Wednesday, May 1, 2013

Shared Value and Nestle

        Since the global recession, there is no secret that capitalism has come under fire, with lage corporations facing the brunt of the blame for the blowback caused by the crash of the stock market in 2008. In response to this, many businesses are focused on not just gains for the shareholders, but for society as a whole. This idea, is explored in great detail in "Creating Shared Value" by Michael Porter and Mark Kramer. 

The idea of Shared Value is centered around the idea that businesses can grow and generate revenues while simultaneously generating value for the society as whole. This includes not only higher wages, but finding ways to make the community as a whole better off, in terms of personal health and environmental protections. Shard Value is challenging the neo-classical view that any additional cost to the business is going to either lower wages or increase the cost of the product they are selling. This value is created in a variety of places, from the supply chain, logistics management and employee wellness and productivity. 

One such company implementing a sustainability program is Nestle. Nestle has created a CSV that is simultaneously helping to create value over seas and locally. To quote Nestle: 

We believe that we can create value for our shareholders and society by doing business in ways that specifically help address global and local issues in the areas of nutrition, water and rural development. This is what we mean when we speak about Creating Shared Value (CSV). We proactively identify opportunities to link our core business activities to action on related social issues,” Peter Brabeck‑Letmathe, Nestlé’s Chairman and Paul Bulcke, Nestlé’s CEO writes at the beginning of the report." 

Nestles Sustainability portfolio includes a variety of products. Nutrition is a big focus, which invovles ensuring the food they sell to their consumers is healthy and affordable. Nestle is investing in ways to better utilize water, ensuring they do not damage water supplies  Nestle is also going outside of the fair trade model of business with its farmers, and doing more to help develop these farmers so they are able to escape the typical cycle of poverty associated with their farming. This includes investing in new farming technology and helping the famers develop new techniques to make a better product. 

The companies CSV has been growing, and Nestle is trying its hardest to make it work. The most recent numbers arent quite definitive as to whether or not Nestles CSV is paying off in terms of increased profit or larger market shares. However, Nestle has made it clear it plans on being a leader into a new way of doing buisiness

Gozneck, Raz. "Nestlé’s 2012 Sustainability Report: Creating Shared Value for the Long Term." Triple Pundit RSS. Triple Pundit, 16 Apr. 2013. Web. 01 May 2013. <>.

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