Doing Better by the Environment

INTRODUCTION

Sustainable development

Rio and after

The latter part of the twentieth century saw

an increasing concern for the environment.
The concept of sustainable development (as
defined by the World Commission on
Environment and Development in 1987) is:

By the early 1990s there was considerable pressure for governments to create
agreements concerning the environment and its protection.

The environment is a key subject that affects us all.

Protection of the environment and the move towards
sustainable development remains a responsibility
that must be shared between the public, governments and the private sector.

development that meets the needs of the

present generation without compromising
the ability of future generations to
meet their own needs.

This case study examines the background to

sustainable development, the environment
and its protection. It also looks at how
Nestl S.A., the worlds leading food
company, developed a policy and current
business practices that reduce the
companys effect on the environment.
Following years of work on environmental
issues dating back to the 30s, in 1996 the
Nestl Environmental Management
System (NEMS) was introduced which
consolidates all environmental
measures taken by the Nestl
Group. NEMS is now used to
ensure continuous improvement
in Nestls environmental
performance covering
all its business
activities.

There are many views about

the nature of sustainability. In
its simplest form it is about
ensuring a better quality of
life for everyone, now and
for future generations. To
achieve this, sustainable
development is concerned
with achieving economic
growth alongside the protection of the environment
and also at the same time
making sure that these
economic and environmental benefits are available to
everyone. These three aspects
- economic, environmental
and social form the basis of
the sustainable
development
concept.

In 1992 the United Nations Conference

on Environmental and Development
(UNCED) was held in Rio de Janeiro.
The main outcome of the conference
was Agenda 21, which marked an
important landmark in the sustainable
development fight, and inter country
co-operation.
Agenda 21 was the main document
signed at the conference. It was over 800
pages long, and represented a new
global commitment to sustainable development. It was not a legally binding
document, but was devised as a working
plan which countries would follow.
The conference marked the start of
global co-operation, which was needed
to deal with the many issues, including
concern for the environment.

The sustainable
business
The concept and support for, sustainable
development is growing. Many businesses
have integrated a strategy of sustainability
(taking into account its 3 main aspects economic, environment, social). It makes
good business sense for companies to be
environmentally friendly as improved

efficiency in manufacturing in turn leads

to a more efficient use of natural
resources. Operating efficiently translates
to competitive advantage for business and
supports the economic pillar of sustainability as well. Therefore, all aspects of
sustainability are seen as complementary,
and mutually interdependent.
Agenda 21 states that responsible
businesses should play a major role in
improving the efficiency of resource
use. This can result in minimising
waste and protecting human health and
environmental quality.
For a business to be environmentally
sustainable, the company must start by
becoming environmentally aware from
the inside. The whole ethics and culture of the organisation must reflect
those of sustainable development. This
includes what the company does, how
it treats its workers, how it deals with
other organisations, how the managers
act and what messages these actions
send out. Sustainable Development is
an integrated approach including economic, environmental and social
aspects. Therefore all three are to be
put at complementary levels of priority
each considering effects of the other
components.
Agenda 21 lays out a seven point plan for
businesses to start changing values and
perceptions. It states that they should:
develop policies that support
operations and products that have
lower environmental impacts

ensure responsible and ethical

management of products and
processes from the point of view of
health, safety and the environment
make environmentally sound
technologies available to affiliates
in developing countries without
prohibitive charges
encourage overseas affiliates to
modify procedures in order to reflect
local ecological conditions and share
information with Governments
create partnerships to help
people in smaller companies
learn business skills
establish national councils for
sustainable development, both in
the formal business community
and in the informal sector, which
includes small scale businesses
increase research and development
of environmentally sound
technologies and environmental
management systems.

Nestl as a
sustainable business
As the worlds largest food company,
Nestl S.A. is dedicated to providing
consumers with the best food throughout their lives. The primary role of the
Company is the transformation of natural resources into finished products
that meet consumers expectations for
safety, quality, convenience and value.

Naturally, Nestl is committed to sustainable development and environmentally

sound business practices. The key drivers
for Nestls worldwide environmental
approach are:
total compliance with all laws
and regulations in all countries
where it operates
that Nestl seeks to provide a
leadership role - to establish the
benchmark for good business practice
by committing resources, both
human and financial, to secure
environmental targets, including:
employing new technologies and
processes
measuring the costs and benefits
to the business of its activities
ensuring employees are aware of
best practice.
To be effective a programme of
environmental improvement must be
supported by practical management
systems.
Nestls worldwide approach, therefore,
has been to:
set targets for environmental
improvements
monitor progress
audit results
review targets.
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Progress to date - An
example from Nestl UK
In the UK a series of surveys at all
Nestl UK locations formed the basis
for a programme of continuous
improvement. Action plans were
developed for each Nestl UK site,
including capital expenditure plans for
environmental protection.

Nestls Environmental
Management System
(NEMS)

Packaging

Energy management

Packaging is essential to maintain the

high quality of the products. Nestl
continuously reviews packaging and,
where possible, reduces the amount
used. This results in saving on materials such as glass and plastics. Nestl is
also playing its part in meeting national targets for the recovery and recycling
of packaging waste.

As an integrated part of its environmental policy, Nestl UK is committed

to responsible energy management and
seeks to use energy as efficiently as
possible. This is done to:

The NEMS objectives include:

To provide a systematic approach
that ensures compliance with Nestls
environmental policy, relevant laws
and Nestls operational standards.

To achieve compatibility with international voluntary standards on

environmental management systems.
To build mutual trust with
consumers, governmental
authorities and business partners.

This involves seeking to buy fuels at

their most economic cost and then to
use them as efficiently as possible. It
also means a reduction in pollution,
and less dependence on non-renewable
resources. In the short-term this
involves gaining better control over
energy consumption. Different operations are measured to determine energy
usage. Nestl is investing in energy
saving measures as well as staff that are
properly informed.

Is the material re-usable or

recyclable?
Between 1991 and 2000 Nestl UK has
been able to reduce its consumption of
materials by up to 10%.
Major achievements in this area
included:

NEMS is being implemented throughout Nestl S.A.s entire operation.

Removal of the inner plastic sleeve

from Kit Kat Bumper packs saving
160 tonnes of plastic per year.

Ways in which
Nestl is doing better
by the environment

A reduction in the thickness of

200g Nescaf jars saving 1041
tonnes of glass per year.
A reduction in thickness of base
material for chilled dessert pots

Nestl UKs commitment to sustainable business practice is illustrated by

Carbon dioxide is the most significant

of the greenhouse gases believed to be
responsible for the effects of Global
Warming. The Kyoto Conference on
Climate Change (1999) has meant that
the UK and many other Governments
have entered into a legally binding
agreement to reduce greenhouse gases.
In addition, the Government has set a
unilateral target of 20% reduction of
carbon dioxide by 2010 from 1990
levels.

Continuous improvement: Based

on the Japanese notion of Kaizen of
continually seeking small incremental
steps to improve products, processes
and ways of working.
Culture: The typical pattern or way
of doing things in an organisation.

How can the removal of

the inner plastic sleeve
from Kit Kat Bumper
packs be seen as a move
towards sustainability?

Practical management systems:

Systems which are designed to put
management decisions into action.

Removal of inner plastic sleeves from Kit-Kat

bumper packs saves 160 tonnes of plastic per annum.

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Why are International

Treaties like Rio and
Kyoto important in
encouraging sustainable
business practice?

Give one other example of

how Nestl has developed
business practice in line
with Agenda 21s seven
point plan for business.

Why is it important for

organisations like Nestl
to show leadership in
developing sustainable
business practice?

What further steps

could Nestl take
in contributing to
sustainability?

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Sustainable development:
Development in living standards
and improvements in the quality
of life of people as a whole (rather
than just for specific individuals)
over a period of time.

Ethics: Sets of moral principles/beliefs.

QUESTIONS

Strategic commitment: Organisation

wide commitment involving all the
parts of organisational policy and
practice.

Environment Protection Act: UK

legislation creating series of requirements on business to operate in
sustainable ways.

Nestl Policy and the Environment

Protection Act all forbid the deliberate
discharge of refrigerants into the
atmosphere. Where refrigerant has to
be removed from a system and cannot
be immediately reused, it is recovered
and sent for recycling or disposal by
suitably qualified companies.

This is a summary of the steps taken by

Nestl UK since 1994 to reduce greenhouse gas emissions:

Audit: Listing and measuring results,

in order to check on performance.

Drivers: The underlying forces that

prompt and lead change.

As a company which produces

frozen, chilled and other
perishable foods, refrigeration is essential to
many
parts
of
Nestls production
and distribution systems. Nestl is progressively cutting
refrige r a n t s t h a t
are
potentially
harmful to the environment. In the late
1980s a survey indicated that up to 10%
of refrigerants used by
the company in the UK
were CFCs. The decision
was made to phase out CFCs
in all but small, hermetically
sealed systems and today this programme is complete.

avoid unnecessary expenditure

Is the size of pack justified?

Could the manufacture and

construction of the outer
packaging be made simpler?

To ensure the continuous improvement of Nestls environmental

performance, e.g. through the
conservation of natural resources
and the minimisation of waste.

All figures shown relate to savings

made per year.

prolong the useful life of fossil fuels

Is the packaging appropriate

for the product?

Could any of the components be

reduced in weight or thickness?

Ashbourne - saving 9,000 tonnes

Fawdon - saving 12,500 tonnes.

prevent related emissions to the

environment.

Are there any unnecessary

components within the pack?

Conclusion
World governments are increasingly
realising their responsibility to develop
and implement shared solutions to
global environmental issues. At the
same time responsible businesses like
Nestl S.A. are taking on a leadership
role. This should drive forward changes
in policy and practice which will help
us all to enjoy a sustainable future.

similar changes at Dalston - saving

24,000 tonnes

improve cost-effectiveness, productivity and working conditions

Nestl has established a set of criteria

for evaluating packaging. These are:

NEMS is an organisational tool at the

heart of Nestle's programme for the
environment, and sets the framework
for all measures applied.

the replacement of a coal-fired

steam raising plant with a gas-fired
combined heat and power plant
at York, saving 45,000 tonnes of
CO2 per year

saving 150 tonnes of plastic over

a two year period.

two business examples of areas where

improvements are being made:

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