BUSM4690: Analysis of Nestle's CSR, Recommendations, and Evaluation

This essay provides a comprehensive analysis of Nestle's corporate social responsibility (CSR) initiatives. It begins with an overview of the company and then delves into an evaluation of their CSR activities across various countries, highlighting their efforts to address environmental concerns, promote wellness, and support local communities. The essay utilizes the stakeholder theory and the three-domain model of CSR to assess Nestle's practices, examining both their positive contributions and the ethical challenges they face, such as the use of child labor and product mislabeling. The analysis concludes with specific recommendations aimed at helping Nestle improve its CSR efforts, overcome existing issues, and enhance its reputation while generating profits. The paper uses several academic references to support the analysis and recommendations.

Running head: CSR ISSUE ANALYSIS
CSR ISSUE ANALYSIS
Name of the Student
Name of the University
Author Note

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Executive summary
Corporate social responsibility is one of the most important factors of a business in recent
times which majority of the businesses has been incorporating in their organisations. This
paper is going to provide a brief overview of the company, Nestle and will analyze and
evaluate the corporate social responsibility activities undertaken by the company. Using the
stakeholder theory and the three-domain model of corporate social responsibility, the CSR
practices of Nestle will be evaluated to see how their activities help in making change and
align with the models. The issue of the use of child labor and mislabeling of the products will
be highlighted in the paper and suitable recommendations has been provided which will help
Nestle in overcoming the issues and generating profits in the market as well as gain a positive
reputation in the market.

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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Overview of the company......................................................................................................2
Analysis and evaluation of the CSR of Nestle.......................................................................2
Recommendation....................................................................................................................5
Conclusion..................................................................................................................................6

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Introduction
Corporate social responsibility (CSR) is defined as a type of self-regulation followed
by international private organisations or businesses which basically aims on contributing to
various societal goals of charitable, activist or philanthropic nature or by supporting
volunteering or practices which are ethically-oriented (Cheng, Ioannou and Serafeim 2014).
CSR basically demonstrates the fact that there are businesses which takes interest in social
issues at a wide scale rather than those which impact the profit margins which will help in
attracting customers that share the same values (Mason and Simmons 2014). Most
organisations these days incorporate corporate social responsibility in their business in order
to gain a positive reputation in the market which helps in increasing their sales. However,
there are many companies who have a lot of corporate social responsibility issues which has
led to the negative reputation of the company and also had a huge impact on the sales of the
company. This paper will reflect on the CSR issues of the company, Nestle, analyse their
issues and also provide recommendations which will help the company overcoming the issues
to acquire a positive reputation in the market.
Discussion
Overview of the company
Nestle is a multinational Swiss food and drinks processing conglomerate. The
company was founded by Henri Nestle and is currently headquartered in Vevey in
Switzerland (Nestlé Global 2020). Nestle is considered to be one of the largest companies all
across the globe in terms of food and drinks. Nestle, since its inception has been a very
popular brand which has led the company in expanding their business to several countries
which has led to the company having a global presence. According to reports, the company

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has generated revenue of CHF 91.4 billion in the year 2018 which shows the success of the
company (Nestlé Global 2020).
Nestle states that the purpose of their company is to enhance the quality of life of their
customers and to contribute to a better and a healthier future. They strive to work in order to
shape a positive and a better world and help in inspiring people to lead healthy lives in order
to ensure their long-term success (Nestlé Global 2020). Currently, the aim of the company is
to provide healthy lives to families and children, improve the livelihood in various
communities with their business activities and have positive impact on the environment
through their operations.
Analysis and evaluation of the CSR of Nestle
Nestle has a huge global presence and is seen to dominate the global market. Nestle
tries to tackle some global issues with their practices however, Nestle operates in various
different countries and it has been seen that their CSR activities on the basis of different
countries. Nestle considers the social issues of a particular country in which they operate and
develop CSR activities and programs that help in mitigating the issues that those countries
have been facing which lead to the company practicing various activities of corporate social
responsibility all across the globe.
Climate change has become a global concern in recent times and people are with time
becoming aware of the detrimental effects that climate change possesses which has been
affecting the behavior of consumers in the market. According to scholars, people these days
are considering companies or organisations that operate in a sustainable manner and have a
positive impact on the environment (Lopes et al 2017).
Initially, Nestle just focused on contributing to the healthy lives of the people
however, with time they started understanding the importance of contributing to a healthier

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environment as well. Thus, since then the company has been making a positive change in
their CSR activities and has been trying to incorporate different measures to act in the interest
of the society and also environment.
One of the major environmental issues in recent times is due to plastic waste and it
has been seen that Nestle recognizes the issue of the rise in plastic waste and has vowed to
increase their target in order to use recyclable materials for their water bottle to about 50% by
the year, 2025. They have been trying to come up with alternative materials for packaging
and considering new delivery models which is going to help the company in reducing their
use of plastics by about one third by the year, 2025 (Nestlé Global 2020).
In Malaysia, Nestle helps communities in various ways from helping the single
mothers to children who are underprivileged, budding athletes and also come up with
programmes and activities which help in bringing awareness about the important nutrition.
Nestle tries to promote wellness and a healthy lifestyle to the people in Malaysia in order to
fulfill their promise which is Good Food, Good Life. Nestle invests in the R&D in order to
innovate their products and to renovate their current products by making it more healthier and
nutritious by reducing sugar, fat and salt content in order to comply with the efforts by the
government of the country via a 10 year National Plan of Action for Nutrition to build an
informed and healthier society (Nestlé Malaysia 2020).
In Singapore, Nestle focusing on enhancing the quality of life and also to contribute to
a better and healthy future. Nestle tries to contribute positively to the society and helps the
farmers who grow the ingredients which are used by the company in their products, they also
provide communities with benefits and also help saving the natural environment (Nestlé
2020).

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Nestle; in Philippines through their activities have helped in tackling the issue of
micronutrient deficiencies. According to a research which was conducted in the year, 2013
which was conducted in partnership with Philippines Food and Nutrition Research Institute
also known as FNRI shed a light on the fact that the deficiency of micronutrients can lead to
the cause of serious health issues and can also be very expensive when it comes to public
health system and also society (Nestle.com 2013). In order to mitigate this issue, Nestle had
teamed up with FNRI in Philippines and had launched a campaign which was a nationwide
multi-sector campaign which encouraged the parents to provide their child with milk which
would be fortified with vitamin A, iron and zinc as it is effective and helps in addressing iron
deficiencies
In India, Nestle in consultation with their stakeholders has thought of considering
coming up with programmes and activities which will have a positive impact on the society.
They will be focusing on the issues which India faces which are nutrition, rural development
and sanitation and water (Nestle.in 2020).
From the CSR activities and the programs that have been incorporated and performed
by Nestle, it can be seen that they consider the issues that prevail in the different societies of
different countries and try to mitigate those issues aligning with their aims and objectives to
ensure the communities achieve a healthy and better lives. The good thing about the approach
of the company is that they try to help countries overcome their own issues which help them
in addressing the different issues and spreading awareness of the different issues through
their campaigns and their activities.
However, Nestle has faced backlash because of few unethical practices which had
contributed to the company acquiring a negative reputation. Nestle in the year 2012 had been
facing legal issues due to the use of child labor as they had already signed an agreement in

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the year, 2001 that they would end the use of child labor in the coffee farms. However,
recently there have been reports that Nespresso which is owned by the company, Nestle has
been using child labor and they have been found in majority of the farms (Doward 2020).
The other issue which has made Nestle gain negative publicity is mislabeling and
misleading advertising of their products. According to reports, Nestle is to face lawsuit as
they had claimed that the Poland Spring which is bottled water and owned by Nestle provided
100% natural spring water whereas the complaint against the company states that the Poland
Spring basically in Maine which labels the name as the source of their brand ran dry
commercially around 50 years ago (The Guardian 2019). This report states that the company
had been mislabeling their products. There were many other scams that the company had
faced which was highly unethical, however they had redeemed themselves and had made
positive changes to overcome the issues they had been facing.
It can be seen that the CSR activities of Nestle can be aligned with the stakeholder
theory but it also contradicts the theory because of the few unethical activities performed by
the company. According to the stakeholder theory, the essence of an organisation or a
business basically lies in creating value and also building positive relationships for all their
stakeholders (Fernando and Lawrence 2014). CSR mainly focuses on a particular stream of
responsibilities of business organisations like responsibility to the society and the local
communities.
Aligning the CSR activities of Nestle with the stakeholder theory, it can be seen that
Nestle does create value and builds positive relationship with their stakeholders as the
activities undertaken by them help in the development and the growth of the communities and
their stakeholders who contribute to the operations and business of the organisation. It can be
seen that Nestle has introduced certain activities, campaigns and programmes which has

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improved the lives of many and has also contributed to reducing the social issues prevalent in
a country. However, there are some activities of the company which is seen to have violated
certain human rights like mislabeling of their products which has led to misinforming people
about the ingredients used in their products and also using child labor which has been strictly
prohibited by the government. When aligned with the stakeholder theory, it can be seen that
there are some practices which had led the company to contribute to the social issues which
makes the practices of the company highly unethical and which reflects on the selfish motive
of the company where they just focus on their business. Reports suggest that there have been
many NGO’s who have given backlash to the company Nestle for not taking strict measures
against the use of child labor in their operations (Jessica Dacey 2011).
According to the model, the three-domain model of corporate social responsibility
proposed by Carroll and Schwartz, the three core responsibilities of the model are economic,
ethical and legal.
The economic domain of the mode captures the activities which are basically intended
to have either direct or an indirect economic impact which is positive on the company. The
positive impact here is based on two very distant however related criteria which is to
maximize the profits of the company and maximize the shared value. It is usually expected
that majority of the activities performed by any corporation or organisation will be economic
in nature (Omran and Ramdhony 2015). Aligning this with Nestle, it can be seen that their
activities usually help in promoting their products as their CSR activity helps in promoting
health to the people and they claim that their products help in providing healthy lifestyle to
the people.
The other factor is legal which states that the CSR activities usually pertains to the
responsiveness of the legal expectations mandated and also that are expected by the society in

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forms of local, state and federal jurisdictions or through the legal principles as created in case
laws. Legality here may be viewed in three basic categories like avoidance of any kind of
civil litigation, anticipation of laws and compliance (Omran and Ramdhony 2015).. Aligning
this with the business of Nestle, it can be seen that the company usually tries to comply with
the rules and regulations set by the government however it can be seen that the company has
violated certain regulations like the use of child labor and also misinformation in their
labeling of products which has had a negative impact on the company.
The last domain is the ethical domain which mainly refers to the responsibility in
terms of ethics in an organisation as expected by the relevant stakeholders of an organisation
and the general population (Omran and Ramdhony 2015). This domain or factor includes the
responsiveness to both the global as well as domestic imperatives. In the case of Nestle, it can
be seen that the company highly focuses on performing activities that are ethical which will
help in improving the society and contribute to the welfare of the communities and societies
all across the globe. The company however has faced backlash for their unethical practices
like child labor and mislabeling their products but in recent times it can be seen that they are
considering taking steps to mitigate the issue.
Recommendation
Nestle practices various CSR activities and helps in mitigating social issues in various
countries which helps in helping various communities however, there are some practices
which can lead the company to be in huge trouble as they are unethical and can make the
company acquire a negative reputation in the market. Thus, Nestle should take effectively
operate and incorporate the following activities and measures which may help the company
in overcoming the issues in terms of their corporate social responsibility.

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 Nestle should come up with strict working guidelines and policies in terms of child
labor so that they can restrict using the use of child labor which is against the law.
 As the company has received backlash for the use of child labor thus should come up
with initiatives and programs that help children who are forced to work and ensure
they receive proper education rather than working.
 Nestle should start correctly labeling their products with proper product description
and the ingredients used in the product which help the company in being transparent
with their customers.
 The company needs to come up with sustainable packaging in terms of their products
so that they can contribute to the welfare of the environment.
 The company should come up with initiatives that spread awareness and importance
of recycling and can announce a date where the company will take all the bottles and
cans of the company so that they can recycle those materials and promote recycling.
 Nestle should come up with products that are healthy as it promotes healthy lifestyle
and reduce the use of preservatives and ingredients which are harmful for the people
and can contribute to life risks.
 Nestle should conduct free health care check-ups for communities and children who
are underprivileged so that they can fulfill their goal to provide a better and a healthy
life for people and to help the communities who cannot afford medical check-ups.
Incorporating these methods will help Nestle in redeeming themselves because of the
poor publicity they have received and will help them in showing people that they take these
issues seriously and try to act on their mistakes and make positive and ethical changes in their
business which will help the company in practicing positive CSR activities and gain a
positive reputation in the market.

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Conclusion
Nestle is one of the biggest companies in the world and it has been seen that the
company highly focuses on corporate social responsibility. The company tries to mitigate the
different social issues faced by different countries in which they operate which makes the
company highly responsible and a favourite among the customers. However, there are some
practices of the company which are unethical like mislabeling of products and child labor.
Thus, the company needs to look into the matter and consider incorporating the proposed
recommendations which will help the company in overcoming the negative backlash,
ensuring welfare of communities and the environment and also help in gaining a positive
reputation in the market which will help in boosting the sales of company and help the
company in generating profits.