s products is crucial to prevent food

waste, guarantee high quality standards and inform consumers.

• Nestle can try to optimize the weight and volume of packaging;

• It Can lead the development and use of materials from sustainably-

managed renewable resources considering packaging and product performance requirements;

•It can support initiatives to recycle or recover energy from used

packaging;

• It can use recycled materials where there is an environmental

benefit and it is appropriate.

5. Distribution:

Delivering the products in highest quality and on time from the factory

to customer is a vital part of business. To continuously enhance

efficiency and environmental performance in distribution, Nestle can-

• optimize distribution networks and route planning across all operations;

• explore opportunities to improve transportation, e.g. use sea and rail

instead of road;

• expand driver training both from a safety and environmental

efficiency perspective, use telematics and latest technology on

vehicles where practical, and recommend the same to suppliers;

6. Marketing & Consumer Communication:

Marketing’s most fundamental commitment is to delight consumers

every day, everywhere, thereby building trust. As part of building trust, Nestle can-

•integrate environmental sustainability into products, and brand

communication where applicable;

•help consumers make informed choices through credible,

substantiated communication;

•leverage relevant contact points (e.g. digital, packaging and point-

of-sale) to inform consumers of environmental improvements, as well

as action they can take when using products and handling used packaging;

•support and shape the development of environmental

communication best practices and standards, working in collaboration

with industry, government and public forums.

7. Human Resources:

Nestle can educate all employees to live by the Nestlé corporate

business principle on environmental sustainability. Therefore, Nestle

can:

•train all employees on this policy;

•create conducive workplace conditions that help all employees take

personal responsibility for protecting the environment by promoting

application of this policy to day-to-day activities at the workplace as

well as at home;

•ensure environmental sustainability is covered as part of relevant

training, workshops and meetings to raise commitment of employees,

suppliers, business partners and the community at large;

•promote corporate and personal responsible behavior towards the

environment through publishing success stories and recognizing positive initiatives to embed these practices within Nestlé and the local

community.

8. Regulation:

Nestle should further carefully monitor, evaluate and communicate

regulatory developments so that they are reflected in strategies. To

promote an effective regulatory system with respect to environmental

sustainability, Nestle can:

•engage with regulators and other relevant stakeholders to foster

environmentally efficient and effective laws and regulations;

•support internationally recognized standards and voluntary initiatives

designed to protect the environment;

•oppose discriminatory measures;

•favor the harmonization of environmental laws, regulations and

standards in order to develop trade and help consumers’

understanding.

Case Study of Anglo American: Social

and Environmental Responsibility

Question 01: What is sustainable development?

Answer: The concept of “sustainable development” (as defined by the

World Commission on Environment and Development in 1987) is:

“development that meets the needs of the present generation without

compromising the ability of future generations to meet their own

needs.” There are many views about the nature of sustainability. In its

simplest form it is about ensuring a better quality of life for everyone,

now and for future generations. To achieve this, sustainable

development is concerned with achieving economic growth alongside the protection of the environment and also at the same

time making sure that these economic and environmental benefits are

available to everyone.

These three aspects- economic, environmental and social form the

basis of the sustainable development concept. The concept is based

on respect for:

• one another, everyone who shares our planet

• future generations (what is called ‘inter-generational equity’), as well as the existing one

• for nature itself – for plants, animals and all life forms.

Question 02: Name two internal and two external pressures for social

and environmental responsibility.

Answer: Pressure for social and environmental responsibility comes

from two main sources:

• internal to the business

• external to the business.

Internal Pressure:

Internal pressures are the most important ones in driving change. The

Board of Directors establishes the key principles for using resources in

the most efficient way. The business must work closely with local communities. It must also minimize the impact of its operations on the

environment.

Shareholders are the owners and want the business to do well long-

term. They recognize that stability, prosperity and community confidence are important in sustaining the business.

External Pressure:

External pressures are also important. For example, Legislation or

Government plays a part. The UK Parliament provides minimum

standards for areas such as the treatment of workers, the environment

and customers. Because they have an international reputation to

protect, major multinational companies will generally seek to operate within the law.

Strong pressure in some markets may come from Customers. Many

customers demand high standards of ethical behavior.

Question 03: How do Anglo American’s sustainable development

principles contribute to its business strategy?

Answer: Anglo American is one of the largest British-based international

businesses and is one of the 20 largest companies on the London Stock

Exchange. Chiefly through Tarmac, it employs nearly 8,000 people in the UK. It is also one of the world’s largest mining companies. It has

managed operations in over 40 countries and employs over 100,000

people worldwide.

Anglo American has created a set of sustainable development

principles that underpin the way it seeks to do business. These are to:

• be ethical, efficient and create value for its stakeholders

• create meaningful employment in safe, healthy environments

• reduce its environmental footprint and contribute to biodiversity

• increase innovation, technology and process improvement

• contribute towards building more adaptable societies in the

communities where it operates.

The following examples illustrate how these principles work in practice:

• Anglo American places a strong emphasis on Safety and Health. The

mining industry has major safety challenges, including a substantial

number of fatalities. Anglo American is seeking to address these

through creating a ‘zero mindset’. This means that the total elimination

of accidents and injury is the goal. There is a supporting principle of

‘zero repeats’. If an accident occurs, it should never happen again. All

employees are expected to follow these rules.

• Anglo American works in a number of countries where water is

scarce, including Chile, Australia and South Africa. The Emalahleni

water treatment plant in South Africa purifies waste water from coal

mines into drinking water for use by the Emalahleni community. At the Kleinkopje colliery in South Africa water from mining activity is treated

and used for farming projects such as growing beans. In the UK,

Tarmac avoids using water from drinkable sources. Instead, it uses

water resulting from industrial processes wherever possible.

• In South Africa Anglo American has the largest directly delivered

workplace HIV/AIDS treatment programs in the world. It took the lead

in providing medical help for its HIV+ employees at a time when the

government was not prepared to provide life-saving drugs. It provides free drugs to about 4,500 employees as well as extensive community

prevention and treatment programs.

• Anglo American sees technology transfer and capacity building as

significant elements in helping local communities to grow

economically. In Venezuela, it has created experimental farms for the transfer of horticultural and agricultural knowledge. In Chile, it has

worked with goat farmers and beekeepers to improve techniques and

product marketing. In South Africa and Chile, the company’s

programs generate new small businesses through supply chain

opportunities, training, mentoring and access to finance.

Question 04: What are the main benefits to Anglo American’s business

of sustainable development?

Answer: There are real benefits to a business in acting responsibly.

Anglo American, by being responsible wins the trust of communities. It gains respect from the governments of countries where it operates. It

wins the loyalty of customers and the respect of the public. It gives a

company an edge in attracting new recruits and talent. It wins

recognition from investors for managing a business well.

Anglo American has made sure that its social and investment

programs match its strategic objective of being a good citizen.

Today it is common practice to refer to the Triple Bottom Line of a

business. A business is successful if it makes a financial profit on the

bottom line. To continually generate profits, it is also necessary that:

a) a business respects the environment and

b) takes a wider social responsibility.

It is important to understand how the benefits of an international

company such as Anglo American are distributed amongst its various

stakeholders.

A relatively small proportion of its ‘value added’ will typically go

directly to shareholders with suppliers, employees, governments and

lenders also benefiting significantly.

Anglo American has created an innovative process - the Socio-

Economic Assessment Toolbox (SEAT). This measures the impact of all

its activities on the communities in which it operates. It engages local

stakeholders in each community to learn about their concerns, needs

and priorities. It then sets out its plans for improving its socio-economic performance through a three-year action plan made widely available

to local people. SEAT enables the company to generate a successful

triple bottom line.

Thank You!