Nestle's Commitment to Sustainability

This assignment examines Nestle's approach to corporate social responsibility, particularly its commitment to environmental sustainability. It explores how the company has transitioned from conventional practices to a more environmentally conscious model, emphasizing fair trade, employee benefits, and customer well-being. The analysis also considers Nestle's position as a leading global food brand and its strategies for maintaining market dominance while upholding ethical and sustainable business practices.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
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1CONTEMPORARY ISSUES IN ACCOUNTING
Executive Summary:
In this report, the intention is to analyse the current state of sustainability reporting of
Nestle, which includes social dimension, economic dimension n and environmental dimension.
Nestle is one of the biggest health, nutrition and wellness organisations, which offers superior
quality products and services to its customers. Nestle has encountered various issues in the
environment in relation to deforestation and climate change. In order to overcome these issues, it
has applied feasible strategies along with maintaining competitive position in the food industry.
It has shown its commitment to the environmental challenges and responsibilities have been
changed from conventional mode of operation to environment-oriented.

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Table of Contents
1. Introduction:................................................................................................................................3
2. Current state of sustainability reporting of Nestle:......................................................................3
2.1 Social dimension:...................................................................................................................3
2.2 Economic dimension:............................................................................................................4
2.3 Environmental dimension:.....................................................................................................4
3. Particular areas to sustain for Nestle:..........................................................................................5
4. Implications for various stakeholders in relation to financial decision-making:.........................6
5. Conclusion:..................................................................................................................................7
References:......................................................................................................................................9

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1. Introduction:
In the current era, every organisation is attempting to explore innovative technology in
the market. After accomplishing the objectives of the organisation, it is crucial to maintain the
sustainable position through implementation of the powerful monitoring system (Amran, Lee and
Devi 2014). In this report, the intention is to analyse the current state of sustainability reporting
of Nestle, which includes social dimension, economic dimension and environmental dimension.
Nestle is one of the biggest health, nutrition and wellness organisations, which offers superior
quality products and services to its customers. It is headquartered in Switzerland having global
employee base of more than 200,000 (Nestle.com 2018). Moreover, the report aims to illustrate
the implications for different stakeholders in relation to financial decision-making.
2. Current state of sustainability reporting of Nestle:
2.1 Social dimension:
In this specific dimension, the social culture is a significant factor for an organisation to
develop. Nestle has formed its business globally and it has become familiar with the facts of the
product closely associated with the social and eating habits of the customers. According to
Anderson and Abensour (2017), the organisation has concentrated on the growing strategy and it
has respected diverse traditions and cultures. In addition, the organisation has integrated into the
tradition and cultures, in which it is present along with strengthening the cultural and social
diversity and it considers the religion, nationality, race and gender. It believes that the activity of
the organisation would result in providing long-term benefits to the community. Thus, Nestle is
thinking from the global perspective with the help of commitment and local action. The

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organisation has shown its commitment to various cultures and its values. These are primarily
from the roots of origin and developing across the world, in which it has been established.
2.2 Economic dimension:
In the words of Aswani and Swami (2017), agriculture plays a crucial role in most of the
global nations. It is the primarily role related to economic growth and prospect development of
vast majority with the developing nations. About 70% of the people are residing in the rural
areas and they depend completely on farming for their livelihood (Buhr, Gray and Milne 2014).
In this respect, Nestle has offered considerable job opportunities to the individuals to involve in
agricultural jobs and it provides consulting advice to the farmers for developing the cultivation
effectively.
The economic dimension of sustainability relies on the indirect and direct economic
effects, which the organisation operates in relation to the surrounding community and the
shareholders. In addition, it has contributed its operations with the help of local tax base and
thus, support is provided to the government in terms of revenue (Ceulemans, Molderez and Van
Liedekerke 2015). This is because tax holds the base and it has considerable influence on the
formation and distribution of wealth of the organisation. Nestle has valuable license to operate in
almost all of the global nations, which has resulted in creation of trust among the customers in
believing in its product quality.
2.3 Environmental dimension:
According to Bebbington, Unerman and O'Dwyer (2014), the environmental dimension
acts as the key to sustainable development and hence, it could be termed as the social
responsibility pillar. Generally, the environmental effects denote the negative results such as

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climate change and soil erosion. Sometimes it takes into account over-utilisation of non-
renewable energy and natural resources along with deforestation (Edgley, Jones and Atkins
2015). Thus, negative effect on the organisation would be created. The calculation of
environmental effect could be made by ascertaining the output and input table along with
ecological footprints. Nestle has encountered various issues in the environment in relation to
deforestation and climate change. In order to overcome these issues, it has applied feasible
strategies along with maintaining competitive position in the food industry. It has shown its
commitment to the environmental challenges and responsibilities have been changed from
conventional mode of operation to environment-oriented. Nestle has executed the system of
environmental management, which is an effective method for improving the overall
environmental performance.
3. Particular areas to sustain for Nestle:
As commented by Ioannou and Serafeim (2017), one of the focus areas is the social
aspect, which would help an organisation to sustain amongst the rivals. Most of the organisations
are concentrated to address the social responsibility by taking into account the social effect of the
organisation. This takes into consideration the organisation with the individuals associated with
the supply chain. It denotes the management and the stakeholders for formulating the action plan
in order to contribute well-being and the societal interest. Nestle has succeeded to maintain huge
customers from the global nations by providing superior quality products along with providing
adequate importance for the shareholders. In addition, it has managed to maintain effective
relationship with its global customers by providing superior quality services with durability and
safe services.

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The fair source of advertising and trading has helped in increasing the business standard
of Nestle in the history of the food industry. In addition, it has concentrated on the staff
responsibility and it has provided effective benefits to the deserving staffs. The social
responsibility of a staff is more in contrast to the former employee contract. Thus, the staffs are
the main strength of the organisation, which is the main reason they are considered as the assets
of the business. In this aspect, Nestle has provided identical opportunities to all its staffs
regardless of age, gender and religion. Moreover, the organisation has concentrated on increasing
the health prosperity and stability of the customers where it operates its business segments.
Despite the stringent competition for Nestle, it has assured the leading position in the global
market by focusing on the major areas and expressing its powerful strategy.
4. Implications for various stakeholders in relation to financial decision-making:
As laid out by Jones, Comfort and Hillier (2016), it is significant for an organisation to
display sound progress in the economic level. This is because it would enable in exploring the
inner capabilities by expanding its business operations in the global nations. The investment is
considered to have an effective source for the economic development of the nation. Hence,
developing long-term value with the consumers and shareholders is the primary strength of
surviving among the rivals in the market (Junior, Best and Cotter 2014). Thus, the accounts need
to be managed with the income statement. This would help Nestle in taking a step forward in
improving its business profits.
Moreover, the exchange rates have direct effect on the largest food company, which is
Nestle. Since Nestle is involved in making various food products, it has immense scope in
various global nations and this would be reflected in the export of products. There is increase in
trading of these products among the customers because of the services and quality. In addition,

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Nestle has experienced considerable increase in sales margin, which is beyond the market growth
rate. In addition, constant growth is necessary without any impact on trade. Thus, it has
concentrated on the major areas in developing its business to a greater level. The organisation
has concentrated continuously in meeting the customer demand along with increasing the quality
of products for increasing the value of money (Miah et al. 2015). With the help of technological
developments and apprentice programs for the staffs, Nestle has managed to create long-term
sustainable development for maintaining its healthy financial position in the global economy.
Finally, it has sponsored the cultural events and local sports for the community, which has
helped in increasing its popularity in the global community. Hence, it has took care of all the
associated stakeholders, which has helped in undertaking financial decisions for increasing its
overall productivity and profitability.
5. Conclusion:
Based on the above discussion, it could be evaluated that the significant factor and the
main strategy in maintaining the organisational stability is sustainability. This is because the
development of the sustainable strategy would enable in staying alive in the competition along
with allowing for moving further to develop its business operations. By gaining an insight of the
marketing condition of the economy, Nestle has implemented its sustainability measures
providing insight into the measurement of its business operations. Nestle has encountered
various issues in the environment in relation to deforestation and climate change. In order to
overcome these issues, it has applied feasible strategies along with maintaining competitive
position in the food industry. It has shown its commitment to the environmental challenges and
responsibilities have been changed from conventional mode of operation to environment-
oriented.

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The fair source of advertising and trading has helped in increasing the business standard
of Nestle in the history of the food industry. In addition, it has concentrated on the staff
responsibility and it has provided effective benefits to the deserving staffs. The social
responsibility of a staff is more in contrast to the former employee contract. Moreover, the
organisation has concentrated on increasing the health prosperity and stability of the customers
where it operates its business segments. Despite the stringent competition for Nestle, it has
assured the leading position in the global market by focusing on the major areas and expressing
its powerful strategy.

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References:
Amran, A., Lee, S.P. and Devi, S.S., 2014. The influence of governance structure and strategic
corporate social responsibility toward sustainability reporting quality. Business Strategy and the
Environment, 23(4), pp.217-235.
Anderson, J. and Abensour, J., 2017. Measuring Your Company’s Impact: How to Make the
Most of Sustainability Reporting Frameworks. In Managing for Social Impact (pp. 255-271).
Springer International Publishing.
Aswani, K. and Swami, S., 2017. Analysis of Sustainability Reporting of Indian Companies.
Bebbington, J., Unerman, J. and O'Dwyer, B. eds., 2014. Sustainability accounting and
accountability. Routledge.
Buhr, N., Gray, R. and Milne, M.J., 2014. Histories, rationales, voluntary standards and future
prospects for sustainability reporting. J. Bebbington, J. Unerman and B. O’Dwyer, eds, pp.51-71.
Ceulemans, K., Molderez, I. and Van Liedekerke, L., 2015. Sustainability reporting in higher
education: A comprehensive review of the recent literature and paths for further
research. Journal of Cleaner Production, 106, pp.127-143.
Edgley, C., Jones, M.J. and Atkins, J., 2015. The adoption of the materiality concept in social
and environmental reporting assurance: A field study approach. The British Accounting
Review, 47(1), pp.1-18.
Ioannou, I. and Serafeim, G., 2017. The consequences of mandatory corporate sustainability
reporting.

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Jones, P., Comfort, D. and Hillier, D., 2016. Materiality in corporate sustainability reporting
within UK retailing. Journal of Public Affairs, 16(1), pp.81-90.
Junior, R.M., Best, P.J. and Cotter, J., 2014. Sustainability reporting and assurance: A historical
analysis on a world-wide phenomenon. Journal of Business Ethics, 120(1), pp.1-11.
Miah, J.H., Griffiths, A., McNeill, R., Poonaji, I., Martin, R., Morse, S., Yang, A. and
Sadhukhan, J., 2015. Creating an environmentally sustainable food factory: a case study of the
Lighthouse project at Nestlé. Procedia CIRP, 26, pp.229-234.
Nestle.com. 2018. [online] Available at: https://www.nestle.com/investors/publications/2017
[Accessed 17 Jan. 2018].