Nestlé at Sustain 2019 – Igniting Change Through CSR

Last week Spend Matters founder, Jason Busch, was over from the US attending the EcoVadis Sustain 2019 event in Paris. EcoVadis works with firms on their sustainability goals, helping to reduce risk and driving transparency and trust between trading partners. It has a worldwide team of experts, innovative technology and a unique corporate social responsibility (CSR) assessment methodology that covers 180 purchasing categories. Its annual event, this year themed Ignite Change, brought together over 500 sustainability and procurement professionals to share ideas and best practice to help tackle climate, human rights and ethical challenges. EcoVadis has thousands of customers around the globe, and several appeared on stage to impart stories of CSR success; two of those were representatives from Nestlé and LPS (La Palette Rouge), who spoke about their collaborative CSR relationship.

Jason attended and reported from many of the sessions, and we’ll be sharing his thoughts with you over the next few days, but today let’s take a look at his key learnings  from this one:

Nestlé Regional Responsible Sourcing Manager, Taylor Miller, talked about the company’s journey towards total CSR. Nestlé, now universally known for its rigorous supply chain checks, has had its fair share of media scandal. It began its CSR campaign following an era when food and drink manufacturers, in particular chocolate, were in the limelight for unethical sourcing practices. Nestlé’s KitKat sources of Indonesian palm oil were accused of illegal deforestation and endangering orang-utans; the firm launched its own investigation and committed to using only "certified sustainable palm oil." It also faced reputational damage from the child labour found among the world’s largest producer of cocoa for an industry estimated to be worth close to £60 billion a year.

In response, a Nestlé CSR team were tasked with building a responsible sourcing programme. It began with just three people who in the early days, she said, described it like being “tasked to build a bike with no money or tools,” but something they just had to do. What they ended up with was not a push bike, but the equivalent of a series of high-speed racing bikes, which culminated in the Nestlé Responsible Sourcing Standard, with many checks and balances in place and a whole team dedicated to it, locally, regionally and globally.

They developed a ‘Supplier Code’ which all tier 1s and upstream suppliers must sign up to, and adhere to, whether direct or indirect. It requires all suppliers, whether of packaging, raw materials, capital equipment, in fact everything they source, to answer the key question of: “Where is it coming from and how is it made?”

The requirements for all suppliers are based on four pillars: Auditing, Traceability, Farm Assessments and Value-Added Projects. All contracted suppliers are audited and assessed by independent verification firms, who assess against the likes of minimum working age, environmental conditions, H&S, women representation and many other principles; basically checking that all direct suppliers are working to the Supplier Code. All upstream suppliers have their materials traced back to the raw stage, be that to the plantation or farm, mapped by the T1s. All farms are assessed against the Responsible Sourcing Guidelines by partner organisations like ProForest and The Forest Trust. Based on assessment results, value-added projects are undertaken to make positive changes.

Built ontop of the Nestlé responsible sourcing process is EcoVadis (and Sedex). Both provide methodologies to rate supplier sustainability performance through scoring mechanisms, monitoring and ongoing improvement recommendations. Assessment focuses on 21 CSR criteria that are grouped into four themes: Environment, Labour & Human Rights, Ethics and Sustainable Procurement, but only the criteria relevant to a company’s size, industry and location are used.

As Taylor explains, “sometimes it does not make sense to carry out an onsite audit,” so these third-party solutions have been valuable in reaching smaller suppliers of all sizes. The system makes it easier to engage with those suppliers because it provides a simple and effective way of monitoring ethical trade and producing action plans. Suppliers find it easier to have one assessment, relevant to their business (and language), that gives them results and feedback, rather than issuing numerous self-assessment questionnaires. For buyers, it means engagement with suppliers, conducting baseline maintenance and close monitoring is simpler, and they get actionable insights from the reports, giving procurement an effective way to add value to the business.

To demonstrate how the Nestlé supplier/buyer partnership works under the EcoVadis methodology, Gaël Gonzalez, Quality & CSR Manager Europe at La Palette Rouge (LPR), talked about how this approach has helped the firm to turn its CSR Green.

The firm, which ships 92m palettes a year and supplies Nestlé with 20m of those, has this year received the EcoVadis Gold rating for CSR. It has minimised its raw materials carbon footprint by 45% less than the industry norm. And because they are responding to what their customers want, in terms of raw material supply chain mapping (for example the provenance of the wood they use), certification, recycling and reducing their logistics footprint (by providing PaaS – palettes as a service!) they are providing a better service for their clients.

What the presentation clearly demonstrated was that EcoVadis is more than a sustainability platform; it has a strong focus on outcomes. And through continual assessments and supplier improvements, it has been able to apply its CSR learnings to other more general areas, including cybersecurity, data privacy and GDPR, third-party management and business continuity – but that’s a story for another day. We’ll be hearing more from Jason in the coming days on other highlights from Sustain 2019.

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