Nestlé has published its materiality matrix in a post Measuring what matters: mapping the challenges we face. It explains that the matrix (included below), ‘plots the economic, social and environmental issues of most concern to stakeholders against the impacts they may have on the company’s reputation, operations and finances.’
In practice, Nestlé uses the matrix to identify problems to be managed – using the range of public relations strategies (and dirty tricks) it has developed. That’s not just our experience – it is also the view of Nestlé’s former Corporate Food Safety Manager, who gives her opinion below.
The matrix shows that Nestlé’s marketing of ‘maternal, infant and young child nutrition’ products is seen by Nestlé as a significant concern to stakeholders. The issue has a ‘major’ impact on Nestlé. The company is described as the least ethical company of the past 25 years by Ethical Consumer Magazine due to its aggressive marketing of these products. Campaigns such as the Nestlé boycott put pressure on executives to change.
However, Nestlé does not automatically respond to the concerns and the impact on its business by improving practices. Nestlé management instead invests a fortune in trying to undermine support for the boycott and attempts to divert criticism so it can continue with business as usual. It only gives ground when the pressure is great enough. For example, the Chairman, Chief Executive and the Global Public Affairs Manager all defended promoting infant formula as the ‘natural start’ for babies, but finally agreed to drop this claim when we shamed them with a campaign during the Nestlé Creating Shared Value Global Forum in October 2014.
I met the former Nestlé Corporate Food Safety Manager, Yasmine Motarjemi, recently. She blew the whistle on the company when she found the company viewed food safety as a public relations issue rather than a public safety issue. We were both panelists at the Geneva International Film Festival and Human Rights Forum after the screening of the film Tigers on 27 February 2015. (Watch the panel here).
Food safety appears at the top right of Nestlé’s materiality matrix, which might make people think it gives it a high priority. I wanted to know from the inside of Nestlé how executives actually use the matrix in practice. Here is the response from Yasmine Motarjemi.
Yasmine Motarjemi, former Nestlé Corporate Food Safety Manager and Assistant Vice-President.
Thank you for this information. I knew a matrix of this style, made by Sarasin Bank, showing how investors evaluate a company. Risk management practices were one of their criteria. I used to show that matrix in my internal Nestlé courses to motivate managers to give importance to food safety.
However, I did not know of this specific matrix. Thank you for bringing it to my attention.
This matrix confirms my experience in many ways: a) the relatively low importance that it is given to employee’s health and safety and b) the role of women. These are ranking lowest priority in the matrix. My issue is that when employees health and safety count very little for the company, we cannot expect that employees will also care for the safety of products in a genuine way and report a non-compliance, particularly if this has a negative impact on their bonus. I recall once the company physician came to me to ask if we could do something to improve the quality of food served in our factories’ canteens. He very rightly said that how can we be a nutrition well-being company if our employees do not experience this?
It does not surprise me to see food safety in a prominent position on this matrix. As I have mentioned in my public statements, on paper and theory Nestlé gives its full (or nearly full) commitment to food safety and have policies which give a good image. The Nestlé Research Center is also impressive in terms of equipment and representativeness of experts. However, these were a show case; according to my experience, the expertise in food safety and its management was far from being widely available. What counts for the company is the image and perception that it gives.
The question is how the company considers food safety, rather than if it recognizes it or not as an important issue. In my experience there are several points to be said on this:
First, Nestlé’s concern in regard to food safety is primarily not to cause mass/collective poisoning which would inevitably come in public attention; however, as long as the problem is not detected, then the product is safe. The company’s limit or criteria of safety is whether the company will be implicated in safety scandal or not.
Second, their concern for safety is whether this will lead to a loss of business, not consumer health, one can see this from the behavior of the company. In other words, if one or few consumers get ill and their problems can be fixed with a compensation, they would not care much. This is seen as the cost of the business. Otherwise, I do not see an explanation for leaving on the market for over 2 years a product (baby biscuits) which caused choking of infants, while the parents were complaining; the manager responsible got even promoted. Also, according to a document submitted to the Court- in a case which opposes me to Nestle (Switzerland CC11.012142) , in 2005, the Company decided for a policy to link the bonus of its managers to incidents and product recalls. In my opinion, such a policy is contrary to food safety management principles. There are times that incidents do occur because of a human error or other factors. Linking bonuses to recall and incidents will discourage managers to report and to take early corrective actions, particularly in a company where the organizational culture is based on fear mongering. The discouragement to report was one of the factors which lead to the infant formula incident associated with melamine (China, 2008) to take such a massive proportion, when over 300 000 infants were intoxicated and over 13 died. This fear culture of Nestlé is openly acknowledged in its book, Transformational Challenge: Nestlé 1995-2005, where the following quote appears:
The unwillingness to report negative events fully and swiftly up the chain of command may be a vestige of the past culture at Nestlé, a culture in which admitting mistakes was not exactly good for your career, and in which internal criticism was “not the done thing.” The culture of learning from mistakes is not yet as widespread as it is in the aviation industry, where even the smallest incident is analyzed and evaluated to prevent repetitions.
Third, there is an issue of company culture which a) silence employees and b) promote incompetence. These two factors are against principles of food safety management and no matter what one writes on paper and say in public, they have adverse effects on food safety. I recall someone who said it does not matter if you are competent or not, as long as you keep silent and obey. The inherent company culture is against the principle of food safety and this is the fundamental problem of Nestlé, no matter what they say or do as all become ad-hoc solutions.
Finally, when the system is designed to select and promote people who think in terms of profit and risk taking, or keep silence and obey, rather than those who care and are competent, food safety becomes by default secondary. In other words, despite the theoretical knowledge of the importance of food safety, the reality and the practice follow the inherent culture of the company. The company culture overshadows/overweights the theoretical recognition of food safety.