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Title:Nestlé included in the Ethibel investment register
Date of publishing:May 07, 2015
Also available in the following languages:Dutch, French

Nestlé included in the Ethibel investment register
May 07, 2015

The European food sector was recently screened and rated in terms of its Corporate Social Responsibility (CSR) performance. In total, 17 companies were screened and four of them were found eligible for the Ethibel register. Three companies were reconfirmed in the register:  Danone, Unilever PLC and Unilever NV. Nestlé is a newcomer in the Ethibel register.

All food companies are facing serious and recurrent allegations regarding the respect of labour rights, human rights and responsible marketing practices. Yet, why are these companies eligible to be included in the Ethibel register?

When assessing companies’ CSR performances, a lot of data are mined by analysts and assessed by CSR experts, leading to a final Ethibel rating. The assessment covers public information, such as annual and social or sustainability reports, media references and reports from NGOs and unions. Next to policies and performances, controversies and involvement in exclusionary activities(1) are taken into account. Finally, there is a feedback process and occasionally other relevant stakeholders are consulted.

Involvement in controversies is assessed by looking at different criteria. Does the company report transparently on the controversy? Are corrective measures taken? Does the company cooperate with relevant stakeholders? What is the frequency of the controversies? Is it a once-off controversy or is it a recurring one meaning that the company is not learning from its mistakes?

Compared to the March 2013 review, Nestlé has improved its CSR performance in four domains (environment, human resources, human rights and community involvement). Nestlé is performing above average in its sector overall. The company does face a number of controversies, but cooperates with the relevant stakeholders and communicates transparently on these. In terms of labour relations, the company has built extensive relations with unions over the last two years, resulting in a regular and proactive dialogue on all labour related topics. In terms of responsible marketing, the company has improved its procedures to approve marketing material and allows external auditors to ensure responsible marketing practices. Overall, Nestlé demonstrates that it manages its controversies more structurally and proactively than in the past.

Nestlé’s overall CSR performance is similar to that of its peers, Danone and Unilever, who are advanced performers in the sector. Nestlé faces more controversies than the other companies, resulting in a C-rating (“performance above sector average”), while the other two companies received a B-rating (“best-in-class”).

(1) Exclusion criteria are applied on the basis of which a company may be excluded from the register depending on the level of involvement of a company in certain controversial products and activities. These products and activities are arms, tobacco, gambling, nuclear energy, hazardous chemicals, sex industry, GMOs, alcohol, animal maltreatment, land grabbing, shale gas, tar sands, fossil fuels, non-certified timber and palm oil and food speculation. In addition, serious violations of human rights andlabour rights, corruption, environmental offences, and the failure to comply with national and international laws and regulations can lead to exclusion.