socio-economic value creation and analysis at...
TRANSCRIPT
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13 June 2016
Socio-economic value
creation and analysis
at Nestlé
Integrated Value Assessment 2.0
Bern, 26 May 2016
Christian A. Vousvouras
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2 26 May 2016
Nestlé’s business activities
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3 26 May 2016
Nestlé’s business activities
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4 26 May 2016
Nestlé’s business activities
Nestlé facilities Tier-1 suppliers Upstream suppliers
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5 26 May 2016
Sustainability drives stakeholders’ trust into Nestlé
• Academic and non-profit
studies show correlation
between capital market
performance and sustainability
investments
- Total shareholder return
- Reduced firm idiosyncratic risk
- Bonds: longer maturities, lower
rates
• Disclosure of additional CSV-
related data may lead to
superior valuations and
greater shareholder
engagement
- Fewer lawsuits, petitions
- Fewer activist investors
• Employee engagement is a
source of competitive
advantage, leading to higher
growth and stock performance
• Bain research shows
employees view their
company’s sustainability
agenda as a critical factor in
their engagement
- 91% of employees rate
sustainability extremely or
somewhat important
• CSV helps secure “license to
operate”
• Positive business reputation
can open up new
geographies, smooth
operations and create
opportunities
• Fewer adverse regulatory
actions
- Fewer government
investigations
- Greater public goodwill in the
event of a crisis situation
• Part of proactive constituency
management
• Shared value leads to
increased profitability:
- Top-line revenue (greater than
any increased costs) driven by
new product lines, access to
new geographies, etc.
- Lower costs driven by reduced
primary resource consumption
(without impact to revenues)
• Drives brand loyalty and
customer engagement
CAPITAL MARKETS LABOUR MARKETS LICENSE TO OPERATE
DIRECT/INDIRECT
BUSINESS METRICS1 2 3 4
On major indices / lists1, impact
unclear
Limited internal
researchImpending issues with water
Great progress, value not well
measured
Nestlé current
status:
1 Dow Jones Sustainability Indexes, Robeco Sam Sustainability Investing Annual Yearbook
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6 26 May 2016
Nestlé Creating Shared Value
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7 26 May 2016
Nestlé Creating Shared Value
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8 26 May 2016
Nestlé Creating Shared Value
Engage with suppliers,
specifically those in agriculture
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9 26 May 2016
Nestlé Creating Shared Value
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10 26 May 2016
Natural Capital Protocol
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11 26 May 2016
Social Capital Protocol
A deep-dive into Human Capital:
employment, skills and safety
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12 26 May 2016
Cause effect chain definition
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13 26 May 2016
Potential Scope
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14 26 May 2016
Results Natural Capital
Coffee
CocoaSugar
Wheat
Rawmilk
Beef
Pork
Sugar
Powdermilk
Cheese Milk
Chicken
Europe
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15 26 May 2016
Results Social Capital
Safety
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16 26 May 2016
Limitations
Absolute Relative Trend
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17 26 May 2016
Thank you