Nescafe

RATING

SECTOR

Beverages

WEBSITE

CONTACT

Nestlé S.A. Avenue Nestlé 55, 1800 Vevey, Switzerland

STOCK EXCHANGE

LISTING

Nescafe

  • #33 World’s Most Valuable Brands 2020

Nestle

  • #570 World’s Best Employers 2020
  • #121 Best Employer for New Grads 2020
  • #54 World’s Most Valuable Brands 2020
  • #41 Global 2000 2020
  • #498 Best Employers for Diversity 2020
  • FTSE4Good
  • Access to Nutrition Index
  • Rated AA by MSCI ESG Research 
  • CDP Climate A list 
  • CDP Water A list 
  • Dow Jones Sustainability Indices

EMPLOYEES

291,000

CHIEF SUSTAINABILITY OFFICER

David Tulauskas

AWARDS

N/A

CONTENT SOURCE

FURTHER READING

Report created by Cec Ehrhard

Nescafe

SECTIONS :  Sustainability    Evaluation  •  Progress  •  Watch  •  Overview

Company Activity

Nescafe is a coffee brand that is part of the large Swiss company, Nestle. Nestle was created in 1905, and has gained its popularity after the World War; Nescafe created a soluble powder that was efficient and transportable for the soldiers at the time.

Currently, there are over 5,000 products under Nescafe and the company provides one-fifth of the coffee consumed worldwide. Coffee continues to be one of Nestle’s most important products and commodities. The popularity of coffee continues to grow and so does Nescafe’s production.

Nestle also sells beverages, cereals, chocolate and baked goods, instant foods, healthcare nutrition, etc. Nestle’s best selling products are powdered and liquid beverages such as coffee and chocolate milk. Some other popular brands under Nestle are Nespresso, Kit Kat, Nesquik, Smarties, and Stouffer’s. 

Company Sustainability Activity

Nestle has implemented many targets to reach within the next decade. One of the biggest goals is to become net neutral GHG emissions in 2050. Within that time frame, they have goals and initiative to make the supply chains more efficient and to reduce production waste.

Many of their main products like cocoa and coffee are sourced outside the United States and there have been poor ethical and sustainability reports regarding the production of these products. Nestle has tried to combat those allegations, but the company has not yet been able to state their production methods are 100% free of child or forced labor. 

Highlights

  • 896,168 people benefiting from WASH program by end of 2019
  • 189 factories purchase 100% renewable electricity 
  • Cut warehouse emissions by 35%

Targets

Reducing Environmental Footprint

  • By 2050, achieve net GHG emissions
  • By 2030, strive for zero environmental impact on company operations 
  • Within the next 3 years be close to 100% deforestation-free
  • Planting 5 million trees in AAA coffee farms and landscapes to combat climate change
  • By 2020, aim to “procure” 100% of electricity from renewable sources
  • By 2020, reduce GHG emissions in scope 1 and 2 for overall reduction of 35% in manufacturing operations

Individuals, Families, & Community 

  • By 2030, ambition to help 50 million children lead healthier lives 
  • By 2030, ambition is to improve 30 million livelihoods in communities directly connected to Nestle Business activities 
  • By 2020 reduce sugar in food and beverages by 5%, reduce sodium in products by 10%, reduce saturated fat by 10% in all relevant products that do not meet the Nestle Nutritional Foundation, and remove all artificial colors from products 
  • Aim to increase the proportion of women in top senior executive positions to 30% by 2022

Sourcing and Minimizing Waste 

  • By 2025, make 100% of packaging recyclable or reusable
  • By 2020, 80% of the total spend and volume of its priority categories to be traceable and 70% to be responsible sources 
  • By 2020, over 80% of the total spend and volume sourced from audited and compliant supplier 
  • By 2020, 70% of total Nescafe coffee supply to be responsibly sourced
  • By 2020, source 100% of the coffee for Nespresso’s permanent range through its AAA sustainable Quality Program on coffee sourcing 

Managing Water

  • By 2020, carry out 40 new Water Resource Reviews in selected manufacturing facilities 

Progress

Reducing Environmental Footprint 

  • In 2019, 76% of raw materials such as soya, sugar, meat, pulp, paper, and palm oil were verified deforestation-free
  • In 2019, 65% of total coffee supplies were responsibly sourced
  • By end of 2019, achieved an overall reduction of water withdrawal per tonne of product of 31% since 2010
  • In 2019, 87% of packaging was recyclable or reusable
  • Since 2009, 96% reduction of waste
  • In 2019, 70% of the volume of the top 15 categories of raw materials was responsible sources
  • Phasing out synthetic refrigerants such as hydrofluorocarbons

Certificates

  • ISO 14001
  • OHSAS 18001
  • CARES
  • SHE

UN Sustainable Development Goals

UN SDGs Compliance

This analysis is based on Nescafe’s parent company, Nestle

SDG 3

SDG 5

  • Support breastfeeding and protect it by continuing to implement an industry-leading policy
  • Work with EpiGen Global Research Consortium on the nutritional intervention preconception, and during pregnancy maintain healthy glucose metabolism and offspring health 
  • Work with FarmStrong Foundation to help women set up their own business, improve livelihood and income
  • Nestle Gender Balance Acceleration Plan

SDG 6

  • In 2019, the company implemented 371 water-saving projects in factories
  • Reuse water in operations while reducing withdrawal of water
  • Help increase access to safe water and sanitation
  • 2019 launched “Wild About Water” program to encourage children to drink more water 

SDG 8

  • “Nestle needs YOUth” to help young people access economic support
  • Improve farm economics in seven priority sourcing location based on results on the Rural Development and Framework baselines
  • Provide training to over 400,000 farmers

Secondary SDGs: 2

Evaluation

Nestle has a few priority SDG’s in place and has set target goals for climate change reform. There are targets in place to be reached within the next decade, but there has not been any major breakthrough progress. Nestle has many listings by Forbes and has received a couple of certifications. The company has priority initiatives in place for gender equity and supporting quality education for the youth.

There have been reports against Nestle for child labor and forced labor in their production chain. The Washington Post found that Nestle’s commitment to eliminating child labor was not achieved, as the company “could only trace 49% of their purchasing back to the farm level”.

Nestle was also sued for not disclosing that seafood products were produced with forced labor in Thailand. These two lawsuits have both been dismissed, but there is no actual evidence that the company has eradicated all child and forced labor at their cocoa farms and in Thailand.

To become more ethical and sustainable Nestle needs to clean up the supply and production chain in all areas specifically the sourcing of cocoa and coffee.

Nescafe has been rated a C.

Analyst Outlook: Negative

Both Nestle and Nescafe lack transparency and there has been child labor allegations against the company.

Key Points

  • Not transparent when it comes to disclosing material life cycle and waste
  • Problems with forced labour and child labour through out their supply chain
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