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Code violators such as Nestlé excluded from FTSE4Good ethical investment index

11 July 2001

Nestlé has been excluded from the new FTSE4Good ethical investment index launched yesterday due to its continued violation of breastmilk substitutes marketing requirements.

Nestlé is the largest violator of the 1981 International Code of Marketing of Breastmilk Substitutes and subsequent, relevant Resolutions adopted by the World Health Assembly. Its aggressive marketing of breastmilk substitutes contributes to the unnecessary death and suffering of infants around the world. UNICEF has stated that reversing the decline in breastfeeding could save the lives of 1.5 million babies every year.

Nestlé, along with other manufacturers of breastmilk substitutes violating the Code, were excluded from the FTSE4Good index under section eight of the criteria for social issues and stakeholder relations which states:

"Companies must not have breached the infant formula manufacturing section of the International Code on Marketing of Breastmilk Substitutes according to the International Baby Food Action Network [IBFAN]."

Jonathan Dorsett, Campaigns Officer at Baby Milk Action, the UK member of IBFAN said:

"This new FTSE index gives those who want to invest in the market the opportunity to take into account issues of corporate social responsibility. The fact that this index excludes Nestlé for its marketing malpractice, sends a clear message to Nestlé that it needs to bring its activities into line with the Code and Resolutions in all countries, and sends a message to investors to avoid Nestlé until it makes the necessary changes."

For more information please contact; Jonathan Dorsett, Campaigns Officer, Baby Milk Action tel: 01223 464420 fax: 01223 464417 email: 23, St. Andrews Street, Cambridge, CB2 3AX

Notes for editors

  1. Baby Milk Action is a non-profit organisation which aims to save infant lives and to end the avoidable suffering caused by inappropriate infant feeding. Baby Milk Action works within a global network to strengthen independent, transparent and effective controls on the marketing of the baby feeding industry. The global network is called IBFAN (the International Baby Food Action Network) a network of over 150 citizens groups in over 90 countries.

  2. Nestlé is the target of an international boycott in 20 countries because of its marketing malpractice. The boycott in the UK is the most widely recognised consumer boycott according to Ethical Consumer magazine.

  3. Nestlé, which controls the largest share of the infant food market (about 40%), is responsible for more violations of the International Code of Marketing of Breastmilk Substitutes and subsequent relevant resolutions adopted by the World Health Assembly than any other company. The recent IBFAN report Breaking the Rules, Stretching the Rules 2001 details many of Nestlé's violations. Also see the codewatch section of this website.

  4. FTSE4Good is an index for "socially responsible investment" designed by FTSE, one of the world's leading global index providers. According to the FTSE4Good website: "FTSE4Good is a series of benchmark and tradable indices facilitating investment in companies with good records of corporate social responsibility. FTSE4Good is unique - there is no other socially responsible index quite like it. Independently defined and researched, FTSE4Good sets an objective global standard for socially responsible investment. The FTSE4Good Selection Criteria cover 3 areas:

  • Working towards environmental sustainability
  • Developing positive relationships with stakeholders
  • Upholding and supporting universal human rights"

FTSE4Good selection criteria were developed by FTSE in association with the Ethical Investment Research Service.

UK pension firms offering ethical funds already avoid Nestlé because of its baby food marketing record.

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