Nestle Chairman takes a strong stance on sustainability

October 15, 2008

 Transcript of Speech  |  PowerPoint Slides 

In a major address to the Georgetown community on Friday, October 10, Nestle Chairman Peter Brabeck made a strong case for sustainable development and described Nestle's efforts to lead the way by incorporating sustainability into its business practices.

In the speech, which was sponsored by the McDonough School of Business, Brabeck took stands against certain types of biofuels, water wastage and prevailing global imbalances between the developed and developing worlds. He delved into the roots of the current food crisis, which has millions suffering from extreme poverty and unable to afford food. "My position is, no biofuels from food," he said, explaining that the use of land for biofuels has disrupted food markets around the world. According to Brabeck, the resulting inflation has meant that people below the poverty line are now forced to spend up to 80 percent of their income on food.

Brabeck held various executive positions with Nestle in Asia, Latin America and Europe prior to ascending to the top post of the company. A multinational nutrition, health and wellness corporation, Nestle is the largest food manufacturer in the world with 2007 revenue of $108 billion.

Criticizing government shortsightedness and lack of investment in water infrastructure, Brabeck warned that an impending water shortage would cause more disruption and inequality, He cited prevailing water shortages in parts of Spain, which has had to import its water from overseas, and China, which deprived thousands of farmers of water for several months in order to accumulate water for the Olympics, as portents of things to come. As a counter measure, Brabeck proposed giving water more value by raising rates on water usage and being more mindful of consumption.

Despite the gloomy outlook, Brabeck said, he is optimistic that the problems are not irreversible. He discussed Nestle's own efforts to reduce its use of resources and improve efficiency. Already, the company has reduced its use of fresh water from more than 4.5 liters to just a little over 1 liter per dollar of sales, he said. "What we need is a complete paradigm change. We need to solve old problems with new approaches, change policies and improve transparency. The responsibility for this is everyone's."

After the lecture, McDonough School Dean George Daly presided over a Q&A with Brabeck, whom he called one of the world's leading executives. Brabeck answered questions from the audience about his prospects for China and India, two of the world's most rapidly growing economies. Several students also asked him about more controversial topics, such as Nestle's use of children as slave laborers and the waste involved in producing bottled water. Brabeck replied that Nestle was never proven to have engaged in slave labor, and that bottled water was ultimately less of a drain on resources when compared to carbonated beverages.

About the Robert Emmett McDonough School of Business
Georgetown University's McDonough School of Business is a premier business school located in the nation's capital. Founded in 1957 to educate undergraduate business students through the integration of liberal arts and professional education, the McDonough School today welcomes approximately 1,300 undergraduates, 620 MBA students, and more than 500 participants in its executive education programs annually. For more information about the McDonough School, visit http://msb.georgetown.edu.

About Georgetown University
Georgetown University is the oldest Catholic and Jesuit university in America, founded in 1789 by Archbishop John Carroll. Georgetown today is a major student-centered, international, research university offering respected undergraduate, graduate and professional programs on its three campuses. For more information about Georgetown University, visit http://www.georgetown.edu.