The environment is a key subject that affects us all. Protection of the environment and the move towards sustainable development remains a responsibility that must be shared between the public, governments and the private sector. Following years of work on environmental issues dating back to the 30’s, in 1996 the Nestlé Environmental Management System (NEMS) was introduced which consolidates all environmental measures taken by the Nestlé Group. NEMS is now used to ensure continuous improvement in Nestlé’s environmental performance covering all its business activities.
This case study examines the background to sustainable development, the environment and its protection. It also looks at how Nestlé S.A., the world’s leading food company, developed a policy and current business practices that reduce the company’s effect on the environment.
Sustainable Development
The latter part of the twentieth century saw an increasing concern for the environment. The concept of sustainable development (as defined by the World Commission on Environment and Development in 1987) is: “development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs.“
Rio and After
By the early 1990s, there was considerable pressure for governments to create agreements concerning the environment and its protection. In 1992 the United Nations Conference on Environmental and Development (UNCED) was held in Rio de Janeiro. The main outcome of the conference was Agenda 21, which marked an important landmark in the sustainable development fight, and inter country co-operation.
Agenda 21 was the main document signed at the conference. It was over 800 pages long, and represented a new global commitment to sustainable development. It was not a legally binding document, but was devised as a working plan which countries would follow. The conference marked the start of global cooperation, which was needed to deal with the many issues, including concern for the environment.
The Sustainable Business
The concept and support for, sustainable development is growing. Many businesses have integrated a strategy of sustainability (taking into account its 3 main aspects – economic, environment, social). It makes good business sense for companies to be environmentally friendly as improved efficiency in manufacturing in turn leads to a more efficient use of natural resources. Operating efficiently translates to competitive advantage for business and supports the economic pillar of sustainability as well. Therefore, all aspects of sustainability are seen as complementary, and mutually interdependent.
Agenda 21 states that responsible businesses should play a major role in improving the efficiency of resource use. This can result in minimising waste and protecting human health and environmental quality. For a business to be environmentally sustainable, the company must start by becoming environmentally aware from the inside. The whole ethics and culture of the organisation must reflect those of sustainable development. This includes what the company does, how it treats its workers, how it deals with other organisations, how the managers act and what messages these actions send out. Sustainable Development is an integrated approach including economic, environmental and social aspects. Therefore all three are to be put at complementary levels of priority each considering effects of the other components.
Agenda 21 lays out a seven point plan for businesses to start changing values and perceptions. It states that they should:
- develop policies that support operations and products that have lower environmental impacts
- ensure responsible and ethical management of products and processes from the point of view of health, safety and the environment
- make environmentally sound technologies available to affiliates in developing countries without prohibitive charges
- encourage overseas affiliates to modify procedures in order to reflect local ecological conditions and share information with Governments
- create partnerships to help people in smaller companies learn business skills
- establish national councils for sustainable development, both in the formal business community and in the informal sector, which includes small scale businesses
- increase research and development of environmentally sound technologies and environmental management systems.
Nestlé As A Sustainable Business
As the world’s largest food company, Nestlé S.A. is dedicated to providing consumers with the best food throughout their lives. The primary role of the Company is the transformation of natural resources into finished products that meet consumers’ expectations for safety, quality, convenience and value. Naturally, Nestlé is committed to sustainable development and environmentally sound business practices. The key drivers for Nestlé’s worldwide environmental approach are:
- total compliance with all laws and regulations in all countries where it operates
- that Nestlé seeks to provide a leadership role – to establish the benchmark for good business practice
By committing resources, both human and financial, to secure environmental targets, including:
- employing new technologies and processes
- measuring the costs and benefits to the business of its activities
- ensuring employees are aware of best practice.
To be effective a programme of environmental improvement must be supported by practical management systems. Nestlé’s worldwide approach, therefore, has been to:
- set targets for environmental improvements
- monitor progress
- audit results
- review targets.
Progress To Date – An Example From Nestlé UK
In the UK a series of surveys at all Nestlé UK locations formed the basis for a programme of continuous improvement. Action plans were developed for each Nestlé UK site, including capital expenditure plans for environmental protection.
Nestlé´s Environmental Management System
NEMS is an organisational tool at the heart of Nestlé’s programme for the environment and sets the framework for all measures applied.
The NEMS objectives include:
- To provide a systematic approach that ensures compliance with Nestlé’s environmental policy, relevant laws and Nestlé’s operational standards.
- To ensure the continuous improvement of Nestlé’s environmental performance, e.g. through the conservation of natural resources and the minimisation of waste.
- To achieve compatibility with international voluntary standards on environmental management systems.
- To build mutual trust with consumers, governmental authorities and business partners.
NEMS is being implemented throughout Nestlé S.A.’s entire operation.
Ways In Which Nestlé Is Doing Better By The Environment
Nestlé UK’s commitment to sustainable business practice is illustrated by two business examples of areas where improvements are being made:
Packaging
Packaging is essential to maintain the high quality of the products. Nestlé continuously reviews packaging and, where possible, reduces the amount used. This results in saving on materials such as glass and plastics. Nestlé is also playing its part in meeting national targets for the recovery and recycling of packaging waste. Nestlé has established a set of criteria for evaluating packaging. These are:
- Is the packaging appropriate for the product?
- Is the size of pack justified?
- Are there any unnecessary components within the pack?
- Could any of the components be reduced in weight or thickness?
- Could the manufacture and construction of the outer packaging be made simpler?
- Is the material reusable or recyclable? Between 1991 and 2000 Nestlé UK has been able to reduce its consumption of materials by up to 10
Major achievements in this area included:
- Removal of the inner plastic sleeve from Kit Kat Bumper packs saves 160 tonnes of plastic per year.
- A reduction in the thickness of 200g Nescafé jars saves 1041 tonnes of glass per year.
- A reduction in thickness of base material for chilled dessert pots saves 150 tonnes of plastic over a two year period.
Energy management
As an integrated part of its environmental policy, Nestlé UK is committed to responsible energy management and seeks to use energy as efficiently as possible. This is done to:
- improve cost-effectiveness, productivity and working conditions
- prolong the useful life of fossil fuels
- avoid unnecessary expenditure
- prevent related emissions to the environment.
This involves seeking to buy fuels at their most economic cost and then to use them as efficiently as possible. It also means a reduction in pollution, and less dependence on non-renewable resources. In the short-term this involves gaining better control over energy consumption. Different operations are measured to determine energy usage. Nestlé is investing in energy saving measures as well as staff that are properly informed. Carbon dioxide is the most significant of the greenhouse gases believed to be responsible for the effects of Global Warming. The Kyoto Conference on Climate Change (1999) has meant that the UK and many other Governments have entered into a legally binding agreement to reduce greenhouse gases. In addition, the Government has set a unilateral target of 20 reduction of carbon dioxide by 2010 from 1990 levels. This is a summary of the steps taken by Nestlé UK since 1994 to reduce greenhouse gas emissions:
- the replacement of a coal-fired steam raising plant with a gas-fired combined heat and power plant at York, saving 45,000 tonnes of CO2 per year
- similar changes at Dalston – saving 24,000 tonnes
- Ashbourne – saving 9,000 tonnes
- Fawdon – saving 12,500 tonnes.
All figures shown relate to savings made per year.
As a company which produces frozen, chilled and other perishable foods, refrigeration is essential to many parts of Nestlé’s production and distribution systems. Nestlé is progressively cutting refrigerants that are potentially harmful to the environment. In the late 1980s a survey indicated that up to 10of refrigerants used by the company in the UK were CFCs. The decision was made to phase out CFCs in all but small, hermetically sealed systems and today this programme is complete. Nestlé Policy and the Environment Protection Act all forbid the deliberate discharge of refrigerants into the atmosphere. Where refrigerant has to be removed from a system and cannot be immediately reused, it is recovered and sent for recycling or disposal by suitably qualified companies.
Conclusion
World governments are increasingly realising their responsibility to develop and implement shared solutions to global environmental issues. At the same time, responsible businesses like Nestlé S.A. are taking on a leadership role. This should drive forward changes in policy and practice which will help us all to enjoy a sustainable future.