Nestle Latin America report inspires debate on limits of corporate responsibility

Multinational companies always face a tension when they make a profit from their operations in developing countries. Their critics may accuse them of exploiting poor communities and weak governments, while their supporters argue they are creating jobs and providing choice and better value products.

But how easy is it to measure the impact? And is it possible to prove a link between corporate responsibility and corporate profitability? And should there be a measurement of a 'fair' profit that companies should make?

At an event organised by IBLF and London Business School in March, a new report by Nestle examining the social impact of its Latin American business - provided an opportunity to examine this dilemma.

Over 80 delegates – from government, academia, business and non-governmental organisations – gathered to try to define where corporate responsibilities lie in a region like Latin America, which is characterised by weak regulations.

Read IBLF's news story on the event: What is a fair profit?, ask delegates at IBLF corporate responsibility event

Here's a summary of the views of the panel members:

Jane Nelson, IBLF and Harvard University
The real challenge is when there is weak or bad government - what roles do NGOs, investors and the private sector do about improving accountability?

Paul Bulcke, Nestle
There is a very strong link between corporate profit and corporate responsibility - but there's only a link when you manage it over time.

Constantino Casasbuenas, Oxfam
We are not against business and investment, but we do ask what would be a fair profit. The purpose of business is to develop wealth, not just make profits.

Daniel Graymore, UK Department for International Development
People talk about the unlimited power of companies but companies aren’t necessarily all powerful and don’t necessarily have full flexibility.

Marc Pfitzer, Foundation Strategy Group
No business can function over the long-term without supportive framework conditions that allow it to flourish.

Craig Smith, London Business School
The premise of Nestle's report is that there is a business case for corporate responsibility. But the quest for this win-win can be elusive.

 

This debate formed part of IBLF's commitment towards the Clinton Global Initiative. Through a series of events, IBLF and its partners (Harvard University and The Conference Board) are identifying examples of corporate good practice in international development and exploring opportunities for greater collaboration between businesses that operate in emerging economies.

Download the full report of this event from www.iblf.org/clinton

More on The Nestle concept of corporate social responsibility as implemented in Latin America - a report launched at the event.

Photograph shows Nicaraguan farmer Federico Elster Hawkings, one of Nestle's suppliers. Provided courtesy of Nestle.