Business principles in action - nutritional labelling A Nestlé case study
Page 2: Ethics and business principles
In business, ethics are the moral principlesor values held by those within the organisation. These support and influence its decision-making. In order to be ethical in its operations, Nestlé's decisions are guided by a series of business principles. In order to be ethical in its operations, Nestlé's decisions are guided by a series of business principles. The well-being of consumers and employees is central to its business principles. For example, one principle is: 'Nestlé recognises that its consumers have a sincere and legitimate interest in the behaviour, beliefs and actions of the Company behind its brands in which they place their trust, and that without its consumers the Company would not exist.' Market research showed that consumers wanted to be better informed so they could make the right food choices for their health. The development of GDA labelling on the front of packs shows Nestlé's consumers that the company is concerned about their health.
Nestlé has also developed a series of business principles focused on communications with consumers. Two of these are:
'Nestlé consumer communication should reflect moderation in food consumption and not encourage overeating. This is especially important regarding children.
Nestlé consumer communication must [match the desire for] healthy, balanced diets. Our advertising must not imply the replacement of meals with indulgence or snack foods, nor encourage heavy snacking'.
By making the symbols immediately visible on the front of packs, Nestlé helps consumers to recognise and understand the nutritional content of the food they buy at a glance. This has had a positive impact on the reputation of the company. Consumers can see that Nestlé is behaving responsibly and is communicating effectively with them.
As a responsible Nutrition, Health and Wellbeing company, Nestlé is keen to promote and facilitate healthy living for its own employees. Nestlé linked the launch of Guideline Daily Amounts on the front of packs with an internal communication programme to inform employees about GDAs and the labelling system. This helped to motivate employees as it showed that Nestlé cared for their well-being and that of their families.
Creating Shared Value
Nestlé's business principles and its approach to corporate responsibility were the beginning of what is known within Nestlé as 'Creating Shared Value'. The process of Creating Shared Value has two important elements. It links the needs of shareholders and consumers to the need to respect people and the environment. Creating Shared Value means that Nestlé looks at the impact of each corporate activity on the wider environment. This attitude is at the heart of everything that the company does. This process starts when products are sourced from various parts of the world. It continues through the manufacturing and distribution of products. It ends when products are distributed to customers (for example, supermarkets) and ultimately sold to consumers (the public).
Each step in this value chain could have harmful consequences if not managed properly. For example, without sustainable agricultural practices the natural resources of farms worldwide might be damaged. By embedding corporate responsibility in its business practices in this way, Nestlé is able to contribute positively to societies across the globe.
Nestlé | Business principles in action - nutritional labelling