Good Food, Good Life

Nestlé in society
Creating Shared Value and
meeting our commitments 2017

Nestlé 2017 Annual Review extract

Our commitments
Our 41 commitments featured in the Creating Shared Value chapter
guide our collective efforts to meet specific objectives.

Every day, we touch the lives For individuals

of billions of people: from and families
the farmers who grow our
ingredients and the families
who enjoy our products; Over 1000 174 billion
through the communities new nutritious products launched servings of fortified foods and
where we live and work; that address daily needs and gaps as beverages in 66 countries
to the natural environment per children intake studies with higher vulnerability to
micronutrient malnutrition
upon which we all depend.
CHF 40.1 billion Over 8000
sales of products providing products/year renovated
Portion Guidance for nutrition or health considerations
(2012–2016 average)

For our
communities

159.9 million 41 867

coffee plantlets distributed (cumulative job opportunities, traineeships or
since 2010) to farmers, against a target apprenticeships were provided for
of 220 million by 2020 young people through our Nestlé needs
YOUth initiative

57% 431 000
of the volume of our 12 priority farmers trained through
categories of raw materials and paper capacity-building programmes
are responsibly sourced

For the planet

33.2% 253
reduction in our GHG emissions factories achieved zero waste
(scope 1 and 2) per tonne of product for disposal
since 2007

38.1% 25.7%
reduction in our water withdrawal per of our electricity comes from
tonne of product since 2007 renewable sources

Nestlé in society 3
Creating Shared Value
We believe that our company will be successful in the long term
by creating value for both our shareholders and for society as a whole.
This approach, called Creating Shared Value (CSV), is the principle
for how we do business. It enables us to bring our purpose to life:
enhancing quality of life and contributing to a healthier future.

Nutrition, water,
rural development, Creating
our focus areas Shared Value

Protect
Further information Sustainability
the future
Find details of our management approach and governance
structure, as well as performance data, case studies and
additional content, in our annual Nestlé in society – Creating
Compliance
Shared Value online report and the Nestlé in society Laws, business principles,
section of our corporate website (www.nestle.com/CSV). codes of conduct

4 Nestlé in society
Maximising value creation
Through our CSV approach we aim to create
value not only for shareholders but also for
society. Our CSV priorities are those areas of
greatest intersection between Nestlé’s business
and society. These include: nutrition, rural
development and water.
Our aim is to have a positive impact on society
while we grow our business. We enable healthier
and happier lives for individuals and families, we
help develop thriving and resilient communities,
and finally, we steward the planet’s natural
resources for future generations. New York, 18 September 2017 – Nestlé Chairman,
To guide us, we have developed long‑term Paul Bulcke, receives the Concordia Leadership Award
2017 for leading the company’s ongoing commitment
ambitions and specific commitments, against
to CSV and supporting the UN Sustainable
which we report our progress transparently Development Goals.
each year. Essential to achieving our goals is a
robust approach to sustainability, human rights
and compliance.

Our values corporate policies and commitments, strengthen

Underpinning all our efforts are our values, our business and target our investments.
which are rooted in respect: respect for ourselves, Stakeholder convenings and CSV events
respect for others, respect for diversity and provide opportunities to intensify that dialogue
respect for the future. Guided by these values, and increase our understanding of the intersection
we work alongside our partners and stakeholders between business and society. They facilitate
to ensure that our approach to CSV continues collective action, and promote trust and mutual
to inform all our behaviours, policies and actions. respect. In March 2017, our Chief Executive
Officer, U. Mark Schneider, participated in our
The business case for CSV stakeholder convening in London, which was
A long‑term approach to business has always attended by 66 representatives from a wide
been part of Nestlé’s DNA. Through CSV, we number of organisations.
integrate sustainable development into business
activities. This is increasingly important to Our material issues
long‑term investors. Every two years, we invite an independent third
CSV brings business and society together by party to conduct a formal materiality assessment.
generating economic value in a way that also It helps us to identify the issues that matter most
produces value for society. Foods and beverages to our business and our stakeholders, and to
with a nutrition, health and wellness dimension better support our strategic decision‑making
perform better. Rural development programmes and reporting. Issues of concern are evaluated
for farmers offer commercial differentiation to determine both risks and opportunities
to consumers, while responsible stewardship for our reputation, revenues and costs.
of water reduces costs and secures supplies for Our most material issues are:
our businesses.
–– over‑ and undernutrition –– resource efficiency
–– water stewardship and (food) waste
Stakeholder engagement –– human rights –– responsible sourcing
Engaging others on important issues lies at –– food and product safety and traceability
–– responsible marketing –– climate change
the heart of how we do business. We seek the and influence –– rural development
advice of experts and advocates to develop our –– business ethics and poverty alleviation

Nestlé in society 5
Nestlé. Enhancing quality
of life and contributing
to a healthier future.
Driven by our company purpose For individuals
– enhancing quality of life and and families
contributing to a healthier future –
our 2030 ambitions align with those
of the United Nations 2030 Agenda Enabling healthier and happier lives
for Sustainable Development. Food is not just a source of nutrition, it also brings us together
as families and friends. It is part of every culture. But food also
presents one of the largest public health challenges: obesity
has doubled since 1980, while hunger and malnutrition affect
millions. We support individuals and their families with tastier
Focused on impact and healthier choices, with information programmes that inspire
We recognise that we live in an interconnected people to live healthier lives, and through helping millions of
world in which our futures are inextricably linked. children develop good eating habits and to enjoy exercise.

Hence, our work in our three main impact areas

Our 2030 ambition is to help 50 million
is supported by 41 public commitments, many
children lead healthier lives
of which target our efforts towards meeting our
three 2030 ambitions. Having helped to shape
the 17 Sustainable Development Goals (SDGs), Related CSV impact area
we – and many companies like Nestlé – are now –– Nutrition
contributing towards delivering them.

Working towards our ambitions Committed to

We have integrated the SDGs into our CSV healthier kids
approach. In 2017, we took a number of steps
We enhance quality of life and
to drive progress towards meeting our 2030 contribute to a healthier future,
ambitions, as well as contributing to the 17 SDGs. by offering healthier products
These included strengthening Nestlé for Healthier and by helping families to eat
and drink better and move
Kids, extending our Nestlé needs YOUth initiative more. We have developed
and further developing our responsible water Nestlé for Healthier Kids to bring
stewardship activities. together all our efforts that
support parents and caregivers.
This includes research, product
formulation, education and
lifestyle services.

Supporting the SDGs:

No poverty Responsible consumption

and production
Zero hunger
Climate action
Good health and well-being
Life below water
Quality education
Life on land
Gender equality
Partnerships for the goals
Reduced inequalities

6 Nestlé in society
 For our For the planet
communities

Helping develop thriving, resilient communities Stewarding resources for future generations
1.2 billion people live in extreme poverty, many of them in rural Natural resources are becoming more constrained. Biodiversity
areas and dependant on agriculture. Our ambition is to help is rapidly declining and forests are still disappearing. Water is
improve livelihoods and develop thriving communities. Our increasingly scarce. Moreover, climate change will exacerbate all
global reach allows us to improve rural development through the challenges that we are currently facing. In addition, one third
better incomes, fostering education, respecting human rights, of the food produced is either lost or wasted every year. To grow
and supporting women and young people. sustainably, we must use the planet’s resources wisely and draw
on our global influence to effect positive change.
Our 2030 ambition is to improve 30 million
livelihoods in communities directly connected Our 2030 ambition is to strive for zero
to our business activities environmental impact in our operations

Related CSV impact areas Related CSV impact areas

–– Rural development –– Water
–– Our people, human rights and compliance –– Environmental sustainability

Supporting our youth Improving our

environmental
Our ambition for our global
youth initiative, Nestlé needs performance
YOUth, is to help 10 million
young people around the world We act on climate change by
have access to economic further reducing greenhouse
opportunities by 2030. This gas (GHG) emissions along our
global initiative combines and value chain. We continue to
coordinates all our activities, reduce withdrawals of water
and those of our partners, that per tonne of product and help
support young people around increase access to safe water
the world. and sanitation. Reducing waste
is a priority: we reuse and
recycle wherever possible. We
help the farmers we work with
to adopt sustainable practices.

Supporting the SDGs: Supporting the SDGs:

No poverty Reduced inequalities No poverty Sustainable cities

and communities
Good health and well-being Responsible consumption Zero hunger
and production Responsible consumption
Quality education Good health and well-being and production
Peace, justice and strong
Gender equality institutions Clean water and sanitation Climate action

Decent work and Partnerships for the goals Affordable and clean Life below water
economic growth energy
Life on land
Industry, innovation
and infrastructure Partnerships for the goals

Nestlé in society 7
Enabling healthier
and happier lives

Inspired by our founder, Henri

Nestlé, and with nutrition at our
core, we work closely with partners
to offer foods and beverages that
enable healthier and happier lives.
We have set commitments and
objectives to make our portfolio
even healthier and tastier, inspire
consumers to lead healthier
lives, and develop and share our
understanding of the connection Uncle Tobys, Australia’s leading brand of oats, has
between nutrition and health. launched Nature’s Mix, a no‑added sugar range that
is naturally sweetened with dried fruit and nuts.

Offering tastier and healthier choices

Nutrition is the area of greatest intersection
between Nestlé’s business and society, where
we can help tackle the global public health
issues of over‑ and undernutrition. It is important
that consumers have tasty, convenient options
containing the nutrients they need, so that they
can maintain a healthy diet.
We are launching more nutritious foods
and beverages, simplifying ingredient lists
Added value for investors and removing artificial colours, while adding
micronutrients where they are deficient in the
The market for healthier foods and local population.
beverages is growing. Products with a A scientific breakthrough will allow us to
nutrition, health and wellness dimension reduce the total amount of sugar in confectionery
perform better. Through our broad by up to 40% without compromising on taste.
portfolio, covering needs from babies The first products will be launched in 2018.
to old age, and our constant investment We have also reinforced our commitment to
in product innovation we are well placed further reduce sodium by an average of 10%
to seize this opportunity. by the end of 2020, in support of the WHO
Nestlé foods and beverages with an recommended intake levels.
above average NHW benefit achieve
1.8x higher growth rates than other
products and are 1.5x more profitable.
This is clearly an opportunity for
7% 174 billion
reduction in sugar content servings of fortified
increased financial impact. Furthermore, of KitKat, which we foods and beverages
our health and wellness work helps us achieved by using more in 66 countries with
stay ahead of regulations, possibly milk and cocoa higher vulnerability to
micronutrient malnutrition
avoiding major costs of non‑compliance.

8 Nestlé in society
Every year, over 22 million children benefit from In 2016, we announced a new way to structure sugar
Nestlé Milo’s programmes promoting physical activity. particles that allows us to reduce the sugar in some
A new partnership with FC Barcelona signed in 2017 of our confectionery products. We scaled up our
will inspire millions more children to participate technology in 2017 and 2018 will see our first launches.
in sport.

Inspiring people to lead healthier lives Building, sharing and applying

We are committed to improving access to nutrition knowledge
nutrition to help reduce non‑communicable Our scientists examine the link between nutrition
diseases. We work with partners to promote and health across generations. From maternal
balanced diets, healthy cooking and hydration, and children’s health to healthy ageing, we adopt
and regular physical activity. We encourage a holistic approach. It focuses on nutrition and
people to lead healthier lives by providing physical activity and their combined impact on
nutritional information and portion guidance, metabolic health. We use our findings to improve
and through responsible marketing. our own foods and beverages.
Nestlé for Healthier Kids celebrated Our Feeding Infants and Toddlers Study (FITS)
International Chefs’ Day by conducting cookery and Kids Nutrition and Health Study (KNHS)
workshops with Nestlé Professional chefs and continued to research the eating habits of infants
children from over 50 countries. In Thailand, Milo and children. FITS in the US, for example, found
launched a low‑sugar ready‑to‑drink beverage, that 30% of older infants and toddlers eat very
and the Milo sports programme reached over one few or no vegetables each day. In 2017, as a result
million children in 1000 schools. of our research, we launched Gerber Grabbers
Strong Veggies Squeezable Puree, a nutritious
snack providing one serving of vegetable (the first
89.4% 81 ingredient) and three‑quarters of a serving of fruit.
of our foods and beverages countries participating in
display Guideline Daily Nestlé for Healthier Kids
Amount labels on the front
of pack
1.724 billion 313
Swiss francs invested in Our scientists shared
research and development nutrition knowledge by
publishing 313 research
papers

Nestlé in society 9
Help develop thriving,
resilient communities

In addition to our own employees,

we work with hundreds of partners,
thousands of suppliers and millions
of farmers around the world. Our
collective aim is to help develop
thriving and resilient communities
as part of a secure, long‑term
supply chain. Our programmes
and commitments are designed to
support rural development, promote
and respect human rights, and As part of Nestlé’s Cocoa Plan, we have developed
ensure fair employment and diversity. the Child Labour Monitoring and Remediation System.
Detailed in our first Tackling Child Labour report,
it is the most comprehensive programme yet to help
children working in cocoa production, according
to the organisation STOP THE TRAFFIK.

Enhancing rural development and livelihoods

We have over four million farmers in our supply
chain and we work directly with approximately
700 000 of them. To help secure a long‑term supply
of high‑quality raw materials for our foods and
beverages, we need to understand where and how
our ingredients are produced, support the farmers
who supply us and drive rural development. We
include in this process our commitment to continue
to improve animal welfare and, in 2017, we set new
goals in this regard.
Our agripreneurship programme supports the
next generation of farmers by providing essential
skills training. We offer training to improve
agricultural practices, develop alternative income
streams and improve dietary diversity.
Through our partnership with the International
Added value for investors Federation of the Red Cross and Red Crescent
Societies (IFRC), we support access to water,
Consumers increasingly want to know sanitation and hygiene, and women’s empowerment
where their foods and beverages in selected areas where we source our products.
come from and that human rights are
respected during their production.
Our responsible sourcing activities,
such as our Nespresso AAA Program,
57% 2025
of the volume of our Our aim is to source all our
Nescafé Plan and Nestlé Cocoa Plan, 12 priority categories of eggs from cage‑free hens
help us to ensure the resilience of our raw materials and paper are for all our food products
supply chain and offer commercial responsibly sourced globally by 2025
differentiation to the consumer.

10 Nestlé in society
Responsible sourcing in pet food: in partnership Nestlé with other partnering companies have
with the Thai Government and a supplier, we have offered young people over 95 000 jobs and training
developed a showcase vessel. It is used in trainings to opportunities since 2014.
address labour rights abuses in the seafood industry.

Respecting and promoting human rights Promoting fair employment and diversity
in our business activities Fair employment, diversity and inclusion are
Human rights abuses have no place in our supply integral to Nestlé’s culture. We aim to provide
chain, which is why we promote human rights a safe, rewarding workplace that inspires
at global and local levels across our business employees to fulfil their potential. We provide
operations and value chain. We continually strive to people with equal development opportunities and
meet the highest ethical standards, and insist that treat each other with dignity and respect.
our partners and suppliers uphold the same high We place a particular focus on the challenge of
criteria. This requires commitment and work over youth unemployment. In 2017, we announced the
time. We will always be open and transparent about extension of our Nestlé needs YOUth initiative to
our efforts to address issues, from forced labour and our entire value chain. Its aim is to help 10 million
gender inequality to corruption. young people around the world have access to
Through our responsible sourcing activities, economic opportunities by 2030. By doing so,
we take concrete actions, based on our 11 salient we support the development of the communities
human rights issues identified in 2015. As part of where we live and work, while ensuring our
this effort, in 2017 we published our Labour Rights talent pipeline. This brings diversity and new skills
in Agricultural Supply Chains: A Roadmap. It has to the organisation and supports local innovation
enabled us to identify and prioritise 11 countries and entrepreneurship.
that present known higher levels of labour risks and
from which we source our 12 priority commodities.
Through this process, we can better target our
remediation efforts on labour rights.
30 157 97%
jobs and 11 710 traineeships of our markets have
or apprenticeships provided a health and wellness
to young people programme in place

13 96 599 under 30 in 2017

human rights impact employees trained in

assessments completed human rights since 2011
in countries where we
have significant business
operations

Nestlé in society 11
Steward resources
for future generations

We are working, with partners and

stakeholders, towards our ambition to
strive for zero environmental impact
in our operations. We have set clear
commitments and objectives to use
sustainably-managed and renewable
resources, operate more efficiently,
aim for zero waste for disposal and
improve water management. We also
continue to participate actively in
initiatives that reduce food loss and The Nestlé Pakistan water plan was unveiled in
waste, and that preserve our forests, October 2017, in collaboration with Lahore University
of Management Sciences and WWF. It promotes
oceans and biodiversity. water resources conservation, introduces sustainable
agricultural techniques, and provides access to clean
and safe water.

Caring for water

Water is a shared and precious resource that we
need to manage sustainably. We unequivocally
believe access to water is a basic human right.
Everyone, everywhere in the world, has the right
to clean, safe water for drinking and sanitation.
Caring for water is a key part of achieving our
ambition to strive for zero environmental impact
in our operations. Water is essential for our
business. The ingredients we source need water
to grow. We need water to run our factories and
consumers use water to enjoy many of our foods
and beverages.
Our initiatives continue to look for ways to
further reduce withdrawals per tonne and reuse
Added value for investors water in our operations. We also work with others
on water stewardship initiatives, and increase
By offering consumers more sustainable access to safe water, sanitation and hygiene.
foods and beverages, we provide them
with more reasons to choose our
brands, generating additional revenue.
We bring savings through improved
38.1% 20
reduction in our water Nestlé Waters announced
operational efficiency, better resource withdrawals per tonne of that it will strengthen
management and less waste. Investing product since 2007 its collaboration with
in climate change adaptation and the Alliance for Water
Stewardship (AWS) to
mitigation, as well as responsible water certify 20 factories by 2020
stewardship, helps secure a more
sustainable supply of resources for
our business.

12 Nestlé in society
Our Nescafé Dolce Gusto factory in Montes Claros, Nespresso continues to extend its global recycling
Brazil, achieved a triple‑zero milestone: zero water scheme and invested CHF 25 million in 2017.
withdrawal, zero waste for disposal and zero net
GHG emissions.

Acting on climate change Safeguarding the environment

Climate change is a major global challenge, The basic ingredients of all of our food products
with shifting weather patterns threatening food come from plants and animals, forests, farms, and
security and changes in consumption putting oceans. Protecting the natural environment where
pressure on natural resources. Our size and scale those ingredients grow and live is essential.
means we can show real leadership on climate We aim to develop our business while improving
change, and find ways to further reduce the our environmental performance, to ensure that a
emissions of greenhouse gases (GHGs) and use more sustainable supply of natural resources and
more renewable energy. We have set ambitious raw ingredients goes into making our products.
targets to reduce GHGs, in line with the Paris We continue to play our part in helping to reduce
Agreement on climate change. food loss and waste. In our sites, we reduce, reuse
We have doubled the amount of renewable and recycle with the ultimate goal of achieving zero
energy we procure compared to 2016. More waste for disposal. On an agricultural level, our team
than 100 sites are now powered with renewable of over 1000 agronomists and other support staff
electricity, including from spent coffee grounds provides training to help our farmers improve their
or wood chips. These are just some of the many methods, reduce losses and keep their land healthy
initiatives that have helped us earn a place in the and productive.
annual CDP Climate A List and become No.1 in
the food products industry in the 2017 Dow Jones
Sustainability Index.
253 100%
factories achieved Nestlé Waters joined the
zero waste for disposal Natur’ALL Bottle Alliance
25.7% 33.2% in 2017 in striving to create a fully
recyclable plastic bottle
of our electricity now reduction in our GHG made from 100% bio‑based
comes from renewable emissions (scope 1 and 2) material
sources. In markets such per tonne of product
as Germany, UK & Ireland since 2007
and Brazil, we procure
100% from solar, wind and
hydropower sources

Nestlé in society 13
Our 2020 commitments

Our impact areas – individuals and families, our

communities and the planet – are interconnected,
For individuals
and our efforts in each of these areas are and families
supported through our 41 public commitments.
These hold us publicly accountable for our
performance and we report our progress against
them every year. Offering tastier and healthier choices
All our public commitments are directly
aligned with our corporate purpose, our Launch more nutritious foods and beverages, especially
2030 ambitions and the UN SDGs. The majority for mothers‑to‑be, new mothers and children
of these commitments are supported by specific Further decrease sugars, sodium and saturated fat
objectives for 2020.
The table below shows our current progress Increase vegetables, fibre‑rich grains, pulses,
against our 2020 commitments, including those nuts and seeds in our foods and beverages
achieved by the end of 2017, as indicated by a
Simplify our ingredient list and remove artificial colours
tick. Our full online report provides more detailed
information and updates on progess.
Address undernutrition through micronutrient fortification

Our performance in leading indices

Although we are not driven by awards and Inspiring people to lead healthier lives
recognition, we remain proud to have our
sustainability efforts and achievements Apply and explain nutrition information on packs,
acknowledged by world‑leading rating and at point of sale and online

ranking agencies: Offer guidance on portions for our products

First breast-milk substitute

manufacturer to be included Market to children only choices that help them achieve
in the FTSE4Good Index, a nutritious diet
and we have retained our place
for six years. Empower parents, caregivers and teachers to foster
healthy behaviours in children

Second out of 22 global food Leverage our marketing efforts to promote

and beverage manufacturers in healthy cooking, eating and lifestyles
the 2016 Access to Nutrition
Support breastfeeding and protect it by continuing
Index™ (ATNI).
to implement an industry‑leading policy to market
breast‑milk substitutes responsibly
First in the foods products
Inspire people to choose water to lead healthier lives
sector of the 2017 Dow Jones
Sustainability Index (DJSI) with
an overall score of 89 out of 100. Partner for promoting healthy food environments

Topped the list of global Building, sharing and applying nutrition knowledge
companies in 2017 CDP climate
change, earning a place in CDP’s
Climate A list. Build and share nutrition knowledge from the first
1000 days through to healthy ageing
Ranked top scorer within the Build biomedical science leading to health‑promoting
packaged food industry at Ceres’ products, personalised nutrition and digital solutions
Feeding Ourselves Thirsty an
analysis comparing the water
risk management performance
of 42 global companies.

14 Nestlé in society
 For our For the planet
communities

Rural development and enhancing rural livelihoods Caring for water

Roll‑out rural development baseline assessments Work to achieve water efficiency and sustainability
to understand the needs of farmers across our operations

Improve farm economics among the farmers Advocate for effective water policies and stewardship
who supply us

Improve food availability and dietary diversity among Treat the water we discharge effectively
the farmers who supply us

Implement responsible sourcing in our supply chain Engage with suppliers, especially those in agriculture
and promote animal welfare

Continuously improve our green coffee supply chain Raise awareness on water conservation, and improve
access to water and sanitation across our value chain

Roll out the Nestlé Cocoa Plan with cocoa farmers Acting on climate change

Respecting and promoting human rights Provide climate change leadership

Assess and address human rights impacts across Promote transparency and proactive,
our business activities long‑term engagement in climate policy

Improve workers’ livelihoods and protect children Safeguarding the environment

in our agricultural supply chain

Enhance a culture of integrity across the organisation Assess and optimise the environmental impact
of our products

Promoting decent employment and diversity

Improve the environmental performance
of our packaging
Roll‑out our Nestlé needs YOUth initiative
across all our operations Reduce food loss and waste

Provide training on Corporate Business Principles,

Nutrition and Environmental Sustainability Provide meaningful and accurate
environmental information and dialogue
Enhance gender balance in our workforce and empower
women across the entire value chain Preserve natural capital, including forests

Advocate for healthy workplaces and healthier employees

Provide effective grievance mechanisms to employees

and stakeholders

Commitments achieved
by the end of 2017

Nestlé in society 15