As the Editor of a nascent website EthicsWorld.org, I wrote this analysis piece in 2008 when Nestle's Corporate Social Responsibility report came out.

1. The Challenges of Corporate CSR Reporting
Nestle’s Creating Shared Value – True CSR or Just Good PR?
Leading global corporations are subject to mounting external pressures to publish detailed
corporate social responsibility reports. Shareholder groups and civil society organizations are
pressing firms to divulge exactly how they are performing in an increasing number of areas.
Companies are also increasingly finding that taking CSR initiatives can do a great deal to boost
their own reputation, which is why programs such as those promoted by the United Nations
Global Compact, Business for Social Responsibility and the Global Reporting Initiative are
gaining in popularity and respect.
But as each new glossy and ever-more detailed CSR report is published, so the question
constantly surfaces: are these credible and accurate reports, or little more than public relations
exercises?
Many organizations have tried to track trends in sustainability reporting and objectively rank
companies on how well they report (see EthicsWorld CSR Surveys and Trends). These
publications do help to sift through some of the fluff, but evaluating whether a company does what
a company says remains a daunting task.
Nestle, the giant global food company headquartered in Switzerland, has released its CSR
report Creating Shared Value.
The report takes on a wide variety of issues developed by a company that works with leading
organizations like SustainAbility and AccountAbility. Nestle was one of the first food companies to
help the Global Reporting Initiative develop a global reporting standard and indicators on
sustainability in the food sector. It participates in such initiatives as the UN framework to tackle
climate change and the International Cocoa Initiative. But despite Nestle’s positive credentials,
advocacy groups like Baby Milk Action and Corporate Watch continue to be critics and challenge
the credibility of the company’s reporting.
Nestle’s report covers four areas it deems to be the most important – Manufacturing and
Environmental Footprint, People, Agriculture and Rural Development, and Products and
Consumers. There is a description of current projects and accomplishments in each area, along
with a “key challenge” to which Nestle then responds with its objective.
Manufacturing and Environmental Footprint
 18% of its factories have been certified, and its goal is to have 100% certified by 2010.
 84% of its factories are audited by an external network, called CARE.
 Since 1998, water usage was reduced by 28% and a goal was set to reduce water 2-3% over the
next five years.
Key Challenge – Sustainable water use
Response – Nestle is increasingly trying to improve water management outside its direct
operations.
People
 The company is working towards external certification of all of its factories.
 Nestle complies with International Labor Organization conventions, but it regrets that in 2007 there
were 15 work related fatalities
 Developing talent is a major initiative to bring in order to maintain a competitive workforce

2. Key Challenge – Empowering high performing teams
Response - Nestlé continuously promotes a culture of engagement and performance to increase
customer satisfaction and reduce absenteeism.
Agriculture and Rural Development
 Milk production factories are growing.
 There is a renewed focus on sustainable productivity in the coffee and cocoa areas. Nestlé will
receive Common Code for the Coffee
 Community (4C)-verified coffee in 6 of its coffee factories by the end of the first quarter of 2008.
Key Challenge – Biofuels
Response - Nestlé believes that decisions about energy sources must be based on cost–benefit
and life-cycle analysis, and should consider their full social and environmental impact, including
the effects on food prices and water.
Key Challenge – Water management in agriculture
Response - Nestlé is a vocal public advocate for access to clean drinking water, and has made
considerable efforts to share knowledge and best practice on agricultural water use and
protection.
Products and Consumers
 Major focus on nutrition in food products, which has been a source of higher profits
 Nestle is starting programs in countries such as Brazil to provide affordable, nutritional products to
low-income consumers
 It is the largest single baby food market worldwide.
Key Challenge – Tackling obesity
Response – Nestle lays out six-pronged response as a strategic approach to this health
worldwide health problem.
Nestle’s accomplishments in its key CSR areas are detailed in the report, but the text falls short
when it comes to admitting problems and difficulties in meeting goals. Articles from outside
sources, notably advocacy NGOs, highlight the shortcomings, but these too raise questions about
objectivity at times and so makes the challenge of determining the reliability of corporate reports
all the more complex.
An article from Baby Milk Action, for example, criticizes Nestle for aggressively marketing baby
foods, trade union busting, failing to act on child slavery in its cocoa supply chain, depleting water
resources, among other concerns. The group’s primary allegation is that Nestle has violated the
baby food marketing requirements adopted by the World Health Assembly and conducts faulty
audits. It has been critical of Nestle for many years.
An article in the Sydney Morning Herald expressed the same concerns over Nestle’s
“aggressive marketing tactics.” According to the article, “under an agreement by the
Manufacturers of Australian Infant Formula, companies may not advertise formula for children
under 12 months as it has been shown to reduce breastfeeding rates.”
Corporate Watch has highlighted Nestle’s questionable marketing schemes in promoting its
bottled water and the company’s impact on public water sources.

3. EthicsWorld seeks to assist companies and organizations to better understand the challenges of
CSR reporting and continues to highlight reports by major firms and comments by leading NGOs.
Keep monitoring our site for analysis on how companies are addressing this sticky issue.