What is Creating Shared Value?
Creating Shared Value is a fundamental part of Nestlé’s way of doing business that focuses on specific areas of the Company’s core business activities – namely water, nutrition and rural development – where value can best be created both for society and shareholders.
Any business that thinks long-term and follows sound business principles creates value for shareholders and for society through its activities, eg in terms of jobs for workers, taxes to support public services, and economic activity in general.
But Creating Shared Value goes one step further. A company consciously identifies areas of focus, where:
- Shareholders’ interest and society’s interest strongly intersect; and
- Where value creation can be optimized for both
As a result, the company invests resources, both in terms of talent and capital, in those areas where the potential for joint value creation is the greatest, and seeks collaborative action with relevant stakeholders in society.
At Nestlé, we have analyzed our value chain and determined that the areas of greatest potential for joint value optimization with society are Water, Nutrition and Rural Development. These activities are core to our business strategy and vital to the welfare of the people in the countries where we operatebr.
We actively seek engagement and partnerships with outside stakeholders that optimizes positive impact in these areas of focus. However, Creating Shared Value is not about philanthropy. It is about leveraging core activities and partnerships for the joint benefit of the people in the countries where we operate and of our shareholders.
Neither should Creating Shared Value be confused with compliance or sustainability. Creating Shared Value is built on the foundation of a strong compliance culture and commitment to sustainability. But Creating Shared Value goes beyond compliance and sustainability, and aims to create new and greater value for society and our shareholders within the areas of focus.
In doing so, Nestlé maintains a very long term perspective on business development and welcomes dialogue with external stakeholders who are committed to principled behaviour and constructive engagement. This includes government and regulatory authorities, intergovernmental organizations, non-governmental organizations, academic and professional bodies, and local communities.