Making A Difference Through CSR:

Meeting the Challenges

CSR as Business Strategy

~ the NESTLÉ perspective
Presented by:
Stephane Alby
Executive Director, Finance & Control
Nestlé (Malaysia) Berhad
Making A Difference Through CSR:
Meeting the Challenges

An Introduction
An introduction
Nestlé’s Concept of CSR

Conclusion
 NESTLÉ ~ An Introduction

NESTLÉ MALAYSIA
The NESTLÉ Group

• • Started business operations in 1912

Founded in 1866 by Henri Nestlé
• Public listed on Bursa Malaysia
• Nestlé is present in over 100 countries

• World’s largest food manufacturer, • Malaysia’s leading halal food

headquartered in Switzerland company

• Employs 253,000 people worldwide • Employs 4,000 employees

• 511 factories in 86 countries • RM3.1 billion in sales turnover in

2005
• Sales of 32 billion individual products
each year • 8 Factories; 6 Sales Offices and 1
National Distribution Centre
• World’s largest private nutrition
research facility
• World class products & brands:
• 17 R&D Centers worldwide

• RM5 billion investment annually on

R&D
 Solid CSR Foundation

- Nestlé was established as the result of the humanitarian act of our

founder, Henri Nestlé. He developed a cereal milk based product in 1866
to save an infant’s life as the baby could not be breastfed.

-CSR is part of Nestlé’s DNA and is inherent in Nestlé’s Management &

Leadership Principles ~ to create long-term value for society

-CSR is built into the Nestlé Corporate Business Principles and is a part of
its business strategy.

-Nestlé supports The UN Global Compact’s Principles which are

incorporated in the Nestlé Corporate Business Principles ~ as a guide for
our business practices.
 The Role of Business and CSR

For Business: For Society:

• reliable, high quality sourcing
• improved government functioning –
regulatory
• skilled, loyal workforce
• superior products which successfully
compete
• improved earnings by suppliers
• improved skills and earnings, job stability –
employees
• higher quality of life – consumers
• greater stability, economic and social
development - whole society

Built into Corporate Strategy

Reflects mutually dependent
relationship: business and society
 The Concept of Shared Value Creation

Mark Kramer, Senior Fellow, Center for Business and

Government, John F. Kennedy School of Government,
Harvard University and Managing Director, Foundation
Strategy Group (FSG)
 Shared Value Creation

Through Shared Value Creation, a company links its

operations to generating long-term value both for its business
and for society as a whole, and defines its success in terms of
internal financial returns and external social and economic
results. Ultimately, creating shared value acknowledges both
the work that corporations need to do to reduce negative
impacts on society as well as, and more fundamentally, how
they can be part of progress on global challenges.
 Shared Value Creation

– Create long term value for Business and Society

– Mutually dependent relationship: business and society

– Key part of business strategy

– Value creation through the value chain: Agricultural suppliers, employees and associates, customers and society at large

– Investments must be good for the country and the company

– Following codes of conduct necessary, but not sufficient

– To create Share value, you have to create Shared Value with society
 Shared Value is applied across Nestlé's
Value Chain
Agriculture and Manufacturing Products and
Sourcing and Distribution consumers
Value Purchasing Practices Environmental, Safety New/renovated products
chain and Labour Practices for nutrition health and
impact wellness

Better Food Safety Increase knowledge and

Growth Agricultural and awareness for healthy
Standards and
context Supplier Development lifestyles
Workforce Development

Nestlé Raw material access at Premium food Profitable growth from

benefit specified quality and manufacturer superior product
foreseeable price benefits

Society
Higher food output Higher food production
benefit Wider access to food,
using fewer resources standards and nutrition and health
 Shared Value Creation

Each Nestlé market has its own CSR projects – with the
overall umbrella theme of Shared Value Creation which
helps ensure that we meet the U.N. Millennium
Development Goals. Throughout the Group, we
try to ensure that one or more of the following goals are met :
• Eradicate extreme poverty and hunger
• Achieve universal primary education
• Promote gender equality and empower
women
• Reduce child mortality
• Improve maternal health
• Combat HIV/AIDS, Malaria and other
diseases
• Ensure environmental sustainability
• Develop global partnerships
 OUR CSR WORK IN MALAYSIA

• Extensive range of CSR initiatives in Malaysia which focus

on education and improving the quality of lives for less
privileged communities.
• Some of our commitments include :
– Contract farming for the hard-core poor;
– Setting up of kindergartens in rural areas;
– Providing learning resources for the physically and mentally
challenged;
– Bridging the digital divide and promoting the learning of English in
rural schools via ICT;
– Mentoring of SMEs in the food industry;
– Helping to provide sustainable livelihoods for single mothers
 Improving Farmers’ Income in Kelantan

Contract Farming of Chillies

– Nestlé works closely with the local farmers association in sourcing for quality
agricultural produce and provide technical expertise to ensure better yields
– Nestlé provides transfer of knowledge and assistance to the farmers on Good
Agricultural Practices and helps them be self-sufficient and independent.
– Created partnerships for sustainable agriculture.
– Access to raw materials from a reliable source and meeting Nestlé quality
standards.
– Project has won the Prime Minister’s Award for Socio-Economic Development,
– Farmers were accorded the respected and acknowledged SALAM accreditation
for excellence in farming practices in 2005 – which is the official recognition
that Good Agricultural Practice (GAP) is implemented and abided by.
 Investing in the Future of the Food Industry

The Nestle Food Mentoring Programme for SMEs

- The programme was initiated in 1999 to provide assistance to small-

medium companies in the food industry to attain world class standards
through the sharing of knowledge and experience with Nestlé

- Range of mentoring topics covered including halal certification;

HACCP; marketing; legislation; sourcing; etc

- To date, the programme has successfully trained more than 2000

participants from 700 companies
 INTERNALISING OUR CSR WORK

In an effort to internalise the CSR philosophy of the company, we unveiled a

company-wide initiative in 2005 ~ the Nestlé REACHING OUT to COMMUNITY &
KIDS employee volunteer programme (or Nestlé ROCKS for short) to further
encourage employee involvement in the communities where the Company
operates, which is aimed at reaffirming and strengthening our commitment to CSR.

• Nestlé ROCKs provides an avenue for all our employees to be involved in Nestlé’s
CSR programmes while giving them the opportunity to fulfil their own social or
community obligations. This is the first initiative that is launched nationally in all work
locations involving some 3,500 employees, and allows our employees to dedicate 16
hours of their work time annually towards CSR activities, endorsed by the Company.

• Currently, there are 28 homes, orphanages and charitable organisations that Nestlé
has been supporting, where they may volunteer their services.
 The NESTLÉ Concept of
Corporate Social Responsibility

Conclusion:
The CSR Hierarchy
CREATE
SHARED VALUE
Reduce poverty,
Improve health
Empower people

SUSTAINABILITY
Protect the future

COMPLIANCE
Laws, Business Principles, codes of conduct
 Thank You

For further info, please visit:

www.nestle.com
www.nestle.com.my
Or call Freephone:
1-800-88-3433