Nestlé in society Creating Shared Value and meeting our commitments 2015

Nestlé in society:
Creating Shared Value
Nutrition, health
and wellness
Rural development
Water
Environmental
sustainability
Human rights
and compliance
Our
people
G4-HR11
Identification process
Business risks versus risks to rights holders
Since 2008, we have had in place a process whereby we
evaluate the impacts that human rights risks might have
on the company, whether from a reputational, operational
or legal perspective (see page 233). This exercise has been
extremely useful for us not only in identifying the main
risks for the company but also in developing targeted
actions to manage them effectively.
The concept of salience adds another dimension to the
definition of risks by focusing exclusively on rights
holders. This had a direct impact on the way we look at
risks and how we evaluate them. For example, instead of
trying to quantify the potential impact of child labour on
our reputation, we tried to assess the level of severity (in
terms of scale, scope and remediability) that child labour
represents for children deprived of access to education
and having to carry out hazardous tasks in our direct and
agricultural supply chains.
Interestingly, this shift of emphasis from business risks
(materiality) to risks to rights holders (salience) has not
significantly changed the outcomes of our human rights
risk assessment process: most of the risks that are high (or
severe) for rights holders had already been identified as
high for the company. In our view, this is mainly due to the
combination of two factors. With more than one billion
Nestlé products sold every day, we are a major consumerfacing
company, with a high international profile and
exposure. This is reinforced by the fact that, with the
widespread use of social media, among other factors,
there are no longer local risks for multinational companies:
any issue that we face in our operations or supply chains
at the local level has a direct impact on our reputation
globally. This certainly applies to human rights impacts
that would have a severe effect on rights holders.
Some items were added to the list of salient issues,
though they had not been identified as high risks for our
business. An example was access to grievance
mechanisms. While the likelihood that our reputation is
affected – or our operations disrupted – by a lack of
access to a grievance mechanism is low (business risk),
this was considered to be a high risk to rights holders.
Based on our experience, more effort needs to be made
to ensure that all our employees – the workers employed
in our direct and indirect supply chain, local communities
and consumers – have an effective way to raise concerns
about human rights-related issues and non-compliances.
The list of 11 salient issues is based on a thorough internal
and external consultation process. Internally, the first list of
salient issues was proposed to the HRWG in early 2015. This
list was based on the results of the Human Rights Risk
Assessment Matrix 2014. This matrix builds on the company’s
experience evaluating human rights issues. It is based on the
results from the different monitoring tools and processes we
have in place, combined with the experience of the members
of the HRWG themselves, and the expert inputs from our main
partners in this area, the Danish Institute for Human Rights
(DIHR) and the Fair Labor Association (FLA).
Once consolidated internally, the list of salient human rights
issues was presented and discussed at the Nestlé stakeholder
convening that we organised in Washington DC, USA, in
December 2015. Participants in the human rights breakout
session represented some of the leading non-governmental
organisations (NGOs), UN organisations, law firms, business
associations and experts from academia on the topic of
business and human rights.
The stakeholders proposed the following changes, which
have all been reflected in the final version of the salient human
rights issues:
• Split child labour and forced labour, which were initially
combined as one salient issue. These two issues have
different geographical scopes and different root causes,
and should, therefore, be looked at and dealt with
separately; and
• Add discrimination as an issue that cuts across all the
salient human rights issues. While stakeholders understood
that – based on our own data, results and experience –
discrimination may not have been identified as a salient
issue, they strongly suggested that this issue be
incorporated into the action plans that will be developed for
the 11 salient issues next year.
While all stakeholders agreed on the growing importance of
data protection and privacy, some of them challenged the
salience of this issue for a company like Nestlé, in particular
compared to IT companies, for example. However, based on
further internal considerations, we decided to keep this issue
on the list mainly because of its scale (risk to all our employees
and consumers).
Governance structure
Each salient issue will be managed by a specific function
within the company with the active support of relevant
functions. This will improve our overall governance structure
on human rights and make the work and mandate of the
HRWG more operational. In addition to its original role, the
HRWG will be in charge of monitoring the proactive
management of the 11 salient issues. To facilitate this work,
we publicly committed to develop action plans and targets for
each salient issue by the end of 2016.
Nestlé in society – Creating Shared Value and meeting our commitments 2015 229