Nestlé’s Global Corporate Social Responsibility

Abstract

Nestlé enjoys a positive global reputation for its brand and is consistently ranked in the Top 100 global companies for its corporate social responsibility and resource sustainability activities. Its stated goal is to create shared value for its shareholders and for the communities in which it does business. While Nestlé’s broad communication practices might effectively leverage their global reputation, they appear to be less effective at the local level. This paper will analyze their overall strategy and present opportunities where that strategy may be improved at the local level through stakeholder engagement, as shown through a water sourcing issue at a spring in northern Florida.

In the late summer of 2019, a controversy surrounding water bottling rights broke out between a multinational conglomerate, Nestlé, and locals and environmental groups in a small town in northern Florida. At issue, as noted by residents, was water regulations that lead the state to pay to restore water levels at a local spring and river while not receiving any money from companies who pumped water out of the same spring (Swirko, 2019). In a replay of a similar issue from 2018 in California where Nestlé was accused of draining water from an impaired spring (Neuman, 2018), the controversy began locally but soon received national press (Luscombe, 2019).

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Considering that Nestlé has worked to build a reputation as a proponent of sustainable business, and in particular in the water bottling business as a responsible steward of water resources (“Our Impact”), on a global scale, questions arise as to how Nestlé deals with issues that spring up from communities, whether they may be better able to leverage their global reputation on a local scale so that the message isn’t lost, and how they may be able to translate their corporate social responsibility efforts they engage in at a corporate level to engage with stakeholders in the community where they conduct business. Through the example of Ginnie Springs, the aim of this paper will be to analyze Nestlé, its global CSR practices, and local issues that blemish its reputation as well as show that a community-centered communication practice that engages and incorporates input from local stakeholders may help stop those issues from happening or help lessen their negative impact.

Nestlé, Shared Value, and Sustainable Development Goals

With over 250,000 employees worldwide, Nestlé is a multinational conglomerate with operations that reach almost every corner of the globe. Over 2,000 brands seen in 190 countries fit under the Nestlé umbrella, and Nestlé has a presence in a multitude of food and beverage brands, covering coffee, bottled water, baby food, and prepared foods, as well as petcare brands (Martin, 2019).

Nestlé has worked to build a global reputation as a company that aims to create shared value for its shareholders as well as its stakeholders (“Our Impact”). According to Porter and Kramer, in evaluating the consequences of a decision, shared value suggests that the choice should benefit both business and society; a decision that prioritizes one over the other may inhibit the long-term success of both (2006). Furthermore, the concept of shared value is about building social benefit through the recognition of the interdependence of the corporation and society (Porter & Kramer, 2006). From Nestlé’s perspective, creating shared value strikes to the core of how they define themselves, as noted on its website: “Business benefits and positive societal impact must be mutually reinforcing. This is the core of Creating Shared Value. We believe that Creating Shared Value enables us to optimize value for our shareholders and have a long-term positive impact on all stakeholders connected to our business” (“Our Impact”).

In addition to their stated goal to create shared value, Nestlé has strived to make an impact on the United Nations Sustainable Development Goals (“Contributing to the global goals”). Briefly explained, the United Nations, in conjunction with its member states, developed a framework for sustainable development with 17 specific goals to reach by 2030 that aimed to tackle poverty, climate change, environmental preservation, and inequality while spurring economic growth (“Sustainable Development Goals”). Nestlé, along with noting that they helped develop the 17 goals, specifically note and highlight initiatives they tie to three of those goals: Good health and well-being relating to “Nestlé for healthier kids”; Decent work and economic growth relating to “Nestlé needs youth”; and Clean Water and Sanitation, relating to “caring for water” (“Contributing to the global goals”).

Through the efforts in creating shared value and in working toward the UN's Sustainable Development Goals, Nestlé has been able to garner, leverage, and maintain a good reputation at a global level (The Most Reputable Companies in the World, 2019). As the website RankingtheBrands.com suggests, Nestlé further enjoys a relatively positive ranking across myriad categories, including sustainability and its corporate social responsibility (2019). As shown on its website and other channels, Nestlé is able to manage and leverage that reputation to inform its communication strategy.

Communication Strategy

Given Nestlé’s stated goal to create shared value as noted above, one can view Nestlé’s communication practices and presence through that lens. As Aakhus and Bzdak note, the “purpose of engaging stakeholders from the shared value perspective is to find the sweet spot where business and social value come together” (2015). When thinking about where business and society intersect to create that sweet spot, one should consider linkages between the organization and the society that describe how and where each influence the other as well as how those linkages drive a communication practice. Inside-out linkages are at what points the company and its daily operations influence society, whereas outside-in linkages are where an external social culture affects an organization’s operations, both with potentially positive or negative consequences (Porter & Kramer, 2006).

Nestlé’s communications on its website show where they feel those linkages are. Online, they highlight their efforts across a variety of categories, including access to water and environmental sustainability (See Appendix 1 for story examples). Several of the stories relate directly to the communities where they source the water and how Nestlé’s behavior aims to foster sustainability and foster long-term relationships with the communities they operate in. The stories seem to be initiative, rather than product, focused, highlighting their efforts to reduce plastic waste and their business practices that aim to improve the lives of, or have minimal effect on, the people who rely on or are affected by Nestlé’s operations. Broadly speaking, their website serves as a one-way broadcast mechanism without the ability for readers to interact with the material.

These communication practices are also reflective on social media. On Twitter, for instance, while Nestlé has a presence, engagement with consumers seems limited. In recent research conducted on Nestlé’s Twitter activity, the researchers found that about half of Nestlé’s tweets related to corporate social responsibility; 72% related to business practices, 15% to philanthropy, and 13% to product-based initiatives; and most tweets included a link away from Twitter, usually back to Nestlé’s corporate page (Farache, Tetchner, & Kollat, 2018). Of the replies those tweets garnered, only 21% were considered to have positive content while 42% were considered negative, and Nestlé rarely engaged with any stakeholder feedback (Farache et al, 2018). The researchers drew several conclusions: First, the tweet content and the low level of interaction suggested that Nestlé was interested in one-way, broadcast communication, as opposed to two-way symmetrical communication, that drew people back to their website, allowing for more control of messaging; and second, the lack of engagement with stakeholder replies could suggest possible evasion of criticism and prolonged interaction  (Farache et al, 2018). Furthermore, Farache et al surmise that Nestlé may either not have a strategy that encourages dialogue or have “a strategy designed specifically to ignore stakeholders’ comments as per traditional communication methods (2018).

Local Issues

Though their communication strategy may highlight their efforts to create shared value and in sustainable development, one can return to the issue of Ginnie Springs in north Florida to see how a local issue can undermine the global message. As referenced above, at issue was the potential for Nestlé to not pay for water from a source that Floridian taxpayers were paying to restore, protect, and replenish (Davidson, 2019).

Given how quickly a story can spread, what was at first a local story soon became national, with stories on NPR, Newsweek, and The Guardian, for example. Notably, activists published an editorial in The New York Times noting the state of the aquifers and springs that provide the water for the water bottling plants and Nestlé’s plans to drain over one million gallons of water from a source that was already unsustainable and undergoing recovery programs (Sainato & Skojec, 2019). Nestlé responded with a letter to the editor that countered claims as well as with editorials in The Orlando Sentinel and The Gainesville Sun local papers (“Understand the Ginnie Springs Florida Water Use Permit,” 2019). Nestlé followed these editorials with a lengthy FAQ on its Nestlé Waters website to refute each part of the controversy from their perspective (“Facts About Our Operations in Florida”, 2019).

However, while this FAQ may have been thorough in its approach and hit upon many issues, the intended audience may not have seen it, and they may have reacted to it skeptically. A review of Twitter feeds from Nestlé and associated Nestlé Waters Twitter feeds suggests the rebuttal was sparingly shared, and when it was used, it was a one-way broadcast message that required people to click the link for a Nestlé website (See Appendix 2 for more information). In addition, Farache et al, as well as other research, note that readers may be skeptical of certain kinds of CSR communication, especially those messages that are seen as self-promotion (2018; Du, Bhattacharya, & Sen, 2007). Overall, activists might have outnumbered Nestlé’s presence on Twitter, particularly with this issue, suggesting that there may be room for improvement.

Communication Suggestions

Even though Nestlé may have a relatively favorable global reputation, local issues, as noted by Griffin, can have national and international consequences, considering the means by which people have to share and spread information (2008). In addition, research by Farache et al suggest that two-way dialogue and product-related CSR discussions may increase engagement and positive response (2018). Nestlé may thus benefit both from moving away from broadcast, one-way communication toward activities that encourage input and dialogue at a local level in an effort to enhance stakeholder engagement as well as from using sites like Twitter to foster those types of activities (Farache et al, 2018).

Given Nestlé’s current practices, the following suggestions may help to reframe issues to allow for improved stakeholder engagement to solve problems collaboratively, especially at the local level; use Twitter in a way that encourages two-way communication and counters local issues; and coordinate messages across channels. 

Aakhus and Bzdak characterize communication design practice as a framework of rules, roles, processes, and operationalization that allow us to invent forms of communication activities that guide engagement among stakeholders and how people communicate and reason together (2015). It may be beneficial to reframe how the stakeholders of the issue in Ginnie Springs are interacting. The issue is twofold: first, Nestlé is taking water from a source in amounts that the source can’t handle, and second, the perceived unfairness in not paying for the water, especially considering that Floridian taxpayers are paying for resource recovery and replenishment programs at that source without receiving compensation for it (Swirko, 2019; Luscombe, 2019). Instead of engaging in a Twitter battle or writing FAQs and editorials that may not be hitting the mark or reaching the intended audience, it may be best to provide a communicative context for the community, environmental activist, and Nestlé stakeholders, though they may be adversarial and have divergent interests, to focus on the two issues and work to develop mutual solutions. What may emerge could be a program through which Nestlé pays for replenishment and recovery programs for the water sources. The solution, and the work to get there, could lead to communications about business practices that regarded stakeholder input as important.

Research by Etter suggests that an engagement strategy, where a company proactively communicates with other Twitter users and thereby creates the space for two-way interaction, may lead to better relationships between stakeholders and the company (2014). Given this, and considering the research conducted by Farache et al (2018), it may be helpful for Nestlé to  show a greater willingness to directly engage with those who comment on their messages and other users. Doing so may increase engagement and perhaps serve as a starting point for problem solving.

The Nestlé website highlights a great deal of positive efforts the organization engages in. However, it is one thing to tell people of the activities, but another to show people how it relates to the people who benefit from those activities and how it may relate to them. A case in point is Nestlé Waters’ work to provide water access points for residents close to a water bottling factory in Nigeria to improve conditions in order to encourage school attendance (Galli, 2019). This activity, rather than only getting a passing mention, could be reframed into a compelling story told from a resident’s or the school’s perspective.

In the case of the stories that do have a local connection with a personal perspective, such as the one about a boy in Pakistan, Ammar, being able to collect clean water from a water access point provided by Nestlé (Khalid, 2019), it may be beneficial to then cross-share those stories across a variety of Nestlé channels, as it’s otherwise a missed opportunity. In the case of this story, it was shared on Facebook but not across other social media (See Appendix 3).

Conclusion

As noted previously, Nestlé benefits from a positive global reputation for its brand and for its efforts toward sustainable business practices and aims to create shared value for its stakeholders and shareholders. However, a review of its communication practices, particularly through its website and on social networks such as Twitter suggests that it engages in one-way, broadcast messages that may not engage stakeholders effectively, and they may not be effectively leveraging their positive global reputation. This may be seen when local issues arise, as it did with water bottling issues at springs in northern Florida. Nestlé may benefit from reframing contexts of issues and from creating the communication mechanisms that allow for stakeholders to provide input to problems and encourage two-way communication.

References

Aakhus, M., & Bzdak, M. (2015). Stakeholder engagement as communication design practice. Journal of Public Affairs, 15(2), 188–200. doi:10.1002/pa

Contributing to the global goals. (n.d.). Retrieved from https://www.nestle.com/csv/what-is-csv/contribution-global-goals.

Davidson, J. (2019, September 11). Nestlé Plans to Plunder 1.1M Gallons a Day from Florida Natural Springs. Retrieved from https://www.ecowatch.com/ginnie-springs-nestle-bottled-water-2640064483.html?rebelltitem=1#rebelltitem1.

Du, S., Bhattacharya, C. B., & Sen, S. (2007). Reaping relational rewards from corporate social responsibility: The role of competitive positioning. International Journal of Research in Marketing, 24(3), 224–241. doi: 10.1016/j.ijresmar.2007.01.001

Etter, M. (2014). Broadcasting, reacting, engaging – three strategies for CSR communication in Twitter. Journal of Communication Management, 18(4), 322–342. doi: 10.1108/jcom-01-2013-0007

Facts About Our Operations in Florida: Nestlé Waters North America. (2019). Retrieved from https://www.nestle-watersna.com/en/nestle-water-news/statements/ginnie-springs-florida-q-and-a.

Farache, F., & Tetchner, I. (2018). CSR Communications on Twitter: An Exploration into Stakeholder Reactions. In J. Kollat (Ed.), Corporate Responsibility and Digital Communities An International Perspective towards Sustainability (pp. 145–163). New York: Palgrave Macmillan.

Galli, C. (2019). Water for all. Retrieved from https://www.nestle.com/stories/safe-water-sanitation-hygiene-for-all.

Griffin, A. (2008). New strategies for reputation management: gaining control of issues, crises and corporate social responsibility. Philadelphia: Kogan Page Ltd.

Khalid, M. (2019). Precious water. Retrieved from https://www.nestle.com/stories/free-access-clean-drinking-water-pakistan-factory.

Luscombe, R. (2019, August 26). Nestlé plan to take 1.1m gallons of water a day from natural springs sparks outcry. Retrieved from https://www.theguardian.com/business/2019/aug/26/nestle-suwannee-river-ginnie-springs-plan-permit.

Martin. (2019, September 20). The History of Nestlé. Retrieved from https://www.cleverism.com/the-history-of-nestle/.

The Most Reputable Companies in the World. (2019). Retrieved from https://insights.reputationinstitute.com/reptrak-reports/global-reptrak-2019.

Nestlé. (2019). Retrieved from https://www.rankingthebrands.com/Brand-detail.aspx?brandID=156.

Neuman, S. (2018, June 28). Nestlé Offered Permit To Continue Taking Water From California Watershed. Retrieved from https://www.npr.org/2018/06/28/624156334/nestl-offered-permit-to-continue-taking-water-from-california-stream.

Our impact. (n.d.). Retrieved from https://www.nestle.com/csv.

Porter, M. & Kramer, M. (2006, December). Strategy & Society: The link between competitive advantage and Corporate Social Responsibility. Harvard Business Review.

Sainato, M., & Skojec, C. (2019, September 15). Bottled Water Is Sucking Florida Dry. Retrieved from https://www.nytimes.com/2019/09/15/opinion/bottled-water-is-sucking-florida-dry.html.

Swirko, C. (2019, September 19). Opposition grows to Ginnie Springs water bottling by Nestle. Retrieved from https://www.gainesville.com/news/20190824/opposition-grows-to-ginnie-springs-water-bottling-by-nestle.

Sustainable Development Goals .:. Sustainable Development Knowledge Platform. (n.d.). Retrieved from https://sustainabledevelopment.un.org/index.php?menu=1300.

Understand the Ginnie Springs Florida Water Use Permit: Nestlé Waters NA. (2019, September 25). Retrieved from https://www.nestle-watersna.com/en/nestle-water-news/statements/ginnie-springs-florida-seven-springs-permit-renewal.

Appendix 1

AS shown in the following screenshots, Nestlé’s communications regarding its sustainability initiatives and other corporate social responsibility activities is extensive.

(Source: https://www.nestle.com/stories#/category/featured-stories/1)

(Source: https://www.nestle.com/stories#/category/featured-stories/1)

Appendix 2

A closer review of Twitter relative to the issue of water bottling at Ginnie Springs and other local springs suggests that activists against Nestlé and their practices there outnumber Nestlé’s attempt to counter it. For example, a search for the keywords “Nestlé” and “Florida” returned mostly messages from activists (https://twitter.com/search?q=nestle%20florida&src=typed_query&f=live), with some leading back to petition and environmental watchdog sites. However, the main Nestlé channels are not well represented, and the response to The New York Times editorial titled  “Facts about our operations in Florida” was hard to find. Searches on Twitter for “facts about our operations in florida,” “Is Bottled Water Sucking Florida Dry?” and others associated with the statement produced no results from Nestlé.

Appendix 3

The story about Ammar by Maryam Khalid was posted on the Nestlé website here, yet there was only another mention of it, on a Nestlé Facebook page. Stories such as this, which personify a local issue at the stakeholder issue, can benefit from being repurposed and cross-shared across a variety of social and other media.