Ethical Performance
inside intelligence for responsible business


Nestlé welcomed into SRI investment fold

July 2004

Nestlé has been admitted to a list of stocks approved as socially responsible by an investment research firm based in Sweden.

Analysts at GES Investment Services decided to take the world’s largest producer of infant formula milk off their blacklist after declaring themselves satisfied that the company was addressing concerns over marketing techniques.

A major UK charity, Breakthrough Breast Cancer, recently declared it had rejected a £1m ($1.8m) cause-related marketing deal with a Nestlé subsidiary on ethical grounds.

Nestlé had previously been on GES’s exclusion list due to alleged violations of the WHO code on the marketing of breast milk substitutes.

GES says dialogue with the Swiss-based food group over the last six months has persuaded it that Nestlé has taken a number of ameliorative measures, such as better product labelling, ‘well-developed’ staff training and ‘extensive guidelines’ on the code.

Nestlé is currently excluded from the FTSE4Good index because it fails to meet criteria for the manufacture and marketing of breast milk substitutes. The next review of FTSE4Good constituents is in September.

The company is in the Dow Jones Group Sustainability World Index, but, unlike FTSE4Good, this does not specifically assess by questionnaire the marketing of breast milk substitutes.

GES, which assesses 4000 companies, has also put on its approved list a company that a Japanese court last autumn found guilty of discriminating against female employees. Analysts upgraded Nomura Holdings after the Japanese financial services company announced improved equality measures.


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