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13 June 2016
Socio-economic value
creation and analysis
at Nestlé
Integrated Value Assessment 2.0
Bern, 26 May 2016
Christian A. Vousvouras
2 26 May 2016
Nestlé’s business activities
3 26 May 2016
Nestlé’s business activities
4 26 May 2016
Nestlé’s business activities
Nestlé facilities Tier-1 suppliers Upstream suppliers
5 26 May 2016
Sustainability drives stakeholders’ trust into Nestlé
• Academic and non-profit
studies show correlation
between capital market
performance and sustainability
investments
- Total shareholder return
- Reduced firm idiosyncratic risk
- Bonds: longer maturities, lower
rates
• Disclosure of additional CSV-
related data may lead to
superior valuations and
greater shareholder
engagement
- Fewer lawsuits, petitions
- Fewer activist investors
• Employee engagement is a
source of competitive
advantage, leading to higher
growth and stock performance
• Bain research shows
employees view their
company’s sustainability
agenda as a critical factor in
their engagement
- 91% of employees rate
sustainability extremely or
somewhat important
• CSV helps secure “license to
operate”
• Positive business reputation
can open up new
geographies, smooth
operations and create
opportunities
• Fewer adverse regulatory
actions
- Fewer government
investigations
- Greater public goodwill in the
event of a crisis situation
• Part of proactive constituency
management
• Shared value leads to
increased profitability:
- Top-line revenue (greater than
any increased costs) driven by
new product lines, access to
new geographies, etc.
- Lower costs driven by reduced
primary resource consumption
(without impact to revenues)
• Drives brand loyalty and
customer engagement
CAPITAL MARKETS LABOUR MARKETS LICENSE TO OPERATE
DIRECT/INDIRECT
BUSINESS METRICS1 2 3 4
On major indices / lists1, impact
unclear
Limited internal
researchImpending issues with water
Great progress, value not well
measured
Nestlé current
status:
1 Dow Jones Sustainability Indexes, Robeco Sam Sustainability Investing Annual Yearbook
6 26 May 2016
Nestlé Creating Shared Value
7 26 May 2016
Nestlé Creating Shared Value
8 26 May 2016
Nestlé Creating Shared Value
Engage with suppliers,
specifically those in agriculture
9 26 May 2016
Nestlé Creating Shared Value
10 26 May 2016
Natural Capital Protocol
11 26 May 2016
Social Capital Protocol
A deep-dive into Human Capital:
employment, skills and safety
12 26 May 2016
Cause effect chain definition
13 26 May 2016
Potential Scope
14 26 May 2016
Results Natural Capital
Coffee
CocoaSugar
Wheat
Rawmilk
Beef
Pork
Sugar
Powdermilk
Cheese Milk
Chicken
Europe
15 26 May 2016
Results Social Capital
Safety
16 26 May 2016
Limitations
Absolute Relative Trend
17 26 May 2016
Thank you
