Nestlé:a) What do you think are the main environmental, social and governance (ESG) issues facing this company? To what extent are these issues financially relevant to the company?Answers) Environmental issues: water issues, agricultural land issues, control of deforestation. Social issues: nutrition and health, food quality issues, ethical sourcing. Governance issues: labor relations, child labor, supply chain management. Customer Relations Nestlé is a consumer-focused company that addresses numerous ESG issues. The leading food and beverage company has the added responsibility of taking care of ESG factors in addition to giving financial appreciation to its shareholders, as its products are part of the daily consumption of almost everyone, from children to adults. ESG issues are of great importance to financial health as neglecting any of these could hinder everything from manufacturing to distribution to sales. Productive activities draw on the environment in terms of water use, use of agricultural land, livestock, etc. Ensuring efficient use and proper methods in terms of water recycling, water conservation, improvement of soil quality and proper livestock husbandry are essentially for long-term sustainability and therefore could impact the financial well-being of the company . Being a multinational entity, it must also be careful about the provenance of the raw material. Sourcing material that is not up to the company's standards, or of lower quality, as this will ultimately cause the consumer to fall for other brands. Nutrition and food quality issues are also essential to the financial health of the company as the products are intended for consumption they will only sell if they are able to deliver health, quality and nutty...... middle of paper .. ....and the value of ESG information to a skeptical credit research team?After working in ESG research in the equity sector I realized that there may be no magic numbers or metrics to convince a skeptic. But I believe that if someone is willing to look at the bigger picture with long-term investments in view, there are considerable examples to demonstrate the importance of including ESG issues in the investment strategy. An apt example that comes to mind is the case of Home Depot, the company deviated from its strategy of employee/customer focus in early 2000 and under the new strategy there was a reduction in headcount, an increase of part-time employees, etc. These changes have seen the share price plummet as the customer experience sours due to the unavailability of knowledgeable and engaged staff, who are the first point of interaction for any retail experience..