Strategic Options<\/strong><\/p>\n I spent my allocated 20 minutes going through some of the themes of Strategy & Sustainability<\/a>, <\/em>a book I published last fall with the objective of giving Sr. Executives and company Directors a way of connecting with the strategic issues involved using\u00a0the language and mindset of business as opposed to that of ecologists. In my view there are five strategic issues<\/a> at play and firms have a choice on whether to focus on complying with the law or going “beyond compliance” as discussed by Harvard’s Forest Reinhard.<\/p>\n Clearly\u00a0no company should adopt a strategy which explicitly or implicitly condones Breaking The Law<\/span> although we have had the recent example of Volkswagen which has been\u00a0discussed\u00a0in an earlier post<\/a>.<\/p>\n I do believe that complying with the law in every country and territory in which a firm does business is certainly legitimate and can be quite complex when dealing with a large multi-product multinational such as Nestl\u00e9.\u00a0To go beyond that and adopt, what I call, Wait and See<\/span>, is about pro-actively looking at issues such as consumer behavior and trying to predict if and when they will start to pay for higher levels of environmental\u00a0performance\u00a0or simply demand it as a condition to remain loyal to a particular brand.<\/p>\n Show and Tell<\/span> is about building a company’s legitimate efforts to improve its performance\u00a0into its communications program and differs from greenwashing when such actions are\u00a0genuine and based on wide spread commitment. The last two options go well beyond compliance and are typically driven by the convictions of shareholders, who agree to spend part of their potential profits in this way, or savvy managers who are convinced that investments in improved environmental performance today will pay off tomorrow due to changing consumer behavior, regulations or both.<\/p>\n Creating Shared Value at Nestl\u00e9<\/strong><\/p>\n What is interesting about Nestl\u00e9 is that while the company does have outstanding\u00a0performance in a number of areas associated with \u00a0the environment and social responsibility, very little of that can be found in their marketing messaging or general communications. As opposed to what I called Show and Tell<\/span> in the book, Nestl\u00e9 is actually doing more and saying less than some of its competitors. Dereux felt this was part of the company’s Swiss heritage which is to demonstrate one’s values through actions rather than words. Nestl\u00e9’s former head of worldwide operations, Spaniard, Jos\u00e9 Lopez, once told me that his goal\u00a0was that the company should never be accused of greenwashing and thus would quietly work to improve society and the environment.<\/p>\n","protected":false},"excerpt":{"rendered":" In a session for IESE Alumni different strategic approaches to sustainability were discussed and Nestl\u00e9 given as an interesting example as it actually does more than one would think based on its corporate communications.<\/p>\n","protected":false},"author":788,"featured_media":2844,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[40367,70358],"tags":[14432],"class_list":["post-2841","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-strategy-sustainability","category-water","tag-nestle","megacategoria-mc-sustainability"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/posts\/2841","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/users\/788"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/comments?post=2841"}],"version-history":[{"count":5,"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/posts\/2841\/revisions"}],"predecessor-version":[{"id":2851,"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/posts\/2841\/revisions\/2851"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/media\/2844"}],"wp:attachment":[{"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/media?parent=2841"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/categories?post=2841"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.iese.edu\/doing-business\/wp-json\/wp\/v2\/tags?post=2841"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Screen](\"https:\/\/blog.iese.edu\/doing-business\/files\/2016\/05\/Screen-Shot-2016-05-16-at-10.38.40-AM-300x142.png\")
<\/a>Each company or institution also has, I believe, its own degree of “environmental sensibility” and by that I mean the degree to which its shareholders, customers, employees, neighbors or civil society as a whole are\u00a0concerned with its environmental performance. While Pope Francis urges “all people of good will” to do what they can, the government does regulate some industries more than others. Putting these ideas together gives a map of different options that a firm can choose and the basic idea I tried to get across to the alums was that the choice of overall strategy must be made by the CEO and the Board from the\u00a0different choices are shown graphically.<\/p>\n![\"Screen](\"https:\/\/blog.iese.edu\/doing-business\/files\/2016\/05\/Screen-Shot-2016-05-16-at-11.00.25-AM-300x153.png\")
<\/a>With over 335,000 employees and 436 factories worldwide, assuring global compliance is a challenging task at Nestl\u00e9. Compliance is, in fact, only the first step in the company’s approach as it also has a strong commitment to environmental sustainability and what it calls creating shared value with civil society. Nestle’s tree major initiatives are in the areas of nutrition, water and rural development and\u00a0Laurent Dereux also discussed the company’s commitment to youth employment in Europe. Nestl\u00e9 actually has 39 commitments<\/a>\u00a0 for 2020 and is routinely ranked at or near the top by the different rating agencies and surveys of sustainable companies.<\/p>\n