Nestle, the world’s largest food company, is promoting 6.4% organic sales growth in the first half of 2006. It was reported in today’s FT, and they require registration, so I won’t link. Here’s a link to the Nestle August 23, 2006 press release.

You might be thinking 6.4%? That’s not nearly as impressive as the 16.2% growth of US organic foods in 2005 (Organic Trade Association, PDF).

Well, it’s not, and it’s not. I’ll explain…

When Nestle reports on organic growth, they’re not reporting the growth of organic foods. They’re reporting on the percentage of growth of their business that didn’t result from m&a or takeover activities. Organic growth is a measure of their ability to sell more products and gain market share. Another important dimension is that the organic growth rate excludes the impact of foreign exchange. This is particularly relevant info for Nestle shareholders, since Nestle has so many substantial foreign markets.

The Nestle press release doesn’t mention the share of that growth that represents organic foods. It didn’t mention Nestle’s efforts to move toward a more sustainable food system.

Here’s a CSR report (PDF) that Nestle published in 2002. It includes some metrics from the 1997-2000 period. Shareholders deserve to know how Nestle has performed against those metrics since 2000.

UPDATE: they’ve published 2001-2005 metrics; independently verified metrics, exactly where you’d expect them to be… I missed it earlier. Please update the cross linking within the susty subdomain. It wasn’t obvious to me that this important info exists. I’m glad it exists.

Nestle’s sustainability website reports:

“As we move ahead in the 21st century, we believe that a business strategy based on high-quality food and beverage products can only be maintained by business practices based on the principles of long term sustainable development.”

No offense to Nestle, but pictures of smiling brown people is no substitute for substantial reporting on significant metrics. If long term sustainable development is part of their business strategy, it seems clear that they would want to track ongoing progress of the key metrics identified in their 2002 report. They identifed water usage as a key environmental priority. The 2002 report promoted water consumption metrics from 1997 to 2000. What’s happened since? SEE UPDATE ABOVE.

The world (including Nestle employees and shareholders) is concerned about a water crisis. What is Nestle doing in regards to this potential water crisis? Are they measuring groundwater recharge rates in the areas where they bottle? If not, should we consider their business model to be moving toward sustainability?

Nestle’s recent financial report credits part of their recent growth to the decreased expense of PET plastics. Have they done any work to move toward more sustainable alternatives to PET bottles? Let’s see some metrics there too.

It’s tough to know if Nestle is still moving toward a model of sustainable development. Without objective third party verified data, can we really believe that they are?

Nestle is the world’s largest food company. Nestle employees are not clones or droids. They’re hard working people, with strongly held values; they’re perfectly capable of making great contributions to society. The 2002 report was a positive step. The 2001-2005 metrics are a positive step. I’m sure they’ll take more positive steps in the future. Perhaps they’ll follow the leadership of others like Wal-Mart (Wal-Mart?!) and recognize that sustainability is not just marketing buzzword from the late 90′s.

RELATED LINKS:

• Nestle corporation’s after McCloud’s aquifer agua (2006)
• Great Lakes for sale! Michigan’s Odawa Indians lead anti-Nestle fight (2006)
• Nestle engages with anti-Nestle blogger (2006)
• Nestle says raw material environment to remain tough in 2006 (2006)
• Nestle Waters North America Press Center
• Nestle Greenhouse Gas Emissions Questionnaire (PDF, 2006)
• Whose Water Is It, Anyway?
• Mexico’s PET peeve: Avalanche of plastic bottles is a national environmental curse
• FAQs: The Safety of Plastic Beverage Bottles (does this “better living with plastics” organization look like an astroturf site?)
• Plastic Bottle Waste Tripled Since 1995 (2003)
• New Era of Plant-Based Plastics and Fibers a Reality (2002)[tags]Nestle, water, PET plastic bottles, CSR metrics[/tags]