(Nestle) Corporate Social Responsibility

(Nestle) Corporate Social Responsibility

Introduction

Corporate generally have to meet ethical, legal, commercial and public expectations. That is what expected of the business world today. This is known as the Corporate Social Responsibility (CSR).However, business with short -term goal will rarely practice it (CSR) since practicing it does not bring any benefit. On the contrary, the practice of CSR is an important consideration for long-term investment as it can help generate more profit in the future. In this report, Nestle would be one of the good examples to illustrate those concepts.√(good introduction)

Nestle is one of the world’s largest food and beverage company. They believe that by creating value for the shareholder and the public, they will have long-term sustainability. Nestle worked hard to ensure that both employees and employers welfare. Other forms of CSR aspects are employee safety, environmental problems, and education. √ (excellent analysis)

Human right

Firstly, the case of safety for employees, Nestle protected their workers by integrating the health and safety measure for the employees to prevent labor injuries and illness. With this system, the numbers of injuries have decreased drastically over the years. For example” employees in Samalkha completed more than 3 million hours complete without any obstacles (Our principles of doing business n.d.). √

 Next, through the improvement in labor quality, long-term investment allows worker to get better jobs and better pay. For example, 2-year training and education programs with marketing and finance courses (Social Report of Nestle Rossiya LLC, 2009).  This allows the workers to increase their knowledge and skill, which resulted in innovation. Innovation increases the company‘s comparative advantage in the competition. √

This essay will focus on three kinds of social aspects which Nestle have executed and the impact it has on the society, environment, human right and society.√

Environment

Nestle plan to reduce 5% water per 1 ton of production to reduce water pollution. Nestlé’s factory in Samara had installed a water recycling system (Social Report of Nestle Rossiya LLC , (punctuation) 2009). Less water wasted and reducing the production cost and Increases Company’s profit. Water pollution is reduced; more aquatic animals are saved.  Furthermore, it brings benefit to the society. Today, many people died after drinking polluted water.√

 In addition, facilities in Zhukously (nestle) has installed a catalytic gas discharge system for air purification by using yatagan gas converter to reduce air pollution. This system is used to purify the smokes (e.g. carbon dioxide) produced from the company (Social Report of Nestle Rossiya LLC, 2009). Carbon dioxide brings a lot of problems to the society, such as health problems and climate change. Worst, higher level of carbon dioxide may cause dangerous to life. (Suess,  1993) Therefore, nestle introduce this system to deal with those problem and create a healthy environment to the society.  Furthermore, nestle introduced a new biodegrade alternative to plastic containers for manufactured food product. Normally, non-biodegrade plastic can remain in the world for several centuries if we do not burn it. However, if we choose to burn it, harmful quantities of CO₂ will be released. The new biodegrade plastic, can help to reduce dioxin produce because it dissolves when meet water.√

Moreover, nestle have provide fund up to (USD $461,000) to individual, small enterprises to work out the solution together and solve the environment problem (Social Report of Nestle Rossiya LLC ,2009).With this financial support, it encourage more people participate and deal with the environment problem. Unity is powerful, each person plays their own part rather than just only nestle dealing the problem itself, environment problem can be solve faster and more efficient.√

Society

Nestle have constantly innovating and changing their products to fulfill their customer’s need. Their aim is to reduce the trans-fatty acids, salt and sugar level in the food. For example, Nestle uses low temperature freezing technology to destabilize the fat droplets in ice cream, while retaining the taste of the ice cream. This reduces ½ of the fat and 1/3 of the calories in the ice cream   (Social Report of Nestle Rossiya LLC 2009).Normally; ice-cream contains high level of sugar and calories, which is the main contributor to obesity rate.√

 Next, increase nutrition value to consumer. Nestle plan to double number of nutrition and physical activity education around the world. Nestle have provided good nutrition program to children.  This education not only benefits the children, it benefits their parents too. For example, more than 70 % of parents that is been to the program start to pay attention to the nutrition and adding healthier dish to regular meal.√

Obesity and malnutrition have raised the awareness of the society therefore; a lot of health programs have been conducted in order to tackle this problem. (H. Lukman , 1998) Nestle noticed these problems and by providing help through education, changing their product, and provide nutrition information to consumer.  With all the information Nestle have provided, it increases nutrition awareness to their consumer.√

 NEGATIVE NEWS

 Some news has proven that Nestle has done something, which is against their principal, for example human rights and safety for food. √

HUMAN RIGHT(expression)

Firstly, low wages paid in certain country (for example, Hong Kong, India).Nestle have used (expression)

Nespressure, which squeezing labor and suppressing right, to lower labour income lever (Baroncini, 2010). For example in Nespressure, Nestle was unable to negotiate wages between labour and employers (Baroncini  ,2010).Inflation is a critical problem to those lower income earners as it erodes their wage (Dornbusch ,1988).In India; some families faced difficulty in living due to the low wage paid. In Russia, in order to maintain their income level, labors have to work more than 12 hour per day. Those unfair treatment incidents are totally against nestle principal.√

Secondly, Nestle abused child labor in Ivory Coast cocoa plantation (Whitehead, 2005).Most of the children was kidnapped and became slaves for USD 30 while working to the plantation. More than 60% of those children are below 14 and ask to take part in dangerous cocoa-farming task (Kerkeruz ,2007)An example for the ill-treat child labour, three Malian children who were trafficked from Mali into the Ivory Coast and forced to work 12 to 14 hours a day with no pay, little food and sleep, and frequent beatings. 2005).Nestle have sign an agreement that against the using of child labour and hang beautiful ‘’CSR” certificate on their wall (Hansen, 2010) but the news have prove nestle are doing something against their social responsibility they have agree initially.  √

Pet foods

Nestle selling contaminated products that cause pet death. Pet owner start their legal action toward Purina, the pet food unit of nestle, for making and selling poison products that lead to around 1,500 to 3,000 pets died "violent, painful" deaths this year after eating Purina's Dog Chow and Cat Chow products (Morales , 2005). After this incident, most of the pet owner and customer will lose their loyalty toward nestle product. Nestle pet food can cause pet died, why not to human. Confidence towards nestle product is fall, this may cause sale drop in the future. In the end, nestle shareholder value is reduced.√

Conclusion

In conclusion, CSR will not only bring benefit to the society, it will also benefit to nestle such as long-term profit. However, the opportunity cost for nestle is they need to spend up more fund to do those social responsibility now such as cost spend on water recycle system. Even though it is the short-term cost to nestle but it generation more profit in future .In my opinion, nestle indeed have done quite a lot of social responsibility, but after a deep research, some report have proof that nestle have actually done something against their principal. Assumption adopt  whether nestle have really want to bring benefit to society or just want cover all the negative news and make positive image  in front of me.√

Recommendation

If Nestle consider negative news, nestle will actually bring a lot of cost in future, nestle should solve it now. Therefore, some recommendation is given below.

HUMAN RIGHT (expression)

Firstly, nestle need to end the Nespressure and apply the human right policy globally. Nestle have to promise every labour get the wage paid they are deserve and extra income paid for those who work overnight. Also, give bonus to award those hardworking labours and this can help to encourage other labour to work more efficiency. Furthermore, labours have the right give some feedback to the company. Nestle have to ensure they listen and respond to labour need. This can help to build a strong bond between labour and employer and make labour willing to scarify for the company. Overall, productivity and profit generated to company.(expression)

Secondly, stop using child labour. Nestle had to make compensate toward those child labour and stop using them for work. Although it is costly but if nestle do not change on it, the cost toward company will be unlimited in the future (e.g. ruined the company image). Also, ensure all their business partners follow the human right policy, honest report on what they have done and encourage them to develop the same standard of responsibility and action (Human Right Translated A Business Reference Guide ,(punctuation and spacing) 2008)

Pet foods

Lastly, by paying more responsibility toward the pet food incident. Even though, nestle (Purina) has regretted any harm caused to animals and recall back the product. (Purina on Pet Food Recall 4-26-07 2007) Also, compensation to customer and exchange the pet food until the end of March. (Morales , 2005)But, pet owner do not think that is enough for the compensations and more is need form nestle (Morales , 2005).More have to be done to compensate the pet owners and it is Nestlé’s responsibility to ensure that. Furthermore, recall the entire related product and prohibit selling this product again in the market. In addition, produce new type of pet foods with scientific evidence that prove it is save for the animal to eat. Overall, even though it is limited to recover the entire consumer confident toward nestle product.√

Government

Firstly, government uses law to protect children (e.g. minimum age, working hour and health). Also, investigate Nestle to see whether they have break the child labour law (Bhargava ,2010) Penalty will be fine if the nestle hide the truth of using child labour. Worst, the company may be banned from the country. This can help to reduce the child labour in the country and also warning other company the consequence of using child labour. Also, investing group should  investigate on whether those labour is being treat fairly .Minimum wage level policy is introduce to ensure the worker can get the wage they deserve.

Moreover, ministry of health in Purina investigates on the Nestle company hygiene condition and the safety of production. Taking nestle sample product for experiment test and analyst whether nestle product have contaminate or not. Grade is given to nestle company for their hygiene and safety performance and this can help give consumer have a briefly idea on the safety.

  

Reference 

Baroncini, Jacqueline. Nestlé European Works Council Steering Committee denounces Nespressure. March 12, 2010. http://www.iuf.org/nespressure/en/2010/03/nestle_european_works_council.html (accessed April 1, 2010).

Bhargava, Gopal. 2010. Child labour. Kalpaz Publications,.

Dornbusch, Rüdiger. 1988. Exchange rates and inflation. Palatino by Asco Trade Typesetting ,.

H. Lukman, L. Dye, J.E. Blundell. 1998. "Relationship between diet and obesity in Chinese groups." British Food Journal 100, no. 1: 3-9.

Hansen, Helle Kastholm. Your chocolates are made by child slaves. March 14, 2010. http://ekstrabladet.dk/flash/filmogtv/tv/article1313865.ece (accessed April 1, 2010).

Human Right Translated A Business Reference Guide. 2008. Foundation For Global Compact .

Kerkeruz. Child labour On Cacao ( NESTLE ) . June 8, 2007. http://www.youtube.com/watch?v=aFnCQrUmieQ (accessed March 28, 2010).

Morales, Magdalena. [NYTr] Venez: Pet Owners Take Action on Purina Contamination. March 11, 2005. http://www.blythe-systems.com/pipermail/nytr/Week-of-Mon-20050314/014354.html (accessed March 28, 2010).

Our principles of doing business. n.d.  http://www.nestle.com/Resource.axd?Id=62C02DBD-12BA-49B5-B6A9-6DDCF7D79513%20 (accessed March 5, 2010).

Purina on Pet Food Recall 4-26-07 . April 26, 2007. http://clubs.akc.org/brit/News/07.PurinaPetFoodRecall.htm (accessed March 29, 2010).

Social Report of Nestle Rossiya LLC. June 2009. http://www.nestle.com/Resource.axd?Id=00B5F8F9-199D-4036-9A27-4E0C955F90F9 (accessed march 2009, 2010).

Suess, Michael J. 1993. "Air pollution : Issue and solution." MCB University Press Limited 4, no. 4: 1.

Whitehead, Jennifer. Nestle faces negative publicity as child labour case is set for hearing. August 25, 2005. http://www.brandrepublic.com/News/492454/Nestle-faces-negative-publicity-child-labour-case-set-hearing/ (accessed March 29, 2010).