Reference no: EM132224364

How recyclable packaging create value for Nestle’s stakeholders

Many business operators now focus on value creation both in the internal and external context of creating better value for customers purchasing its products and services, as well as for shareholders in the business who want to see their stake appreciate in value creation. Stakeholders can be internal or external to the business.

Internal stakeholders include employees and shareholders. External stakeholders include suppliers, customers, the communities in which the business operates and the environment. Nestle actively seeks engagement with stakeholders to optimise positive impact. It aims to use the power of its core activities for the joint benefit of the people in the countries where it operates and of its shareholders (Nestle 2010).

According to Nestle, recyclable packaging plays a crucial role in the development of well-functioning collection, sorting and recycling schemes across the countries. In addition, sustainable packaging support packaging materials to protect foods and beverages, prevent food waste, and provide important information for individuals and families. Nestle is also committed and focused towards the environmental impact of packaging in which it integrates its stakeholders and beyond to reduce the packaging waste and design and deliver more efficient packaging solutions (Nestle 2012).

Value creation of recyclable packaging on Nestle’s stakeholders:

Investors: They share concerns about the growing accumulation of packaging waste. Group of investors push Nestle to act responsibly to set plastic use reduction goals, facilitate recycling and transition to recyclable, reusable or compostable packaging as much as possible.

Suppliers: Suppliers provide assurance that its food recyclable packaging is safe from the chemicals from which it is manufactured.

Communities: Nestlé’s packaging tool helps society to select the most

appropriate materials and supports initiatives to recycle or recover energy from used packaging; and use recycled materials wherever there is a clear environmental benefit and it is appropriate. It is also raising awareness among consumers about the recyclability bottles so that collection schemes improve.

Customers: Recyclable or reusable packaging help consumers recycle their packaging correctly and develop new approaches to facilitate recycling and eliminate plastic waste.

Governments: NGO’s and government are actively participating in the recyclable packaging project and investing to design better packaging, increase recycling rates and introduce new models for making better use of packaging.

Employees: Relating to packaging employees develop the right procedures, the right behaviours and the right skills into their everyday activities.

Creating value creation is the essence of business. The most successful organizations understand that the purpose of any business is to create value for customers, employees, and investors, and that the interests of these three groups are inextricably linked. Therefore, sustainable value cannot be created for one group unless it is created for all of them. Nestlé has created shared value (CSV) strategy, which focused on the three categories of nutrition, water, and rural development. In the packaged food and beverage industry, pressure had mounted since the 1990s to improve supply chain sustainability and provide healthier, more natural foods, leading to consolidation and causing sales to decline in 2010. With 150 years' experience in the industry, Nestlé had transformed into a nutrition, health, and wellness company and made its CSV strategy explicit in the early 21st century (Porter et al. 2015).

Nestle’s value creation is a fundamental part of doing business that focuses on specific areas of the company's core business activities. As a company, it entails businesses creating competitive advantage, which in turn will deliver better returns for shareholders, through actions that substantially address a social or environmental challenge. It is built on strong foundations of compliance and sustainable business practices to preserve the environment for future generations. Taking a long-term approach has always been Nestlé’s approach to business. Value creation brings business and society together by generating sustainable economic value in a way that also produces value for society (Nestle 2016). According to Nestle, the world is changing fast, with consumer expectations, competition and society evolving at an unprecedented pace. While company is anticipating and adapting to these changes, two important dimensions do not change – our purpose and our values. Its purpose is to enhance quality of life and contribute to a healthier future and values, rooted in respect, guide our decisions and actions. These efforts, among others, show that business has a vital role to play in building a better, more sustainable world for everyone.

Through value creation approach it aims to create value not only for shareholders but also for society.Its brands enhance quality of life and contribute to a healthier future for individuals and families, for our communities and for the planet and also continue to actively manage its commitments to environmental and social sustainability, necessary for operating our factories and for the sustainable growth and development of the communities and countries in which it operates (Nestle 2017).