IUF Downgrades Nestlé CSR Rating from B+ to Junk

We never bought it, so we can’t change the recommendation to sell – but we have taken a closer look at the rating put on Nestlé’s Creating Shared Value Report 2009 in order to investigate the reporting criteria – and whether they’ve been met.

The agrofood giant’s Creating Shared Value Report 2009 claims to be based, for the first time, on the G3 Sustainability Guidelines of the Global Reporting Initiative (GRI). Nestlé assigned itself a ‘B’ grade out of a possible ‘A’, ‘B’, and ‘C’. An external auditor – Bureau Veritas UK – certified that the report was in compliance with the GRI rules, thus advancing the grade from ‘B’ to ‘B+’.

However, Nestlé, in our view, failed to meet the minimal requirements to qualify for even a ‘C’ grade! Basic information on fundamental issues was not reported as required by the GRI protocol. The report actually includes no information on wages, salaries, benefits or taxes paid, employee turnover, collective bargaining agreements, the situation of “temporary” employees with respect to permanent workers, skills training, occupational diseases and rates of injury, child  labour in the agricultural supply chain or organized lobbying efforts, which the GRI asks for.

The GRI is about reporting standards – it does not assess a company’s social or environmental performance, but only provides a framework for reporting relevant data. On that basis alone, Nestlé’s ‘B+’ doesn’t even merit a GRI  ‘C’. It should be downgraded to non-investment grade, CSR ‘junk’ status.

Click here to read the full report.