Outlining the key concepts from this case study : Nestl: Creating Shared Value Not Corporate Social Responsibility In January 2008 the chairperson of Nestl SA, Peter Brabeck-Letmathe, attended the World Economic Forum, where the main subject was corporate social responsibility (CSR), emphasising the need for companies to give back to society. At the closing plenary session Brabeck-Letmathe sent a shockwave through the forum when he stood up and stated that he did not agree with the notion that a company should give back to society. He argued that his company, Nestl, had not stolen anything from society and therefore had nothing to give back. As he stated in an interview some years later, I personally believe that no CEO of a public company should be allowed to make philanthropy. I know this is shocking for the American environment, but I think anybody who does philanthropy should do it with his own money and not the money of the shareholders.Footnote Nevertheless, Brabeck-Letmathe left the World Economic Forum feeling that the issue of CSR required further thought, and in early 2008 he contacted Michael Porter to discuss an article he had written about competitive CSR. During their subsequent discussions Porter and his colleague Mark Kramer were asked to conduct an independent analysis of the Nestl value chain in Latin America. The outcome was the publication of a report, The Nestl Concept of Corporate Social Responsibility, which introduced a new concept of creating shareholder value (CSV) as opposed to corporate social responsibly (CSR), which was a concept that sat more comfortably with Brabeck-Letmathes business philosophy. Rather than focusing on philanthropy or externally imposed criteria, CSV focuses on the simultaneous creation of long-term shareholder and societal value. Brabeck-Letmathe moved quickly to embrace the concept of CSV. In 2008 a Nestl CSV Advisory Board was established that included among its membership representatives from the most prominent non-governmental organisations in the world. The first of what was to become a series of annual Creating Shared Value Reports was published that year, and in April 2009 the first annual Creating Shared Value Forum was launched in New York, in which a Nestl Creating Shared Value Prize was awarded with the aim of fostering innovative approaches to solve problems of nutrition, water and rural development. CSV is embedded in the corporate culture of Nestl and is operationalised in a process of evidence-based reporting where a comprehensive set of key performance indicators (KPIs) are established for each division, focusing on nutrition, rural development, water, environmental sustainability and people, human rights and compliance.Footnote With this, the company made 39 commitments globally to meet by 2020 or earlier to support its philosophy of creating shared value (https://www.nestle.com.au/creating-shared-value/our-commitments). Some of these commitments include a reduction in greenhouse gas emissions by 35 per cent for every ton of product made, a reduction in water usage by 40 per cent across all products and a switch to 100 per cent sustainable palm oil. QUIZ 3: Referring to the Nestle Case 4.5 (see case study in Mindtap) as background information. In todays corporate environment many companies have responded to stakeholders/publics concerns e.g., sustainability, ethics etc. by adapting elements of their corporate strategy, marketing strategy and marketing tactics to reflect these concerns. Your CEO wants to know why and how the company should respond to stakeholder concerns. Show your understanding of these topic areas by using examples of how they apply to several industries (e.g., mobile phones, cars, sporting goods, fast moving consumer goods).

Q 1: Outlining the key concepts