Blog #5: Shared Value creation at Nestle

Traditional business approach dictates generating revenue, profits and rewarding shareholders. However, in recent times this approach has undergone certain changes. The value generated in business by people and society in general has gained importance. Economic value along with this societal value together has given birth to concept of Shared Value. This is exactly the value that Nestle embodies.

The belief at Nestle is that long term success in a company can be achieved only by creating value for both shareholders as well as for society. Nestle believes that creating such shared value helps maintain relevance in a business.

Traditionally, companies implement CSR(Corporate Social Responsibility) initiatives since they are mandated. However very few companies take active interest in the CSR activities and are able to add value to their business through the CSR activities.

Nestle launched an initiative called the Global Youth Initiative(GYI) in the year 2017. The GYI is expected to generate 10 million opportunities for young people in the next 10 years. Nestle has identified a very common problem through this initiative. Many youth move from small villages to big cities in search of employment. In the process, they leave their villages in uncertainty and lacking skilled youth. This leads to less advancements in fields like farming, since most of the farming happens in villages. Nestle believes that farming needs to be seen as a viable career option for the youth. Nestle plans to fund and equip the youth with skills to pursue careers in such fields. So, the next generation of agripreneurs, entrepreneurs and leaders could then create an impact in fields such as farming. This helps Nestle add value to their own business, by providing employment to the youth.

Another initiative by Nestle is the caring for water initiative. There is a very obvious value add here as Nestle requires huge amounts of water in their factories and plants. The caring for water initiative encompasses areas such as reducing the use of plastics, preserving water bodies, using sustainable resources over non-renewable resources etc.

To tackle the plastic issue, Nestle aims to reduce the amount of packaging done using plastic. Especially the packaging of food and beverages is traditionally done using plastic. If a viable alternative is found for the same, there can be a reduction in the use of plastic. Along with plastic, solid waste is also a major cause for concern, as most of this waste is disposed in the water bodies. Nestle aims to reduce solid waste from their own plants first and then from other activities.

Each initiative of Nestle’s shows a shared value. One takeaway from Nestle is that they have truly embodied the combination of business and societal values, and are actually implementing them.

References:

Nestle.com. (2019). [online] Available at: https://www.nestle.com/csv [Accessed 29 Apr. 2019].

Hbsp.harvard.edu. (2019). Harvard Business Publishing. [online] Available at: https://hbsp.harvard.edu/download?url=%2Fcourses%2F617870%2Fitems%2FR0804E-PDF-ENG%2Fcontent&metadata=e30%3D [Accessed 24 Apr. 2019].