Download - Case study of nestle & anglo american
Welcome to The Presentation of Case Studies of Nestlé & Anglo American
Prepared By
Fariha Ahmad
ID-10111101092
Intake-23rd (03)
Program-BBA
Bangladesh University of Business & Technology
Case Study of Nestlé: Doing Better by
the Environment
Question 01: How can the removal of the inner plastic sleeve from Kit Kat
Bumper packs be seen as a move towards sustainability?
Answer: Companies with good business sense try to be environmentally
friendly by improving efficiency and effectiveness in using natural resources in
a more responsible way. Nestle, the world’s largest food company is known for
its responsibility towards environmental, social, economic concerns. Nestle
continuously reviews packaging and where possible, reduces the amount
used, it has established a set of criteria for evaluating packaging. Through this
evaluation, Nestle has been removing the inner plastic sleeve from Kit Kat
Bumper packs. This step is seen as a move towards sustainability, as the
removal saves 160 tons of plastic per year.
Question 02: Why are International Treaties like Rio and Kyoto
important in encouraging sustainable business practice?
Answer: By the early 1990s there was considerable pressure for
governments to create agreements concerning the environment and
its protection.
In 1992 the United Nations Conference on Environmental and
Development (UNCED) was held in Rio de Janeiro. The main outcome
of the conference was Agenda 21, which marked an important
landmark in the sustainable development fight, and inter country co-operation.
The Kyoto Conference on Climate Change (1999) has meant that the
UK and many other Governments have entered into a legally binding
agreement to reduce greenhouse gases. In addition, the Government
has set a unilateral target of 20% reduction of carbon dioxide by 2010 from 1990 levels.
These conferences represented a new global commitment to
sustainable development. The conferences marked the start of global
co-operation, which was needed to deal with the many issues,
including concern for the environment, a working plan which countries
would follow.
Question 03: Give one other example of how Nestle has developed
business practice in line with Agenda 21’s seven point for business?
Answer: Agenda 21 was the main document signed at the
conference. It was over 800 pages long, and represented a new
global commitment to sustainable development. It was not a legally
binding document, but was devised as a working plan which countries
would follow. Agenda 21 lays out a seven point plan for businesses to start changing values and perceptions. An example of how Nestle has
developed business practice in line with Agenda 21’s seven point plan
for business id given below:
Nestlé is dedicated to providing consumers with the best food
throughout their lives. The primary role of the Company is the
transformation of natural resources into finished products that meet
consumers’ expectations for safety, quality, convenience and value. Nestlé is committed to sustainable development and environmentally
sound business practices.
Nestlé fully supports the United Nations Global Compact’s three
guiding principles on environment. The key drivers for Nestlé’s
worldwide environmental approach are :
– integrates environmental policies, programs and practices into each business as an element of management in all its functions
– develops, designs and operates facilities and conducts its activities
taking into consideration the efficient and sustainable use of
renewable resources, the minimization of adverse environmental
impact and waste generation, and the safe and responsible disposal
of residual wastes
– respects and complies with existing laws and regulations in local
markets concerning environmental issues
– applies Nestlé internal standards suitable to local conditions in those
regions where specific environmental legislation is non- existent or
insufficient
– improves environmental protection relevant to its activities on a continuous basis
– provides appropriate information, communication and training to
build internal and external understanding about its environmental
commitment and action
– supports professional associations such as the International Chamber
of Commerce in their work relative to environmental protection, as
well as efforts to set up environmental management guidelines–
improves environmental protection relevant to its activities on a
continuous basis
– provides appropriate information, communication and training to
build internal and external understanding about its environmental
commitment and action
– supports professional associations such as the International Chamber
of Commerce in their work relative to environmental protection, as
well as efforts to set up environmental management guidelines
– establishes environmental objectives, monitors progress, checks
results and defines future actions. This activity, carried out by Nestlé
specialists, ensures the continuous improvement of environmental
performance throughout the supply chain, from producing and
purchasing of raw materials, to manufacturing, packaging, distribution and finally to the consumer.
Question 04: Why is it important for organizations like Nestle to show
leadership in developing sustainable business practice?
Answer: Nestlé is committed to the following Business Principles in all
countries, taking into account local legislation, cultural and religious
practices:
– Nestlé’s business objective, and that of management and employees at all levels, is to manufacture and market the Company’s
products in such a way as to create value that can be sustained over
the long term for shareholders, employees, consumers, business
partners and the large number of national economies in which Nestlé
operates;
– Nestlé does not favor short-term profit at the expense of successful
long-term business development, but recognizes the need to generate
a healthy profit each year in order to maintain the support of our
shareholders and the financial markets, and to finance investments;
– Nestlé recognizes that its consumers have a sincere and legitimate
interest in the
behavior, beliefs and actions of the Company behind brands in which
they place their trust, and that without its consumers the Company
would not exist;
– Nestlé believes that, as a general rule, legislation is the most effective
safeguard of responsible conduct, although in certain areas,
additional guidance to staff in the form of voluntary business principles
is beneficial in order to ensure that the highest standards are met
throughout the organization;
– Nestlé is conscious of the fact that the success of a corporation is a
reflection of the professionalism, conduct and the responsible attitude
of its management and employees. Therefore recruitment of the right
people and ongoing training and development are crucial;
– Nestlé operates in many countries and in many cultures throughout
the world. This rich diversity is an invaluable source for leadership. No
single document can capture every legal obligation that may be required in each of these countries. Indeed, there may be conflicting
legal requirements. Nestlé continues to maintain its commitment to
follow and respect all applicable local laws in each of its markets.
The given Business Principles of Nestle are necessary to develop
sustainable business practice, as Nestle has established these principles
and performs its business activities according to these principles, surely
it is important for Nestle to show leadership in developing sustainable
business practice.
Question 05: What further steps could Nestle take in contributing to
sustainability?
Answer:
1. Research and Development:
Nestlé can build Research and Development centers which will have
two primary objectives: to create new products and processes and to
improve those that already exist.
In order to have environmental sustainability being more and more
built into products, Nestle can build Sustainability by Design Program to
systematically assess and optimize the environmental performance
across the entire value chain at the earliest stage in the development of new and renovated products.
2. Sourcing of Raw Materials:
Nestlé can source its raw materials either directly from farmers or from
primary processors or traders. Nestle can foster environmental
sustainability in the supply chain through:
•Responsible Sourcing Audit Program:
Which will request key vendors to demonstrate compliance with
Nestlé’s environmental standards through independent third party audits; if corrective actions are required Nestlé, together with auditors,
will guide vendors in upgrading their practices;
•Responsible Sourcing Traceability Program:
Which will promote transparency in extended supply chains back to
the farm or feedstock, implementing our commitments on no-
deforestation, responsible use of water, sustainable fisheries and
animal welfare, and addressing other specific environmental aspects;
•Farmer Connect Program:
Which will support the farming communities where Nestle can source
agricultural raw materials, and provides technical assistance on
sustainable production methods;
3. Manufacturing:
Manufacturing comprises all processes that are necessary to transform
perishable raw materials into safe and value-added food products for
consumers. Nestle aims to do more with less by eliminating all types of
waste, with a key focus on what is valuable for both the environment
and consumers. Thus can improve overall efficiency, quality and
environmental performance.
Nestle aims to use the most efficient technologies and apply best practices in order to further optimize energy and water consumption,
minimize waste generation, utilize sustainably- managed renewable
energy sources, recover value from by-products and control and
eliminate emissions, including greenhouse gases.
4. Packaging:
The packaging of the company’s products is crucial to prevent food
waste, guarantee high quality standards and inform consumers.
• Nestle can try to optimize the weight and volume of packaging;
• It Can lead the development and use of materials from sustainably-
managed renewable resources considering packaging and product performance requirements;
•It can support initiatives to recycle or recover energy from used
packaging;
• It can use recycled materials where there is an environmental
benefit and it is appropriate.
5. Distribution:
Delivering the products in highest quality and on time from the factory
to customer is a vital part of business. To continuously enhance
efficiency and environmental performance in distribution, Nestle can-
• optimize distribution networks and route planning across all operations;
• explore opportunities to improve transportation, e.g. use sea and rail
instead of road;
• expand driver training both from a safety and environmental
efficiency perspective, use telematics and latest technology on
vehicles where practical, and recommend the same to suppliers;
6. Marketing & Consumer Communication:
Marketing’s most fundamental commitment is to delight consumers
every day, everywhere, thereby building trust. As part of building trust, Nestle can-
•integrate environmental sustainability into products, and brand
communication where applicable;
•help consumers make informed choices through credible,
substantiated communication;
•leverage relevant contact points (e.g. digital, packaging and point-
of-sale) to inform consumers of environmental improvements, as well
as action they can take when using products and handling used packaging;
•support and shape the development of environmental
communication best practices and standards, working in collaboration
with industry, government and public forums.
7. Human Resources:
Nestle can educate all employees to live by the Nestlé corporate
business principle on environmental sustainability. Therefore, Nestle
can:
•train all employees on this policy;
•create conducive workplace conditions that help all employees take
personal responsibility for protecting the environment by promoting
application of this policy to day-to-day activities at the workplace as
well as at home;
•ensure environmental sustainability is covered as part of relevant
training, workshops and meetings to raise commitment of employees,
suppliers, business partners and the community at large;
•promote corporate and personal responsible behavior towards the
environment through publishing success stories and recognizing positive initiatives to embed these practices within Nestlé and the local
community.
8. Regulation:
Nestle should further carefully monitor, evaluate and communicate
regulatory developments so that they are reflected in strategies. To
promote an effective regulatory system with respect to environmental
sustainability, Nestle can:
•engage with regulators and other relevant stakeholders to foster
environmentally efficient and effective laws and regulations;
•support internationally recognized standards and voluntary initiatives
designed to protect the environment;
•oppose discriminatory measures;
•favor the harmonization of environmental laws, regulations and
standards in order to develop trade and help consumers’
understanding.
Case Study of Anglo American: Social
and Environmental Responsibility
Question 01: What is sustainable development?
Answer: The concept of “sustainable development” (as defined by the
World Commission on Environment and Development in 1987) is:
“development that meets the needs of the present generation without
compromising the ability of future generations to meet their own
needs.” There are many views about the nature of sustainability. In its
simplest form it is about ensuring a better quality of life for everyone,
now and for future generations. To achieve this, sustainable
development is concerned with achieving economic growth alongside the protection of the environment and also at the same
time making sure that these economic and environmental benefits are
available to everyone.
These three aspects- economic, environmental and social form the
basis of the sustainable development concept. The concept is based
on respect for:
• one another, everyone who shares our planet
• future generations (what is called ‘inter-generational equity’), as well as the existing one
• for nature itself – for plants, animals and all life forms.
Question 02: Name two internal and two external pressures for social
and environmental responsibility.
Answer: Pressure for social and environmental responsibility comes
from two main sources:
• internal to the business
• external to the business.
Internal Pressure:
Internal pressures are the most important ones in driving change. The
Board of Directors establishes the key principles for using resources in
the most efficient way. The business must work closely with local communities. It must also minimize the impact of its operations on the
environment.
Shareholders are the owners and want the business to do well long-
term. They recognize that stability, prosperity and community confidence are important in sustaining the business.
External Pressure:
External pressures are also important. For example, Legislation or
Government plays a part. The UK Parliament provides minimum
standards for areas such as the treatment of workers, the environment
and customers. Because they have an international reputation to
protect, major multinational companies will generally seek to operate within the law.
Strong pressure in some markets may come from Customers. Many
customers demand high standards of ethical behavior.
Question 03: How do Anglo American’s sustainable development
principles contribute to its business strategy?
Answer: Anglo American is one of the largest British-based international
businesses and is one of the 20 largest companies on the London Stock
Exchange. Chiefly through Tarmac, it employs nearly 8,000 people in the UK. It is also one of the world’s largest mining companies. It has
managed operations in over 40 countries and employs over 100,000
people worldwide.
Anglo American has created a set of sustainable development
principles that underpin the way it seeks to do business. These are to:
• be ethical, efficient and create value for its stakeholders
• create meaningful employment in safe, healthy environments
• reduce its environmental footprint and contribute to biodiversity
• increase innovation, technology and process improvement
• contribute towards building more adaptable societies in the
communities where it operates.
The following examples illustrate how these principles work in practice:
• Anglo American places a strong emphasis on Safety and Health. The
mining industry has major safety challenges, including a substantial
number of fatalities. Anglo American is seeking to address these
through creating a ‘zero mindset’. This means that the total elimination
of accidents and injury is the goal. There is a supporting principle of
‘zero repeats’. If an accident occurs, it should never happen again. All
employees are expected to follow these rules.
• Anglo American works in a number of countries where water is
scarce, including Chile, Australia and South Africa. The Emalahleni
water treatment plant in South Africa purifies waste water from coal
mines into drinking water for use by the Emalahleni community. At the Kleinkopje colliery in South Africa water from mining activity is treated
and used for farming projects such as growing beans. In the UK,
Tarmac avoids using water from drinkable sources. Instead, it uses
water resulting from industrial processes wherever possible.
• In South Africa Anglo American has the largest directly delivered
workplace HIV/AIDS treatment programs in the world. It took the lead
in providing medical help for its HIV+ employees at a time when the
government was not prepared to provide life-saving drugs. It provides free drugs to about 4,500 employees as well as extensive community
prevention and treatment programs.
• Anglo American sees technology transfer and capacity building as
significant elements in helping local communities to grow
economically. In Venezuela, it has created experimental farms for the transfer of horticultural and agricultural knowledge. In Chile, it has
worked with goat farmers and beekeepers to improve techniques and
product marketing. In South Africa and Chile, the company’s
programs generate new small businesses through supply chain
opportunities, training, mentoring and access to finance.
Question 04: What are the main benefits to Anglo American’s business
of sustainable development?
Answer: There are real benefits to a business in acting responsibly.
Anglo American, by being responsible wins the trust of communities. It gains respect from the governments of countries where it operates. It
wins the loyalty of customers and the respect of the public. It gives a
company an edge in attracting new recruits and talent. It wins
recognition from investors for managing a business well.
Anglo American has made sure that its social and investment
programs match its strategic objective of being a good citizen.
Today it is common practice to refer to the Triple Bottom Line of a
business. A business is successful if it makes a financial profit on the
bottom line. To continually generate profits, it is also necessary that:
a) a business respects the environment and
b) takes a wider social responsibility.
It is important to understand how the benefits of an international
company such as Anglo American are distributed amongst its various
stakeholders.
A relatively small proportion of its ‘value added’ will typically go
directly to shareholders with suppliers, employees, governments and
lenders also benefiting significantly.
Anglo American has created an innovative process - the Socio-
Economic Assessment Toolbox (SEAT). This measures the impact of all
its activities on the communities in which it operates. It engages local
stakeholders in each community to learn about their concerns, needs
and priorities. It then sets out its plans for improving its socio-economic performance through a three-year action plan made widely available
to local people. SEAT enables the company to generate a successful
triple bottom line.
Thank You!