NESTLE:

CREATING SHARED VALUE

Abdul Hayee 20110166

Azka Asad 20110198
Haaris Cheema 20110079
Minahil Javaid 20110299
Zainab Salam 20020256
Zainab Soomro 20110178
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Introduction
Operating in an increasingly competitive world, the importance of factors such as profitability
and corporate social responsibility has varied to a great extent. Traditionally, very little
importance has been given to responsible business practices. By responsible business practices,
we refer to those business activities whose purpose is to benefit individuals, communities and the
environment. In today’s world, corporate social responsibility programs have been widely
adopted by companies and for some of them these are a part of their vision, mission and core
values.

Some companies, however, have made far more efforts in this regard and have emerged as
industry leaders. Nestle is one of these companies and has a purpose to improve the quality of
life and to contribute to a healthier future for different age brackets via their products as well as
their activities.

Research Questions
We had to research questions upon which our whole project was based.

Q1. How is responsible business evolving within responsible business leaders in Pakistan?

Q2. What tensions exist therein and how are they overcome?

Purpose
The primary aim of this research is to examine what factors influence the evolution of medium to
large scale companies into responsible business and to identify the process of this evolution. This
research will therefore shed light on the responsible practices of Nestle and how the paradoxes of
belonging, learning, organizing and performing apply in the company’s context.
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Literature Review
Abstract

Over the years there has been an evident shift by many large-scale organizations towards
responsible business practices. A sound reflection of corporate ethical and responsible practices
is their explicit engagement in Corporate Social Responsibility (CSR) activities. Corporate social
responsibility is the commitment of a business to contribute to sustainable economic
development, by working with employees, their families, the local community and society at
large to improve their quality of life. The purpose of this study is to investigate the factors that
make (or allow) medium and large-size companies in Pakistan to evolve into responsible
businesses and to charter the process of their evolution. In order to contribute to the existing
literature, we offer a paradox perspective on the development and incorporation of responsible
business practices by Nestle Pakistan. A cross sectional qualitative research has been conducted
and data has been collected through interviews. The findings suggest that there are various
paradoxes that explain the transformation journey of Nestle from an irresponsible business to a
responsible one. Other companies can take Nestle as an inspiration and adopt its paradox
approach to sustainability for a better future.

Literature Review

What are responsible businesses?

Responsible businesses choose to take responsibility for their corporate activities and aim to
have a positive impact through their activities on the environment or community. One indicator
of ethical, responsible business practice is explicit engagement in Corporate Social
Responsibility (CSR) activities. “Corporate social responsibility is the commitment of business
to contribute to sustainable economic development, working with employees, their families, the
local community and society at large to improve their quality of life” (Holme & Phil Watts,
2000). Glavas (2016) defined CSR as “caring for the well-being of others and the environment
with the purpose of also creating value for the business. CSR is manifested in the strategies and
operating practices that a company develops in operationalizing its relationships with and impact
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on the well-being of all of its key stakeholders and the natural environment”. The definition of
CSR has both economic and ethical considerations. The economic aspect is catered by the
environmental sustainability development and the ethical side is met by working responsibly
with company stakeholders. (Cetindamar 2007). First let’s take a look at the economic side of it.
Corporations cannot deny the depletion of natural resources and that it is very unlikely to come
up with a solution in the future. Therefore, businesses should understand the importance of
sustainability and establish cooperate environmental responsibility. Corporate environmental
responsibility encompasses "environmentally friendly actions not required by law, also referred
to as going beyond compliance, the private provision of public goods, or voluntarily internalizing
externalities". (Gănescu, C., Dindire) Sustainability efforts by corporations are directed in a way
to lessen the impact of business practices on the natural environment and should revolve around
socio economic and environmental factors to tackle the organizational challenges involved in a
meaningful way. A sustainable corporation is the one that creates profit for its shareholders while
protecting the environment and improving the lives of those with whom it interacts. (W Savitz,
A., Weber, K., 2006). “The development of organizations’ CSR is not an overnight business.
CSR is a process that organizations need to follow the paths of working in collaboration with all
stakeholders.” (Aseghehey, 2018) The companies should be encouraged to voluntarily adopt
ethical and responsible behavior instead of forcible actions taken due to government regulations.
Stakeholder management aims to make companies accountable to not only their stakeholders, but
all those people influenced by their activities such as customers, suppliers, partners etc. Lastly,
the network effect is all about properly executing responsible and ethical behavior by spreading
information and bringing companies together to understand and learn how other companies are
conducting corporate responsible practices. (Cetindamar 2007)

Factors that make/allow companies undertake responsible behavior

Corporate social responsibility has grown significantly over the years. It has not only become
popular in the business world, but its benefits have also been recognized by consumers, political
leaders, non-governmental organizations (NGOs), media, and many other institutions. Studies
show that consumers would switch brands and buy from companies that support a certain social
cause despite high prices or economic recession. Considering the rise in consumer demands for
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responsible business activities it is extremely important for firms to undertake corporate social
responsibility. With help from traditional and social media, corporate communications contribute
to establish a good corporate citizen image that is caring about important stakeholder issues.
“Specifically, it enhances brand credibility, brand equity, reputation, positive attitudes toward
companies, purchase intention, customer loyalty and overall evolution of companies.” (Taylor &
Francis) One of the key elements of strategic CSR management is visibility. Companies aim to
effectively communicate their social responsibility initiatives through annual reports, codes of
conduct, internal communications, and their official websites. However, the most effective tool
for businesses to reach their target audience is advertising. Perks et al. (2013) define CSR
advertising as “a technique that projects the organization's CSR image disclosing its social and/or
environmental programs, actions or stances”. (p. 1882) Advertising influences consumer
perceptions about businesses by displaying the desired corporate identy. Therefore, business
leaders and managers take interest in CSR advertising to build effective communication with
today’s socially conscious consumers. Companies today do not consider CSR practices as one-
time events, but instead integrate them into their core business strategies to gain competitive
advantage. Companies use CSR advertising to uniquely position themselves in the market and
differentiate themselves from their competitors. (Taylor & Francis)

The concept of CSR has evolved from a marketing strategy tool to corporate citizenship or
sustainable business practices. The development of business sustainability models is essential for
the businesses involved in corporate environmental responsibility. To achieve sustainability in
business networks, organizations need to take a much broader perspective (paradox perspective)
to demonstrate chain custody where environmental and social aspects extend beyond
organizational boundaries. (Carter, C.R., Rogers, D.S., 2008). A paradox theory can also be used
to develop corporate sustainability. A Paradox theory in management posits that paradoxes, i.e.,
‘‘persistent contradiction between interdependent elements’’, are ubiquitous phenomena in
organizations, resulting in tensions between various aspects that ‘‘seem logical in isolation but
absurd and irrational when appearing simultaneously’’. “A paradox perspective on corporate
sustainability accommodates interrelated yet conflicting economic, environmental, and social
concerns with the objective of achieving superior business contributions to sustainable
development “. (Hahn, Figge, Pinkse, & Preuss 2017). Successful management of business
sustainability must involve coordination of product design, manufacturing, delivery, distribution
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and disposal throughout the product life cycle. (Manrique, S., Ballester, M., n.d. Sustainability).
Firms should make environmental policies that focus on supply and demand management in
terms of the entire value process. Environmentally-conscious supply management would enable
better waste management and inventory control through lean manufacturing, reuse,
remanufacture, and recycling, as well as a focus on product design for disassembly.
Remanufacturing strategies can greatly reduce environmental damage if they are properly
planned and executed in an efficient manner. On the other hand, environmentally-conscious
demand management requires strategies that would reduce reverse supply, including better
product design, precision in demand forecasting, and customized development and delivery.
(Sustainability and business-to-business marketing, 2010). An effective reverse logistics allows
the company to take the advantage of inventory reduction and distribution cost salvage to
improve customer satisfaction. (Lee, C.K.M., Lam, J.S.L., 2012). Firms should carefully monitor
their purchasing policies as they are primarily based on value added or natural resources and can
be used to facilitate environmentally friendly activities. Increased coordination with suppliers
and retailers could further support this process. Organizations can establish a certain code of
conduct for environmental protection that can be embedded into supplier contracts. They can
also closely monitor and alter the value-added production processes eg design and operations to
preserve the environment. The distribution channel should be inhouse rather than 3 rd party
outsourcing to ensure that environmental regulations have been maintained. Environmental
responsibility of firms can also be integrated well in sustainability marketing strategies which
aim to benefit the customers as well as the environment. Green and ecological marketing
strategies are well recognized in this area. Ecological marketing is when firms use their
marketing tools to solve ecological issues eg pollution. Green marketing is “A holistic and
responsible management process that identifies, anticipates, satisfies and fulfils stakeholder
requirements, for a reasonable reward, that does not adversely affect human or natural
environmental wellbeing” (Charter, M., Peattie, K., Ottman, J., Polonsky, M.J., n.d). According
to (Kumar, V., Rahman, Z., Kazmi, A.A., Goyal, P., 2012) companies should proactively adopt
sustainability as their marketing strategy as it is not only a moral obligation but a win win
approach from both, the side of company and its customers.
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Tensions and Solutions:

Despite of the several benefits of CSR, organizations face challenges in its implementation and
effectiveness. The greatest challenge at hand is the high investment cost associated with adopting
sustainability models and green marketing strategies. Also, the limited financial resources of a
corporation make it difficult to properly train its staff for incorporating these strategies. “It is
most commonly understood that the greatest main challenge for implementing and developing
CSR were steady competitive tension, inadequate backing from the government and other
nongovernment organizations beside the huge cost of implementation.” (Jonker & Witte 2010)
The issue can be resolved by providing a good picture of CSR to the company shareholders and
convincing them to invest as there are long term profits associated with this change. The public
companies can also turn to government authorities for funding’s for creating a positive change.
Moreover, it is a challenging task for the company managers to align the company goals and
strategies with the CSR agenda which requires great commitment by their end. The
implementation of CSR is a very difficult process which needs hard work and dedication to get
the desired change. Many managers lack the expertise and capability required to successfully
implement this process. Past research indicates that the transformation of business models and
strategies is difficult to administer and demands exceptional managerial leadership qualities.
However, the implementation of CSR could be made easier by assigning responsibility to the
upper level of corporations and executing it uniformly across all levels in reference to specific
plans and strategies. Upper managers should use effective communication strategies to convince
its employees of the benefits of taking part in CSR and its superiority over previous traditional
models. A research study was conducted at Karlstad bus dept in Sweden to assess the challenges,
which potentially could be encountered during the actual process of implementation of CSR in
achieving of sustainable business growth. Its findings suggest that “the active engagement with
stakeholders is an indicator that CSR is not a one-man business rather it is a teamwork. Hence,
CSR activities should not be left only to CEO’s of a department or an organization. KBD, by
rendering services is not only concerned on economic gain but it is also socially and
environmentally responsible in all aspects of its operational activities to achieve a common goal
of sustainable business development.” (Aseghehey, 2018)
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Lastly, with respect to the paradox approach, while working on corporate responsibility an
organization should think in terms of engagement rather than speedy solutions as you can’t
ignore the gap this change will bring in between the stakeholders or the employees. (How can
you align CSR theories with organizational realities? (2003) All in all, developing and building
upon a paradox approach when it comes to corporate sustainability will lead to opening
dimensions for the organizations for understanding multiple tensions that arise during integrating
sustainability within a business’s approaches and will also provide creative approaches to tackle
or bypassing these tensions. (Byle & Slawinski, 2015) There are four main types of paradoxes:
paradoxes of belonging, learning, organizing, and performing. “Paradoxes of belonging refer to
tensions around individual and collective identities and between different values and roles” The
conflict between organization and personal views often lead to opposition by organizational
members against company’s sustainability activities. “Paradoxes of learning describe tensions
between existing and novel activities during processes of renewal, change, and innovation” It is a
difficult and challenging task to replace traditional business practices with innovative sustainable
activities. “Paradoxes of organizing stem from the structure and leadership of organizations and
manifest themselves in tensions around collaboration and competition, empowerment and
direction, and flexibility and control. Paradoxes of performing touch the very heart of corporate
sustainability and its ambition to contribute to a diverse set of potentially competing
sustainability issues, such as climate change, biodiversity conservation, poverty alleviation,
public health, or education.” (Smith and Lewis 2011) Therefore, it is evident that the paradox
perspective dominates the business case perspective and should be used by organizations to
develop sustainability models.
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Research Design
Our research is descriptive in nature. The focus is to gain insight on the current status of the
evolution of responsible business practices. Thus, for the purpose of this research, we used case
study as our strategy. The research was conducted in a non-contrived setting with minimal
researcher interference. The unit of analysis was the organization, Nestle itself. This was a cross
sectional study, as data was collected, analyzed and interpreted only once.

We interviewed Ali Ashar, the head of the CSV department at Nestle. The meeting resulted in an
hour-long interview. For the purpose of transcription, we first recorded it on our mobiles and
then transcribed it manually. Through this interview we were able to get a full descriptive
account of Nestle’s ideology on sustainability and its efforts.

For ease in analysis, we coded the interview by identifying the main themes and color coding
them. The coded interview is as follows. The actual transcript and consent form is attached in
Appendix B.

Interview Coding

Speaker 1: Good morning sir. Okay so before

we begin, I would like to ask you if you would
be okay with us recording this interview as we
later need to transcribe it.
Speaker 2: Yes go ahead. Nestle- Industry leader in CSR
Speaker 1: Alright. So we were basically given
a list of industry leaders in terms of the CSR
activities of these companies. We chose Nestle
as our first preference. As you can see, this New CSR Projects
document contains only some of the CSR
activities of Nestle, especially not the recent
ones and therefore the purpose of this interview
is to identify some of the newer CSR projects
that Nestle is undertaking and what are the
associated challenges and tradeoffs. Difference between CSR and CSV
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Speaker 2: Wait let me hand out our CSV Long-term benefits and tradeoffs
(Creating Shared Value) report of 2018 which
will give you a good idea of what we’re doing
on different issues pertaining to nutrition, the
environment, etc. So basically what I want to
elaborate here is the difference between CSR
and CSV. CSR is a short term solution to our
problems whereas CSV is a long term
solution. It is like giving somebody a fish and Individual, community and global targets
teaching someone how to fish. Our primary
purpose is to making people aware of
nutritional requirements and challenges and
to train them to meet their economic,
financial, and environmental requirements.
CSV, is also the value created due to our
presence in the market, even if it is outside
Pakistan. Our ambition is to share this value
with our shareholders- anyone who is directly
or indirectly involved with Nestle. Globally
we have three broader areas under which we
try to do our projects. These areas remain
the same regardless of which market we are
operating in. First area is of the individual’s
or family’s life that is impacted by us. The
second one is the larger community and our
impacts on it. Last is the area of our global
efforts which mainly pertains to
environmental concerns. So now there is a
long list of projects which I can go over if you
want me to.

Speaker 1: Yes so firstly if you could describe Criteria for CSR Awards
some of the recent projects in this regard and
also highlight what were they revolving around.
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Also, when we entered the main building, I

noticed a CSR award for 2016, could you please
highlight what were the activities performed that
led to Nestle winning that award?
Speaker 2: I think the most prestigious award of
CSR for us is the one given by PCP, Pakistan
Center for Philanthropy. Other than that we Activities and impact
have also been mentioned on multiple occasions
by the OICCI in their reports. So I think the
award that you saw outside was probably the
one given by PCP. As far as the criteria is
concerned, first are the activities that you do,
and second is the impact that they have. What is Awards given on overall performance
the outreach of your activity and what impact
does it have. You monitor this and then you
evaluate it.
Speaker 3: So are these awards given on Focus on nutritional needs and requirements
particular activities that you conduct or are they
given on the basis of your overall CSR
activities?
Speaker 2: These are an overall package. There
are no separate awards for responsible business
practices in terms of the environment and in Future generational benefits
terms of enhancing the education systems in the
country. It is important to note that there are
some practices which overlap for companies but
if you look at Nestle, many of our campaigns
are surrounding nutritional needs and
requirements. If you take a look at P&G
however, their work would center on an entirely
different concept. Being a producer of this
particular product line we cannot center our
CSR activities by building dispensaries and
funding hospital as we are under obligation
Nestle: Creating Shared Value P a g e | 11

under the WHO code to not do so. If you look at

the CSV report that I have handed over to you,
the cover page shows the healthy kids program,
done at a global scale, which is a nutritional
awareness program for school going kids.
Coming to the CSR that we do, we donate some
of the locally manufactured processed products
to entities like the FountainHouse and another
old age home.

Speaker 1: So this would be your contribution NGO Contribution

towards NGO basically?
Speaker 2: Yes. But we have a strict evaluation Strict evaluation process
procedure for this. Also, one thing I’d like to
say is that our products and their advertisements
are age-bound. Have you seen any ad in which Target generation: Teenagers
young children are drinking our juices?
Speaker 3: No, they usually show teenagers NGO Activities aligned with target generation
drinking juices.
Speaker 2: Exactly, because this is the age
bracket that these advertisements are aimed for.
So the processed products that we do send to CSV activities at personal level
these NGOs are also according to their needs
and according to the compliance parameters of
the company.
Speaker 1: Alright. So you mentioned three Healthy Kids program
areas in which most of your CSV activities
belong. Could you please shed light on the Focus on nutritional awareness in rural areas
activities which lie in the first area which is
pertaining to the individual and family?
Speaker 2: Right so I have already mentioned
the healthy kids program. Apart from this we
have a Nestle Healthy Women Program. This
program is divided into two components,
Nestle: Creating Shared Value P a g e | 12

namely the urban and rural aspects. The latter is

particularly important as it provides nutritional
awareness to women who are completely barred
from society and have very little idea regarding Activities at Community level
their needs. There is a National nutrition Survey
which highlights the nutritional deficiencies and Milk processing units, farmer training and crop
needs of the communities. This survey is done facilitation: Nutritional Benefits and
after every five years or so. It is particularly due Requirements
to such deficiencies, that we feel the urge to
create awareness regarding nutritional
requirements in most of our CSV campaigns. So
now we have 27 R&D centers with a presence
in about a 179 countries, and every single
second, a check is done regarding ingredients
and quality control.
Speaker 3: Okay so this gives us a pretty good
idea about the CSV activities at a personal level.
Could you now highlight some activities at the Female farmer training
community level?
Speaker 2: The majority CSV activities are
pertaining to our milk processing units in the
rural areas through which we are trying to uplift
the rural economy. In this regard, we work
towards the development of small and medium
scale farmers. We have two training camps for
these farmers, one located in Okara and the Provision of raw materials to over 3000 female
other in Sukheki. If you evaluate our efforts and farmers: Long-term solutions
interventions in these farms, you can see that
there is nearly a 90% increase in yield per
animal. Just to give you an idea, we returned 25
billion rupees back to the rural economy last
year. This has also helped to improve the
education and living standards of these rural
areas. Also, a lot of work is being done towards
Nestle: Creating Shared Value P a g e | 13

the development of rural women. This is

something that Nestle has done to a far greater
extent as compared to other businesses. Women
are given training regarding handling of animals
as they are the ones who spend most of the time
in taking care of the farm animals.
Speaker 1: Sir could you please roughly explain
the reach of these rural programs launched by
Nestle?
Speaker 2: Approximately 30,000 farmers have
been trained and are working with Nestle.
Speaker 3: And how many females have been
trained?
Speaker 2: Around 3000 I think. Some of them
have opened their shops, some have become
animal nurses while we have developed some
into entrepreneurs. We have also hired 300
women as milk suppliers to make them a part of
our value chain. The ideology behind this is that
the people actually providing raw materials
should gain the direct benefit of their effort. We
have also invested in help camps.

Speaker 1: could you please elaborate on what Purpose of Help camps

these help camps are? And why the need arose?
Speaker 2: it is to facilitate those farmers who Facilitate farmers and help in yielding export
are unable to reach the training camps. There is quality crops like mangos
an agricultural services team that develops a
yearly calendar which is distributed in these
rural areas. It informs them of when our teams
and medical experts etc. will be in their area.
We go to them if they can’t come to us. We
introduced Kisaan club too. It has a card for all
Nestle: Creating Shared Value P a g e | 14

our registered farmers who are directly linked to

us. What it does is to connect them to loan
facilities which enable them to generate capital
for expanding/improving their farms.
FruitaVitals Chaunsa is one of our leading
juices. Pakistan’s cahunsa is export quality. Value addition
Traditionally, we would procure chaunsa pulp
from vendors. As a result, due to a long chain of
intermediaries, the benefits of the sale of these
chaunsas would not reach the farmers. However,
with time we thought of introducing our best
practices in this business aspect too. We wanted
to make chaunsa providers a part of our value
system. Four years ago, we started with the aim Challenges faced
to procure mangoes directly from the vendor by
2018. We started procuring chaunsas directly Orthodox methods still being followed
from four farms and ever since then our
procurement from them is increasing. As of
now, 32 farms are a direct part of our value
chain. For this we also signed a MoU with
Punjab Agriculture department’s subsidiary
Mango research department, working on
developing and improving the quality of locally
produced mangoes, for this project since we
lack the expertise.
Speaker 1: Can you please highlight some
challenges that you faced with this program?
Mango sector is a quite challenging sector.
People are still using orthodox methods of
production. They stick to those methods which
their forefathers followed. A secondary
challenge is an alternate year fruit bearing
farming practice. If one year, a farm produces
100 tonnes, chances of producing the same
Nestle: Creating Shared Value P a g e | 15

amount or higher are very low in the next year.

Our teams would constantly visit these
producers and spread awareness about best farm Global outreach
practices to safeguard them from adverse effects
of climate etc. revolved around giving them Caring for water: Water conservation
demonstrations and advising. 40 cases of Responsible water usage
farmers show how they have benefitted.
Concept of shared value applied here in the
sense that when we finally procured mangoes Agriculture sector consumes the most amount of
from these farmers, they benefited by getting a water
good price for their produce and the
organization bnefitted too by getting a good rate
and the gaps in between were minimized.
Transparent process. These farmers were
mostly small to medium landowners, who
needed this help as opposed to large Scientific innovation
landowners. Moreover, by providing them
training etc throughout the year, Nestle never
really bound the farmers to sell their produce to
us. Rather, all these 32 farmers came with their
own free will to sell their mangoes to us.

S1: What global initiatives is Nestle pursuing?

S2: So we have a global initiative by the name
Caring for Water. It has three components that
we are addressing. It is mainly addressing the
water challenges that we have. As you know,
Pakistan is amongst the red zone countries
where there is a severe water problem. So, the
three initiatives were that what we were doing in
our factories, what we are doing for
Nestle: Creating Shared Value P a g e | 16

communities and an arrangement with the

agricultural sector. Now why agriculture? Not
many people know and realise agriculture sector
is the biggest water consumer in Pakistan.
Around 94 – 96% of water is utilized by
agriculture sector. And why? Due to our bad
and old conservative irrigation and agricultural
practices. We still believe that flooding is the
right way – using tube well and generator. So, in
this, we started projects with the Punjab
Government and LUMS on irrigation ways and
started small projects with our dairy farmers and
provided them some subsidies as well. The best
possible irrigation methods promoted. LUMS
developed water sensors which was something
new that would be plugged into the soil and that
sensor would sense and send a message when
the water was needed. We are trying to get
results using these. Normally there isn’t a need
by the plant but whatever was seen in the
previous generations was just being continued.
So, this underground water gets wasted.
Agriculture also has the concept of advocacy, so
we are working with the Sustainable Institute of
Islamabad. We are using the concept Reuse,
reduce and recycle for water in our factories.
We started a project on cow water as well. As
you would already know we make Nido. Nido is
one of the best products and is made from fresh
milk which is 85% water. We came up with the
idea to use the water that was evaporated from
this and use it for the cleaning purposes. When
we get the containers, we must ensure the
cleanliness of it so the first step that we do is to
Nestle: Creating Shared Value P a g e | 17

clean it so that the contaminations don’t go

inside the factory. Then what we are doing for
the environment. We have two factories here
which have water cleaning plants. The water
that is used within the factory is treated fist and
then deposed in the canal that can be used for
irrigation purposes but not drinking though.
What we are doing for communities is that we
have 6 safe drinking facilities for them – 3 are in
the Sheikhupura district and 3 in Khanewal
district. Why these two areas? We have got one
of the largest factories in Asia in Sheikhupura,
so the basic primary right is for them. Similarly,
we have got another big factory in Kabir Wala,
somewhere in the middle of Kabir Wala and
Khanewal. So, these facilities give water to
around 60000 people daily. We are maintaining
those and are ensuring that we keep the
commitment we have made of the quality of
water. We do this by test and checks. You
wouldn’t find better examples in corporates for
these. For the environment activities we do tree
plantation. In this year we will be planting
50000 trees. Around 25k are done in spring.

S1 Are these concentrated in Lahore? Or

are other cities considered too?
S2 No, these activities are done in Punjab Agricultural activities mostly based in Punjab
in a lot of areas and in Islamabad. Why Punjab?
Our agricultural services milk collection area is
mainly spread over Punjab. Every zone, factory
and offices have done these. Every place we are Nestle’s role in responsible practices
present we are trying to make an impact.
S1 As being the industry leader, what role
Nestle: Creating Shared Value P a g e | 18

does Nestle play in these responsible practices Set examples

for other companies? Do you think nestle plays
a role? And to what extent can it encourage
this? Focus on core business values
S2 We can only set examples. The problem
that comes is that the focus areas differ from
organization to organization. P&G would
believe in something else; oil companies would
focus on something else. P&G might not be
interested in developing dairy farmers or
spreading nutritional awareness. Why should
they be developing dairy farmers? The thing is Set examples
the core businesses give you a vision that where
your primary stakeholder lies. You start from
your home e.g. you start from the safety of your
employees, are they given a decent workplace –
high noise area employees are given earplugs.
So, the thing is we can set examples, but you
can’t go directly and convince other companies.
We are working a lot on gender. We are doing
this inhouse as well in HR where if a female has
left due to some family challenges, we later
invite them again to join. In universities and
colleges, HR goes and holds sessions to set
examples of what to do. These examples that
you see we try to share publicly through our csv
reports and through bigger forums like csr
conference or social media. People get inspired
and appreciate but it comes that every work
doesn’t come in their focus area. Like a
challenge we face is that even if we want to Nutritional Benefits and Awareness
work in the health sector, we aren’t allowed to.
In education sector, we used to develop schools
a few years ago but in our community
Nestle: Creating Shared Value P a g e | 19

engagement side we refurbish schools as well.

We have also developed a vocational training
centre for women in Kabir Wala where we
provide training for sewing and stitching to
women and that’s being done in partnership
with Punjab vocational centre. They get training
and certification and we ensure they get a
stipend also so that they can start a business as
well. Within two three years, 84 women have
gotten their certification and majority of them
have started their business and we try that we
link them to our value chain. We also get
request from the government about csr
activities. And we also participate when there
are any national catastrophes and disasters. So,
some areas come where the initiatives you take
are replicated one way or the other. But your
vision globally decides where we work. Yes,
projects may differ over companies but why
they differ because of the existing challenges in
the market. Now like the program of healthy
kids in Australia, our focus is on malnutrition,
but you’ll be astonished that malnutrition is
double burdened. You have communities that
are undernourished and there are the
communities that are over nourished like in the
cities you’ll find fatty and obese kids while if
you go to the rural side, you’ll find kids
malnourished. But for developed countries like
America and Australia, they have more issues of
obesity so their programs will be more focused
towards physical activity. So, this will differ,
but product umbrella is the same. Over here we
are dealing with dairy farmers while in Africa
Nestle: Creating Shared Value P a g e | 20

we are dealing with coffee farmers. Their milk

isn’t the primary thing. With the passage of time
we are working on water and in Mexico we
have a factory that is zero water usage. It
operates on totally inhouse. We are working a
lot on packaging to make it recyclable and
reusable.

S1 The pet bottles nestle recently launched

are plastic right? So, does that not contradict Contradictory use of plastic?
with your environmentally friendly notion?
S2 What I would say is that the plastic Plastic is recyclable
bottles are never found in garbage. Plastic is
100% recyclable and it’s the most valuable item Conservation of resources
in garbage. It is reused, actually let’s say it is
recyclable. Reused would mean it is being used
again. These plastic bottles are collected by
garbage collectors and then they are sold, and
they are crushed after which they are used for
carpeting underside and decoration pieces and is
used in all of this. It is one of those items which
is not creating any hazard currently at least in
our country. This is something that doesn’t stay
long in garbage. You throw it and the first thing
the garbage collector would find would be this.
But we are working that our packaging in the
future is 100% recyclable. Tetra the cardboard
packaging is recyclable.

S1 How do u think nestle has evolved in

terms of responsible business practices?
S2 You see we have moved from csr to Switch from CSR to CSV
csv.
S1 Around what time was this?
Nestle: Creating Shared Value P a g e | 21

S2 it was around 2009. We were the first

organisation in Pakistan to come up with this
phrase. Now others are also following. At that
time people would be asking what csv is. What
is creating shared value? Similarly, what
happens is, evolving is a process that never
ends. When u start something then you start
innovating and then you get more challenges
and some projects you get you try to improvise
and customize. Some projects you must
customize based on locality. You come up with Focus on employee satisfaction
more initiatives. It is a continuous process.
Responsible business practices are also followed Minimal work hours for workers
similarly and the waste we have we try to
responsibly dispose. If the milk that comes
doesn’t meet our quality standard, so we make
sure that it is responsibly disposed. Its not that if
we aren’t buying it, we say that you can just sell
it in the market instead. We don’t do that. Safety
measures that we take both inhouse and outside
is that we train drivers as well. We would want
that the drivers that go to the communities don’t
make the roads unsafe. Why do we do this? We
make sure that drivers don’t work for more that
8 hours. It’s not that If the driver says he wants
to work for 24 hrs we let them. It doesn’t
happen like that. The practices we do in our
products like constantly innovating. Like we try
to minimize the usage of salt sugar and sodium.
Almost to zero and we try in the future that
completely zero. So, all of these come in your
business practices and in csv
S3 Prior to 2009, all this csv wasn’t as
broad?
Nestle: Creating Shared Value P a g e | 22

S2 Some of the stuff was continued from

the previous time. Like the dairy farmers
training, we have been doing that since the last
30-35 years since we launched nestle here. But
it was more focused on csr. We would say to the
organization to just develop schools on our
behalf or that start teaching. And then we
realised that we need direct involvement. And
now 99% of the projects we do we are directly
involved. We do get requests as well. P&G
doesn’t have an expertise in the working of
schools so they take on board an educational
NGO where P&G would bear the operational
cost.

S1 What are some challenges and how do u Tradeoff between profitability and CSV
overcome them? Considering there is a fair bit
you must spend in the csv activity. Does it help
with your profitability? CSV purpose is to share value not make profit
S2 No. its not like we are doing it to gain
more profitability. We are doing it to enhance
our image. Enhancing the common lives of your
users. It has nothing to do with profitability. Communal acceptance is the primary goal
Challenges we have is that the general practices
we have like with Chaunsa as I told earlier. We
face the same with dairy also. Compliance Effects of CSV
issues and government rules and regulations.
Communities acceptance that you must ensure.
But if you have the dedication you overcome the CSV enhances image and value
challenges.
S3 Does pursuing the interests of the Compensates for cash outflow in programs
community and the environment lead to positive
or negaitve outcomes for other performance
areas in the organisation?
Nestle: Creating Shared Value P a g e | 23

S2 I think it goes both ways. I mean there is one

obvious effect on profitability as such programs
require considerable investments so the
cashflows of the company are affected.
However, it can go the other way round as well.
If you take the example of our educational
program which is an awareness campaign, good
health and nutrition is promoted. Even though
our intention is not to market our products, but it
becomes inevitable that after such campaigns,
the demand for our products tend to rise by
quite a fair bit.

Creating Long term value

Performance in CSV
Public Contribution
Challenges Faced
Agricultural Focus

Discussion and Implications

After conducting a careful analysis of the interview, we were able to develop a better
understanding of how paradoxical theories apply to responsible business practices in the
Pakistani context. The paradoxical perspective is further divided into four subcategories. Starting
off with the paradox of belonging and learning, we identified that until 2009, Nestle’s
responsible business practices comprised of limited CSR initiatives. However, with the passage
Nestle: Creating Shared Value P a g e | 24

of time, the concept of creating shared developed amongst some of the top managers. They
believed in the idea of sharing value with not just the internal stakeholders, but also the external
stakeholders, who were not a direct part of the organization. In this regard, they began by
renaming their CSR activities as CSV, which stands for “creating shared value”. This focused on
three aspects: the uplift of the individual, the community and the environment. The CSV concept
was a relatively new idea and thus, was faced with resistance from the employees and financial
stakeholders. As the paradox of belonging suggests, this problem rose because of conflicting
ideologies and values of these stakeholders. However, gradually, a complete cognitive
organizational reorientation took place and the concept of CSV became widely accepted. The
company now has a separate CSV department responsible for all such activities.

Moving on to the paradox of organizing, Nestle faced tensions when it came to incorporating
CSV activities into their daily business practices. Gradually, as mentioned above, acceptance
grew of these ideas. One major step that the management took in this regard was creating
awareness about water scarcity. They started off by global initiatives like Caring for Water. As a
result of this, their international plants, like in Mexico, reduced their water usage to almost null.
Thus, Nestle Pakistan, following these footsteps, decided to minimize water usage on their
production plants. To achieve this, they started reusing the water extracted from cows’ milk in
the process of powdered milk extraction in washing the plants and for agricultural purposes.

Moving on to the descriptive, instrumental and normative, aspects of the paradoxical theories, we
gained some useful insights. There are several paradoxes faced by such companies when trying
to be more responsible. Nestle faced one such conflict when they launched their PET bottles. In
this case, they were faced with a dilemma between minimizing customer reservations about their
juices and sustaining the environment. The PET bottles were made of plastic to enable customers
to see the product inside the bottle and ensure that it was free of fungi etc. However, this launch
contradicted with their goal of conserving the environment. Thus, a strategy which Nestle
developed in this regard was to create awareness regarding the reuse of these plastic bottles.

During the interview, we asked Mr. Ali whether these initiatives were serving them in terms of
increased profitability. Upon this, he emphasized that, at Nestle, when it comes to CSV, these
initiatives hold great intrinsic value for the company. Their sole purpose is to give back to the
society rather than enhancing their image for increasing profits. The firm does not actively hope
Nestle: Creating Shared Value P a g e | 25

to achieve anything but good out of these initiatives. However, we feel that Nestle does not
recognize an indirect impact of CSV on the firm’s reputation which may lead to further profits.

Among the mechanisms which they have used in corporate sustainability to achieve superior
sustainability outcomes include their rural women empowerment initiatives. These programs
provide women with vocational training and improves their living standards. It does so by
making them a part of their value chain. This is achieved by training them on how to deal with
livestock and procuring raw materials like milk, from them. This has also led to minimizing gaps
in their value chain. Upon analysis we also find that these CSV activities tend to have varying
impacts on performance areas other than sustainability. As these projects require considerable
investment, their profit is affected negatively. However, if you take the example of their
educational programs, which revolve around good health and nutrition for kids, it serves the
company in a circular manner. While these awareness programs are not marketing campaigns,
yet they end up serving the same purpose. This can be explained by the fact that the major
consumer of their child nutrition products are school going children, thus increased awareness
among them can possibly lead to spikes in the demand for these products.

To understand how Nestle justifies choosing one sustainability goal over another, we need to
realize certain goals hold a greater intrinsic value for the company. We have observed through
the interview, that the company’s major concern is health and nutrition. Thus, serving these goals
is more important for them compared to other equally significant goals like poverty alleviation
and combating environmental degradation.

Conclusion
From the discussion above, we can see that the various aspects of these paradoxes show how a
firm evolves from an irresponsible business to a responsible one. These paradoxes also highlight
the tensions within organization while implementing these responsible business practices. This
case study also shows that as an industry leader, Nestle can serve as great example for other
companies looking to move towards responsible business practices. Using the implications of
this research, other small/big companies can understand how to start being responsible and the
challenges therein.
Nestle: Creating Shared Value P a g e | 26
Nestle: Creating Shared Value P a g e | 27

Appendix A
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Nestle: Creating Shared Value P a g e | 28

16. (2003) "Shell discovers the paradox of CSR: How can you align CSR theories with
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17. Byl, Connie A. Van der, and Natalie Slawinski. “Embracing Tensions in Corporate
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Nestle: Creating Shared Value P a g e | 29

Appendix B
Nestle: Creating Shared Value P a g e | 30

Interview Transcription
S1: Good morning sir. Okay so before we begin, I would like to ask you if you would be okay
with us recording this interview as we later need to transcribe it.

S2: Yes, go ahead.

S1: Alright. So, we were basically given a list of industry leaders in terms of the CSR activities
of these companies. We chose Nestle as our first preference. As you can see, this document
contains only some of the CSR activities of Nestle, especially not the recent ones and therefore
the purpose of this interview is to identify some of the newer CSR projects that Nestle is
undertaking and what are the associated challenges and tradeoffs.

S2: Wait let me hand out our CSV (Creating Shared Value) report of 2018 which will give you a
good idea of what we’re doing on different issues pertaining to nutrition, the environment, etc.
So basically, what I want to elaborate here is the difference between CSR and CSV. CSR is a
short-term solution to our problems whereas CSV is a long-term solution. It is like giving
somebody a fish and teaching someone how to fish. Our primary purpose is to making
people aware of nutritional requirements and challenges and to train them to meet their
economic, financial, and environmental requirements. CSV is also the value created due to
our presence in the market, even if it is outside Pakistan. Our ambition is to share this
value with our shareholders- anyone who is directly or indirectly involved with Nestle.
Globally we have three broader areas under which we try to do our projects. These areas
remain the same regardless of which market we are operating in. First area is of the
individual’s or family’s life that is impacted by us. The second one is the larger community
and our impacts on it. Last is the area of our global efforts which mainly pertains to
environmental concerns. So now there is a long list of projects which I can go over if you
want me to.

S1: Yes, so firstly if you could describe some of the recent projects in this regard and highlight
what were they revolving around. Also, when we entered the main building, I noticed a CSR
award for 2016, could you please highlight what were the activities performed that led to Nestle
winning that award?

S2: I think the most prestigious award of CSR for us is the one given by PCP, Pakistan Center
for Philanthropy. Other than that, we have also been mentioned on multiple occasions by the
OICCI in their reports. So, I think the award that you saw outside was probably the one given by
PCP. As far as the criteria is concerned, first are the activities that you do, and second is the
impact that they have. What is the outreach of your activity and what impact does it have? You
monitor this and then you evaluate it.

S3: So, are these awards given on activities that you conduct or are they given based on your
overall CSR activities?
Nestle: Creating Shared Value P a g e | 31

S2: These are an overall package. There are no separate awards for responsible business
practices in terms of the environment and in terms of enhancing the education systems in the
country. It is important to note that there are some practices which overlap for companies but if
you look at Nestle, many of our campaigns are surrounding nutritional needs and requirements.
If you look at P&G however, their work would center on an entirely different concept. Being a
producer of this product line, we cannot center our CSR activities by building dispensaries and
funding hospital as we are under obligation under the WHO code to not do so. If you look at the
CSV report that I have handed over to you, the cover page shows the healthy kids’ program,
done at a global scale, which is a nutritional awareness program for school going kids. Coming
to the CSR that we do, we donate some of the locally manufactured processed products to
entities like the FountainHouse and another old age home.

S1: So, this would be your contribution towards NGO basically?

S2: Yes. But we have a strict evaluation procedure for this. Also, one thing I’d like to say is that
our products and their advertisements are age-bound. Have you seen any ad in which young
children are drinking our juices?

S3: No, they usually show teenagers drinking juices.

S2: Exactly, because this is the age bracket that these advertisements are aimed for. So, the
processed products that we do send to these NGOs are also according to their needs and
according to the compliance parameters of the company.

S1: Alright. So, you mentioned three areas in which most of your CSV activities belong. Could
you please shed light on the activities which lie in the first area which is pertaining to the
individual and family?

S2: Right so I have already mentioned the healthy kids’ program. Apart from this we have a
Nestle Healthy Women Program. This program is divided into two components, namely the
urban and rural aspects. The latter is particularly important as it provides nutritional awareness to
women who are completely barred from society and have very little idea regarding their needs.
There is a National nutrition Survey which highlights the nutritional deficiencies and needs of
the communities. This survey is done after every five years or so. It is particularly due to such
deficiencies, that we feel the urge to create awareness regarding nutritional requirements in most
of our CSV campaigns. So now we have 27 R&D centers with a presence in 179 countries, and
every single second, a check is done regarding ingredients and quality control.

S3: Okay so this gives us a pretty good idea about the CSV activities at a personal level. Could
you now highlight some activities at the community level?

S2: The majority CSV activities are pertaining to our milk processing units in the rural areas
through which we are trying to uplift the rural economy. In this regard, we work towards the
Nestle: Creating Shared Value P a g e | 32

development of small and medium scale farmers. We have two training camps for these farmers,
one located in Okara and the other in Sukheki. If you evaluate our efforts and interventions in
these farms, you can see that there is nearly a 90% increase in yield per animal. Just to give you
an idea, we returned 25 billion rupees back to the rural economy last year. This has also helped
to improve the education and living standards of these rural areas. Also, a lot of work is being
done towards the development of rural women. This is something that Nestle has done to a far
greater extent as compared to other businesses. Women are given training regarding handling of
animals as they are the ones who spend most of the time in taking care of the farm animals.

S1: Sir could you please roughly explain the reach of these rural programs launched by Nestle?

S2: Approximately 30,000 farmers have been trained and are working with Nestle.

S3: And how many females have been trained?

S2: Around 3000, I think. Some of them have opened their shops, some have become animal
nurses while we have developed some into entrepreneurs. We have also hired 300 women as
milk suppliers to make them a part of our value chain. The ideology behind this is that the people
providing raw materials should gain the direct benefit of their effort. We have also invested in
help camps.

S1: could you please elaborate on what these help camps are? And why the need arose?

S2: it is to facilitate those farmers who are unable to reach the training camps. There is an
agricultural services team that develops a yearly calendar which is distributed in these rural
areas. It informs them of when our teams and medical experts etc. will be in their area. We go to
them if they can’t come to us. We introduced Kisaan club too. It has a card for all our registered
farmers who are directly linked to us. What it does is to connect them to loan facilities which
enable them to generate capital for expanding/improving their farms. FruitaVitals Chaunsa is one
of our leading juices. Pakistan’s chaunsa is export quality. Traditionally, we would procure
chaunsa pulp from vendors. As a result, due to a long chain of intermediaries, the benefits of the
sale of these chaunsas would not reach the farmers. However, with time we thought of
introducing our best practices in this business aspect too. We wanted to make chaunsa providers
a part of our value system. Four years ago, we started with the aim to procure mangoes directly
from the vendor by 2018. We started procuring chaunsas directly from four farms and ever since
then our procurement from them is increasing. As of now, 32 farms are a direct part of our value
chain. For this we also signed a MoU with Punjab Agriculture department’s subsidiary Mango
research department, working on developing and improving the quality of locally produced
mangoes, for this project since we lack the expertise.

S1: Can you please highlight some challenges that you faced with this program?
Nestle: Creating Shared Value P a g e | 33

Mango sector is a quite challenging sector. People are still using orthodox methods of
production. They stick to those methods which their forefathers followed. A secondary challenge
is an alternate year fruit bearing farming practice. If one year, a farm produces 100 tones,
chances of producing the same amount or higher are very low in the next year. Our teams would
constantly visit these producers and spread awareness about best farm practices to safeguard
them from adverse effects of climate etc. revolved around giving them demonstrations and
advising. 40 cases of farmers show how they have benefitted. Concept of shared value applied
here in the sense that when we finally procured mangoes from these farmers, they benefited by
getting a good price for their produce and the organization benefitted too by getting a good rate
and the gaps in between were minimized. Transparent process. These farmers were mostly
small to medium landowners, who needed this help as opposed to large landowners. Moreover,
by providing them training etc. throughout the year, Nestle never really bound the farmers to sell
their produce to us. Rather, all these 32 farmers came with their own free will to sell their
mangoes to us.

S2 So we have a global initiative by the name Caring for Water. It has three components
that we are addressing. It is mainly addressing the water challenges that we have. As you know,
Pakistan is amongst the red zone countries where there is a severe water problem. So, the three
initiatives were that what we were doing in our factories, what we are doing for communities and
an arrangement with the agricultural sector. Now why agriculture? Not many people know and
realise agriculture sector is the biggest water consumer in Pakistan. Around 94 – 96% of water is
utilized by agriculture sector. And why? Due to our bad and old conservative irrigation and
agricultural practices. We still believe that flooding is the right way – using tube well and
generator. So, in this, we started projects with the Punjab Government and LUMS on irrigation
ways and started small projects with our dairy farmers and provided them some subsidies as
well. The best possible irrigation methods promoted. LUMS developed water sensors which was
something new that would be plugged into the soil and that sensor would sense and send a
message when the water was needed. We are trying to get results using these. Normally there
isn’t a need by the plant but whatever was seen in the previous generations was just being
continued. So, this underground water gets wasted. Agriculture also has the concept of advocacy,
so we are working with the Sustainable Institute of Islamabad. We are using the concept Reuse,
reduce and recycle for water in our factories. We started a project on cow water as well. As you
would already know we make Nido. Nido is one of the best products and is made from fresh
milk which is 85% water. We came up with the idea to use the water that was evaporated from
this and use it for the cleaning purposes. When we get the containers, we must ensure the
cleanliness of it so the first step that we do is to clean it so that the contaminations don’t go
inside the factory. Then what we are doing for the environment. We have two factories here
which have water cleaning plants. The water that is used within the factory is treated fist and
then deposed in the canal that can be used for irrigation purposes but not drinking though. What
we are doing for communities is that we have 6 safe drinking facilities for them – 3 are in the
Sheikhupura district and 3 in Khanewal district. Why these two areas? We have got one of the
Nestle: Creating Shared Value P a g e | 34

largest factories in Asia in Sheikhupura, so the basic primary right is for them. Similarly, we
have got another big factory in Kabir Wala, somewhere in the middle of Kabir Wala and
Khanewal. So, these facilities give water to around 60000 people daily. We are maintaining
those and are ensuring that we keep the commitment we have made of the quality of water. We
do this by test and checks. You wouldn’t find better examples incorporates for these. For the
environment activities we do tree plantation. In this year we will be planting 50000 trees. Around
25k are done in spring.

S1 Are these concentrated in Lahore? Or are other cities considered too?

S2 No, these activities are done in Punjab in a lot of areas and in Islamabad. Why Punjab?
Our agricultural services milk collection area is mainly spread over Punjab. Every zone, factory
and offices have done these. Every place we are present we are trying to make an impact.

S1 As being the industry leader, what role does Nestle play in these responsible practices for
other companies? Do you think nestle plays a role? And to what extent can it encourage this?

S2 We can only set examples. The problem that comes is that the focus areas differ from
organization to organization. P&G would believe in something else; oil companies would focus
on something else. P&G might not be interested in developing dairy farmers or spreading
nutritional awareness. Why should they be developing dairy farmers? The thing is the core
businesses give you a vision that where your primary stakeholder lies. You start from your home
e.g. you start from the safety of your employees, are they given a decent workplace – high noise
area employees are given earplugs. So, the thing is we can set examples, but you can’t go
directly and convince other companies. We are working a lot on gender. We are doing this
inhouse as well in HR where if a female has left due to some family challenges, we later invite
them again to join. In universities and colleges, HR goes and holds sessions to set examples of
what to do. These examples that you see we try to share publicly through our csv reports and
through bigger forums like CSR conference or social media. People get inspired and appreciate
but it comes that every work doesn’t come in their focus area. Like a challenge we face is that
even if we want to work in the health sector, we aren’t allowed to. In education sector, we used
to develop schools a few years ago but in our community engagement side we refurbish schools
as well. We have also developed a vocational training centre for women in Kabir Wala where we
provide training for sewing and stitching to women and that’s being done in partnership with
Punjab vocational centre. They get training and certification and we ensure they get a stipend
also so that they can start a business as well. Within two three years, 84 women have gotten their
certification and majority of them have started their business and we try that we link them to our
value chain. We also get request from the government about CSR activities. And we also
participate when there are any national catastrophes and disasters. So, some areas come where
the initiatives you take are replicated one way or the other. But your vision globally decides
where we work. Yes, projects may differ over companies but why they differ because of the
existing challenges in the market. Now like the program of healthy kids in Australia, our focus is
Nestle: Creating Shared Value P a g e | 35

on malnutrition, but you’ll be astonished that malnutrition is double burdened. You have
communities that are undernourished and there are the communities that are over nourished like
in the cities you’ll find fatty and obese kids while if you go to the rural side, you’ll find kids
malnourished. But for developed countries like America and Australia, they have more issues of
obesity so their programs will be more focused towards physical activity. So, this will differ, but
product umbrella is the same. Over here we are dealing with dairy farmers while in Africa we are
dealing with coffee farmers. Their milk isn’t the primary thing. With the passage of time we are
working on water and in Mexico we have a factory that is zero water usage. It operates on totally
inhouse. We are working a lot on packaging to make it recyclable and reusable.

S1 The pet bottles nestle recently launched are plastic right? So, does that not contradict with
your environmentally friendly notion?

S2 What I would say is that the plastic bottles are never found in garbage. Plastic is 100%
recyclable and it’s the most valuable item in garbage. It is reused, actually let’s say it is
recyclable. Reused would mean it is being used again. These plastic bottles are collected by
garbage collectors and then they are sold, and they are crushed after which they are used for
carpeting underside and decoration pieces and is used in all of this. It is one of those items which
is not creating any hazard currently at least in our country. This is something that doesn’t stay
long in garbage. You throw it and the first thing the garbage collector would find would be this.
But we are working that our packaging in the future is 100% recyclable. Tetra the cardboard
packaging is recyclable.

S1 How does u think nestle has evolved in terms of responsible business practices?

S2 You see we have moved from CSR to CSV.

S1 Around what time was this?

S2 it was around 2009. We were the first organisation in Pakistan to come up with this
phrase. Now others are also following. At that time people would be asking what csv is. What is
creating shared value? Similarly, what happens is, evolving is a process that never ends. When u
start something then you start innovating and then you get more challenges and some projects
you get you try to improvise and customize. Some projects you must customize based on
locality. You come up with more initiatives. It is a continuous process. Responsible business
practices are also followed similarly and the waste we have we try to responsibly dispose. If the
milk that comes doesn’t meet our quality standard, so we make sure that it is responsibly
disposed. It’s not that if we aren’t buying it, we say that you can just sell it in the market instead.
We don’t do that. Safety measures that we take both inhouse and outside is that we train drivers
as well. We would want that the drivers that go to the communities don’t make the roads unsafe.
Why do we do this? We make sure that drivers don’t work for more than 8 hours. It’s not that If
the driver says he wants to work for 24 hrs we let them. It doesn’t happen like that. The practices
we do in our products like constantly innovating. Like we try to minimize the usage of salt sugar
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and sodium. Almost to zero and we try in the future that completely zero. So, all of these come in
your business practices and in csv

S3 Prior to 2009, all this csv wasn’t as broad?

S2 Some of the stuff was continued from the previous time. Like the dairy farmers training,
we have been doing that since the last 30-35 years since we launched nestle here. But it was
more focused on CSR. We would say to the organization to just develop schools on our behalf or
that start teaching. And then we realised that we need direct involvement. And now 99% of the
projects we do we are directly involved. We do get requests as well. P&G doesn’t have an
expertise in the working of schools so they take on board an educational NGO where P&G
would bear the operational cost.

S1 What are some challenges and how do u overcome them? Considering there is a fair bit
you must spend in the csv activity. Does it help with your profitability?

S2 No. it’s not like we are doing it to gain more profitability. We are doing it to enhance our
image. Enhancing the common lives of your users. It has nothing to do with profitability.
Challenges we have is that the general practices we have like with Chaunsa as I told earlier. We
face the same with dairy also. Compliance issues and government rules and regulations.
Communities acceptance that you must ensure. But if you have the dedication you overcome the
challenges.

S3 Does pursuing the interests of the community and the environment lead to positive or
negative outcomes for other performance areas in the organisation?

S2 I think it goes both ways. I mean there is one obvious effect on profitability as such programs
require considerable investments so the cashflows of the company are affected. However, it can
go the other way around as well. If you take the example of our educational program which is an
awareness campaign, good health and nutrition is promoted. Even though our intention is not to
market our products, but it becomes inevitable that after such campaigns, the demand for our
products tend to rise by quite a fair bit.
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