business report

COMMUNICATION IN BUSINESS 100 ASSESSMENT 2: Business Submission Student Name: A Student Student Number: 12345678 Student’s Email Address: [email protected] Tutor’s Name: Hannah Vickers Tutorial Day and Time: Thursday, 10am Name of Company: Nestlé Title: Local Network Submission Semester/ Campus Details: Semester 2, 2014 - Bentley (Word Count: 1191) Local Network Submission

Our Commitment

As a signatory to the United Nation’s Global Compact (UNGC) and a member of the Global Compact Local Network since 2001 , we, Nestlé, have long been recognized to be “ the forefront of the global movement to incorporate sustainability into overall company strategy” (Kruschwitz 2013) on maintaining compliance with the ten principles of the Global compact. Admittedly, much more effort could be put into adhering to the mission of UNGC to create a sustainable and diversified global economy. Accordingly, in this submission, we would like to suggest two possible recommendations to further improve Nestlé ‘s practices on principle 8 and 10 of UNGC in order to create the shared value of respect, for people, the environment and the future of the world(Nestlé 2015 ).

The principles are:

Principle 8: “Undertake initiatives to promote greater environmental responsibility.” (Environment)

Principle 10: “Businesses should work against all forms of corruption, including extortion and bribery.” (Anti-corruption)

In this submission, we assess our past and present practices against these principles and draw lessons from them.

The Environment Principle

We have long been committed to produce products in accordance with environmental sustainability along the value chain to deal with the problems of declined biodiversity and climate change (Nestlé 2015). In particular, we would like to work more on maintaining compliance with principle 8 of UNGC.

Past and current practices

Regarding agricultural practices, we always support our related agricultural communities to carry out sustainable agriculture by ensuring environmental-friendly agricultural practices (Mortished 2006). For instance, we have assisted the coffee bean small growers in South Sudan to grow high quality and sustainably-grown beans through What Was A Pilot Project (Terazono 2014). In our manufacturing practices, we are committed to achieve resource efficiency production to preserve natural resources. We established over 14000 Nespresso’s capsule collection points across 31 countries for the purpose of recycling (Nestlé 2015).

As an international food company that cooperates with huge numbers of suppliers and agricultural partners, we did receive a number of criticisms from the public that we might not have put enough attention into assessing our partners. For example, the World Wildlife Fund discovered that we had carelessly purchased the mix of illegal beans from Bukit Barisan Selatan reserve, a protected area, with legitimate beans from suppliers (Leow 2007). This action might add to the problems of endangered species and forests. Therefore, we propose a crucial factor that would improve our work on the principle 8 of UNGC would be to increase the scrutiny of suppliers and agricultural partners along the supply chain.

Recommendation: Provide education and training for members along the supply chain towards the importance of green practices and provide awards and sponsor innovative and feasible green practice ideas from members.

Benefits for key stakeholders:

· Nestlé

It helps to build up a moral sense of environmental protection along the supply chain and develop systematic green practices. Moreover, innovative practices can help Nestlé cut down costs due to compensation for environmental damages.

· Members along the supply chains

Education and trainings can help to raise their awareness of environmental practices to achieve eco-efficiency production. Besides, award schemes and sponsorship can motivate members to create green ideas which would benefits Nestlé and themselves.

· Customers

They can be benefited by consuming environmental- friendly products and being more moral customers.

· Shareholders

They will be optimistic about the goodwill of Nestlé since our recommendation will help them gain the trust and appreciations of the public.

· Environmental Interest groups

It may provide opportunities for them to collaborate with Nestlé and its partners in developing a greener society.

Challenges and risk for key stakeholders:

· Nestlé

Some partners may be reluctant to adopt the recommendation and prefer the less eco-efficiency methods of production. Yet, they may follow suit when they see the positive impacts such as reducing costs from the new green practices.

· Shareholders

They may suffer from a short term decrease in profit due to more resources being allocated to the green practices. However, the long term decreases in the cost of production due to more eco-efficiency practices and an increase in sales profits due to improved reputations can offset the cost in long run.

The Anti-corruption Principle

Principle 10 of UNGC has been included in our code of business conduct since 2004 and we are required to work against corruption, bribes and facilitation payments (with public or government officials) in our workplace (Nestlé 2015).

Current and past practices

The CARE audit programme to monitors our anti-corruption processes. We can also report any alleged corruption through an Integrity Reporting System. Moreover, online and in-class anti-corruption training has been provided for some of the employees since 2008. Furthermore, we are committed to introduce a new e-learning system by 2015 to clearly communicate to employees what is expected from them on anti-corruption and other codes of conduct (Nestlé 2015).

Despite these anti-corruption measures, it had been revealed that we had purchased milk illegally from farms in Zimbabwe (Patrick 2012). The farms were belonged to Mrs Mugabe, wife of the head of the Zimbabwe government, who was subject to European Union and US sanctions because she had engaged in unethical activities (Peta 2009). As a multinational food company, we realise that corruption may occur in some countries where corruption of government officials is a common practice. Furthermore, we identify that we have to increase the scrutiny of regional intermediaries who are not directly monitored by our companies such as distributors. It is difficult for us to get the full record of transactions from related parties due to independency between firms. Therefore collective action with private agents is required to avoid the corruption of intermediaries.

Recommendation: Allocate resources to all related regional intermediaries to undertake anti-corruption programmes, invite a civil society organization to facilitate Nestlé and regional intermediaries on the agreement of anti-corruption practices and set the rules for both parties to follow to avoid corruptions.

Benefits for key stakeholders:

· Nestlé

It can help uphold a fair and transparent approach to corruption from a third person agent and build up an anti-corruption atmosphere.

· Regional intermediaries

It provides a clear pathway for them towards what they have to comply with in their practices to avoid corruption and protect their own rights.

· Shareholders

They can gain more profit as this practice will live up to social expectation on anti-corruption.

Challenges and risk for key stakeholders:

· Nestlé

One challenge is that some of the regional intermediaries may refuse to cooperate with the suggested practices. However, we can approach alternative intermediaries in order to reduce our risk on corruption and increase business reputation.

· Shareholders

They may suffer from a short term decrease in profits due to more resources being allocated to the anti-corruption programmes. However, the fair working atmosphere and increased reputation can raise productivity and offset costs in long run.

Conclusion

Nowadays, Nestlé is one of the world’s leading corporations who have actively achieved sustainable development in all aspects. We hope you can consider these two recommendations and find them useful in maximising good for the society while maintaining compliance with principles 8 and 10 for environment and anti-corruption respectively in UNGC. Reference

Jallow, Kumba. 2009. "Nestlé as Corporate Citizen: A Critique of its Commitment to Africa Report." Social Responsibility Journal 5 (4): 512-524. doi:http://dx.doi.org.dbgw.lis.curtin.edu.au/10.1108/17471110910995375. http://search.proquest.com.dbgw.lis.curtin.edu.au/docview/1012099784?accountid=10382.

Kruschwitz, Nina. 2013. "Creating Shared Value at Nestle." MIT Sloan Management Review 55 (1): 1-3. http://search.proquest.com.dbgw.lis.curtin.edu.au/docview/1438819111?accountid=10382.

Leow, Claire. 2007. "Nestle Vows to Avoid Illegal Coffee MARKETPLACE by Bloomberg." International Herald Tribune, Jan 19, 20. http://search.proquest.com.dbgw.lis.curtin.edu.au/docview/318792073?accountid=10382.

Mortished, Carl. 2006. "A Plain-Speaking Defender on the Battlefield of Big-Companyethics." The Times, Jul 29, 63. http://search.proquest.com.dbgw.lis.curtin.edu.au/docview/319551671?accountid=10382.

Nestlé . 2015.“ Creating Shared Value and meeting our commitments 2014” Nestlé in Society. Accessed October 3, https://www.unglobalcompact.org/system/attachments/cop_2015/152981/original/2_Nestle_2014_CSV_Print_report_EN.pdf?1429111496

PETA THORNYCROFT, in Harare and Africa Correspondent SEBASTIEN BERGER Southern. 2009. "Mrs Mugabe, Her Seized Farm and a Secret Deal with Nestle the Zimbabwean President's Wife is Selling Up to a Million Litres of Milk a Year, Produced on a Former White-Owned Dairy, to the Global Food Giant." The Sunday Telegraph, Sep 27, 25. http://search.proquest.com.dbgw.lis.curtin.edu.au/docview/309607278?accountid=10382.

Terazono, Emiko. 2014. "Nespresso Reaches into 'Cradle of Coffee'." Financial Times, Aug 27, 14. http://search.proquest.com.dbgw.lis.curtin.edu.au/docview/1565586996?accountid=10382.

"The Global Reporting Initiative: Food Companies Take Responsibility for Improved Sustainability Reporting; Nestle, Bunge, Tyson Foods and Green Mountain Coffee Roasters First to Commit to Multi- Stakeholder Development of GRI's Sector-Specific Indicators for Sustainability Reporting." 2007.M2 Presswire, Nov 20, 1. http://search.proquest.com.dbgw.lis.curtin.edu.au/docview/444609526?accountid=10382.

A Student, 12345678

A Student, 12345678 2