‘Continuous excellence’ or more dubious claims in Nestlé’s sustainability reporting?

Nestlé watchers on the company’s mailing list may be puzzled by the fate of the message they received on April 12 entitled “Nestlé receives GRI A+ rating for Creating Shared Value report”. The original article claimed that Nestlé had received an A+ rating from the Global Reporting Initiative for its 2011 ‘Creating Shared Value Report’.” That claim is no longer made – apparently the communications folks at Nestlé were apprised that the GRI awards no ratings.

As a guide for investors concerned with various aspects of risk, the GRI reports remain most valuable for what the companies choose not to report on then for what they claim to disclose.

Thus it happens that Nestlé, as in 2009, again chose not to respond to such “Key Performance Indicators” as “All company taxes (corporate, income, property, etc.) and related penalties paid at the international, national, and local levels”, including taxes paid by country. Or “Employee salaries, including amounts paid to government institutions (employee taxes, levies, and unemployment funds) on behalf of employees”, and “Total benefits include regular contributions (e.g., to pensions, insurance, company vehicles, and private health), as well as other employee support such as housing, interest-free loans, public transport assistance, educational grants, and redundancy payments.” These issues are excluded from the “materiality matrix” which purportedly “shows issues that are most material to Creating Shared Value (CSV) at Nestlé” in the “Materiality” section of the report.”

For the first time – and here Nestlé deserves credit – the report acknowledges that the company is at human rights risk in the areas of freedom of association and collective bargaining. Yet Nestlé, as in past years, cannot provide information on something as basic as the number of employees covered by collective bargaining agreements, or union involvement in health and safety programs. And the report falsely contends that the mass firings of union members at the Panjang factory in Indonesia – currently an area of conflict with the IUF – was in response to a strike which was “illegal”. It was not. There is a total disconnect between the abstract acknowledgement of human rights risks arising from workplace relations and the company’s persistent refusal to furnish concrete information which might elucidate at least part of the reality of those workplaces.

The “significant leap” in “sustainability reporting” by Nestlé consists entirely in the profusion of words, photos, and text. Key issues of substance – issues of vital concern to Nestlé workers, their communities, and all those concerned with the manifold impact of corporate activities on society – continue to elude the Nestlé “materiality matrix”. Once again: buyer beware.

Read the full IUF report here.