Nestlé:a) What do you think are the main environmental, social and governance (ESG) issues facing this company? How financially important are these issues to the company? Answer) Environmental issues: water issues, farmland issues, deforestation control Social issues: nutrition and health, food quality issues, ethical sourcing Governance issues: labor relations, child labor, supply chain management, customer relationsNestlé is a consumer-centric company facing many ESG issues. The food and beverage giant has the added responsibility of considering ESG factors in addition to giving financial appreciation to its shareholders, as its products are part of the daily consumption of almost everyone, from toddlers to adults. ESG issues are of great importance to financial health, as neglecting any one of them could hamper everything from production to distribution to sales. Production activities take inspiration from the environment in terms of water use, agricultural land use, livestock, etc. Ensuring efficient use and appropriate methods in terms of water recycling, water conservation, soil quality improvement and appropriate animal husbandry are essentially aimed at long-term sustainability and therefore could have an impact on the financial well-being of the company. As a multinational entity, it must also be concerned about the origin of its raw materials. Sourcing materials that do not meet company standards, or of lower quality, as this will ultimately cause the consumer to turn to other brands. Nutrition and food quality issues are also critical to the financial health of the business because products are meant to be used. intended for consumption will only sell if they are able to offer health, quality and nuts...... middle of paper ......e the value of ESG information to a skeptical credit research team? After working in ESG research in equities, I realized that there may be no magic numbers or metrics to turn a skeptic around. But I believe that if someone is willing to look at the bigger picture with a view to investing for the long term, there are many examples proving the value of including ESG issues in investment strategy. A suitable example that comes to mind is the case of Home Depot, the company deviated from its employee/customer focus strategy in the early 2000s and under the new strategy there was a reduction in the workforce, an increase in the number of part-time employees, etc. These changes saw the share price fall as the customer experience deteriorated due to the unavailability of informed and engaged staff, who are a first point of interaction for any retail experience..