Responsible sourcing at Nestlé – BSL students learn first-hand about key elements of corporate sustainability

As all of us working in this field know, sustainability is highly complex, requiring an understanding of multiple disciplines, many of which rather technical. Additionally, there’s a big gap between theory and practice, especially when attempting to transform existing companies and systems that were not built with sustainability in mind.

In our case, after 5 classes of “Business Responsibility & Sustainability”, covering principles, natural and planetary boundaries, human dimensions, major programs like SDGs and MDGs, the role of businesses, stakeholder models and management, including role plays on how companies create conflict and how to resolve them – it was time to see how it all works in practice.

Early January, we were fortunate to be received by Dionys Forster (Sourcing specialist, department of corporate agriculture) and Diarmuid O’Connor (Global manager, agricultural raw materials) at the Nestlé HQ in Vevey.

Given the size and complexity of Nestlé (over 300k employees, 190 countries, thousand of brands and many more products), we had to focus, in the case of our visit on rural development and responsible sourcing of agricultural products, especially milk, cocoa, coffee. This of course means that many other topics with high sustainability relevance, such as processed food, added sugars, bottled water, palm oil, pesticides and many others, were not discussed during this visit.

What we saw and discussed was highly sophisticated, well designed and effectively implemented. Here are a few highlights:

  • Planetary boundaries and Terrestrial biodiversity were used to introduce the subject, similarly to how we started our own class two months ago.
  • Nestlé, with 1.7% world market share, is the biggest player in a highly distributed market, top 20 companies collectively accounting for only 9%. This means, to make a big difference, working with competitors is required.
  • Social media analysis reveals that people are concerned about food quality, climate change, packaging, animal welfare.
  • To make sourcing more responsible, Nestlé implemented Farmer Connect, directly sourcing from 760’000 farmers, ensuring almost total product traceability, offering training (400’000 farmers trained) and limiting price volatility (a major benefit for farmers, allowing them to better plan ahead).
  • A broad sustainable agriculture initiative (SAIN) aims to reduce waste and pollution, better use water, reduce greenhouse gases through technology dissemination, financial support for farmers, buying clubs, price stability, education, training, and advocacy.
  • RISE (Response-Inducing Sustainability Evaluation) is a questionnaire-based tool developed at the Bern University of Applied Sciences, rapidly identifying problem areas, allowing to better focus improvement efforts.
  • “Dairy for you” is an education program offering differentiated training for workers, specialists, managers, and graduates, by setting up a local institute or working with a local university.
  • At Nestlé Nutrition, baby food requires much lower limits of pesticide, lead, cadmium, mercury etc. residues – Nestlé applies the same (strictest) standards around the world, even in countries where not legally required.
  • In Ghana, to reach the majority of farmers who don’t read or write, a local theater play with characters representing good farmer / bad farmer is used to develop local community knowledge – and at the same time improve raw material quality and safety
  • A key issue in agriculture is succession – worldwide, the average farmer age is 60, in the US 65, in Japan 77; and specifically making farming attractive for the young generation. Nestlé has been working with many farmers for 2 or 3 generations, but the issue remains.

This reminds me of an excellent article published in the NYTimes “Don’t Let Your Children Grow Up to Be Farmers”, showing how the design of our food system, among many other issues, also makes farming unattractive for young generations.

Therefore we thank again Dionys Forster and Diarmuid O’Connor, not only for receiving us so well, but for doing so much to make sourcing more responsible.

Author: Sascha Nick, Associate Professor at BSL

No society functions without trust

Thoughts on the  2nd UN Business and Human Rights Forum, Geneva 2-4 December, 2013

Joseph Stiglitz, recipient of the Nobel Memorial Prize in Economic Sciences in 2001, made the keynote address to the audience of almost 2,000 people on Tuesday, 3rd December, 2013 at the 2nd UN Business and Human Rights Forum in Geneva. Governments, business, academia and civil society were present at this important 3-day gathering.  The reason for this Forum?  Continue reading

What’s Corporate Finance got to do with Human Rights?

Dr Liz UmlasDr. Liz Umlas (see her bio below) came to Business School Lausanne to talk in the Corporate Finance MBA class about Business and Human Rights – a discussion very much centered in Switzerland right now. Dr. Umlas is a political scientist who has worked as a Human Rights specialist for a US socially responsible investment (SRI) research firm, for the United Nations High Commission for Refugees and for Oxfam. She now lectures extensively on business and human rights in different universities, globally. Continue reading

Integrating Sustainability in Business – an evening with Ron Popper, ABB

Ron Popper, Vice President and head of Corporate Responsibility and Sustainability at ABB, paid a visit to Business School Lausanne on Tuesday, 11th September, 2013. He gave the opening keynote speech to the new MBA students and his presentation was greatly appreciated.

Ron Popper, ABB

ABB is a global company active in 120 to 130 countries worldwide, they have about 150,000 employees and another 150,000 contractors.  ABB is in the power and automaton world and they also are involved in the area of renewable energy. Popper began his career as a journalist and in that job he travelled extensively to different parts of the world. He joined ABB in 2001 and is based in the Swiss German region of Switzerland. Continue reading

Are lawyers an obstacle to progress on Corporate Responsibility and Sustainability?

About the author of this blog post

We welcome the first blog post of our BSL colleague Mary Mayenfisch-Tobin and grab the chance to introduce her briefly.

Mary Mayenfisch-Tobin is a lawyer, who specializes and teaches in the area of Law, Business and Human Rights. She is responsible for Stakeholder Relations and Student Counseling at Business School Lausanne.

Mary’s principle preoccupation in recent years has related to education, and particularly responsible education, not only as taught in business schools but in all educational institutions, including law schools. Continue reading