Nestle India Creating A New CSR Strategy Case Solution

1. What risks does Nestle face? Who are Nestle’s stakeholders? In what areas should Nestle undertake CSR activities? Define CSR, CSV, and sustainability, and explain the differences between them. 

Nestle faces the risk of spending twice on activities that benefit the society, under both CSR and CSV activities due to the change in Indian law. The company would have to either stop its CSV activities, which could mean damage to existing relationships established with farmers and others reached through the CSV initiatives. Nestle's stakeholders, in this case, are the government, farmers, regional bodies that it collaborated with that include students, non-governmental organizations, academia, the general public, suppliers, and industry associations. Under the new law, beginning in April 2014, companies are required to spend CSR budgets on activities that are not part of their normal business operations. Nestle should undertake its CSR activities to help the environment, but spending on rural development or nutrition would not be considered as CSR under the new law. 

There have been many definitions for CSR in the past, but it generally refers to the obligations of business towards society apart from its legal and economic obligations. These activities are not in the economic interest of the business (Carroll, 1999). As opposed to this CSV is in the economic interest of the company, where working for the improvement of society will benefit it and ensure long term success (Porter, & Kramer, 2011). Sustainability is a concept that involves business activities to preserve the environment for their benefit in the long run (Dyllick, & Hockerts, 2002).

2. How should Nestle plan its social responsibility activities for the next year? Should it discontinue its current activities and only undertake activities under the new law? Should it undertake both CSR and SCV activities? 

Nestle should carry out both of its CSV and CSR activities. Its CSV activities for water and environmental sustainability can be counted as CSR under the definitions of CSR by Carrol (1999). This is because it is not in the economic interest of the company to spend on reducing water shortages and its environmental footprint. It should continue its CSV activities as shared value ensures that the company does not face internal costs (Porter & Kramer, 2011). 

Nestle should carry out CSR activities to solve larger societal problems that do not benefit itself economically. Examples include women’s rights, girl’s rights and children’s rights issues as identified in the Human Rights Watch (Human Rights Watch, 2018).