FROM MORAL ARGUMENT TO BUSINESS SENSE

Paul Bulcke, demonstrates through Creating Shared Value, how corporate sustainability has progressed from being a moral argument to making business sense.
Paul Bulcke
Chief Executive Officer
Nestlé
“I believe that sustainability has progressed from being a moral obligation to making business sense.
The ability for a business to grow and perform well in the long-term depends on the collective welfare of the society in which it operates.”
PAUL BULCKE

For Nestlé, the ability for a business to grow and perform well in the long-term depends on the collective well-being of the society in which it operates. A few months after Paul Bulcke’s tenure as CEO of Nestlé began in April 2008, the credit crisis hit its most critical stages, at times threatening the stability of the global financial system. Government intervention prevented that, but the global economy has suffered from the effects since. Bulcke describes the crisis in the financial markets as a crisis of values, where short-termism overpowered long-term thinking: “Too many people and businesses have been seduced by or pressured into delivering on short-term self-serving targets. Leaders should always understand their relationship with society and go back to the basic role of business: value creation for society as a whole – with a long-term perspective.”

Very early on, Nestlé has integrated this notion of respect for society and the environment in which it operates. The Principles of the UN Global Compact have been an integral part of the Nestlé Corporate Business Principles since 2001, guiding the behaviour of its 340,000 employees.

In Bulcke’s view, “The Compact has been a catalyst for reform in many companies by providing them with an established and clear framework on which to base the approach to corporate citizenship.”

But the company goes further in the way it does business. Based on its 150-year-old history, Nestlé is convinced that for a business to prosper over the long term, the communities it serves and in which it operates must prosper as well. This is what the company calls ”Creating Shared Value”. Bulcke is very clear that the consideration of business opportunities and societal needs at every level of the company requires a commitment from the top. “This is why I put Creating Shared Value at the heart of Nestlé’s business strategy, because the ‘How’ matters,” he says.

It is also about focus and making choices: for Nestlé, as a leader in nutrition, health and wellness, there are three clear focus areas: nutrition, evidently, but also water, because quite simply water is the linchpin of food and nutrition security, and rural development, because the overall well-being of farmers, rural communities, small entrepreneurs and suppliers is intrinsic to the long-term success of Nestlé. “This is how we connect with society,” says Bulcke. “We do this in full transparency and with a profound respect for local law, international standards and the needs of people and future generations. The company, in partnership with external stakeholders, has published concrete and time-bound societal commitments related to issues seen as material to its success, as well as for the sustainable development of the communities and countries where it operates. “We meet regularly with NGOs, academics, multilateral agencies, governments and others to listen and learn from their criticisms and encouragement. Our efforts are strengthened by this dialogue,” says Bulcke.

Given its strong case for driving value, Bulcke foresees corporate sustainability in all its forms becoming “business as usual” for all corporations. However, developing a consistent method for measuring the business value of such activity will certainly help win over critics and sceptics. Nestlé embarked on an initial analysis in 2014, and continues to work to develop a consistent method of measuring the business value of Creating Shared Value, as well as to assess the societal impact.


WHAT’S NEXT?
MAINSTREAMING SUSTAINABILITY

Mainstreaming sustainability into the heart of every corporation is the next big step, as Paul Bulcke sees it; and developing a consistent method for measuring the business value of such activity will certainly help win over critics and sceptics.