What are material issues?
According to the Global Reporting Initiative, material issues include: “those topics that have a direct or indirect impact on an organisation’s ability to create, preserve or erode economic, environmental and social value for itself, its stakeholders and society at large”.
In simple terms, materiality is about identifying the societal issues that pose risks or present opportunities to Nestlé, balanced against the issues that are of most concern to our external stakeholders. It’s how we choose what to focus and report on.
Applying a rigorous materiality process can not only help us report on the issues our stakeholders want to hear about, but also help us decide where to focus our internal resources.
How does Nestlé determine its material issues?
For several years, we have worked with SustainAbility, an independent think tank and strategic advisory firm, to identify and prioritise the issues deemed most important to our company and its stakeholders.
In this year’s materiality analysis we developed our methodology to determine our material issues by involving SustainAbility and GlobeScan, a global research firm specialising in sustainability.
To understand the positioning and movement of issues, we used opinion-leader reputation research; surveys involving sustainability experts and consumers; feedback from stakeholder convenings; our engagement events; an extensive media scan; an internal business impact survey; and our corporate risk map.
Using a set of 13 mega trends as a starting point for discussion, we then prioritised issues on a materiality matrix based on the level of stakeholder concern and level of potential impact on the Company. The 13 mega trends were – economic volatility, political upheaval, technological innovation, resource constraints, increasing/decreasing purchasing power, urbanisation, ageing population, rural poverty, over/under nutrition, population growth, rise of the developing world, climate change, and water constraints.
Nestlé's materiality matrix
Increasing or current impact on Nestlé
Increasing concern to stakeholders
Legend - Click on the text to see whether concern has increased or decreased
- Increase in stakeholder concern
- Decrease in stakeholder concern
- Steady concern
- Increasing concern and business impact
- Increase in business impact
- Highly variable issue
- Highly variable issue for stakeholders
- Environmental sustainability
- Rural developmentLegend
- Responsible sourcing
- Our people
* Indicates new issue for 2012
What are Nestlé's material issues?
The highest priority issues identified by our materiality analysis are below.
- Innovation and renovation of products to address obesity, malnutrition and micronutrient deficiencies. A fundamental priority for us as a Nutrition, Health and Wellness Company.
- Product safety and quality are integral to the trust we have with our customers and consumers.
- Food security, which includes food accessibility and affordability, will remain of high concern to stakeholders, particularly with rising input prices.
- Water usage and conservation, and its complex links to agriculture, energy and a range of other social, environmental and economic issues, continues to rise up the agenda.
- Packaging, which moved to an area of higher significance this year, is an issue of high visibility to consumers, but also has a strong role to play in food safety, reducing food waste and ensuing environmental impacts, and providing nutrition and portion guidance.
- Responsible sourcing is becoming a more prominent issue, due to the large volumes of commodities purchased by us.
- Respect for human rights, in particular freedom from child labour, is a fundamental issue that affects not only livelihoods in rural communities, but also the long-term sustainability of one of our key raw materials, cocoa.
- Labour relations is critical to business continuity and continues to rise in significance for a wide range of stakeholders beyond the factory gate.
New additions to the materiality matrix
Several new issues have been added to the materiality analysis this year, based on feedback from key stakeholders. They include:
In this year’s report we have included some information on these topics. We will be providing a more detailed account of our activities in each of these areas in future reports.