Nestlé, one of the world’s largest consumer products companies, should not be the one shouldering responsibility for reducing the world’s mounting plastic waste, says CEO Mark Schneider.
The Switzerland-based company, famous for products such as KitKat and Maggi, is already contributing to the solution via Extended Producer Responsibility (EPR) fees and payments, says Schneider, which he believes is “absolutely fine” and “workable too”.
“It shouldn’t be just thrown in our lap. Everyone has to work together. We’re certainly contributing to the solution here, through the fees that we’re paying, and through the research we’re doing,” says Schneider, speaking at a panel by Swiss private bank Lombard Odier on Oct 5.
He was answering a question by a former member of government from a country in the Balkans, who asked if private companies should play a greater role in collecting the packaging waste they produce around the world. “To simply point at one actor in the system to kind of say: ‘Thou shalt solve the problem.’ I think that alone will not get us very far,” says Schneider.
In response to Schneider’s comments, Kishore Ravuri, the sustainability head of multinational dairy company FrieslandCampina, says he is “surprised at the weak and frivolous messaging”.
Based in the Netherlands, FrieslandCampina is the world’s largest dairy co-operative. It counts Bursa Malaysia-listed company Dutch Lady Milk Industries as a subsidiary.
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Writing on LinkedIn, Ravuri says large businesses of influence like Nestlé should “at least acknowledge the need to continuously look at alternatives to plastic” by funding research and innovation. “CEOs need to think [about] what kind of leadership example is being set by denying or shifting accountability. And if large resourceful businesses are going to complain about taking the lead to catalyse the needed change, no one else is going to do it.”
Ravuri adds: “Whoever is the source of putting harmful materials (plastics for instance) into the system must be willing to take the responsibility. The ‘polluter pays’ principle should be the new order.”
Ravuri, who joined FrieslandCampina in September from Malaysian sustainability consultancy Impacto, which he founded, later wrote in defence of Nestlé’s Malaysia head. “To be fair, Nestlé Malaysia CEO Juan Aranols does walk the talk. He not only volunteers his time to do beach clean-up exercises but is also an active advocate of tackling plastic waste. Nestlé Malaysia is also the founding member of Malaysia’s first EPR, [the] Malaysian Recycling Alliance (MAREA).”
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Schneider’s comments came just a day after Nestlé announced its Nescafé Plan 2030, which includes an investment of over CHF1 billion ($1.4 billion) to grow coffee more sustainably. In 2020, Nestlé committed to halve its absolute emissions by 2030 and achieve net zero by 2050.
David E Wynne, chairman of the Canadian Chamber of Commerce in Singapore, also shared his two cents on LinkedIn. “Plastics are profits… They are used inter alia to increase shelf life, reduce transportation and handling costs, are cheaper than alternatives [and] they contribute to the bottom line. They also represent another free corporate use of the commons and the environment. To this extent, they are arguably the responsibility of corporations.”
Wynne goes on to raise the example of Nestlé’s controversial operations near Flint, Michigan, where residents have endured unsafe tap water for years. “Nestlé is one of the world’s biggest sellers of ‘mineral’ water, which is sold in plastic bottles globally for billions. In most cases, this is water they acquire at almost no cost and where the cost of recycling of the bottles is passed to the consumer.”
The New York Times published an exposé in 2017, claiming that Nestlé pays just US$200 annually to pump 130 million gallons of groundwater from Michigan each year. The company successfully applied to increase this volume in 2019, before selling its bottling factory and groundwater extraction wells in February 2021 to One Rock Capital Partners, a New York private equity firm.
Wynne adds: “A better approach might be to consider the life cycle costs of all inputs, including environmental.”
The cost of waste
Other panellists spoke largely in concert with Schneider, highlighting the role of governments, investors and consumers working together in eliminating plastic waste. “If something costs more in terms of resources for the planet, it must cost more to the consumer,” says Professor Jean-Pierre Danthine, managing director at the Enterprise for Society Centre (E4S).
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E4S is a joint venture between Switzerland’s University of Lausanne, the Switzerland and Singapore-based International Institute for Management Development (IMD) and Swiss public research university EPFL.
The centre offers a Masters programme in sustainable management and technology. Prior to the panel, Lombard Odier announced a multi-year partnership with E4S to foster sustainable finance research, “with a particular focus on the transition to a circular economy”.
Consumers must be prepared to pay a premium, says Danthine. “The objective should be a level playing field; it should not be a disadvantage if you’re offering a better product in terms of environmental [impact]. That information might help the willingness of consumers to pay a bit more; that’s why the narrative is also very important.”
A World Economic Forum (WEF) representative on the panel disagreed. Kristin Hughes, director of the Resource Circularity Pillar at the WEF, says: “It can’t all be on the consumer because people just won’t shift a hundred percent without us making it easy. So again, this comes back to collaboration. You need innovative ideas, you also need the brands involved; then eventually, the consumer can get engaged. I wouldn’t put all the pressure out there on the individual consumer until we start to make some solutions that are easy to adopt.”
Instead, Hughes says, she is surprised by banks’ hesitation to invest in plastic waste management projects — Lombard Odier included. “I really was quite shocked; we were invited years ago to be a part of the Sustainable Markets Initiative [established by the UK’s King Charles in 2020], which brings together all sorts of banks — I think you’re a part of it — but very few wanted to talk about plastic pollution.”
“De-risking” investments in this space is critical to bringing other players on board, adds Hughes. “There are loads of investment opportunities. The question is how do you de-risk them such that the traditional banks and investors will come to the table and engage?”
Ambitious treaties may boast headline targets to reduce waste, but developing countries will still be dependent on external financing, says Jacob Duer, president and CEO of the Singapore-based Alliance To End Plastic Waste (AEPW).
“It’s not an area that has attracted a lot of resources from national budgets. The transition is actually a lot harder than just saying we are going to put in waste infrastructure, because you have to ensure that that infrastructure in itself is economically viable afterwards.”
Duer adds: “If you’re a household in one of the countries where there’s no waste management infrastructure in place, there is no other place [to dispose of trash] than the beach nearby, or the river or the immediate environment.”
AEPW has promised to spend US$1.5 billion ($2.1 billion) by 2024 to reduce plastic pollution and increase recycling efforts. With ExxonMobil, Dow Chemical, Procter & Gamble and Shell among its founding members, the AEPW has been criticised for goals to reduce plastic waste instead of reducing plastic production.
“I think we all [play a] part in creating those options and alternatives so that we can make the change,” says Duer. “It’s not enough just to say, you shouldn’t do X, Y and Z; you shouldn’t put your waste out in the environment; or you should buy a packaging material that’s different… It’s the fact that there is no option.”
Photo: Screengrab/Lombard Odier
