E.U.

business environmental audit of Nestle

On EU Competition Policy in Particular:
EU competition policy aims at preventing excessive market power and other distortions applying
to intra-EU trade. This means, in effect, that no attempts will be made to interfere with national
competition policies as long as they relate only to domestic competition and do not have "an
appreciable impact on actual or potential" trade between EU Member States. The Rome Treaty
devotes ten articles (85-94) to laying down the basic principles of competition policy in the EU.
The first two of these articles (85 and 86) are known as the Cartel Rule and the Monopoly Rule
respectively.
Article 85 deals with aspects of collusive behaviour such as price-fixing, joint-purchasing
agreements and market sharing which are judged to be "incompatible with the common
market…[as] they affect trade between Member States". This follows on from the theory that if
collusion is perfect, the effect on consumers is no different from a monopoly. However, this
article also acknowledges real world complications in applying an anti-collusion rule, and allows
for exceptions in certain cases such as joint R&D agreements. Article 86 deals with controls on
monopoly and abuse of a dominant position. The inclusion of this provision comes from the
general proposition that firms in a position to influence the market will push prices above MC
and reduce the levels of consumer welfare and efficiency in the economy. The implication of this
article is that it is concerned with the firm’s behaviour and not the actual market structure.
However, in practice "dominance and abuse are almost indistinguishable.
One gap in this original article was the absence of controls on mergers that might result in the
emergence of a dominant position. This was rectified when the Commission’s Merger
Regulation was adopted and came into force in 1990. Articles 90 and 92 are the other important
provisions on competition in the EU Treaties and they are also the ones in which potential
conflict between competition and industrial policies first becomes evident. These are the Articles
dealing with state ownership and aids to industry.

.the EU plays an important role in setting this agenda.The amount of greenhouse gas emissions that firms are allowed to produce under the ETS has been set too high.Industrial Policy: Unlike competition policy which aims to remove restrictions on market forces.The European business environment of today is part of a large European market involving 27 countries. Environmental policy is one area where there is a great deal of public support for action at a Europe-wide level. so firms have little incentive to cut their emissions to meet the EU's wider targets. Backgroundandscope Doing business in Europe is a day to day reality. including small and medium sized enterprises(SMEs). Arguments against this policy areb included the cost of EU environmental regulation can undermine the competitiveness of EU businesses.Also. The EU's commitment to environmental protection encourages other countries to adopt similar measures. not only for global companies but also for Those with crossborder activities. There are over 20 million SMEs in Europe representing 99% of the total number of companies. approximately one third of the top 500 global companies had their headquarters in Europe. and it has been observed that this area of policy is considerably weaker and less developed than competition or trade policies. Environmental Policy The threat to the environment is global and should be tackled on an international scale . which makes large-scale intervention difficult. Industrial policy is not explicitly dealt with in the Treaties underpinning the EU. This is due largely to the limited size of the Union’s budget. In2009. industrial policy seeks to overcome the effects of these forces and to channel them into working for particular national or industry interests.

leading to better quality goods and services and lower prices. At best. .The single market is oneof theEuropeanUnion's greatest achievements. The latter assesses the potential environmental effects of a proposed facility. low availability of agricultural space and looming food shortages have prompted the firm to throw its weight behind calls by the United Nations and advocacy groups to prevent food being used as a source of fuel. Nestle Responses to EU Policies Nestle’s CEO Paul Bulcke has said that the U. We say that the EU and U. and EU must change their biofuel targets to prevent future food shortages.S. “Agricultural food-based biofuel is an aberration. These price reductions have been particularly perceptible in the fields of air travel and communications. Business Environmental Audit It is important to draw the distinction between auditing and techniques such as environmental impact assessment (EIA). “We say no food for fuel.S. It has helped to dismantle economic barriers throughout Europe and to increase competition. While the EU represents only 7% of the world population.” said Paul Bulcke. should put money behind the right biofuels”. an audit is a comprehensive examination of management systems and facilities. it is a superficial review. at worst. its trade with the rest of the world accounts for about one fifth of global imports and exports. The essential purpose of an environmental audit is the systematic scrutiny of environmental performance throughout a company’s existing operations. chief executive of Nestlé. at the end of the World Water Week conference in Sweden. The rising price of food.

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Gourmet. fuelled by a strong innovation pipeline combined with a rigorous approach to efficiencies. is enabling the Zone to increase both its brand investment and margin. maintaining momentum from last year. convenience and discounter channels. This growth. This should enable us to maintain our growth momentum in 2013.Western Europe. with increased local manufacturing and distribution capabilities. Nescafé Dolce Gusto continued to be a key growth engine and Maggi also performed well in many markets. ice cream and chocolate all contributing good real internal growth. another key growth driver. Central Europe and Eastern Europe we have enhanced our competitive position in coffee and petcare. The other parts of the region also performed well. Across the Zone. There was continued improving momentum in Russia. was driven by the premium category. In France we gained market share in most categories. in particular Felix. We also grew well in Great Britain where we made real progress in the fast-growing online. Proplan and Purina ONE. In Greece and Spain trading conditions were extremely tough but we were able to deliver growth. The performance of petcare. with Nescafé. .

and 98% compliance for inschool communications. while Nestlé’s compliance rate was 99. regulations. Canada and the EU.trading operating profit margin increased 10 basis points. low levels of infant mortality and strong public health measures are termed “lower-risk countries”. and/or other applicable legislation relating to the marketing of infant formula. EU Pledge Compliance 2011 For the third year running. the monitoring of 12 EU markets for advertising and 12 EU markets for in-school communications has demonstrated high compliance rates. In primary schools. This improvement built on the 230 basis points improvement in 2011. There was close to 100% compliance for advertising on all media. such as the European Union Directive 2006/141/EC on Infant Formulae and Follow-on Formulae which applies to all EU Member States Compliance by medium Medium EU Pledge overall compliance rate Nestlé compliance rate TV 99. the overall compliance rate was 98%. reflecting volume growth and good cost management. Developed countries such as the US.48% Print 100% 100% . and was achieved whilst increasing brand investment. with good sanitation. In lower-risk countries. Nestlé respects national codes.5%.1% 98.

which is applied across the enterprise. designed to identify p otential events that may affect the company.5% 99.6% 99.9% 98. employees and production sites.5% Netherlands 99% 99. to manage risk and opportunities.6% Slovakia 99% 99.7% Ireland 98.3% 97. to anticipate risks/opprtunities early and to make sound business decisions throughout the Group by understanding relative business impact of different types of risks and opportunities. and to prevent them from .Online 100% 100% Compliance by market Market EU Pledge overall compliance rate Nestlé compliance rate France 99.5% 99.4% Nestlé has in place an Enterprise Risk Management (ERM) process. presumed or perceived incidents related to its business. Clima te Change is an integrated part of the risk and opportunity assessment for business.55% Poland 98. and to provide reasonable assurance regarding the achievement of objectives. ERM enable s Nestlé Management to raise risk and opportunities awareness. Nestlé has established a Standard for Crisis Preparedness and Management where is mentioned that Nestlé's first priority is to detect emerging issues as well as real. root causes and correlations among interdependent risks/opportunities.7% Portugal 99.6% Romania 99.

However. the European Food Sustainable Consumption and Production (SCP) Roundtab le and we also actively participate in the UNEP FAO Agrifood Task Force to advocate in this topic. divestiture. water & energy use and biodiversity. Asset level results are reported to country managers . eg. and issues. The results of the Group ERM are presented annually to the Executive Board and to the Audit Committee. Globally Managed Business. This helps getting better information and understanding on climate change and helps therefore addressing the negative consequences of cl imate change. d. Company level results are reported to the Executive Board via Zone Management. To define robust criteria for the provision of comprehensive environmental information including GHG emissions. At a company level. if Nestlé does face a crisis. in all Markets. M&A. and finally on an ad hoc basis in many other areas. deforestation. an ad hoc presentation is made to the Executive Board We are co chairing. major capital spending. Frequency of monitoring is monthly: The Issues Round Table meets on a monthly basis under the chairmanship of R&D and Operations Executive Board Members. . and conclusions reported t o the Board of Directors. restructuring. on strategic planning. eg. on a bottom up approach. on refrigeration. for projects in innovation & renovation. We chair the Fo od Drink Europe Environmental Sustainability Committee. related to Climate Change. ERM is applied systematically top down in each Zone. It reviews in particular emerging regulations. Action plans are establ1ished. together with the European Commission (EC). it is important to manage it in a professional and efficient manner. In the case of an individual risk assessment identifying a risk which requires action at Group level.turning into crisis.

.We advocate for harmonised and scientifically reliable met hodology for food and drink products as well as suitable communication channels for consumers and other stakeholders. iv) Impact of those actions are Positive: French government is considering a legislation based on a comprehensive set of indicators and the Eu ropean Food SCP Roundtable launched a communication environmental performance tool.

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