Ethos recommends that shareholders vote against Nestlé's sustainability report at the Annual General Meeting on 18 April due to the lack of information on key issues such as child labour and climate change. Ethos recommends approving the shareholder resolution aimed at encouraging Nestlé to increase the share of its sales of healthier and more nutritious food products.

Nestlé will hold its annual general meeting in Lausanne on 18 April. In addition to the usual agenda items (remuneration, elections, etc.), shareholders will have to vote on the sustainability report, which is now required by Swiss law, and on a shareholder resolution filed by ShareAction and a coalition of institutional investors. The latter aims to amend the company's articles of association to encourage it to increase the share of sales of the healthiest products according to a recognised standard. 

Ethos, which issues voting recommendations based on an in-depth and detailed analysis of each item on the agenda, recommends to oppose the vote on the sustainability report and, conversely, to approve the shareholder resolution. These decisions are based on its voting guidelines, which are reviewed and updated annually, and on an ACT analysis of the company's climate plan, which assesses its ability to be part of a low-carbon economy.

With regard to the 2023 sustainability report, Ethos welcomes the efforts made by the company in recent years to improve the content and the quality of the report. However, Ethos considers that the level of transparency is still insufficient for a company of Nestlé's size, which faces numerous environmental and social challenges. In particular:

  • Greenhouse gas (GHG) emissions are not disclosed in sufficient detail, in particular indirect emissions in scope 3 are not presented by category as required by the GHG protocol;
  • The report does not specify what capital expenditure has been made (or will be made in the future) with a view to meet the climate objectives set;
  • The report does not indicate what capital expenditure has been made (or will be made in the future), nor does it give details of the measures taken to date to achieve the climate targets set;
  • Despite being highly exposed to risks related to human rights and child labour, Nestlé does not publish the number of audits carried out specifically on this issue, nor does it report on the results of these audits.

Ethos also regrets that, contrary to the spirit of the law, the company considers that the vote on the sustainability report to be consultative rather than binding. 

Strengthening Nestlé's social responsibility

Regarding the resolution filed by a coalition of shareholders led by the NGO ShareAction, Ethos considers that it is in line with the long-term interests of the majority of the company's stakeholders. Indeed, the resolution aims to reinforce Nestlé's social responsibility by requiring the company to set targets for the proportion of its sales accounted for by healthier and more balanced food products according to a recognised standard such as the "Nutri-Score".

Ethos notes Nestlé's recent progress in increasing transparency on the nutritional quality of its portfolio. However, Ethos considers that the proposed amendment to the Articles of Association builds on this progress and is a good way to ensure that the proportion of sales linked to healthier products will increase in the future. This amendment will also make the Board of Directors more accountable to shareholders and give it a clear mandate to promote a balanced and sustainable diet.

As usual, Ethos publishes all its voting recommendations on its website five days before the general meeting.

General meetings