Peter Brabeck-Letmathe, Chairman, Nestlé S.A.
Creating Shared Value: the role of business in society
Creating Shared Value is a basic principle of business strategy and fundamental to our overall success as a company. By Creating Shared Value, we mean that in order to create long-term business success, we have to create value for our shareholders and value for society at the same time. If we fail to create value for shareholders, we do not serve the hundreds of thousands of investors, primarily retirement savers and pension funds, who rely on Nestlé to provide a reliable return that is the basis of their economic and social welfare. If, on the other hand, we fail to create value for society, we do not serve consumer and public needs, and interest in buying our products suffers.
It is this motivation to serve society through our business, which I believe is partially responsible for the high level of loyalty and motivation, as well as the low turnover rate, of our 283 000 associates. It is thus highly important to our business success.
We aim to go beyond compliance and sustainability. A business must follow not only laws, but also the highest norms of corporate behaviour, as contained in codes of conduct, documents such the United Nations Global Compact and other commitments we have made. This is fundamental and non-negotiable. A business must also operate in an environmentally sustainable manner, operating in a way that provides for current needs without compromising the earth’s resources for use and enjoyment by future generations. But the unique role of business is value creation; that is, in order to develop a successful long-term business, we must go beyond compliance and sustainability, and actually create value for society.
Our number one priority is obviously to provide value to our consumers, and Nestlé has become the number one Nutrition, Health and Wellness Company in the world through providing nutritional value. We have done this since 1867, when Henri Nestlé invented the first milk and cereal product that could sustain the lives of infants, the elderly and the infirm.
But we go beyond consumer value, and aim to create value, where it makes long-term business sense, for farmers, for our employees, for small entrepreneurs and for the communities where we operate. We believe that this long-term view is what distinguishes us from many companies and has been a clear competitive advantage, particularly in the developing world.
But we are not satisfied with our current performance, and constantly seek to find new ways to serve, such as our Popularly Positioned Products, aimed at the base of the income pyramid.
I hope that you find latest CSV Report useful in understanding what we try to do as a company, and am happy to respond to any questions which you may have after reading this report.
Peter Brabeck-Letmathe
Chairman, Nestlé S.A.