As far as Nestle’s key environmental sustainability policies are concerned, the company sources its raw materials from agricultural producers who grow their crops using sustainable methods. The company doesn’t only engage with producers when buying raw materials but actually monitors them and tries to understand the production processes. It even provides training to farmers to improve their production methods as well as financial assistance to certain producers such as milk farmers . Thus, the company doesn’t deal its suppliers as merely business partners but stakeholders and in involved with them in different stages of the production process. This ensures that the raw materials provided to the company are grown in sustainable manner and the production process also helps improve local communities.
The company also understands that water is a precious scarce commodity and takes efforts to minimize the impact of its commercial activities on global water supply. First of all, the company takes efforts to improve its operations so as the minimize water requirements. The company expects to implement water savings projects in every single high-priority manufacturing facilities by 2016. The company has also taken efforts to reduce water discharge per ton of product and also educates and influences its suppliers to use water more efficiently .

One of the initiatives taken by the company to reduce the impact of its activities on the environment is more efficient packaging for its products. The company evaluated more than 5200 projects in 2013 to identify possible ways to reduce use of packaging material. The company expects to reduce direct greenhouse gas emissions per ton of product by 35 percent of 2005 level by 2015 .

These initiatives fit in well with the company’s principles, values, and culture. One of the company’s cultural values is to enhance value for all stakeholders including communities. This is why company carefully evaluates the impact of its activities not on just bottom line profitability but also on the society and the environment. Similarly, company’s business principles also focus on all stakeholders. For example, one business principle is to ensure high quality and nutritional product to raise health and wellness standards of its consumers. Another business principle is to join hands with local and international organizations to improve the state of human rights around the world. Nestle works with several organizations including Red Cross and UN in this regard. Nestle’s business principles also include working with suppliers to improve production processes in terms of efficiency and sustainability as well as reducing negative impact on environment .

These initiatives help Nestle build competitive advantages in the food industry. First of all, they help strengthen customer loyalty because of the trust in the company. Consumers are increasingly becoming conscious of the corporate social responsibility initiatives of the companies they do business with and these activities enhance Nestle’s perceptions in consumers’ minds. These activities also help the company quickly enter new markets or introduce new products because of the positive goodwill it enjoys with various stakeholders including the communities and the government. Nestle doesn’t only build positive goodwill but also gains economic advantages. First of all, lower production costs improve profitability. Second, suppliers provide better quality raw puts at more competitive prices due to trust and long-term relationship with the company. Similarly, communities and governments are more eager to welcome Nestle and offer attractive incentives to attract company’s investments in their communities.