The State of Children's Rights and Business

Due diligence and beyond:
How Nestlé manages human rights risks in the supply chain

Global Benchmark 2022

Company score level:

Leader

Sector:

Food, Beverage & Personal Care

Industry:

Food & Beverage

Country HQ:

Switzerland

About Nestlé

Nestlé is a Swiss multinational food and drink processing conglomerate corporation headquartered in Vevey, Vaud, Switzerland. It is the largest publicly held food company in the world, measured by revenue and has ranked as No. 64 (2017) and No. 33 (2016) on the Fortune Global 500 of the Forbes Global 2000 list of largest public companies.

About the case series

Global Child Forum knows that one of the best ways to increase your company’s positive impact on children is by learning from others. The challenges that companies face, while seemingly unique, do share much in common with one another when trying to understand how best to manage operations sustainably and with a child-first perspective. The cases in this series, based on interviews with company professionals are executing on their company’s sustainability and human rights practices,  provide a range of perspectives and solutions that we hope widen your thinking on what’s possible when children’s rights are put into focus.

Case:

Due diligence and beyond: how Nestlé manages human rights risks in the supply chain

For Nestlé, a global company that sources products from the agricultural sector, addressing human rights risks in the supply chain is both a basic requirement and not always an easy task. Pressure is exerted by legislators, consumers, media and non-governmental organisations to ensure that the people who are producing the important basic ingredients found in many of Nestlé’s products – including cocoa, coffee, nuts, sugar and palm oil – have decent working conditions and their rights are respected. This includes preventing addressing child labour risks, and helping children grow up in and around plantations and agricultural production to have access to healthcare, education and to their parents.

Clear Direction from the Top

Nestlé’s approach to ensuring that human rights, including children’s rights, are respected in the supply chain begins at the top with ultimate responsibility for human rights resting with the Board of Directors. It is the Executive Board which approved the company’s Human Rights Framework and Roadmap that sets out the company’s strategy in this area. Responsibility for executing the roadmap is with the Human Rights Community, a body comprising all those with operational responsibility for human rights which meets every two months to learn from each other and share experiences.

This Roadmap helps the business determine which issues to focus on based on the collected data from human rights impact assessments, supplier assessments, certification schemes and grievance mechanisms among others. The information gathered helps establish what the risks are, where they are located and what can be done about them. This drive from the top, together with policies and control systems that have human rights integrated (as opposed to treating human rights as a separate issue) combined with continuous training, enable the entire business to work towards a common goal with a clear understanding as to what is expected of them.

Results/business case

One of the issues that Nestlé has focused on for quite some time is child labour in the cocoa supply chain. Its efforts were further strengthened in 2012, when the company set up a Child Labour Monitoring and Remediation System (CLMRS). Since then, according to the company more than 150,000 children have been helped, either through accessing education or by offering support to parents. The reach of CLMRS has more than doubled in the last 5 years.. Despite this, child labour has proven to be an intractable issue in cocoa production and Nestlé is now redoubling its efforts by focusing on one of the main root causes of child labour, that is to say, poverty. In collaboration with local partners and the communities, various incentives aimed at raising incomes have been set up. For example, there are cash incentives designed to promote activities that work towards sustainability, both for the individual farmer and for Nestlé as a buyer. Such activities include pruning cocoa trees to increase productivity, cash benefits for diversifying production to crops other than cocoa, and cash benefits to a household when all of its children attend school.

Nestlé, together along with some peers, stands out for its transparency regarding not only what has been done to combat child labour in cocoa production but also as to the risks and systemic challenges inherent in doing this work. The company insists that this transparency serves as an important driver towards improving conditions for workers and their families in cocoa production.

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