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Creating SharedValue
Dr. Claus Conzelmann, NestléWWF One Planet Webinars – 2degreesnetwork15 January 2013
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Creating Shared Value
Howwas itmade?
Consumerpreference
Wheredoes it
come from?
What’s inmy food?
Nutrition Health Wellness
Responsiblesourcing
Environmentalsustainability
Context: Consumers
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Creating Shared Value
Context: Scarcity
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Creating Shared Value
Environmental scarcities: Planetary Boundaries
A safe operating spacefor humanityRockström et al.,Nature 461, 472-475(24 September 2009)
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Creating Shared Value
Societal Scarcities:Do we invest enough in farming?
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Creating Shared Value
3 Capitals: Financial + Societal + Natural
Forum for the FutureJonathon PorrittCapitalism As If The World Matters
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Creating Shared Value
Creating Shared Value
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Creating Shared Value
Nestlé in Society
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Creating Shared Value
Three CSV focus areas at Nestlé
Nutrition Water Rural Development
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Creating Shared Value
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Creating Shared Value
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Creating Shared Value
Plant ProteinsImproving Ingredient Impact & Nutrition
Plant proteins for affordable nutritionwith lower environmental impact
0123456789
10
Estimated water consumptionfor daily requirements of essential nutrients
Wat
erco
nsum
ptio
n(m
3 )
Quinoa13% protein
Local sources of proteins
Chickpeas22% protein
Lentils25% protein
White niebé21% protein
Red niebé25% protein
Bambara beans22% protein
Africa
S. America
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Creating Shared Value
Water
Water efficiency
Advocate for effective water policies
Treat the water we discharge
Engage with agricultural suppliers
Raise awareness of water
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Creating Shared Value
From water shortage to food shortage
“If present trends continue ... we could be facingannual losses equivalent to the entire graincrops of India and the US combined.”
Frank Rijsberman
Former DGInternational WaterManagementInstitute
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Creating Shared Value
Rural Development
Crop Annual Production (Mt) Net Income (US$)
Oil Palm 30 2,740Rice 12 1,240Cocoa 0.5 620Coffee 0.5 500
Indonesian FarmersSource: Armajaro
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Creating Shared Value
Developing Sustainable Cocoa Sourcing
Example Mexico:
Reduce imports, increasecompetitiveness & preservethe heritage of Mexican cocoa
Activities:
Research programs withINIFAP and preservinggermplasm of local hybridssince 1993
Technical Assistance andField Schools
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Creating Shared Value
Responsible Sourcing:Aligned with Societal Trends
Rising consumer /customerexpectations
Increasing resource scarcity
Increasing regulations/standard complexity
Stronger civil society activism /Social Media
TrendsTriple Bottom Line
EconomicDevelopment
MaximumBenefit
Area
EnvironmentalImpact of Business
Activities
Social &Environment
Economically viablebusiness model along
the value chain
Efficiency &Social
Growth &Environment
Enterprise Impacton Staff / Society
EnvironmentalSustainability Social
Wellbeing
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Creating Shared Value
• Direct engagement with670,000 farmers
• 17,000 support staff
Audit ProgramNestlé Supplier Code
• > 3’000 third party audits
Traceability Program• Material-specific Responsible Sourcing Guidelines (RSGs)
for high risk categories.• 12 categories prioritized
Consumer& Customer
Marketing& SalesAgriculture Procurement Manufacturing Supply Chain
Farm/Feedstock
Tier
1su
pplie
rs
Farmer Connect
Responsible Sourcing: Key to Delighting Consumers
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Creating Shared Value
Drivers for Sustainability Improvements
Compliance
CompetitiveAdvantage
ProtectingFuture Business
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Creating Shared Value
Competitive advantageby improving current business
Cost savings
Pay-back fromenergy & waste reduction
Growth driver
Sustainability benefitsas additional reason for
consumers to prefer our products
Drives Innovation& Renovation
EnhancesBrand Equity
Efficiency programmes(Lean, War on Waste)
CapitalInvestment
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Creating Shared Value
Will the « Business Case » get us all the wayto Sustainability?
Compliance
CompetitiveAdvantage
ProtectingFuture Business
Contributes toSustainability
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Creating Shared Value
Potential Sustainability Gap
Compliance
CompetitiveAdvantage
ProtectingFuture Business
Contributes toSustainability
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Creating Shared Value
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Creating Shared Value
50
75
100
125
150
175
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Inde
x
Total production volume Total on-site energy consumptionTotal water withdrawal Total water dischargeDirect GHG emissions Waste for disposal
+0.5%
-12%-17%
-28%
-38%
+73%
Decoupling growth from resource use:Carbon intensity improved 5% per year
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Creating Shared Value
CDP 2012: Joint # 1
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Creating Shared Value
Major Impacts are Upstream & Downstream
2001-2011 AbsoluteChange
Production +73%Water -27%Waste -12%GHG -17%
Agriculture & Materials Factories Logistics Consumer Use
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Creating Shared Value
Humbert S, Loerincik Y, Rossi V, Margni M and Jolliet O (2009). Life cycle assessment of spray dried soluble coffee and comparison withalternatives (drip filter and capsule espresso). Journal Cleaner Production
Waste recovery:
Positive effects
Rawmaterials
Manufacturing/Packaging
Consumer
From Company to Product Life-cycle view
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Creating Shared Value
Soluble coffee is more resource-efficient
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Creating Shared Value
Minimising Waste in the Value Chain
MinimiseFood Loss
OptimiseResources
•Yields•Variety•Damage•Spoilageresistance
•Production•Yields
•Damage•Spoilage•Shelf life
•Damage•Spoilage•Shelf life
•Portions•Methods•Yields•Bioavailability
•Portions•Versatility•Re-value
•Water•Agriproducts•Methods•Transport
•Water•Energy•Technology
• Packagingmaterial
•Kg/kg
•Distance•Density•Weight
•Energy•Water
•Re-use•Re-value•Recycle
Limits toResources
Food Waste• Developing world: 630 mn Tonnes 40% in post-harvest & processing• Developed world: 670 mn Tonnes 40% in retail & by consumer
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Creating Shared Value
Brands communicate sustainability
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Creating Shared Value
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Creating Shared Value
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Creating Shared Value
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Creating Shared Value
Detailled Information Beyond the Label
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Creating Shared Value
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Creating Shared Value
Partner & Engage
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Creating Shared Value
are tastier & healthier
create value for society
preserve natural resourcesfor future generations
= GOOD FOOD, GOOD LIFE
More at: www.nestle.com/csv
Delighting our Consumerswith products that: