Nestle is the world’s largest marketer and manufacturer of beverages and food. The company’s headquarters are in Vevey, Switzerland, with a business presence across Europe, Oceania, the Middle East, Asia, Africa, and the Americas. Besides, Nestle’s product portfolio has different categories, including nutrition, beverages, dairy, pet care, frozen foods, and confectionery. The company markets its products under several brands, including Milo, Cerelac, Nescafe, Aero, Milky Bar, KitKat, Boost, Acqua Panna, and Movenpick (Eugénio et al., 2022, p.230-236). Over the years, Nestle has faced criticisms and controversies about labor rights, water extraction practices, and infant formula marketing practices. As a result, nestle is scrutinized to show more transparency, responsibility, and commitment. In light of this, I will analyze Nestle’s environmental and social impact and recommend the necessary actions.
Water Extraction Practices
The world faces water scarcity and social and environmental challenges that lead to a shortage of safe drinking water. As a result, food and beverage companies have monopolized public water resources aggressively. Nestle has created an ecosystem that provides fresh water for its operations (Galli and Vousvouras, 2020, p 1090-1100). Due to the water shortage globally, the UN countries are committed to addressing the social and environmental challenges to reduce the negative impacts on the environment. The mobilization of UN countries has ordered Nestle to change its business model by reducing bottled water sales. Nestle has a social obligation to respect stakeholders’ rights to water. As a result, Nestle faces a sustainability controversy challenging the company’s sustainability engagement.
Environmentalists say Nestle’s aggressive water attraction to generate profit has negatively affected the environment. Besides, Nestle’s water extraction has caused water depletion and ecological damage to rivers (Galli and Vousvouras, 2020, p 1090-1100). As a result, the company is faced with a controversy about committing to responsible and sustainable water management practices. Therefore, as a Chief Sustainability Officer (CSO) of Nestle, I will take the necessary actions to mitigate the environmental impact caused by water extraction practices.
A Stakeholder Analysis for Nestle Regarding the Water Extraction Controversy and the Relevant Stakeholders Involved
Nestle’s global stakeholders network comprises all the parties impacted by the company’s operations and the influencers of the company’s ventures. Meetings, events, and workshops held by the stakeholders significantly help the company by providing a platform to discuss the critical and challenging issues affecting the company (Eugénio et al., 2022, p.230-236). Besides, stakeholders’ interactions support teams in facilitating collective action and promoting mutual trust and respect. An extensive stakeholders’ analysis for Nestle will involve the stakeholders’ influence, interests, and power level. The analysis will include stakeholders, customers, government bodies and regulatory authorities, media and public opinion, competitors, local communities and residents, employees, international organizations, and environmental activists.
Customers
The customers are the most significant stakeholders in the sustainability of Nestle’s water extraction practices. Since they know the environmental changes, customers will expect Nestle to develop ethical, responsible, and sustainable water extraction practices. Besides, the consumers will require Nestle’s satisfaction to build and maintain their loyalty to the brand. Any negative reviews about the company’s water extraction practices will significantly reduce customer trust. Therefore, customers expect the company to provide high-quality, safe drinking water. Besides, the consumers desire transparent and open communication by the company about their Nestle operations, water source, and overall environmental practices (Sanogho, 2022, p.8). In the social media era, customers and consumers can attract a wider audience, share opinions, and influence purchasing decisions. Therefore, Nestle should ensure the water extraction practices align with customer expectations. Aligning with the consumer’s expectations and needs will maintain the loyalty of their buyers and support the brand’s image.
Government Bodies and Regulatory Authorities
Regulatory authorities and government bodies are significant in the water extraction practices at Nestle. The government must follow up on the safety and public health aspects adopted in the production and packaging of water by ensuring all the safety standards are met. Additionally, nestle will be required by the government bodies to adhere to the national and local water regulations and the set standards and laws (Khojastehpour and Shams, 2020, p.306). Nestle has been given mandatory compliance by the government, and non-adherence can lead to revoking their license and legal consequences. Besides, the government expects Nestle to publicly address society’s concerns about water extraction as a sign of accountability. As a result, regulatory authorities and government bodies should work with Nestle to develop environmental sustainability, corporate responsibility, and water usage policies. Working in collaboration with regulatory authorities and government bodies will pave the way for accurate and transparent information to the public, hence showing commitment to compliance with regulations. Nestle’s adherence to government regulations will improve its operations and boost its consumer reputation.
Media and Public Opinion
The public and media stakeholders’ opinions significantly influence Nestle’s water extraction practices. The media has put high expectations on Nestle to maintain transparency concerning their practices in water extraction. Besides, public opinion and media ensure the company holds onto sustainable and ethical practices related to ecosystem protection, water conservation, and environmental responsibility (Dobija et al., 2023, pp. 76-80). Nestle is held accountable by the public and the media for the impact of its water extraction practices on the ecosystems and the community. The media and public conduct investigative journalism to highlight and cover all the aspects of uncouth water extraction practices. On the positive, public opinion and media outlets amplify campaigns and advocacy of the water extraction practices conducted by Nestle. Therefore, the framing stories by the media about the company highlights the commitment of the company to emphasize sustainability. Consequently, Nestle is committed to fostering a positive attitude about the company by practicing responsible and sustainable practices during water extraction.
Competitors
Despite competitors being indirect stakeholders in water extraction practices in Nestle, they significantly influence the sustainability of water extraction practices. Shifts in market dynamics of competitors, setting the industry benchmarks, and influencing the choices of the customers can play a significant role in influencing Nestle’s sustainability (Khojastehpour and Shams, 2020, p.306). Therefore, Nestle must set high standards in water extraction practices to maintain its position in a highly competitive market. Consumers continuously change their tastes and preferences arising from the standards set by potential competitors. As a result, nestle is required to meet the importance of its consumers to ensure sustainability in the market.
Local Communities and Residents
The most significant stakeholders in Nestle’s water extraction practices are the residents and the local communities where water bottling operations occur. The residents have an insatiable interest in the sustainability and preservation management of water bodies. Since the local communities depend on the water resources used by Nestle, they are incredibly concerned about the environmental impact on the ecosystem and water bodies by the water extraction practices. Additionally, the residents are influential in influencing the water extraction practices since their protection and negative comments about the procedure can affect the reputation of the company and its operations (Johnson and Duckett, 2020, p-575). A lack of compliance by the company can lead to the residents taking legal action against the company. Nestle should be committed to engaging the community in meaningful, transparent, and consultative initiatives. Besides, it should create community development projects and job opportunities for the locals to create fair economic contributions (Srivastava, Jonjua, and Rana, 2019, p. 86-89). Furthermore, nestle should curate sustainable water management practices to ensure they do not harm the environment and water sources. Ultimately, collaborating with the local community, addressing their concerns, maintaining peaceful relationships, and curating sustainability strategies will sustain the company.
Employees
Employees play an essential role as the lead stakeholders in water extraction practices at Nestle. In this case, the company is expected to engage the employees in sustainable and ethical water extraction practices that align with professionalism. The employer should also ensure clear communication to the employees on environmental responsibility and sustainability initiatives on water extraction practices (Dobija et al., 2023, pp. 76-80). Besides, it is necessary to involve the employees in the decision-making process related to sustainability and corporate responsibility. As a result, creating a positive workplace culture for the employees will lead to loyalty and satisfaction. It is crucial to create awareness and training programs for the employees on the sustainability of water extraction practices to ensure the employees are aligned with the company’s goals. Creating awareness and engaging the employees encourages a sense of belonging and maintenance of sustainable practices. Lastly, Nestle must address the concerns of its employees to ensure the company achieves its success.
International Organizations
The focus of the international organizations on adherence to the global standards, protecting the environment, and international sustainability puts them on the Nestle stakeholders’ frontline. The international organizations are seriously committed to ensuring Nestle maintains social responsibility in the areas where water extraction takes place. Besides, Nestle is required by international standards to keep the necessary intranational policies and principles during water extraction (Khojastehpour and Shams, 2020, p.306). To sustain Nestle’s water extraction practices, international organizations can influence the policies aligned to corporate responsibility, water usage, and protection of the environment. In light of this, Nestle should be committed to collaborating with international organizations to ensure they create positive relationships and sustain the global policies and goals related to water extraction practices.
Environmental Activists
Environmental activists advocate for long-term water availability and sustainable water extraction practices. Besides, environmental activities seek accountability and transparency in the conservation of the environment (Srivastava, Jonjua, and Rana, 2019, p. 86-89). As a result, the stakeholders emphasize ethical and accountable water extraction practices to ensure water sources are not depleted. Therefore, Nestle should maintain accountability, ethical standards, and sustainable water extraction practices. Consequently, Nestle will conserve the global environment, maintain its reputation, and win the trust of environmental activists.
The Actions Nestle to Take to Address the Criticism, Concerns, and to Create Positive Changes
Addressing the criticisms and concerns about the sustainability of social and environmental challenges requires Nestle to embrace actions that will improve the company’s operations (Srivastava, Jonjua, and Rana, 2019, p. 86-89). Besides, Nestle is required to promote positive change around water extraction practices to ensure the venture is sustainable. Therefore, Nestle can take some actions, including engaging the community, conducting comprehensive impact assessments, providing transparency in the supply chain, integrating corporate social responsibility initiatives, collaborating with the stakeholders, continuously innovating and improving, and investing in water conservation projects.
Engaging the community affected by the water extraction practices will create room for transparent and open communication since the community and the company will agree on sustainable practices for water management (McNeish and Neufeldt, 2023, p. 440-448). Besides, Nestle will get an effective platform for addressing the local community concerns and any disputes that arise. As a result, nestle will run its operations without fearing disruptions from the community. Also, Nestle must conduct an extensive impact assessment across the water extraction points. Fulfilling an environmental assessment impact will reveal the economic, environmental, ecological, and social implications before extraction commences. The company needs to ensure there is transparency in the supply chain management. A transparent supply chain will improve the company’s adherence to global environmental standards, transparency, and visibility during extraction processes.
Furthermore, integrating corporate social responsibility into the company’s business policies and standards will allow for aligning objectives and goals. Nestle can also focus on giving the community members development-oriented resources, including healthcare, infrastructure, and education, in the areas in which it operates. Additionally, promoting healthy collaboration with the residents and NGOs will assist Nestle in identifying the social and environmental challenges affecting water extraction practices. Nestle company should also engage in continuous innovation and improvement, focusing on a constant improvement culture and investing in development and research (Johnson and Duckett, 2020, p-575). A continuous improvement culture will involve updating and reviewing practices that will sustain the company’s water extraction venture.
On the other hand, investing in development and research will allow the company to identify the areas that require the application of new technological practices (Singh et al., 2021, p.65). As a result, the company will embrace techniques that will foster sustainability in all the operations at Nestle. Nestle can participate and invest in water stewardship and conservation projects to enhance collaboration with other companies and the authorities involved and allocate resources that promote sustainable water usage. Eventually, Nestle should launch training and educational programs for the employees and customers to create awareness about the company’s sustainable practices and initiatives.
Evaluation of how these Actions affect the Company’s Main Stakeholders
The recommended actions for change have a high probability of yielding positive results in developing a responsible and sustainable business venture. Besides, the activities are likely to strengthen the relationship between Nestle and the stakeholders, fostering continuous implementation of environmentally friendly practices and addressing the concerns raised by the community (Sanogho, 2022, p.8). Nestle will also be committed to educating, creating awareness, and training its employees about safe practices to protect the environment and sustain the water extraction processes. Therefore, an overall evaluation of all the stakeholders will be conducted to evaluate how the recommended actions affect the company’s stakeholders.
Evaluating the actions recommended for residents and local communities will involve tracking the impact of community development projects and addressing social and environmental concerns. Nestle should also introduce a continuous improvement assessment of the employees and implement labor practices lenient to both the employer and the employees. The recommended actions for environmental activists will require an evaluation of the reduction of the usage of plastics and engagement in regenerative efforts (Khojastehpour and Shams, 2020, p.306). Nestle should also address the water extraction practices to preserve ecosystems and water sources to create collaboration and trust in the authorities and their customers. Furthermore, to evaluate the recommended action of investing in community development, nestle should focus on creating positive relationships with the community. Ensuring the company gives employees fair labor practices will create a safe working space for employees, leading to improved job satisfaction.
A successful evaluation of the recommended actions for investors will involve creating CSR initiatives and sustainable practices that are appealing socially. Consequently, the company’s dedication will lead to positive shareholder relations and lasting sustainability. Evaluating the reduction of plastic usage and encouraging transparency in the supply chain will positively influence the customers of Nestle’s products. Engagement in collaborative efforts, participating in the industry’s initiatives, and giving back to the community will create a stronger relationship between the stakeholders and the company. Nevertheless, Nestle must uphold transparency, clear communication, and active stakeholder engagement to succeed (Srivastava, Jonjua, and Rana, 2019, p. 86-89). Building the brand’s trust with the stakeholders will require Nestle to participate in the development activities of the community and engage in all the necessary efforts to build more trust with the stakeholders (McNeish and Neufeldt, 2023, p. 440-448). To mitigate the risks involved in the water extraction practices, nestle must address the social and environmental challenges cautiously. The mitigation risks for Nestle include operational disruptions from local communities and residents, reputational damage, and legal challenges.
Reference List
Dobija, D., Cho, C.H., She, C., Zarzycka, E., Krasodomska, J. and Jemielniak, D., 2023. Involuntary disclosures and stakeholder-initiated communication on social media. Organization & Environment, 36(1), pp.69-97.
Eugénio, T., Rodrigues, S.C. and Gonçalves, M.J., 2022. Sustainability Report Evolution: The Nestlé Case Study Applicability. In Research Anthology on Measuring and Achieving Sustainable Development Goals (pp. 227-249). IGI Global.
Galli, C.C. and Vousvouras, C., 2020. Nestlé caring for water. International Journal of Water Resources Development, 36(6), pp.1093-1104.
Johnson, D.A. and Duckett, L.J., 2020. Advocacy, strategy, and tactics used to confront corporate power: The Nestlé Boycott and International Code of Marketing of Breast-Milk Substitutes. Journal of Human Lactation, 36(4), pp.568-578.
Khojastehpour, M. and Shams, S.R., 2020. Addressing the complexity of stakeholder management in international ecological setting: A CSR approach. Journal of Business Research, 119, pp.302-309.
McNeish, J.E. and Neufeldt, J., 2023. Can Nestlé Transform from a Corporation That ‘Talks About Doing Good’to ‘Doing Good’for the Environment?. In Dealing with Socially Responsible Consumers: Studies in Marketing (pp. 429-456). Singapore: Springer Nature Singapore.
Sanogho, Y., 2022. Nestlé and the Right to Water. The Journal of International Relations, Peace Studies, and Development, 7(1), p.8.
Singh, P., Sin, L.G., Kama’Aziri, N.S.B., Jian, O.Z., Azlan, N.A.S.B.M., Ibrahim, P.N.I.B.B., Sheng, D.H., Kee, D.M.H., Heng, J.T.S., Wee, L.S. and Ying, L.Y., 2021. A study on Nestle’s promotion strategy. International Journal of Accounting & Finance in Asia Pacific (IJAFAP), 4(1), pp.60-70.
Srivastava, A.K., Jonjua, M. and Rana, R., 2019. Status of Communicating CSR to Stakeholders on Social Media-A Case Study on ITC Limited & Nestle India. Journal of Content, Community & Communication, 9, pp.81-91.
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