2008 Corporate Responsibility Report

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Corporate Responsibility Report | 2008

“Bringing Our Best To You” For more than 100 years, corporate responsibility has been at the foundation of Kellogg Company and a key part of our heritage and culture. We are pleased to share this report with you. It provides an overview of our corporate responsibility approach, priorities and targets, as well as a baseline performance review in several key areas. Welcome

Welcome to Kellogg’s first global Corporate Responsibility Report. We hope this report provides information useful to our stakeholders, including our consumers, employees, customers, investors, business partners, community members, and governmental and nongovernmental organizations. We plan to publish a corporate responsibility report on an annual basis, expanding and improving upon this first effort.

Data in this report are for 2007 except as noted. Although the report focuses primarily on calendar year 2007, it includes discussion of some 2008 events that were particularly relevant to our corporate responsibility strategy.

The report covers Kellogg’s wholly and majority-owned operations, and complements other information about Kellogg available on our company Web site (www.kelloggcompany.com) and our nutrition Web site (www.kelloggnutrition.com). As part of our strategic focus to pursue selective growth opportunities, we have recently acquired several new businesses around the world. Those acquisitions are being integrated into our company, and we intend to report on them more fully in the future, once they are aligned with the rest of our business.

This report uses the Global Reporting Initiative (GRI) G3 Guidelines, which provide a recommended framework and indicators for reporting. We are reporting at a GRI-checked application level of “B.” More information on the G3 Guidelines and application levels is available at: www.globalreporting.org. We did not seek third-party assurance of this report but will consider doing so for future reports. The report received extensive internal review by subject matter experts and our Global Leadership Team, composed of our top executives.

A printed Executive Summary of this report is available upon request by e-mailing [email protected] and is available online at www.kelloggcompany.com/CR.

Report Application Levels 4 Kellogg Company’s 2008 Corporate Responsibility Report Contents Table: ProgressandPerformance Corporate ResponsibilityStrategy Our Company PROFILE AND STRATEGY CEO Statement Chair Statement OVERVIEW Case Study:W.K. Kellogg Values Awards Looking Ahead Labor Standards Occupational HealthandSafety Compensation andBenefits Diversity andInclusion Employee LearningandDevelopment Culture W Looking Ahead Supplier Diversity Product QualityandFoodSafety Consumer InformationandLabeling Responsible Marketing Issue Focus:Obesity The ImportanceofBreakfast Health andNutrition MARKETPLACE orkplace 10 36 22 21 16 10 44 42 42 41 40 39 38 38 34 33 31 30 29 28 27 23 7 8 7 Kellogg Company’s 2008 Corporate Responsibility Report 5 61 63 64 66 68 69 70 69 60 ADDITIONAL INFORMATION ADDITIONAL INFORMATION Contact Us/Feedback COMMUNITY Philanthropy Strategic Corporate Community Development Looking Ahead Case Study: Employee Engagement Issue Focus: Malnutrition GRI Index 47 49 51 52 53 55 55 56 59 46 ENVIRONMENT Management Energy Use and Greenhouse Gas Emissions Energy Use and Greenhouse Use Water Waste Packaging Sustainable Agriculture Looking Ahead Case Study: Employee-Driven Environmental Initiatives Engagement Activities External Table: 6 Kellogg Company’s 2008 Corporate Responsibility Report Kellogg Company’s 2008 Corporate Responsibility Report 7 - OVERVIEW Jim Jenness

At our company, W.K. Kellogg’s passion, vision and Kellogg’s W.K. At our company, His example not only continues to values live on today. and role our examine we as us guides also but us, inspire global tackling to positively contributing in responsibilities global complex increasingly an in managing challenges, impact. our minimizing and chain, value and business we have begun a Building on our values and heritage, responsibility strat- process to define a robust corporate will reach out As we move through the process, we egy. and to stakeholders to understand their perspectives our response take these views into account as we chart to operational and global issues. a Providing This report is a key part of our strategy. of our goals, transparent and comprehensive account our actions, our achievements and our areas of oppor tunity is the right thing to do – and in keeping with W.K. vision for this company. Kellogg’s This is the first in what will be a series of annual global find you hope We Reports. Responsibility Corporate feedback your welcome we and useful, report this we how on ([email protected]) can improve it. Jim Jenness Chairman of the Board Chairman of the Board More and more, consumers also trust companies like ours to care about the things they care about. Beyond the product itself, this includes a wide range of social and environmental concerns that arise in our value chain, such as the impacts of agriculture and food processing on climate change, water availability and Consumers are also energy use, as well as food safety. increasingly concerned about global issues like malnu- public health and access to clean water trition, obesity, live up to our brand promise, and nutritious foods. To we must confront and address a growing range of issues with humility and creativity. Our brand is our promise. It says consumers can count Our brand is our promise. It says consumers tasting, great on us to provide consistent, high-quality, wholesome food. W.K. Kellogg put his signature on every package of W.K. to quality and cereal to express his personal pledge trust in the nutrition. In doing so, he began building vision is to be the our Kellogg brand. A century later, many choices food company of choice. But with so Kellogg? available, why should consumers choose believe it still comes down to trust. We Our founder, William Keith Kellogg, was an exceptional William Keith Kellogg, Our founder, and a passion for leader with an entrepreneurial spirit about his em- nutrition and health. He cared deeply activist and ployees and was a committed community philanthropist. To live up to our brand promise, we must confront promise, we must live up to our brand To with humility a growing range of issues and address and creativity. Chair Statement Chair

OVERVIEW

8 Kellogg Company’s 2008 Corporate Responsibility Report

communities, amongothers. customers, their ultimate consumers, investorsand Companies todayfacehigherexpectationsfromtheir w w significant actionsonkeyissues: corporate responsibility. Theyhaveinspiredustotake damental tohowwedobusiness,arealsodriversof All oftheseelementsourculture,whicharefun- levels ofthecompany. the day-to-daychoicesandactionsofemployeesatall Kellogg hasdefinedasetofvaluesthattrulydoguide novation andtomeasuringourprogressinachievingit. ing andsetrealistictargets.We arecommittedtoin- business strategy. We avoidfadsandshort-termthink- pany forlong-term,sustainablegrowthusingaproven nutritious andgreat-tastingfood.We managethecom- Kellogg Companywasfoundedtoprovidehigh-quality, CEOStatement marketing commitments,we developednutrition under age12.Inadditionto strengtheningouroverall with enhancedpracticesfor marketingtochildren wide MarketingandCommunications Guidelines Marketing Responsibly:We strengthenedourWorld - about theproduct’s nutritionalprofile. choices byprovidingsimple,at-a-glanceinformation designed tohelpconsumersmakemoreinformed information prominentlyshownonthepackageis Australia, Mexico,CanadaandSouthKorea.The pioneering approachtotheUnitedStates,Europe, Kingdom. Bytheendof2007,wehadextendedthis (GDAs) onthefrontofcerealpackaginginUnited voluntarily introducenutritioninformationlabeling February 2005,webecamethefirstcompanyto Providing Fact-BasedConsumerInformation:In

our direction and priorities as we move forward. mance in 2007 and part of 2008, as well as a glimpse of Responsibility Reportprovides alookbackatourperfor place, environment and community – this Corporate (issues relatingtoourproductsandcustomers),work- Organized around our four strategic areas – marketplace greater detailinthenextsectionofthisreport. responsibility strategy. We discussthisstrategyin to buildasystematicandcomprehensivecorporate our heritageandcultureasasolidfoundationonwhich for ourselves.In2008,webeganaprocessthatuses whether tochooseus.We alsohavehighexpectations stakeholders lookatthechoiceswemakeindeciding investors andcommunities,amongothers.These from theircustomers,ultimateconsumers, to bedone.Companiestodayfacehigherexpectations These areallimportantsteps,butmuchmoreremains Our Corporate ResponsibilityStrategy w 2015, workingfrom2005baselines. use andwastepermetrictonneoffoodproducedby in ourenergyuse,greenhousegasemissions,water adopted goalstoachieve1520percentreductions Reducing OurEnvironmentalImpacts:We have we willbefullyoperationalwithourcommitments. under 12 or will be reformulated. By the end of 2008, new Nutrient Criteria will not be advertised to children be marketed to children. Products that do not meet our to determinewhichproductsaroundtheworldwill standards, calledtheKelloggGlobalNutrientCriteria,

David Mackay Chief ExecutiveOfficer President

- Risks and Opportunities I firmly believe that developing and implementing our strategy will strengthen our business in the long term. Intensive use of limited natural resources – including clean water, fer- tile land and fossil fuels – has driven up the cost of the basic inputs to our business, while the interconnections between markets for energy and food are becoming more evident. Nutrition issues, including hunger, obesity and the role of food in contributing to and preventing disease, have taken center stage in public discussion. The globalization of food markets and supply chains has heightened concerns about human rights, food safety and the impacts of transporting foods.

These issues pose both risks and opportunities for Kellogg. As a company with deep expertise in nutrition, we are in a position to expand nutritious food choices for consumers. We see tremendous potential for growth in developing markets. Deepening our understanding of corporate responsibility issues and stakeholder concerns will allow us to take greater advantage of opportunities and challenges created by global markets. Implementing our corporate responsibility strategy will also help to improve the efficiency of our operations and avoid risks to our reputation. At the same time, we believe our strategy will benefit our consumers and the communities within which we operate.

We have begun the process of defining goals, targets and performance indicators for our key opportunities. With a dis- ciplined and thoughtful approach, our strategy will enable us to make decisions about these key issues and create value for our consumers, our customers, our employees and the environment upon which we all depend.

I’m pleased to report on our efforts so far, and look forward to sharing our progress with you in future reports.

David Mackay President Chief Executive Officer

PROFILEANDSTRATEGY

10 Kellogg Company’s 2008 Corporate Responsibility Report Data inthe companyprofile sectionisinU.S. dollars. cereal bars, frozen waffles andvegetable-based meatalternatives. convenience foods,includingcookies,crackers, toasterpastries, world’s leadingproducer ofcerealandaleadingproducer of With 2007salesofnearly$12billion,Kellogg Companyisthe $2.76 pershare 7percent

To learnaboutourcompany anditshistory, visitwww.kellogghistory.com. $472million

Our Company $9.908 billion $36.8 million $444 million $1.03 billion $11.8 billion $1.1 billion 32,000 180 59 19

* * *

“ and communities.” committed toourconsumers,customers Our 32,000employeesaroundtheglobeare 2007 capitalexpenditures 2007 cashflow 2007 dilutedearningspershare 2007 shareholderreturn 2007 netearnings 2007 netsales Manufacturing facilities Countries whereourproductsaremanufactured Countries whereourproductsaremarketed Employees worldwide 2007 communityinvestments 2007 incometaxes 2007 operatingcosts David Mackay, PresidentandCEO *2008 data Kellogg Company’s 2008 Corporate Responsibility Report 11 Japan Australia South Korea 2007 cash flow cash 2007 2007 income taxes income 2007

wages and benefits and wages 2007 operating costs operating 2007 XX XX Russia China $1.03 billion $1.03 2007 community investments community 2007 Thailand

$444 million $444 2007 Asia amount of products sold (tons?) sold products of amount Pacific Sales XX $649 million India XXX 2007 payments to providers of capitol of providers to payments 2007 $2.4 2007 billion XX European Sales Germany South Africa countries with countries facilities manufacturing Spain Great Britain = Brazil Venezuela Kellogg Company Around the World Around Company Kellogg marketed in 180 countries around the world. world. the in 180 countries around marketed Battle Creek, MI Kellogg products are manufactured in 19 countries and in 19 countries and manufactured are products Kellogg Kellogg Company operates through four operating segments: operating four through operates Company Kellogg Kellogg North America, Europe, Latin America and Asia Pacific. America and Latin America, Europe, North Kellogg Colombia 2007 Sales Ecuador Canada $984 million 2007 net sales net 2007 Latin American Mexico United States net earnings net Guatemala Kellogg is a publicly traded company headquartered in Battle Creek, Michigan. Michigan. Creek, in Battle headquartered company is a publicly traded Kellogg

employees worldwide employees

$7.8 2007 Sales

North Shareholder return Shareholder

billion countries where our products are marketed are products our where countries

Kellogg Company Around the World the Around Company Kellogg American countries where our products are manufactured are products our where countries facilities manufacturing

59 billion $11.8 billion $1.1 32,000 19 180 XX PROFILEANDSTRATEGY

12 Kellogg Company’s 2008 Corporate Responsibility Report Our Vision andMission Sample Brands andProducts managing allaspectsofourbusinessforsustainableperformance. be economically, sociallyandenvironmentallyresponsibleby Our brandsandourheritagedifferentiate andguideus.We will managing allaspectsofourbusinessforsustainableperformance. be economically, sociallyandenvironmentallyresponsibleby Our brandsandourheritagedifferentiate andguideus.We will More information onourbrands canbefound at www.kelloggs.com Statement ofPurpose“BringingOurBesttoYou” and at ourcompany’s various international Web sites. Our valuesguideourday-to-day actions. Our valuesguideourday-to-day actions. Through ourfoods,webringhealth,nutritionandenjoymenttopeopleallovertheworld. Through ourfoods,webringhealth,nutritionandenjoymenttopeopleallovertheworld. Sustainable Growth (V2V) • Grow cereal cereal Grow Sustainable Growth (V2V) • Grow cereal cereal Grow needs of our consumers, customers and communities. and customers consumers, our of needs To drive sustainable growth through the power power the through growth sustainable Todrive of our people and brands by better serving the the serving better by brands and people our of Continuous e ciency improvementContinuous e ciency • Operating Principles Operating Expand snacks snacks Expand needs of our consumers, customers and communities. and customers consumers, our of needs Kellogg peopleareourcompetitive advantage. To drive sustainable growth through the power power the through growth sustainable Todrive of our people and brands by better serving the the serving better by brands and people our of Strategic Focus Strategic Remain consumerRemain centric Continuous e ciency improvementContinuous e ciency • Operating Principles Operating Expand snacks snacks Expand Kellogg peopleareourcompetitive advantage. Executional excellence work andtheopportunitytogrowprosper. We strivetoprovideemployeeswithagreatplace Our peopleandtheirdiversityareourgreatestasset. company of choice. of company To be the food the To be Mission Prioritize to win Strategic Focus Strategic Remain consumerRemain centric Vision Executional excellence work andtheopportunitytogrowprosper. We strivetoprovideemployeeswithagreatplace Our peopleandtheirdiversityareourgreatestasset. company of choice. of company • Pursue selective growth opportunities growth selective Pursue To be the food the To be Mission Prioritize to win Vision • Pursue selective growth opportunities growth selective Pursue involvement andnutritionleadership. includes environmentalstewardship, community Social responsibilityiskeytosustainability and Manage Cash Responsibility for involvement andnutritionleadership. includes environmentalstewardship, community Social responsibilityiskeytosustainability and Manage Corporate Cash Responsibility for Corporate unite andinspireustosucceedtogether. Our vision,mission,operatingprinciplesandvalues unite andinspireustosucceedtogether. Our vision,mission,operatingprinciplesandvalues Kellogg Company’s 2008 Corporate Responsibility Report 13 - hunger to learn. We love success. We We are all accountable. We We strive for simplicity. We We have the humility and We integrity and show respect. We are passionate about our We At Kellogg Company, we act with At Kellogg Company, business, our brands and our food. Our Values Our ™, shape our values, K Values Kellogg Company’s guide the way culture, serve as our social contract and have elaborated on the values we run our business. We in out play they how to help our employees understand activities. They are integrated with business day-to-day employee several of our business processes, including performance evaluation. on category dollar share).* We also have fast-growing, also have fast-growing, We dollar share).* on category businesses in many other countries wholesome snacks The focus for all of these businesses around the world. brand-building support. is innovation and strong Opportunities. Selected Growth 3. Pursue our business for long-term perfor Because we manage mance with realistic targets, we have the flexibility to mance with realistic that strengthen the health make strategic investments of opportunities for growth Examples of our company. complementary acquisitions; might include small, infrastructure or capabilities; and expansion of existing goal is to remain expansion into related categories. Our generating focused on our areas of strength while growth. sustainable, dependable rates of sales re information on our company can be found at at can be found on our company information More www.kelloggcompany.com under “Our Company” and “Investor Relations.” Relations.” and “Investor under “Our Company” www.kelloggcompany.com , a U.S. all-natural Inc. Acquisition of Bear Naked granola and trail mix business. (November 2007) a U.S. veggie foods Acquisition of Gardenburger, business, including one manufacturing facility and approximately 120 employees. (November 2007) Russian a , Group Acquisition of United Bakers facilities manufacturing six with maker cereal and biscuit and approximately 4,000 employees. (January 2008) Acquisition of substantially all of Zhenghang Ltd., a Chinese manufacturer of Company Foods cookies and crackers, with approximately 1,800 employees and two manufacturing facilities. (June 2008) Products Acquisition of the assets of IndyBake , with two manufacturing Products and Brownie facilities in Illinois and Indiana and approximately 150 employees. (August 2008) Pty Limited, Acquisition of Specialty Cereals a manufacturer of natural ready-to-eat cereals based in Australia, including one manufacturing facility and approximately 50 employees. (September 2008) Cookies’ trademarks and Acquisition of Mother’s recipes in the U.S. (December 2008) *Information Resources Inc. data

Acquisitions 2007/2008 w w w w w w w Our Business Strategy Our Business model is based on sustainable At Kellogg, our business an unwavering focus on the long- maintain growth. We business, set realistic targets and term health of our successful, business strategy: follow a simple, but the success of recognize that We Cereal. 1. Grow - is essential for our company to suc our cereal business make significant investments we ceed. Consequently, and brand building. We in research and development position in most countries in hold the leading share which we operate. also have a strong snacks We 2. Expand Snacks. cookie, cracker have the number-two business. We the U.S. (based and wholesome snack businesses in PROFILEANDSTRATEGY

14 Kellogg Company’s 2008 Corporate Responsibility Report and the preparation of this report. Other committees of and thepreparationofthisreport.Othercommittees the development of our corporate responsibility strategy protection, ethicalbusinessconduct,consumeraffairs, matters, nutrition and regulatory affairs, environmental ment strategy and initiatives, diversity, equal opportunity responsibility approach,includingourcommunityinvest- ity. TheCommitteeoverseesaspectsofourcorporate its chartertospecificallyincludecorporateresponsibil- the Board in 1979. Recently, the Committee updated We established a Social Responsibility Committee of are independent. Guidelines. AllofthemembersBoardcommittees bility –andaccordingtoasetofCorporateGovernance ing, NominatingandGovernance,SocialResponsi- – Audit,Compensation,Executive,ConsumerMarket- Exchange. TheBoardoperatesthroughsixcommittees dent ofthecompany, asdefinedbytheNew York Stock Directors. Ten oftheseBoardmembersareindepen- Our companyisgovernedbya12-memberBoardof Governance andEthics Our Corporate Governance Guidelines,GlobalCodeofEthicsandadditional information about ourgovernance systemscanbefound onlineat www.kelloggcompany.com. nal systems and ethics/compliance program. tone from thetop,legal,regulatory andreputation trackrecord,inter the publicwell-being, industryleadership,executiveleadership and responsibility, corporategovernance,innovation thatcontributesto categories: citizenship and several in worldwide companies 10,000 of performance the of review expert on based is recognition Company toitsWorld’s MostEthicalCompanieslist.Ethisphere’s In 2007andagainin2008,theEthisphere InstitutenamedKellogg “World’s MostEthicalCompanies” Kellogg Namedoneofthe questions orconcernsanonymously. a Web-based reportingtoolforouremployeestoraise We havebothahotline,calledtheEthicsAlertLine,and employee healthandsafety, harassmentprevention. subjects suchaslaborstandards,diversityandinclusion, than 26,000hours.Thetrainingaddressesavarietyof half ofouremployeesreceivedthetraining,totalingmore right behaviors. During 2007, 13,122 employees or about our training to make it more effective and to drive the been inplacesince2000,andwearecontinuallyrefining is conducted in 13 languages. This annual program has plete Kellogg’s Compliance and Ethics Training, which employees withaccesstocompanycomputerscom- of all Kellogg employees worldwide. Substantially all A Global Code of Ethics guides the business practices ing to health and nutrition. key issuesdiscussedinthisreport,includingmanyrelat- ronmental issues. The Board as a whole also addresses For example,theAuditCommitteereviewsvariousenvi- the Board address corporate responsibility issues as well. - Kellogg Company’s 2008 Corporate Responsibility Report 15 PROFILEANDSTRATEGY

16 Kellogg Company’s 2008 Corporate Responsibility Report health and nutritionhealth experts, environmental experts and consumers, customers, with engaged long has Kellogg stakeholders. its and company the to relevant most figure page17)and–justasimportantwhichare (see chain value Kellogg’s across occur that issues of range the of understanding an requires issues responsibility corporate addressing Strategically Analyzing OurIssues long-term ramifications andthatwemake informed,responsiblechoices. and impactswhenwemake decisions,thatweunderstand theshort-and corporate responsibility aimstoensurethat weconsiderarange ofoptions and integrated globalcorporate responsibilitystrategy. Ourapproach to they poseforourcompany, wehavebeguntodevelopacomprehensive holders. To betterunderstand thosechoicesandtherisksopportunities stakeour - on have we impacts the and company our of direction future the Every day, allaround theworld,wemake thousandsofchoicesthataffect

*The GlobalReporting Initiativedefinesmateriality in a corporate responsibility reporting context as follows: “The information in a report should influence theassessments anddecisionsof stakeholders.” cover topics and indicators thatreflectthe organization’s significant economic,environmental and socialimpacts, or thatwouldsubstantively Corporate ResponsibilityStrategy pose the most significant risks and opportunities.* and risks significant most the pose that issues those on efforts company’s a focus to way a as corporate responsibility to applied been recently has that accounting financial in concept familiar a is Materiality analysis. materiality a conducted we development, strategy our in step first a as and issues, these understand To company. better our and industry our for issues significant the into insight gain to others the highestpriorityissues. them informulatingstrategies to address key stakeholderswithinKelloggandengage to seniorleaders.Theteamwillalsoidentify these issuesandprovidesregularupdates across theglobe,evaluatesandprioritizes that mayhaveanimpactonourcompany technology, identifiesfoodindustryissues president ofcorporatequality, researchand functional team,whichreportstoourvice an EmergingIssuesTeam. Thecross- pose forourcompany, werecentlyformed emerging issuesandtheriskstheymay we’re already tracking. To helpidentifythese can changeourunderstanding of issues always emerging,andadditionalresearch health, nutritionandfood-safetyissuesare key issuesisanongoingprocess.New Identifying, understandingandmanaging Kellogg’s EmergingIssuesTeam Kellogg Company’s 2008 Corporate Responsibility Report 17 Consumer Sust. Agriculture Strategic Philanthropy Employee Volunteerism Health and Nutrition Responsible Marketing Customer Consumer Information and Labeling We will continue to be a trusted provider will continue to be a trusted provider Marketplace: We of safe and high-quality products and contribute to the health and nutrition of our consumers by providing them with food products that they can integrate as part of a balanced diet and that meet their varying taste advance our efforts will continue to requirements. We as a trusted leader in creating ethical and responsible marketing standards and ensure that our consumers Packaging Transport Setting Priorities and Ambitions Setting Priorities and understand best practice in addressing the key better To issues, we benchmarked the approaches of industry peers and leading companies in other sectors. In an interac- tive workshop in June 2008, our Global Leadership Team reviewed various issues and our current positioning and in company the see to agreed on where they would like the for direction set to way a as years, five in areas these development of more detailed plans. Among our ambitions are: w Governance and Ethics Community Development Product Quality and Safety - Labor Standards Diversity and Inclusion Compensation and Benefits Occupational Health and Safety Employee Learning and Development Manufacturing Supplier Diversity Environmental Impact Reduction (Energy Use, GHG Emissions, Water Use, Waste) Health and Nutrition Strategic Philanthropy Employee Volunteerism must be managed across organizational boundaries. Sourcing Sust. Agriculture Addressing corporate responsibility issues strategically requires an understanding thatthe issues occur at multiple stages value of chain, Kellogg’s and consequently

Corporate Responsibility Across the Value Chain Value the Across Responsibility Corporate

Workplace Community Marketplace $ Environment Corporate Responsibility Across the Value Chain the Value Across Responsibility Corporate stages of Kellogg’s value chain, and consequently must be managed across organizational boundaries. value chain, and consequently must stages of Kellogg’s Addressing corporate responsibility issues strategically requires an understanding that the issues occur at multiple an understanding that the issues responsibility issues strategically requires Addressing corporate terviews with numerous Kellogg business leaders to identify key corporate responsibility business risks and opportunities. The issues were assessed and ranked qualitatively along three parameters: societal interest and concern, impact on Kellogg (based on financial and reputational impact), and level of control. A large set of stakeholder concerns and expectations A large set of stakeholder concerns and were identified. An external group conducted a series of in-depth in w Among the issues ranked highly for societal interest and concern and impact on Kellogg were food quality and health and nutrition, climate change and energy safety, use, and consumer information and labeling. The issues were grouped into four areas that form the structure for this report and the further development of the strategy: marketplace, workplace, environment and community. The materiality analysis process proceeded in several steps: w w PROFILEANDSTRATEGY

18 Kellogg Company’s 2008 Corporate Responsibility Report w w recycled andrecyclable contentofourpackaging. We the ratioofpackagingtoproduct andincreasethe throughout ourvaluechain. We willaimtoreduce footprint ofourproductsand significantcostsavings We willtargetbothreductions intheenvironmental sources iskeytoourmissionofsustainablegrowth. Environment: Protectingandconservingnaturalre- expect ofourownoperations. suppliers toholdthesamelaborstandardsthatwe sector inhealthandsafetyprograms,expectour competitive inourcompensationpolicies,lead of ourconsumerdemographics.We willremain diversity andinclusionreflectsthediversenature force andfosteraworkenvironmentthatvalues Workplace: Kelloggwillsupportanexemplarywork informed choices. have accesstotheinformationnecessarymake Measurement Action Plans Significant Progress Significant Initial Development Initial Statement Fully Developed Fully Elements Material Purpose Issues Vision Key and Key: Corporate ResponsibilityStrategy Framework Diversity Supplier • Safety Food & Quality Product • Labeling & Information Consumer • Marketing Responsible • Nutrition & Health • Marketplace economically, andenvironmentally socially responsible by managingallaspects Through ourfoods, we health, bring andenjoyment nutrition to allover people Targets / Indicators Performance Key Programs Engagement Objectives the world. Ourbrands differentiate andourheritage andguideus. We will be To bethefoodcompanyofchoice. of ourbusinessfor sustainable perfomance. Standards Labor • Safety & Health Occupational • Benefits & Compensation • Inclusion & Diversity • Development & Learning Employee • Culture • Workplace Targets / Indicators Performance Key Programs Engagement Objectives

achieve theobjectives, andgoalskey performance are toidentifyoverallobjectives, actionsneededto The nextstepsinourstrategy developmentprocess and Action Plans Identifying Objectives, Goals w development andlocalphilanthropy. We willseektocontinueoursupportofcommunity element ofourcorporateresponsibilitystrategy. which weoperatewillcontinuetobeanimportant Community: Contributingtothecommunitiesin continuity ofsupply. required quality, traceability, nutritionalcontentand into theprocurementofouringredients,ensuring will incorporatethetenetsofsustainableagriculture Agriculture Sustainable • • Waste • Water • Use Emissions Gas Greenhouse • Use Energy • Environment Packaging Targets / Indicators Performance Key Programs Engagement Objectives

Volunteerism Employee • Development Community • Philanthropy Corporate Strategic • Community Targets / Indicators Performance Key Programs Engagement Objectives

Kellogg Company’s 2008 Corporate Responsibility Report 19 - Asia / Pacific Sustainability Steering Team Sustainability Latin America Steering Team in this report would not have been possible without without possible been have not would report this in intend to ex- stakeholder input. Moving forward, we to be morepand our stakeholder engagement efforts new gain to goal a with systematic, and comprehensive better and decisions business our improve insights, understand and meet stakeholders’ needs. we identified Through the materiality analysis process, to get stake- the issues on which it is most important which stakeholder input. These insights will influence holders Our weengagement engage with will and how. include a range of methods, from ongoing outreach around critical and communication to focused dialogue will seek to ensure that our goals and stake- issues. We holders’ goals are clear and that there is accountability is an important in the engagement process. This report tool in that process. Our Evolving Corporate Corporate Our Evolving Responsibility Strategy our with aligns framework responsibility corporate Our vision to be the food company of choice, making that vision relevant to both business imperatives and exter nal stakeholder expectations. It builds on our culture, heritage and expertise in food and nutrition issues. We believe that refining and implementing the strategy will help Kellogg stay competitive – and lead – in a rapidly changing global business environment. - Chief Executive Officer Chief Sustainability Officer EU / Russia Sustainability Steering Team Global Sustainability Advisory Council Board of Directors Social Responsibility Commitee Corporate Responsibility Structure Responsibility Corporate Sustainability Steering Team North America We currently engage with a wide variety of stakehold- currently engage with a wide variety We ers on issues ranging from nutrition to climate change, as described in this report. The achievements discussed tant regional issues. Recently, we established a new structure for corpo- Recently, rate responsibility management at Kellogg (see figure above). Our chief sustainability officer reports to our CEO. Through this structure, we will drive initiatives across our business units and gather input on impor We consider sound governance, transparency and We in addressing engagement to be enablers of progress will continue to be among the our material issues. We governance and leaders in our industry on corporate will also develop appropriate governance ethics. We structures for our corporate responsibility strategy to ensure the success of our strategy and its integration with our business. Governance, Transparency Transparency Governance, and Engagement indicators for each of the issues. (See figure page 18.) indicators for each of the issues. (See have completed this process for the environmental We performance indica- area, reflected in the goals and key are working systemati- tors presented in this report. We issue areas. We cally to do the same in the other key will update our progress in future reports. 20 Kellogg Company’s 2008 Corporate Responsibility Report Kellogg Company’s 2008 Corporate Responsibility Report 21 2 program TM emissions since 2005** More than $40 million in cash and $120 million in products donated over last five years contribu- Increased United Way tions by more than $2 million since 2003 4.5 percent decrease in energy use since 2005** 4.0 percent decrease in CO 6.9 percent decrease in water use since 2005** 5.9 percent increase in waste generated since 2005 (though a 6.6 percent decrease from 2006 to 2007)** Insight Investment ranked Insight Investment ranked U.S.-based Kellogg first among in global food companies responsiveness to obesity Compliance with commitment to to shift products marketed those children under 12 to only that meet the KGNC of portfolioMore than 95 percent trans fat converted to 0 grams per serving at 5.8 Diverse supplier spending in percent, up from 1.9 percent 1999 in recognition of the Award Feeling Gr-r-reat Outperforming comparable companies in employee engagement benchmark Multiple recognitions as a leading company for diversity and inclusion Recordable Injury Rate Total 47 percent lower than industry average

w w Performance* w w w w w w w w w w w w

Developing methods to evaluate the impact of strategic philanthropy programs Finding ways to affect and reduce the growing problems of obesity and malnutrition Ensuring that human resource investments continue to drive culture of innovation Progress toward ultimate goal of zero illnesses and injuries on the job Ensuring that labor standards are met by suppliers Finding new markets and infrastructure to increase re-use and recycling of waste streams Understanding potential impact of climate change on our food ingredient supply Addressing global health Addressing global health challenges including obesity, heart malnutrition, diabetes, disease Innovating and reformulating products to address health concerns while maintaining great taste Balancing popular perception about nutrition with validated science within Managing product safety a global supply chain Ensuring that we continue to build a diverse and inclusive employee population

w w w w w w w Key challenges Key w w w w w

- - - Gain a deeper understanding of communities that are new to Kellogg Develop Community Key Perfor mance Indicators and targets Ensure new acquisitions meet environmental policies Explore ways to encourage and support sustainable agriculture Identify cost-effective alternative energy options Focus even more strategically on the communities in which we operate Place even greater emphasis on those programs that align with our objectives as a global food company Embed environmental sustainability practices throughout company Implement multiple efforts in facilities worldwide to achieve reduction targets Expand internal networks to share best practices company- wide Develop Marketplace Key Perfor Develop Marketplace Continue to engage employees and provide learning and development opportunities to create talent powerhouse Invest further in diversity and inclusion programs and recruitment to build a work force that is representative of consumer demographics Key Perfor Develop Workplace Expand strategy for consumer Expand strategy for consumer and information, education transparency Expand consumer engagement in around health and nutrition new markets effective- Evaluate and improve ness of health and nutrition education programs Expand responsible sourcing suppliers program; engage with Meet increased supplier diversity spending targets mance Indicators and targets mance Indicators and targets

w w w w w w w w w w w w w w Where we are going are we Where w w w w w

wellness TM The table below identifies current activities at Kellogg in our key corporate responsibility areas, areas, key corporate responsibility at Kellogg in our current activities below identifies The table along with future plans, challenges and our current performance. We look forwardour company. across strategy and performance responsibility our corporate to advancing program Exemplary support for United efforts in communities Way where we operate incentive program Volunteer Significant contributions of food to hunger and disaster relief programs Founding member of Global FoodBanking Network Multi-stakeholder partnerships to define sustainable agriculture Industry partnerships to drive sustainable packaging 15-20 percent reduction targets for greenhouse gas emissions, energy use, water use and waste (per metric tonne of food using a 2005 baseline) New senior management structure overseeing environmental sustainability Feeling Gr-r-reat Continuous improvement in occupational safety Periodic culture survey New learning curriculum and business leader model Investments in diversity and inclusion programs and initiatives for suppliers Comprehensive Code of Ethics training Recognized excellence in corporate governance ™ training K Values Global Code of Ethics and Code of Conduct for Manufacturing messaging in product marketing messaging in product Increased spending on supplier diversity Enhancement and expansion of Enhancement and expansion healthy lifestyle and fitness Enhancement of food quality and safety strategy Product reformulations (meetingProduct reformulations fats, etc.) KGNC, eliminating trans Development and roll-out of Development and roll-out Criteria Kellogg Global Nutrient (KGNC) Development and expansion Guideline of consumer-friendly Daily Amount labeling Acquisitions to expand health- Acquisitions to expand Naked, ful products (e.g., Bear Kashi, Gardenburger)

w w w w w w w w w w w w w w w w w w w w w w w Where we are we Where w

Progress and Performance and Progress *All data is global unless noted **Per metric tonne of food

Community Environment Workplace Marketplace 22 Kellogg Company’s 2008 Corporate Responsibility Report Kellogg Company’s 2008 Corporate Responsibility Report 23 Health and Nutrition Health and can have their At Kellogg, we believe that all foods Exercise place in a diet, with balance and moderation. are integral to a and a well-rounded dietary approach our Global healthy lifestyle. These concepts underpin to which outlines our commitments Nutrition Policy, have pledged, for example, to stay our consumers. We and food current with scientific advances in nutrition health profes- research by collaborating with academia, agencies. sionals, advocacy groups and government are continuously Our research and development teams existing developing new products, and reformulating in health ones, to keep pace with scientific advances and wellness. believe the notion of balance – or “calories in, We calories out” – remain the central tenet of any must and weight man- long-term solution to global obesity consumers the agement. Our role at Kellogg is to give tools they need to make informed dietary choices for offer a range of themselves and for their families. We products to meet consumers’ desires to have great- tasting alternatives in their diet, including healthful foods and more indulgent treats. and Reformulation Innovation Innovation is a key element of our global business strategy. At our global R&D headquarters in the U.S., the Research Nutrition and Food for Institute Kellogg W.K. world, the around centers R&D our at and (WKKI), food and technologists food nutritionists, of hundreds in those and products existing our evaluate scientists the development pipeline for ways to improve their profiles. nutritional - - keting. Many of these initiatives resulted from ongoing from ongoing keting. Many of these initiatives resulted engagement with consumers, nutrition experts, health organizations. professionals and nongovernmental To do that, we are providingTo a wider portfolio of and sodium and/ products that are lower in fat, sugar or higher in fiber and whole grains.We have reduced and removed trans fats. And we have made substantial responsible mar commitments in product labeling and tant global nutrition initiatives as part of our ongoing tant global nutrition and related commitment to the fight against obesity diabetes and heart dis- 2 health problems, such as Type recognize that we have a responsibility to en- ease. We choices, able consumers to make informed nutritional their individual which in turn will help them address dietary needs. In recent years, we have undertaken a series of impor In recent years, we As one of the world’s largest food companies, Kellogg is committed to of consumer needs range diverse foods that satisfy a high-quality providing we strive sold in 180 countries, more than 1,500 products and tastes. With concerns into account broader desires while taking consumers’ to meet our food safety. quality and nutrition, product health and about Marketplace MARKETPLACE

24 Kellogg Company’s 2008 Corporate Responsibility Report w For example: enhances consumerandacademicunderstanding. We believeit’s importanttoinvestinresearchthat full/1601814a.html). ment (seewww.nature.com/ejcn/journal/v57/n1s/ now usedasreferencedatabytheSpanishgovern- survey amongyoungpeople,theresultsofwhichare In Spain,wefinancedthatcountry’s largestdietary such popularbrandsas: through theacquisitionof innovation atKelloggand product offeringsthrough our portfolioofhealthier significantly expanded In recentyears,wehave w ing healthylifestyles(seewww.kelloggsnutrition.ca). weight management and the role of parents in promot- for healthprofessionals,focusingonissuessuchas In Canada,wehostanannualnutritionsymposium Kellogg Company’s 2008 Corporate Responsibility Report 25 Shape Shape Brain Health Brain Health Management Management Shape Shape Shape Brain Health Brain Brain Management Health Health Management Management specific dietary needs. specific dietary specific dietary needs. specific dietary consumers better manage their consumers better We developed the Kellogg Global Nutrient developed the Kellogg Global We Criteria to determine which products around the world will be marketed to meet our new children. Products that don’t Nutrient Criteria will not be advertised to children under 12 or will be reformulated. By the end of 2008, we will be fully operational with our commitments. consumers better manage their consumers better Our product portfolio is as diverse as Our product portfolio Our product portfolio is as diverse as Our product portfolio our international customer base and can help customer base and can help our international our international customer base and can help customer base and can help our international Heart Health Heart Health specific dietary needs. specific dietary Health Health specific dietary needs. specific dietary specific dietary needs. specific dietary Digestive and can help consumers better consumers help can and Digestive consumers better manage their consumers better Our product portfolio is as diverse is as diverse portfolio Our product as our international consumer base base consumer as our international consumers better manage their consumers better manage their specific dietary needs. manage their consumers better manage their consumers better Our product portfolio is as diverse as Our product portfolio Our product portfolio is as diverse as Our product portfolio

Our product portfolio is as diverse as Our product portfolio { our international customer base and can help customer base and can help our international our international customer base and can help customer base and can help our international our international customer base and can help customer base and can help our international Heart Health Heart Heart Health Health Health Digestive Health Health Digestive Digestive MARKETPLACE

26 Kellogg Company’s 2008 Corporate Responsibility Report Kellogg Company’s 2008 Corporate Responsibility Report 27 The Importance of Breakfast Importance The leading producer of cereals, Kellogg As the world’s of breakfast for people understands the importance the body and brain for the of all ages, for fueling and for maintaining a healthy weight. activities day’s that children eat a nutritious especially important It’s - studies around the globe have con breakfast. Scores of kids who eat breakfast have more sistently shown that energy than those who do not. physical and mental to have healthier Breakfast eaters are also more likely intakes and body weights, greater vitamin and mineral of the benefits better memory skills, to name just some corroborated by researchers. and minerals, Ready-to-eat cereals supply B-vitamins for healthy such as iron and zinc, which are essential those benefits growth and development. Milk boosts D, A and B12. We with additional calcium and vitamins in keeping with fortify our cereals and other products nutrient intakes national laws and regulations and the and needs of consumers. Pre-sweetened cereals have been demonstrated to be a good source of vitamins and minerals for children. Studies show that children who eat pre-sweetened and bet- cereal have lower BMIs (body mass index) to the ter nutritive content in their diets. According less Survey, National Health and Nutrition Examination than five percent of the total sugar consumed by U.S. children comes from ready-to-eat cereals. The National Diet and Nutrition Survey found that breakfast cereals contribute less than six percent of the average daily intake of sugar in children in the U.K. And the 2005 U.S. Dietary Guidelines note that small amounts of sugar can improve the taste of nutrient-dense foods that might not otherwise be consumed. To coincide with these efforts, we began investing coincide To to trans fats. in new technologies and alternatives were the first in our industry to use low-linolenic We the need soybean oil, which can reduce or eliminate have been working with seed for hydrogenation. We of “low-lin” developers to influence the characteristics soybeans that would be most beneficial for the food and we have encouraged edible oil converters industry, to work together with developers to adopt a plan for also have held commercialization to meet demand. We grower meetings to promote the benefits of the oils to consumers and the agricultural supply chain. We continually monitor and evaluate science, and We innovate our interpretations of it, as we develop and 2005, in response portfolio. For instance, in December to heart disease, to growing evidence linking trans fats reduce trans-fatty we announced a plan to eliminate or the end of 2007, acids from our products worldwide. By worldwide had more than 95 percent of our portfolio serving.* been converted to 0 grams trans fat per One of our key challenges as a company is balancing One of our key challenges about nutri- popular perceptions (or misconceptions) tion with credible, validated science. We team up frequently with external experts, academic external experts, up frequently with team We to help us further our researchers and consultants issues in nutrition. Kellogg is knowledge of important of the American Dietetic Associa- a corporate sponsor have sat on the boards of the tion, and our executives - Information Council, the Internation International Food and AACC International, the al Life Sciences Institute known as the American Associa- organization formerly tion of Cereal Chemists. ll fats, are dietetically insignificant for all fats, *The Food and Drug Administration has determined that amounts of less than 0.5g per serving panel. As a result, consumers may see including trans fat, and should be declared as “0g” trans fat per serving on the Nutrition Facts oil.” products that list 0g trans fat on the label, while the ingredient list still shows “partially hydrogenated 28 Kellogg Company’s 2008 Corporate Responsibility Report MARKETPLACEISSUEFOCUS are seekingwaystomakeeven moreofanimpact. host of active working groups around the world that sity reduction a priority. Kellogg is also involved in a alone. But at Kellogg, we will continue to make obe- problemobesity the solveinstitution cansingle No align industryefforts. and initiatives company existing on build to ways find reduction, obesity on ideas share to sociation, As- Manufacturers Grocery the and Institute keting Mar Food the as well as companies, peer our of many from counterparts with joined has CEO Our contributing $10millioninthisarea2007alone. strategy, giving our corporate in a priority fitness and nutrition made have we and fit, physically get to kids encourage that programs developed have we innovations, product our to addition obesity.In based, global food companies in U.S.- responsiveness to among first Kellogg ranked Morgan, JP by sponsored Investment, Insight by study recent A Physical ActivityandHealth. in this report, that respond directly to the World Health Organization’s 2004 Global Strategy on Diet, elsewhere described as activities, robust many implementing nutrition, and health to commitment a demonstrated have century,we a than more For marketing. responsible to development product from – Kellogg at decisions business our of many behind force driving a is epidemic obesity The and education,encouragefundphysicalfitnessinitiatives,amongotherthings. research nutrition fund and provide options, healthier consumers offer to position unique a in are Kellogg believes that all foods can have Although a place solutions. in to a balanced contributing diet, in we recognize role that food active companies an playing continue to need and – concerned been have ours like companies Food too. complex, and multi-faceted are problem the to Solutions the sametimethatmillionsofpeoplefacehungerandunder-nutrition. at concern health global a is obesity that fact the in irony considerable also is There food. healthy affordable, to access lack people many And generations. recent even of those than active less cally typi- are lifestyles modern play, and work at Both complex. and varied are obesity of causes The lines. racial and economic socio- across cuts obesity risk, at especially are minorities lower-and families While income toll. their taking are adults, and children for implications, health Cardiovascular disease. Hypertension. Type 2 diabetes. Cancer. Obesity-related Obesity - Obesity Around theWorld

2005 Obesity Around the World

(projected)

2015 under fiveworldwide 17.6 millionchildren 400 million People over15yearsofage are overweight 1

700 million who areobese 7 . 6 Kellogg Company’s 2008 Corporate Responsibility Report 29 - -

® , ® , Crispix ® , Corn Pops ® in Southeast Asia/ ® in Canada; and Frosties

® , Cocoa Krispies ® in the U.S.; Rice Krispies ® and Coco Pops ® and Corn Pops ® Krispies (see figure below). Criteria on We based these Nutrient a broad review of scientific reports. As we developed the standards, we shared our approach with a number including the Food and Drug Ad- of key stakeholders, ministration (FDA), the U.S. Department of Agriculture for Science in the Public Interest (USDA), the Center and members of the Institute of Medicine. alsoWe nutri of influencers – including reached out to dozens –leaders toindustry and academics regulators, tionists, gather feedback. When we made our announcement, about half of the products we marketed to children worldwide did not meet our new criteria. Since then, we have made significant efforts to introduce new products that do meet the criteria and reformulate existing ones by other grains. For salt, fats and adding reducing sugar, we have refor example, to meet or exceed the KGNC, mulated Rice Krispies Cocoa Frosties and Apple Jacks Greater China. has been chal- Finding ways to reformulate products continued lenging, but we are committed to making taste that our progress while delivering the same great consumers desire. the majority of anticipate that, by the end of 2008, We our products currently marketed to children will meet upper per-serving grams of trans fat 0 calories milligrams of sodium* grams of sugar grams of saturated fat 200 2 and 230 12 thresholds to determine which products we will market to children. These thresholds allow no more than: The KGNC set Kellogg Global Nutrient Criteria Kellogg Global Nutrient Criteria Kellogg For Eggo™ frozen waffles/products, the maximum allowable level of sodium under the KGNC is 20 percent DV (460mg), since these products For Eggo™ frozen waffles/products, the maximum allowable level of sodium under the KGNC to the leavening agent necessary to the are typically served as entrees/main dishes and approximately 50 percent of the sodium is attributed functionality and form of the food. * Kellogg Global Nutrient Criteria Kellogg We devoted significant time and resources to developing the Kellogg Global Nutrient Criteria We developed nutrition standards, called the Kellogg We which Global Nutrient Criteria (KGNC), to determine Products that do products will be marketed to children. be advertised to not meet the Nutrient Criteria will not to meet the children under 12 or will be reformulated Nutrient Criteria by the end of 2008. In June 2007, in what many viewed as an industry-lead- In June 2007, in what many viewed as in our practices ing approach, we announced changes (Our prior for marketing to children under age 12. to children guidelines already prohibited advertising under the age of six.) While we understand that consumer values and While we understand that consumer believe we customs vary from country to country, for all our these principles provide sound guidance consumers – no matter where they live. Responsible Marketing Responsible to marketing and communicating are committed We a responsible, truthful and about our brands in allowing consumers to make transparent manner, Marketing and Our Worldwide informed choices. which form the basis for Communications Guidelines, communications, were designed to all of our consumer standards across the globe. ensure high uniform MARKETPLACE

30 Kellogg Company’s 2008 Corporate Responsibility Report our FrostedFlakes Tony theTiger encourages childrentoexercisethrough messengers onissuesofdietandfitness.Forexample, use ourtrademarkedcharacterstoserveaseffective In addition,wecontinuetolookforopportunities a menuoffunactivities. 15 minutesandencourageschildrentogetactivewith sites, whichautomaticallyinterruptsscreentimeafter feature, “GetYour MoveOn,” onchild-directedWeb contain innovativeapproaches,includinganewonline and depthapplygloballytoourbusinesses.They media. Theguidelinesarecomprehensiveinbreadth areas ofprivacyprotection,e-commerceanddigital erty use,contestsandpromotions,aswellrelated established media,in-schoolactivities,licensedprop- responsible businesspractices.Theycoveronlineand latest additionalcommitments,continueourheritageof Guidelines, whichwerecentlyupdatedtoreflectour Our Worldwide MarketingandCommunication Guidelines Worldwide Marketing andCommunication of 12. will nolongerbemarketedtochildrenundertheage the newKGNC.Thosethatdonotmeetcriteria ® EarnYour Stripes TM program. cium andpotassium,among others(seefigureabove). consumers typicallyneedmoreof,suchasfiber, cal- back panelsofpackages,alsoidentifiesthenutrients nutrition andingredientlabelsfoundonthesideor ing system,whichcomplementsthemoredetailed 2,000-calorie diet.Thisfact-based,front-of-packlabel- and wherethefoodmight fitinaconsumer’s – daily of calories,totalfat,sodiumandgramssugar about aproduct designed toprovidesimple,at-a-glanceinformation on thefrontofcerealpackaging.GDAswere – GDAs in theformofGuidelineDailyAmounts,or – labeling the U.K.tovoluntarilyintroducenutritioninformation In February2005,webecamethefirstcompanyin Guideline Daily Amounts (GDAs) tory requirements. sive information–oftengoingbeyondlegalandregula- packages. Today, wecontinuetoprovidecomprehen - nutrition messagesandproductinformationoncereal In the1930s,wewerefirstcompanytoinclude into them. explanations of our products and what ingredients go goal is always to provide clear and understandable of productpackages,aswell as on our Web sites. Our education andhealthylifestylemessagesonmillions We providecomprehensivenutritioninformation, empower consumerstomakegoodnutritionalchoices. Through ourcommitmenttotransparency, we and Labeling Consumer Information – including per-serving – percentages www.kelloggsnutrition.ca Kellogg Company’s 2008 Corporate Responsibility Report 31 - - - - internal training programs internal and supplier audits periodic product testing environmental pathogen monitoring allergen controls labeling verification systems recall procedures and traceability programs benchmarking of industry best practices Product Quality and Food Safety and Food Quality Product Kellogg name – a trust we have Consumers trust the stan strict to our products earned by manufacturing Kellogg, W.K. our founder, ago, century a Over dards. every product as his personal as- placed his name on surance of quality. of our foods remains a top prior The quality and safety the integrity of more than ity at Kellogg. Managing extensive coordination across 1,500 products requires materi raw of sourcing the our global operations, from als to manufacturing, packaging and distribution. The The distribution. and packaging manufacturing, to als 21st century the in chain food-supply the of globalization has made food safety particularly challenging. view food safety as a competitive At Kellogg, we don’t a prod- issue. When one food company experiences in the uct safety problem, consumers lose confidence actively engage with other food We entire industry. ensure that we manufacturers and industry groups to the safest all are in line with best practices to produce products for consumers. quality model Kellogg has a comprehensive and robust to ensuring for monitoring the steps that are pivotal These elements include: product safety. w w w w w w w w tive. The first such report was issued in July 2008. For more information, visit http://us.bbb.org. also continue our efforts participate in comparable programs in Australia, Canada, the EU, Mexico and Thailand. We We to create similar initiatives around food around the world to support and strengthen existing self-regulatory programs and and beverage advertising to children. The food industry has made a collective commitment to improved self-regulation, and we’re proud to be a charter The food industry has made a collective commitment to improved self-regulation, with 14 other major food and beverage manufacturers Food and Beverage Advertising Initiative member of the Children’s dietary choices and lifestyles in the U.S. This important, voluntary industry program is designed to encourage healthier for children. The Council of Better Business Bureaus will monitor and report on companies’ compliance with the initia Our U.S. packages and online materials help educate Our U.S. packages and online materials food pyramid. And we consumers about the USDA’s nutrition have developed active, school-based programs in a number of countries, including the U.S., Canada, Denmark and Sweden. (For more examples of our nutrition outreach, see the Community section of this report.) Nutrition Education Programs Nutrition Education of what we do, Nutrition education is an important part encouraging and we have a long history of proactively health and fitness. Meanwhile, Kellogg continues to conduct research to Meanwhile, Kellogg continues to conduct and labels the of understanding consumers’ examine use. to them putting are they how In the U.S., we have been encouraging other food and In the U.S., we have to join this initiative, and we’re beverage companies dialogue within the industry to engaging in ongoing consumer establish labeling uniformity to minimize continue to confusion. While we believe in and will such as our GDA endorse fact-based nutrition labeling that initiative, we are open to additional approaches may gain industry-wide acceptance. We rolled out the GDA labeling programs in Europe programs in out the GDA labeling rolled We they were also adopted by many and Australia, where food manufacturers and other major international extended the labeling program retailers. In 2007, we Canada and South Korea. Further to the U.S., Mexico, in 2008 to South Africa and Latin expansion continued America. MARKETPLACE

32 Kellogg Company’s 2008 Corporate Responsibility Report **Conducted byAdvantage GroupInc. *Awarded in2008for 2007 ing cleanliness). for complianceregardingworking conditions(includ- Social Accountabilityprogram settingforthapolicy Code ofConductforManufacturers, andmaintaina process foritsfactories,agreetofollowtheKellogg pliers maintainadocumentedqualitymanagement countries. We requirethateachofourcontracted sup- as thepromotionalitemspackagedwiththeminsome material ingredient thatgoesintoourproducts, aswell net). We have a series of safeguards for each raw ally adoptedfoodstandards(www.codexalimentarius. safety requirements,whicharebasedoninternation- All ofoursuppliersmustmeetstringentfood- Material SupplierFood Safety process. production levels ofourfooddevelopment,manufacturingand HACCP trainingprogramforallemployeesat mandatory a began recently we years, several for principles HACCP the employed have we Although approach adoptedbytheFDAandUSDA. Program, asystematicandpreventativefood-safety on theHazardAnalysisCriticalControlPoint(HACCP) extensive trainingprogramforouremployeesbased tive astheemployeeswhoexecutethem.We havean The mostrigoroussafetymeasuresareonlyaseffec- Training andEducation vendors that serve Wal-Mart’s serve that vendors Award recipients are selected selected are recipients Award In 2008, 2008, In selected KelloggCanada Vendor of the Year* the Vendorof division fortwomajor from the thousands of of thousands the from Dry Grocer Vendor Grocer Dry Canadian business. Canadian supplier awards: of the Year* the of and overall and Wal-Mart Canada

as thescienceprogresses. bodies regulatory from direction with comply will and We will continue to monitor and evaluate developments products. our in materials nanotechnology engineered use knowingly or intentionally we do nor time, this at Kellogg is not conducting any nanotechnology research Kellogg productsastheybecomeavailabletotheindustry. regulatory bodies would be considered for use in be safe and acceptable by the scientific community and packaging. Only those uses and applications deemed to uses of existing materials to technology, foods and Nanotechnology is bringing new materials and new regulations for use in food for human consumption. where applicable,compliantwithfederalandlocal products areacceptablefortheirintendeduseand, All componentsusedbyKelloggtomanufacturefood Nanotechnology quality requirements. applicable lawsandregulationsgoverningproduct also submittothird-partyauditsandconformall compliance. Ourcontractsprovidethatsuppliersmust and areassessedagainstacertificateofanalysisor they areunloadedtoourstoragesilosorwarehouses to qualitysystems.Rawmaterialsarecheckedbefore rigid specificationsandthatthesuppliersareadhering plants tomakecertainthatrawmaterialsmeetour Kellogg QualityAssurancepersonnelvisitsuppliers’ Our U.S.snacksbusiness was recognizedbymore grocery retailersas top snack foods foods snack top manufacturer manufacturer than 30major America’s in 2007. in **

Kellogg Company’s 2008 Corporate Responsibility Report 33 - Incident Management Incident Management warning system to iden- have an early We tify concerns or potential problems with our products, and experienced, cross-functional, crisis-management teams across the world who are prepared to handle any issues that may arise. Potential issues are typically identified in one of two ways: during routine internal quality audits at our production facilities or through have a strong system in place consumers. We to track consumer comments and complaints. When an incident occurs, we take immediate, corrective action and resolve any gaps in the process. We conduct regular training sessions,process. We using to react to a situa- mock scenarios, to assess our ability systems. tion and to continuously improve our Traceability Product ingredients The ability to quickly trace products and has become back through the manufacturing process particularly as increasingly important in recent years, global. Fed- the supply chain has grown ever more like Kellogg eral regulations require manufacturers and ingredients to ensure we can trace our products upstream and one through our supply chain – one step step downstream. Our suppliers must have written procedures in place to record and track their usage of specific lots of ingredients, packaging materials, inter mediate products and finished goods – from receipt through finished product distribution. More than 20 years ago, we began a supplier diversity program in the U.S. to increase our use of supplier companies that are owned by women and minorities. By investing in diverse suppliers, we can provide better opportunities for companies owned by minorities and Supplier Diversity Farm Importer Chain Supplier Collector Processor Supply Supply Broker / Exporter Complex Complex Ingredient Ingredient Supply Chain Supply Complex Ingredient Complex Successful internal audits are a prerequisite for the external audits we voluntarily undergo through the Global Food Safety Initiative, which was launched in 2000 to improve food-safety management systems throughout the supply chain. have We also been strengthening the quality requirements for the third- our produce help that party contract manufacturers products. Auditing Standards Auditing expanded our in- In recent years, we have updated and greater responsi- ternal auditing program to emphasize bility for employees at each of our manufacturing facilities. Our internal food safety audit program, which we enhanced during 2008, verifies quality and food safety activities to assure continuous improvement across our manufacturing facilities. We likewise require our suppliers to have We allergen-control programs and to provide in their us with a listing of all the allergens present ensure we communicate the presence of facilities. To declare serious allergens, our retail product packages with local appli- allergenic ingredients in accordance may change, cable laws. Because product formulations the ingredient we encourage our consumers to check up-to-date statement on each package for the most product information. Managing Allergens Managing We understand allergies. and share the concerns food of by affected are who consumers exten- an developed we 1990s, early the In focus- program allergen-management sive ing on the control of allergenic materials during manufacturing and the communication of allergens to consumers. Kellogg is a leader within the food industry in developing manufacturing processes to control food allergens. We work extensively with organizations around the world such as the Food Allergy and Anaphylaxis Net- work to share industry best practices. 34 Kellogg Company’s 2008 Corporate Responsibility Report share infuture reportsabout ourgoalsandperformance intheseareas. responsibilitystrategies around healthandwellness,weexpect tohavemore corporate marketplace our refine and industrydevelop to organizationscontinuing and are government.We part ofabroad range ofstakeholders andgroups, including other food companies, suppliers, see theseasevolving areasthatrequire notonlyinvolvement onthepartofKellogg butonthe informed choices.The safety andqualityofourproducts willalways remain ourtoppriority. We marketing standardsandproviding theinformationourcustomers needtomake healthy and and maintaining, their health goals. We aim to be a trusted leader in creating ethical andWe willcontinuetofocuson generating innovativeresponsible newproducts thatwill assistpeopleinreaching, Looking Ahead which wespend$10millionormoreperyear. with companies diverse recognizing Club, our Platinum in companies seven have We 2007. in 49 to 2001 in companies 14 from grown has services, and goods in million $1 than more purchase we which from nies compa- Million diverse those Our recognizes which Club, States. Dollar United the in veterans disabled and women minorities, by owned businesses 300 than Today’s program includes suppliers representing more cent in1999.Ourtargetfor2008was$270million. of ourtotalspend,upfrom$49millionand1.9per was recognized with prestigious prestigious with recognized was awards from four organizations: four from awards Michigan Minority Business Minority Michigan supplier diversity program diversity supplier Corporation of the Year the of Corporation Year the of Corporation Chamber of Commerce of Chamber DiversityBusiness.com Multicultural Business Multicultural Development Council Development Advocate of the Year the of Advocate Michigan Hispanic Michigan Business Alliance Business Organizations for Organizations In 2007, 2007, In Native American Native America’s Top America’s Opportunities Opportunities Kellogg’s

1 nesses, or 5.8 percent percent 5.8 or nesses, women-owned busi- and minority- from services and goods on million $247 spent we 2007, In decade. a than less in suppliers diverse in investment our quintupling gram, progress withthispro- good made have We ways ofdoingthings. solutions andbetter a pipelineofideas, suppliers alsoopensup Partnering withdiverse our communities. ously, helpstrengthen women and,simultane- - $48 million. million. $48 in 2007.Oursecond-tierspendingtargetfor2008is million $36 to 2005 in million $22.2 from increased has spend combined The 2005. in spend supplier diverse from suppliers. We began tracking sourcing our second-tier diversity for opportunities create they that ensure to suppliers our with working also are We to ensurethatwearemeetingourgoals. reviews conduct We sources. of base best and widest the from services and products materials, acquire to efforts our to essential diversity supplier consider We Total Supplier Diversity Spend Diversity Supplier Total of Dollars In Millions 2nd Tier 1st Tier

$187.2 $22.2 $165 ’05

$241.8 $33.8 $208 ’06 $247

$283 $36 ’07 Kellogg Company’s 2008 Corporate Responsibility Report 35 36 Kellogg Company’s 2008 Corporate Responsibility Report Kellogg Company’s 2008 Corporate Responsibility Report 37 - port. 500 hourly , which are discussed ™ Asia, Australia, Asia Pacific 1,400 employees New Zealand, South Africa 900 salaried 1,800 salaried 1,500 hourly Europe we depend on our K Values in this section along with other workplace-related aspects of our corporate responsibility strategy. At the executive level, most of the workplace issues addressed in this section are overseen by our senior vice president of global human resources. Our senior director of safety has oversight responsibility for occupational health and safety. 3,300 employees 2,200 salaried 1,800 hourly hese rounded figures are as of the end of now2007. have We approximately 32,000 ment computes the breakdown by region and employment type at the end of each and calendarwe will provideyear, an updated breakdown in our next re employees worldwide due to recent acquisitions. Human Resources Kellogg’s depart *T 4,000 employees Latin America 12,700 salaried

7,800 * 17,800 employees hourly 10,000 North America (non-production) salaried globally 26,500 employees (production) 13,800 hourly . Workplace We seek to foster a safe, inclusive, values-driven workplace that develops and rewards employees for ethical behavior and sustainable results. Our employees come from diverse backgrounds and bring with them a wide range of experiences and expertise. We view this diversity as a competitive advantage, as it helps to drive innovation that meets the needs and desires of our global customer and consumer base. provideTo a foundation for our diverse work force in vision and mission, their efforts to achieve Kellogg’s At Kellogg, we not only aspire to be the food company of choice, we want we want company of choice, aspire to be the food we not only At Kellogg, to be the employer of choice in our communities. Company founder W.K. invest my money in people,” said a century ago, “I will famously Kellogg developing, recruiting, invest in We holds true today. and that statement locations. talent in all of our global retaining high-performing engaging and our vision of fulfill will help us to powerhouse of talent Achieving this food company of choice. becoming the Workplace

38 Kellogg Company’s 2008 Corporate Responsibility Report * Kellogg’s Culture ment index.”Theresultsindicate thatemployeesat ture surveytogethermakeup an“employeeengage- vey ofemployees.*Fourquestions fromthe2007cul- In 2007,Kelloggconducted its thirdglobalculturesur personal responsibilityandmore. ees holdabouttheirjobs–satisfaction,pride,loyalty, engagement asacombinationofperceptionsemploy- dedicated tooursharedfuture.We defineemployee ees areengagedinthesuccessofcompanyand workplace culture.We worktoensurethatouremploy - Employee engagementisanotherkeyaspectofour required accountabilities. they puttheKValues period, buthowtheyaccomplishedit–thatis,well not onlywhattheyaccomplishedduringthereview self-assess andareratedbytheirmanagersregarding tion oftheKValues account anemployee’s adherencetoanddemonstra- In addition,employeeperformancereviewstakeinto tion – that includes training in the in training includes that – tion loca- each to customized – program orientation an in part take employees new our of Most and we refer to them regularly in our work. applying theKValues and learning to devoted is employees salaried to given course orientation two-day the of day full one example, for U.S., the In practice. into them put to how and are values those what understand employees all that sures at all levels take the take levels all at employees our Kellogg of culture. basis workplace the form and company we willnot havenewdata to reportin2009. comparable. Therefore,we focusinthissection justontheresults ofthe2007survey. Because thesesurveys arenotconducted annually, simplified andmore closelytailoredtoKellogg’s culture andKValues™ thantheprevious surveys,andthustheresultsarenot easily The previoussurveys wereconductedin2002and2004 bytheGreatPlacetoWork Institute. The2007survey, conducted byKenexa,was Values K culture the 2007 completed across theglobe of Kelloggemployees survey ™ ™ . Inthesereviews,employees K ValuesK ™ ™ e u aat s a as apart us set 71% intopracticeinachievingthe . ™ seriously,

K Values K

S I

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P • ACC

. This en- This . L O

I U

C N

I T

T A Y B

• I

- I N Y

T •

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G A V mance managementglobally. has beenembeddedintopeople practicesandperfor Board (12Kelloggleadersfrom aroundtheworld)and was designedbymembersoftheLeadershipAdvisory mon languageforleadershipwithinKellogg.TheKBLM of competenciesestablishesafoundationandcom- which wasintroducedin2007.Thissingle,globalset outlined inKellogg’s BusinessLeaderModel (KBLM), all Kelloggemployees–focusonthesixcompetencies Additional learninganddevelopmentcourses–opento sees theprogram. Learning andDevelopmentteamdevelopedover training overthecourseofayear. Kellogg’s Global managers undertaketheequivalentoffivedays computer-based trainingandfacilitator-led workshops, ers. Usingthisjust-in-timemodularcombinationof performance, developtalentandbeeffectivelead- hiring decisions,coachtheirdirectreports,manage signed tohelpfirst-timepeoplemanagersmakegood learning curriculum,launchedinFebruary2008,de- For example,Gr-r-reat ManagerUisanewKellogg become effectivemanagersandleaders. their skillsets,identifycareergrowthopportunitiesand help employeestransitionintothecompany, build and becomeanemployerofchoice.Theseprograms key partofourefforttodevelopapowerhousetalent Kellogg’s learninganddevelopmentprogramsarea and Development Employee Learning

of respondentsincomparablecompanies. S

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I S

T I O

Y UE

• •

S R H

E U as a place to work,” compared to 66 percent percent 66 to compared work,” to place a as

S M

L I T

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“extremely satisfied with Kellogg Company Company Kellogg “extremely satisfiedwith S of Kelloggrespondentssaidthey were Kellogg are highly engaged. In fact, the the fact, In engaged. highly are Kellogg of one question in the index, 74 percent percent 74 index, the in question one of Kellogg employeeengagementindexis comparable companies. As an example example an As companies. comparable in than higher points percentage seven - - Kellogg Company’s 2008 Corporate Responsibility Report 39 - - - one is Hispanic. of Directors members, two are women, women, are two members, one is African-American and one is African-American Team are women and two are are and two women are Team team is multicultural with three with three is multicultural team Europeans, two Australians, one one Australians, two Europeans, Kellogg’s Board Kellogg’s Four of the senior executives on of the senior executives Four Of of Directors Board our current Kellogg’s Global Kellogg’s African-American. In addition, the In addition, African-American. Latin American and one Canadian. Latin our 16-member Global Leadership our 16-member Global Leadership Leadership Team Leadership gone diversity and inclusion training. And in 2008, moregone diversity and inclusion training. were sessions training inclusion and diversity 50 than alone. U.S. the in employees Kellogg to offered being sity and Inclusion Council – sponsored by CEO David David CEO by sponsored – Council Inclusion and sity of 18 executives from across theMackay and consisting our that ensure to 2007 late in created was – company aligned with our business objec- diversity strategy is tives. aware build to training inclusion and diversity offer We and business acumen among ourness, competency has under Leadership Team employees. Our Global development; and building a more inclusive culture. Asa more inclusive culture. and building development; implementation, an Executive Diver part of the plan’s . One of those values is to “act with integrity . One of those values is to “act with integrity ™ Kellogg has long sought to maintain a diverse work work diverse a maintain to sought long has Kellogg Inclusion and Diversity specific a had has and force, company the 2005, In years. 10 about for initiative made the decision to accelerate its efforts by creating an Office of Diversity and Inclusion. This office is partnering and strategy the creating for responsible with the business to implement our diversity and in- through accountability on focuses which plan, clusion and retention recruitment, tracking; and setting goal Diversity is crucial to our current and future success. success. future and current our to crucial is Diversity talented most the retain and attract to us enables It stronger for allows innovation, sparks employees, feels everyone that ensures and collaboration team helps force work diverse A included. and respected and needs insights, consumer with aligned stay us employer an remain we that ensures also It concerns. communities the in goodwill maintain and choice of in which we operate. and show respect,” which is further explained as to and show respect,” which is further explained for their “show respect for and value all individuals approaches diverse backgrounds, experiences, styles, and ideas.” Kellogg seeks to maintain a work force that is diverse Kellogg seeks to maintain a work force age, culture, sexual orientation, in terms of gender, experience, skills and work geography, ethnicity, serve. In fact, styles, reflecting the consumers we K diversity is woven directly into our foundational Values Diversity and Inclusion Diversity Our Talent Management program, which covers all program, which Management Our Talent enables leaders to ensure that they salaried employees, in the right roles – now and in the have the right talent provides employees with a clear future. This program they directly impact Kellogg’s line of sight into how a structure to promote business results, establishes employees and managers, communication between - and managers to align employ and enables employees with development opportunities ees’ career interests organization. and the needs of the workplace

40 Kellogg Company’s 2008 Corporate Responsibility Report peer company group. employees) are targetedatthe50thpercentile ofour results. Allcomponentsofcompensation (forall executive performanceand the company’s financial looks atsalariescomparedwith ourpeercompanies, independent compensation consultant,thecommittee members oftheBoardDirectors.Working with an tion Committee,whichismadeupoffourindependent Executive compensationisreviewedbytheCompensa- Compensation andBenefits independent publications,asnotedabove. efforts thusfarhavebeenrecognizedbyseveral inclusion planhassetusontherightpath.Andour of ourconsumers.We dobelievethatourdiversityand creased representation across the diverse demographics work force,wearestillworkingtowardourgoalofin- While Kelloggdeeplysupportstheconceptofadiverse is voluntary. leaders sponsorandsupportthegroups,participation cultural awareness.Whilethecompanyandexecutive professional development,networking,retentionand involved inrecruitment,orientationofnewemployees, The ERGs,whichareopentoallemployees, professional, Latinoandmultinationalemployees. U.S. –oneeachforAfrican-American,female,young We havefiveEmployeeResourceGroups(ERGs)inthe Recognition in2007 Top 100 Companies for Diversity for TopCompanies 100 Top 60 Companies for Hispanics for TopCompanies 60 40 Best Companies for Diversity for Companies Best 40 Kellogg Diversity Top 25 Noteworthy Companies TopNoteworthy 25 Top 50 Companies for Latinas for TopCompanies 50 DiversityBusiness.com in Corporate America Corporate in Black Professional Black Hispanic Business Hispanic TopOrganizations 50 Black Enterprise Black LATINAStyle DiversityInc for Diversity for for Diversity for

In 2007,KelloggexpandedtheFeelingGr-r-reat flu shots. programs, exerciseandweight-losschallenges health-coaching assessments, health-risk screenings, health includes program activity. The physical boost pursue healthierlifestyles,addresshealthrisksand – availabletoemployeesworldwidehelps signing atobacco-freedeclaration. opportunity todoublethispremiumreductionbyalso or health-riskassessment.In2008,employeeshadthe insurance premiumsforcompletingahealthscreening employees areductionof$180intheirannualhealth program byofferingsalariedandnon-unionhourly programs. Forinstance,theFeelingGr-r-reat We offeravarietyofwork-lifeandhealthwellness in agloballydiversifiedportfolio. and welfareplansarefundedwithtrustassetsinvested gram. OurmajorpensionplansandU.S.retireehealth Kellogg currentlyoffersacompetitivebenefitspro- In therecentculturesurvey of Kellogg’s employees... In a recent culture survey survey culture recent a In of Kellogg’s of employees... opportunities forallemployees...... committed toprovidingequal in theirlocationiscommitted creates aclimateinwhichall ... 59% to buildingandretaining 63% 6 a diverseworkforce. opinions arevalued. 1% said theirworkgroup said thatleadership felt thatKelloggis ™ program ™

Kellogg Company’s 2008 Corporate Responsibility Report 41

‘07

1.2

3.4

1.2

3.5

‘06

‘06 (per 100 Injuries employees) Global Lost Time Global Safety 2007 2005- 2005-2007

1.5 Total Total Recordable Injuries (per 100 employees)

‘05

4.8 Workplace Workplace Safety Workplace emergency response. A Global Safety Group, which includes senior executives, meets regularly to share current strategies and accomplishments from Kellogg areas and facilities. in place to require our suppliers to have systems We assess and control health and safety risks for their employees. For example, each supplier must have a written program that identifies potential personal and hazards associated with the job and machinery, must address personal injury identification and prevention in employee training. Safety performance improvement goals are included in each sector of our business and are key indicators of performance. Although our long-term goal is zero program

Feeling Gr-r-reat Feeling

Feeling Gr-r-reat! “healthy weight, healthy lifestyles” healthy lifestyles” “healthy weight, Lifestyles” award from theaward National Lifestyles” Business Group on Health. Kellogg Business Group on Health. programs with measurable success. programs with measurable success. was one of only 11 companies to earn a establishedPlatinum-level for award received a “Best Healthy Employers for a received In 2007, our In 2007, Each safety manager supports the local management Each safety manager supports the local poli- team and employees, ensuring that appropriate between cies are used and best practices are shared engagement is facilities and business units. Employee safety committees established through cross-functional employees. composed of both salaried and hourly training Employees receive comprehensive safety Administra- relating to Occupational Safety and Health specialized tion and Kellogg requirements, including and operator, training for certain jobs, such as forklift Occupational health and safety activities at Kellogg are and safety activities at Kellogg are Occupational health which educates, guided by the Corporate Safety Group, the com- guides and assists safety managers across with processes, pany and in manufacturing locations policies, standards and best practices. Occupational Health and Safety and Safety Health Occupational In our 2007 culture survey, 67 percent of respondents of respondents 67 percent culture survey, In our 2007 with the benefits they receive said they were satisfied percent said they are paid fairly for at Kellogg, and 59 results are on track with those the work they do. These of comparable companies. workplace

42 Kellogg Company’s 2008 Corporate Responsibility Report distribution locationstoensureadherence conducts regularauditsatitsmanufacturingand and freedom from child labor or forced labor. Kellogg laws andregulations,accesstofreedomofassociation, ment, adherencetocompensationandemployment globe, includingbutnotlimitedto:asafeworkenviron- manufacturing anddistributionlocationsaroundthe Kellogg maintainshighlaborstandardsatallofour tional counterpartstosharebestpractices. regions, LaborRelationscollaborateswithitsinterna- and unionrelationshipsinNorthAmerica.Inourother Labor Relationsfunctiondirectlysupportsemployee representatives ateverylocation.Kellogg’s corporate relationship withouremployeesandtheirbargaining to maintainapositiveandprofessionalworking work forcewasrepresentedbyunions.Kelloggworks In 2007,approximately33percentofKellogg’s global Labor Standards vides asafeplacetowork. to theirjobs,and80percentsaidtheyfeelKelloggpro- said theyunderstandthesafetyrequirementsrelated In the2007culturesurvey, 87percentofrespondents injury and10didnotrecordanylostworkdaycases. our facilitiesin2007didnotexperiencearecordable percent lowerthanthefoodindustryaverage.Fourof In 2007,Kellogg’s Total RecordableInjuryRatewas47 continuous improvement. injuries, a15percentreductionisouryearlytargetfor Looking Ahead even astheydrivethe achievement ofKellogg’s goals. aspire toprovide afulfillingplaceto work,whereemployees canachieve theirowngoals open andinnovative atmospherethatvalues newapproaches, processes andideas.We also build aworkforce thatisrepresentative ofourconsumers’ demographics, and toprovide an help uscreateatalent powerhouse, anduphold theethicsinstilledby ourfounder. We aimto our effortstoengageemployees, provide learninganddevelopmentopportunitiesthatwill To becometheemployer ofchoiceinthecommunitieswhichweoperate, wewillcontinue cleanliness, wagesandtheprohibitionofchildlabor. for complianceregardingworkingconditions,including Social Accountabilityprogram,settingforthapolicy Code ofConductforManufacturersandmaintaina of oursuppliersmustalsoagreetofollowtheKellogg poral punishmentthatmaygobeyondlocallaws.Each prohibitions againstchildlabor, forcedlaborandcor well aswithourGlobalCodeofEthics,whichcontains comply withalllaborlawsinthecountryoforigin,as tices withinoursupplychain.Kelloggsuppliersmust In addition,Kelloggsupportsethicalemploymentprac- tion ofTaft-Hartley Plancompliance andpayroll. occasionally conducted in areas such as the administra- collective bargainingagreements.Externalauditsare Plan administrationandotherareasassociatedwith grievance processing, benefit administration, Taft-Hartley such areasascompliancewithpayrollrequirements, regulatory requirementsandKelloggpoliciesin Safety and health practices are are practices health and Safety components of a safety and and safety a of components employee engagement, job job engagement, employee All injuries are preventable. are injuries All improvement are essential essential are improvement everyone’s responsibility. everyone’s Leadership commitment, commitment, Leadership training and continuous continuous and training and Illnesses and Zero We Believe: We health process. health Our Goal: Our Injuries Injuries -

The W.K. Kellogg Values Awards reinforce the K Values™ behaviors and our efforts to build an inclusive culture. “They also encourage the sharing of best practices globally.”

W.K. Kellogg Values Awards

Each year since 2005, Kellogg has recognized outstanding employees who have consistently modeled the company’s K Values™ while making significant contributions to our business results. The W.K. Kellogg Values Awards reinforce the K Values™ behaviors and our efforts to build an inclusive culture. They also encourage the sharing of best practices globally.

In 2007, one of the individual K Values™ Awards went to Claire S., a manager of financial reporting, who led the relocation of a collection function from Italy to Manchester, England. Although this proved to be a challenging project, Claire broke down internal barriers and worked across organizational boundaries to get it accomplished. She said she was inspired by the values of Humility and Accountability in her efforts.

“I found myself thinking about ‘We Have the Hunger and Humility to Learn’ at many stages in the process,” Claire said. “It really helped me focus on my need to learn from the local teams in Sales and Finance. By fully understanding their concerns about the transition, we were better able to address them as part of the plan.”

“‘We Are All Accountable’ reminded me to emphasize hon- esty and openness with stakeholders throughout the project,” she continued. “This helped us determine which parts of the process we could transition to [Manchester] and which parts would remain in Italy.”

Claire said employees in her department are encouraged to come up with one K Value™ they think they should focus more K ValuesTM Award winner Claire S. on in their work. She selected “Passion” for herself. “I try to 44 Kellogg Company’s 2008 Corporate Responsibility Report 2008 Corporate Company’s 44 Kellogg make work fun for my team,” she said. “Promoting a positive environment helps foster the passion that makes people motivated, engaged and productive.”

Any Kellogg employee or team can be nominated by their fellow employees for a K Values™ Award. “Area Awards” are given to one outstanding individual and one outstanding team from each Kellogg region. A global selection committee then typically chooses one individual and one team from among the Area Award winners for recognition with a final Global Award.

In 2007, the selection committee chose to bestow the Global Awards on two individuals and two teams. In addition to Claire, the 2007 winners included: Kellogg Company’s 2008 Corporate Responsibility Report 45 w David M., a demand planner and customer service rep- ™ resentative in Canada who lived the K Values every K ValuesTM Award day as he helped to reduce lead time for orders, winner David M. optimize truckload deliveries and better leverage warehouse resources. w Latin America’s Ecuador Sachets Team, which reduced costs and eliminated delays by packaging sachet (bagged) products locally at our Ecuador Plant. w North America’s Heat Seal for Bars Packaging Innovation Team, which successfully implemented a conversion from cold-seal to heat-seal film for wrapped bar products.

To protect their privacy, this report uses first names and last initials only for our non-executive employees. 46 Kellogg Company’s 2008 Corporate Responsibility Report Kellogg Company’s 2008 Corporate Responsibility Report 47

% Kellogg is working to incorporate environmental sus- Kellogg is working to incorporate environmental and level of tainability practices into every location In August 2008, management within our operations. we reorganized our executive-level management of corporate responsibility issues, in part to respond to of environ- the heightened priority and materiality mental issues to our company. by a chief Environmental issues are now overseen sustainability officer, who also serves as corporate vice president of global nutrition and senior of our Global affairs. This position is a member presi- and reports to Kellogg’s Leadership Team dent and CEO. A vice president for environmental stewardship, health and safety now has full responsibility for all aspects of those arenas within Kellogg and also oversees the Global Sustainability Advisory Council, a cross-functional team focused on driving Kellogg’s corporate responsibility efforts. (See page 19 for more information.) Management in energy use, greenhouse gas emissions, water use and waste per metric tonne of food produced by 2015, working from 2005 baselines.* 15-20

Kellogg is targeting Kellogg REDUCTIONS . Environment We are beginning to work with our suppliers to understand and assess their contributions to our environmental footprint and engage them in reducing the life-cycle impacts of our products. Through our participation with industry groups, we are seeking to encourage the broader application of sustainable agricultural practices. However, this section focuses on environmental goals and achievements specific to our own operations. We have made progress toward achieving this vision. have made progress toward achieving this vision. We haveWe implemented initiatives aimed at reducing our environmental impacts in the areas deemed most – energy use, important in our materiality analysis use, waste greenhouse gas (GHG) emissions, water recently updated and strengthened and packaging. We our Global Environmental Policy, set ambitious and specific environmental goals and reconfigured our management structure to best achieve these goals. areWe also working with key external stakeholders organi- – including industry associations, nonprofit to further our zations and government agencies – steps, we have achievement of these goals. With these progress in positioned ourselves to make significant the coming years. Environmental issues are increasingly shaping the context of our business. the context of our business. are increasingly shaping issues Environmental agricultural the impacts of and energy, of water availability The cost and rising concerns and quality, and water biodiversity on land, production our throughout for operations all have implications climate change about must make we the food company of choice, to be Kellogg chain. For value issues. other environmental and relating to these responsible choices sustainability to foster an environmental that end, we are seeking Toward within our processes, sustainability our company – to embed culture within and develop broad-based impacts of our products the life-cycle understand efforts. improvement environmental internal participation in our *Does not include contract manufacturing partners’ facilities. 48 Kellogg Company’s 2008 Corporate Responsibility Report { –Kellogg’s GlobalEnvironmental Policy, updatedin2008 footprint of ourproductsthroughout theirlife cycle.” Kellogg willseekto minimizetheenvironmental performance, across allaspectsofourbusiness, Through continuous improvementinenvironmental environmentally soundandsustainable manner. an in operates Company our ensure to working the naturalenvironmentandsociety, weareactively future generations.Byacknowledging ourimpacton and enhancesthequalityoflifefor current and our businessisconductedinamanner thatprotects “Kellogg Companyrecognizestheneedtoensure

Kellogg Company’s 2008 Corporate Responsibility Report 49

4.2644 Range: 4.0136 4.0136 Range:

goal to 2015 4.8169

- ’07 4.8694 Per

’06 5.0169 of food 2

’05

metric tonne CO 1,134,320 Data

’07 Global 1,122,984

in metric tonnes 2005-2007

’06 1,091,851 Total

’05 Manufacturing

4.8240 Range: 4.5403 4.5403 Range:

goal to 2015 ) 5.4191

2005-2007

’07 5.5050

Per

’06 5.6754 of food

’05

metric tonne Data 12,761,290

Global Energy

’07 Global Manufacturing Data Manufacturing Global 12,695,778 2005-2007 in gigajoules (GJ

’06 12,351,613 Total Manufacturing ’05 Environment Key Performance Indicator Performance Key Environment ment, enabling us to consistently meet the GHG At the same time, cutting our energy use not only use not only At the same time, cutting our energy in significant cost reduces GHG emissions but results savings. And as consumers become more aware of respon- climate change, demand for environmentally one reason we sible products may increase. That’s are seeking to share our environmental performance more visibly with the public. We have completed future scenario planning for by the Global energy using the approach developed are now applying this ap- Business Network. We to further proach to assess climate change scenarios understand the potential impacts to our business. The climate change regulatory landscape is evolving rapidly, and regulatory programs governing GHG emissions are now in place in the EU. Our U.K. business has aggressively addressed energy manage Kellogg Position on Biofuels provided that such Kellogg supports the development of renewable energy sources such as biofuels, and that it is done in development is sustainable, respects the environment and protects biodiversity, all stakeholders’ such a way that competition is encouraged in a free market environment that respects biofuels and urge interests. That said, we are very concerned about the unintended consequences of from dinner plates to government to reconsider policy in this area. By diverting grain and oilseed crops fuel tanks, biofuels are raising world food prices and endangering the hungry. Climate change presents both risks and opportunities and opportunities Climate change presents both risks for Kellogg. As a company dependent on agricultural inputs, we are concerned about the potential for climate change to alter the availability of agricultural commodities and water. We have plans in place to handle short-term business interruptions, such as and we will continue to localized severe weather, track the long-term supply trends of our agricultural ingredients as they evolve. Kellogg’s use of energy – in both our manufacturing operations and in the transportation of our finished goods to market – represents our most significant environmental impact. Our energy use contributes to of greenhouse resource depletion and the emission pressing issue of gases, which are contributing to the anthropogenic climate change. Energy Use and Greenhouse Gas Emissions In the late 1990s, Kellogg developed the Kellogg System (KEMS), which Environmental Management has helped to ensure that the environmental aspects of Kellogg’s activities conform to the company’s environmental policy. We routinely audit our facilities to ensure compliance. We are now in the process of robust system, fully aligned to developing a more to be rolled out in 2009. In ISO 14001; it is expected the U.K., three Kellogg facilities have undergone ISO one in Manchester and two 14001 certification: in Wrexham. In Mexico, our Querétero plant has (“clean received four consecutive Industry Limpia Mexico’s industry”) certifications from PROFEPA, federal environmental protection agency. ENVIRONMENT

50 Kellogg Company’s 2008 Corporate Responsibility Report **“Metric tonnesoffood” is ameasurement ofactualfoodproduct, notincluding packaging. expand thescopeofour GHGemissions reporting. opedbytheWorld ResourcesInstituteandtheWorld BusinessCouncilforSustainableDevelopment. Inthefuture,wewill continue torefineand andMethodsWorkbook wasused.Alloftheprotocols usedarebasedontheGHGProtocol CorporateAccountingandReporting Standarddevel- calculatedusing theEnvironmentalProtectionAgency’s ClimateLeadersGHGInventory Guidance.InAustralia,theGreenhouse OfficeFactors

*We havebeenworking toensurethatouremissionsand energyusecalculationmethods arerobust.IntheU.S.,GHGemissions figuresare our energyuseandCO Nonetheless, production. in expansions to due 2007, through a variety of energy-efficiency projects in our our in projects energy-efficiency of variety a through We achievedGHGand energyusereductions Facility Initiatives of foodcontinuedtodecrease.** use andcarbondioxide(CO energy overall our that show data The 2005.* since performance our illustrates 49 page on figure The ergy useandGHGemissionsinrecentyears. We havemadesubstantialprogressinreducingen- Performance markets. carbon of development further the and regulation increased from arise may that ties well positionedtoaddresstherisksandopportuni- are we believe We world. the around businesses our impact may programs regulatory how on spective Trading Scheme. Theseactivitieshavegivenusper Change Levyanditssuccessor, theEU’s Emissions emissions-reduction goalsoftheU.K.’s Climate w w w w w 2008, thefacilityincludes: by LibertyPropertyTrust andleasedbyKellogginJune ship inEnergyandEnvironmentalDesign(LEED).Built certified bytheU.S.GreenBuildingCouncil’s Leader Hagerstown, MarylandisthefirstKelloggfacility A 215,460squarefootsnacksdistributioncenterin Kellogg’s New LEED-Certified Facility contain “slag,”awasteproductfrommetalrefineries percent recycledcontent,suchasconcretewallsthat Building materialsthatcontainaminimumof20 lons ofwaterperyear that don’t requireirrigation,savingthousandsofgal- Locally adaptedandnativeplantsinthelandscaping energy useforcoolinginthesummermonths A whiterubberroofthatreflectsthesun,reducing up 40percentenergysavings State-of-the-art, blow-throughspaceheatersthatrack less energythantraditionalfixtures Innovative fluorescentlightingthatuses50percent 2 emissionspermetrictonne 2 ) emissionsincreasedin - - w w w alternative fuelsandrenewableenergy. including opportunities, savings energy investigate and use energy manage conservation, promote to ment programbegunin2005(andcontinuingtoday) below. Manywerepartofaglobalenergy-manage- facilities worldwide,severalofwhicharehighlighted w w w by savings at the Manchester plant. plant. Manchester the at savings by offset be will increase any but target, ETS its exceed Wrexhammay 2008, In date. to targets ETS all met have Trading facilities These Emissions (ETS). Scheme EU’s the in part taking began U.K. the in facilities ham In October2007,Kellogg’s Manchesterand Wrex-

Modifications tothesteamsystematourBattle At ourplantsintheU.K.,energy-efficiencyinitia- A lightingretrofitacrossmultiplemanufacturing At ourLancaster, Pennsylvaniaplantin2007,we emissions by2,000metrictonnesperyear. energy consumption decreased by 17 percent in in percent 17 by decreased consumption energy headquarters, U.K. Road Talbot Kellogg’s At efficiency in the plant’s steam generation system system generation steam plant’s the in efficiency In India, ourplanthasreducedenergyuseper tonnes annually. annually. tonnes emissions by1,700metrictonnesperyear. GHG reduced have 2006 in plant Michigan Creek, tives completedin2005and2006cutCO facilities remaintoberetrofitted. U.S. few A warehouses. our of areas unoccupied as wellinstallingmotionsensorsingenerally systems, fluorescent high-efficiency to lighting discharge high-intensity from switching involved than 25percentsincelate2005.Thisproject has reducedlighting-relatedenergyusebymore and warehousefacilitiesintheU.S.Canada thereby reducingCO ment plantasonesourceoffuelforourboilers, began usingbiogasfromourwastewatertreat- 2007 throughavarietyofconservationinitiatives. tion system. and redesignofthewastewatertreatmentaera- was achievedthroughimprovedcombustion This 2006. since percent 25 by product of pound 2 emissions by 3,300 metric metric 3,300 by emissions 2

Kellogg Company’s 2008 Corporate Responsibility Report 51

4.5486 Range: 4.2810 4.2810 Range: goal to 2015 4.9846

’07 5.0610

Per

’06 5.3512 of food ’05

metric tonne Data 11,738,244 Water

Global ’07 11,671,764 in cubic meters 2005-2007 2005-2007

’06 11,646,115 Total Manufacturing ’05 Global Manufacturing Data Manufacturing Global Environment Key Performance Indicator Performance Key Environment Water Use Water increasing Sustainable water use is an issue of global importance, and one we take very seriously. Water scarcity presents several potential risks for our company. In our agricultural supply chain, the impact, farmers use largest water place of Kellogg’s water to produce significant quantities of irrigation the agricultural commodities used in our products. Drought conditions in agricultural regions thus have the potential to increase grain prices, which in turn affects our input costs. In our manufacturing facilities, we use water primarily for cleaning, but also to feed boilers, cool machinery and wet filtration systems and as a raw ingredient in our products. Water scarcity in areas where our facilities are located could potentially disrupt manufacturing. In addition, water used for irrigation and manufacturing must meet certain quality standards, so we are dependent on other users within each watershed to maintain acceptable quality. We are very mindful of these potential risks and are prepared to address them if they arise. And to do our part in water conservation, we are working hard to minimize our overall water use and our impacts on local water supplies in the communities in which we operate. - emissions. The following 2 emissions by 380 metric tonnes per year. emissions by 380 metric tonnes per 2 In the U.S., we have increased our use of rail ship- In the U.S., we have increased our use ments, saving more than 1.6 million gallons of diesel fuel per year since 2006. air space in In 2007 we decreased the amount of cases of ready-to-eat cereal and increased the amount of product on each truck, thus reducing for distribu- the number of vehicle miles required 74,000 gal- tion. This project saved approximately lons of fuel with the same unit volume of product. GPS tracking and speed controls were piloted in 2007 and fully implemented in 2008 on our U.S. - truck fleet. The GPS system delivers computer-gen erated routes and delivery schedules, minimizing the number of miles traveled. Also, the data gath- ered enables us to identify driver training oppor tunities and monitor speed, idle time and off-route miles. Initial use indicates a five percent increase in fuel efficiency. Recent distribution network efficiencies in the U.S. have saved more than 700,000 gallons of fuel annually. In a groundbreaking project in England, Kellogg teamed up with the global health and hygiene company Kimberly-Clark and the supply-chain to consolidate management company TDG in 2006 in London, shipments to retailers. First rolled out the partnership is now in operation throughout the country and is saving the companies 270,000 miles and 30,000 gallons of diesel fuel and reducing their CO

w w w w Transportation Initiatives Transportation Our Global Logistics team has been aggressively working to deliver more products to market with fewer vehicles and less energy. Our 800 vehicle, of uses about 4.5 million gallons U.S.-based truck fleet diesel fuel annually, which equates to approximately of CO 46,000 metric tonnes are some examples of progress to date in reducing emissions: GHG and use energy transportation-related w ENVIRONMENT

52 Kellogg Company’s 2008 Corporate Responsibility Report Waste w w w curbing wateruse: been have we how of examples are following The decrease. to continued has produced food of tonne metric per use water but production, increased have we as years few past the in risen has use water overall Our 2005. since performance our shows 51 page on figure The Performance riencing an increase in both these measures in 2006. 2006. in measures these both in increase an riencing per metrictonneoffoodproduced in2007,afterexpe- waste nonfood and waste nonfood overall both ducing As seeninthefigureabove, wehavesucceededinre- Performance resources andrealizecostsavings. natural of use our reduce both to us enable will so are seekingtoreduceitwhereverfeasible.Doing we and inefficiency, of indication an as waste view materials destinedforlandfillsandincinerators. We and feed animal into converted be can that waste includes materialsdesignatedforrecycling,food that arenotpartofapackagefinishedfood.This facilities our leaving materials as waste define We

supply, saving more than seven million gallons of water peryear.of gallons million seven than more saving supply, wheat incoming our cleaning for used water the reuses and filters 2007 in installed equipment new facility, Pennsylvania Lancaster, our At systems. product-contact areas,suchasairexhaustfiltration ment andcapturingwastewaterforreuseinnon- years byintroducinghigh-efficiencysprayequip- five past the over percent 40 by use water its duced Our BotanyplantnearSydney, Australia,hasre- annually. gallons million seven additional an save equipment wasinstalledatthisplant,whichwill for irrigation.In2007,new, high-efficiencywashing it reusing by annually water of gallons million 57 than more saves Mexico, Querétaro, in plant Our

w w Additional highlightsincludethefollowing: London, Canadaplantisrecycled. our from waste nonfood and food of percent 95 than us toachievethisperformance.Inaddition,more Germany, drivenbygovernmentregulation,enabled in infrastructure recycling The energy.) for incinerated energy generation.(Andonlyaboutonepercentis is recoveredforreuseorrecyclingincinerated many plant,100percentoffoodandnonfoodwaste results withregardtorecycling.AtourBremen,Ger outstanding truly achieved have locations Some generated. waste waste metricsinordertodrivethereductionoftotal chosen toincluderecycledwastematerialsinour have We goal. waste-reduction our toward contribute not does but effect environmental positive a has on increasingtherecyclingofwasteproducts,which focused have initiatives waste-related our of Many Environment Key Performance Indicator streams at our cereal plants in Lancaster, Pennsylvania A 2007projectimprovedthe separationofwaste shipping. chain toreducewasteassociated withbulkmaterial of paperpackagingthrough aprojectwithoursupply From 2004to2006,weeliminated 25millionpounds Global ManufacturingData ’05 Manufacturing

Total 211,347 Waste dataincludewaste ’06 as wellthosesent recycled andreused, 2005-2007 in metrictonnes

253,984 materials thatare 2005-2007 ’07 Global Waste to landfill.

242,125 Data metric tonne ’05

of food .9711 ’06 Per 1.1013 ’07 1.0282 2015 goal

Range: .7769to .8255 - Kellogg Company’s 2008 Corporate Responsibility Report 53

® 15% Corn Flakes

® Sent to Landfill Global manufacturing facilities manufacturing Waste generated at Kellogg generated Waste Recycling Rate Recycling Manufacturing Facilities Manufacturing Recycled 85% Kellogg Global Recycling Rate, Rate, Recycling Global Kellogg In the U.S. in 2006, we eliminated more than 3,200 metric tonnes of packaging material (annual use) through multiple initiatives, one of which involved packaging a reduction in the thickness of flexible We reduced an ad- films in the cereal category. ditional 1,500 metric tonnes in 2007 by converting select corrugate cases to trays, reducing the size of certain cartons to improve the product-to-package ratio and optimizing film thickness in additional product categories. In 2007, we redesigned the geometry of the serving trays for Kashi frozen food entrees, eliminating 145 metric tonnes of plastic resin and 90 metric tonnes of paperboard and corrugate per year. In Australia in 2006, we eliminated 24 metric This was achieved tonnes of corrugate annually. by changing how one of our snack products was stacked for shipping, enabling us to reduce the dimensions of the shipping cases.

Performance In 1906, the first box of Kellogg’s came off the assembly line packaged in 100 percent recycled paperboard, and Kellogg has used recycled board for most of our products since that time. We in paperboard recycled of users largest the of one are cereal cartons almost all of Kellogg’s the U.S. Today, with at least are made of 100 percent recycled fiber, 35 percent coming from consumer-recycled material. recent environ- The following are some examples of mental improvements in our packaging. w w w - Also in the U.K., at Kellogg’s Talbot Road headquar Talbot Kellogg’s Also in the U.K., at In the U.K., Kellogg worked with the National Indus- In the U.K., Kellogg to identify items typically trial Symbiosis Programme as used work garments) that sent to landfill (such recycled. As a result, we diverted could be reused or waste from landfills. 3.4 metric tonnes of decreased ters, the amount of waste sent to landfills of recycling by 15 percent in 2007 through a variety and reduction initiatives. and Memphis, Tennessee, allowing packaging-related packaging-related allowing Tennessee, Memphis, and for recycling. This project materials to be removed more than 1,300 metric tonnes ultimately diverted into recycling. per year from landfill Kellogg has recently developed a list of environmental guiding principles relating to packaging. These principles communicate a consistent approach within our group for how Packaging Innovation and Technology to incorporate and track the environmental impacts of design decisions. We are committed to optimizing our processes and designs to reduce overall packaging and maximize the use of recycled content and recyclable materials. In 1994 we began source-reduction initiativesall packaging in categories. Since then, new source reduction have been identified and achieved goals for also aim to identify ways to in- We every year. crease the recycling of packaging material consumer level. at the For all its benefits, packaging does require energy and natural resources to produce, and it can become the contents are a waste product if not recycled after consumed. While not included in our waste metrics, issue for society. our packaging does represent a waste Kellogg’s packaging protects our products, maintains products, maintains packaging protects our Kellogg’s freshness during transport and in our customers’ to con- homes, and provides a means to communicate sumers. Sturdy, good-quality packaging can actually help to prevent the waste of stale or damaged food. Packaging w w

ENVIRONMENT

54 Kellogg Company’s 2008 Corporate Responsibility Report 12 Note thatourwaste dataincludeswastematerialsthat arerecycledandreused,aswell thosesenttolandfill. { large company. Environmental Practices fora the prestigiousaward ofBest our U.K.teamwashonoredwith Environment Awards ceremony, At the2007NorthwestBusiness Kellogg Company’s 2008 Corporate Responsibility Report 55 - continuing to identify effective ways to reduce energy use, GHG emissions, water use and GHG emissions, water use, to reduce energy continuing to identify effective ways of our products the life cycle through waste facilities and regions across an internal network to share best practices establishing page 59 on and experts, as noted in the table engaging with external groups and exploring each of our business units developing GHG emissions-reduction targets for sources technologies and alternative energy the use of energy-efficient focusing and use water of reporting and measurement assessment, our improve to working regions in water-stressed more closely on our operations This section outlined our current performance and near-term goals. To achieve these goals, goals. To near-term This section outlined our current performance and we are: w business and to reduce an energy-efficient In the longer term, we aspire to be recognized as every stage of their life within footprint” of our products the carbon footprint and the “water reduce the materials and resources, in our use of also aim to achieve reductions We cycle. content in our packaging. and recyclable the recycled and increase to product of packaging ratio entire global work the combined effort of our and it will take These are high aspirations, in the coming years. to reporting on our progress forward look to achieve them. We force Looking Ahead Looking w w w w section of sustainable agriculture with ingredient traceability and improved nutritional content for our primary food ingredients. Sustainable Agriculture Sustainable - early stages of understanding sus remain in the We tainable agriculture and how we can help to promote actively participating in learn more, we are its use. To agriculture-related, multi-stake- the five sustainable holder efforts noted in the table on page 59. Through these and other activities, we aim to contribute to the expectations for sustainable development of industry agriculture and incorporate sustainable agriculture are also We into our responsible sourcing standards. of programs seeking to contribute to the development that ensure the sustainability of our food ingredient primary ingre- supplies, enable traceability for our dients from field to production, and identify links between agriculture and the nutritional content of drive the inter crops. Our ultimate aspiration is to In Querétaro, Mexico, our employees undertook a complex project to restore a native plant species in protected areas around Peña de Bernal, the “world’s second-largest rock monolith.”

Employee-Driven Environmental Initiatives

At Kellogg locations throughout the world, our employees are launching and taking part in initiatives that help us (and them) positively impact the environment.

In Querétaro, Mexico for example, our employees undertook a complex project to restore a native plant species in protected areas around Peña de Bernal, the world’s second-largest rock monolith. The project was coordinated by a Corporate Social Responsibility (CSR) Committee in our Mexican business. “This plant [Desert Spoon, or sotol in Spanish] used to grow everywhere but now is endangered,” explained Lulu I., coordinator of the Commit- tee’s environmental activities. “It has been exploited for traditional indigenous crafts.” The plant is also necessary for halting erosion in the dry, desert-like landscape.

The CSR Committee pulled together multiple entities to make the restoration project happen. “An active social club at our Querétaro plant wanted to do an environmental project to give back to the community,” Lulu explained. “At the same time, we learned that Kellogg’s Merchandising Team wanted to undertake a project with Wal-Mart to raise money for a good cause, and the government wanted to replant sotols in this area to restore the native ecosystem.” The Committee saw the opportunity to harness Kellogg’s fundraising and volunteering abilities to achieve this environmental goal.

In November 2007, Kellogg launched the Peña de Bernal promotion in Wal-Mart stores. For every two boxes of Kellogg snack bars sold, Kellogg donated funds for the restoration project.

In this way, approximately $200,000 pesos ($20,000 USD) was raised and donated to the state government’s Sustainable Development Office. With those funds, the government conducted nearly two dozen seminars in early 2008 to educate community members about their local ecosystem and about planting, caring for and reproducing the sotols.

Then in June 2008, 150 Kellogg volunteers worked with local citizens to plant an amazing 5,000 sotols in one day. The volunteers included employees (and some spouses and 56 Kellogg Company’s 2008 Corporate Responsibility Report 2008 Corporate Company’s 56 Kellogg children) from the Querétaro manufacturing plant, from Kellogg’s Latin American headquarters in Querétaro, from a nearby Kellogg distribution facility and from the local factory of a Kellogg packaging supplier. The day of planting ended with a meal of traditional Mexican dishes presented by the community to the volunteers.

Ultimately, the government oversaw the planting of 15,000 sotols with the funds raised by Kellogg. Lulu said the project was a very positive experience that they hope to repeat. “We are all starting to be more environmentally conscious, and we want to do the right thing,” she said.

Kellogg employees in other locations around the world have similarly taken the initiative to launch and take part in “green” projects. For example: w In the U.S., “Green Teams” have recently been Kellogg Company’s 2008 Corporate Responsibility Report 57 launched at several North American locations. These teams aim to promote environmentally sustainable practices in Kellogg offices and our employees’ homes. w Employees at our European headquarters in Dublin and U.K. headquarters in Manchester held “Environmental Week” events in 2007 and 2008. Activities included employee education regarding the use of video conferencing as an alternative to carbon-intensive business travel, the launch of a new recycling scheme and a Q&A with a representative of the Carbon Trust. w Kellogg offices in the U.K. and Italy have launched “paper leagues” to track the amount of paper used per person in each department, in a competition to reduce those numbers. The U.K. league has set a target to reduce paper and toner use by 10 percent in 2008.

To protect their privacy, this report uses first names and last initials only for our non-executive employees. 58 Kellogg Company’s 2008 Corporate Responsibility Report External Engagement Activities

To help foster continued progress toward our environmental goals, and as a key piece of our corporate responsibility strategy, Kellogg is engaging with a range of external stakeholders – including customers, government agencies, nonprofit organizations and others in our industry – to better understand important environmental issues and participate in the search for solutions.

Partnership Involvement

Sustainability Confederation of the Food and Drink Industry in the EU, a Belgium- Take part in the Environment Committee and the Sustainable Produc- based industry association (www.ciaa.be) tion and Consumption Working Group

Food and Consumer Products of Canada, an industry association As a member, participate in sustainability-related committees working (www.fcpmc.com) to define industry metrics

Food and Drink Federation, a U.K.-based industry association Set reduction goals (outlined in this section) aligned with FDF targets (www.fdf.org.uk) for energy use, transport, water use, waste and packaging

Food Marketing Institute, a U.S.-based industry association As a member of the Sustainability Committee, contribute to under- (www.fmi.org) standing and program development for food-retail supply chain sustainability initiatives

Grocery Manufacturers Association, a U.S.-based industry association Participate in sustainability-related committees (www.gmabrands.com)

World 50/Sustainability 50, a cross-industry, invitation-only committee As a member, participate in the sharing of ideas and best practices of chief sustainability officers (www.w50.com) GHG Emissions Carbon Disclosure Project (CDP), a U.K.-based nonprofit organization Report annually on global GHG emissions and climate-related (www.cdproject.net) shareholder risks

Carbon Trust, a U.K.-based government-funded company Set benchmarks for CO2 emissions for the life cycle of our products (www.carbontrust.co.uk)

Climate Leaders Program of the U.S. Environmental Protection Agency Work with the EPA to track, report and reduce our GHG emissions (www.epa.gov/climateleaders)

Sustainable Packaging

National Packaging Covenant, an Australia-based, co-regulatory Develop and implement a voluntary action plan to reduce the arrangement (www.pca.org.au/?id=8) environmental impacts of packaging

Sustainable Packaging Coalition, a U.S.-based industry working group As a member, take part in sharing information on best practices (www.sustainablepackaging.org) Kellogg Company’s 2008 Corporate Responsibility Report 59 Waste Resource Action Program, a U.K.-based government-funded Participate with this organization to increase recycling company (www.wrap.org.uk)

Sustainable Agriculture and Responsible Sourcing

AIM-PROGRESS, a forum sponsored by industry associations in Collaboratively develop common positions regarding responsible the U.S. and Europe sourcing practices and methods for evaluating and driving responsible supply chain practices

American National Standards Institute, a U.S.-based nonprofit Involved in developing the American National Standard for Sustainable organization (www.ansi.org) Agriculture Practices

Field to Market – The Alliance for Sustainable Agriculture Outcomes As a member of the Steering Committee of this cross-industry group (www.keystone.org) (facilitated by the Keystone Center), identify and support sustainable agriculture practices

Roundtable on Sustainable Palm Oil, a Malaysia-based nonprofit As a member, along with several of our palm oil suppliers, contribute organization (www.rspo.org) to the development of additional sustainable palm oil

Sustainable Agriculture Initiative, an EU-based industry group As a member, work to understand trends and contribute to (www.saiplatform.org) developments

60 Kellogg Company’s 2008 Corporate Responsibility Report Kellogg Company’s 2008 Corporate Responsibility Report 61 -

$27,100,000

$25,000,000

$23,000,000

68% 68% Strategic Corporate Philanthropy Corporate Strategic partner with a variety of service and nonprofit We organizations to provide financial support, food and other resources to improve the communities where we operate – and beyond. In the last five years, has contributed Corporate Citizenship Fund Kellogg’s million in more than $40 million in cash and $120 products to nonprofits and charitable organizations around the world. designed our philanthropic strategy to align We with our business goals. As a food company – and leader one with a 100-year heritage of nutrition ship – it makes good sense for us focus on programs that target nutrition and physical fitness. While we emphasize these areas, we also support initiatives and expand that improve community development opportunities for people of diverse backgrounds. $7,800,000 $7,900,000 $7,700,000 * ** $4,000,000 $3,900,000 * 2005 2006 2007 2005 2006 2007 2006 2007 Cash contributions In-kind contributions Charitable Contributions Charitable Funding to community improvement initiatives through Kellogg‘s Corporate Citizenship Fund: Brand philanthropy Charitable Charitable Contributions and nutritious. Annual but are still high quality and nutritious. Annual *In-kind contributions are typically products that are too close to sell-by dates to be marketable, cost of goods sold. product donation totals fluctuate yet are consistently in the range of $20 million to $30 million. These products are valued at . Community **Data not available for 2005 Our charitable contributions and programs come Company and from two primary sources: Kellogg Kellogg’s Corporate Citizenship Fund, a charitable corporate foundation. Four independent members to and of our Board of Directors provide guidance oversight of our community engagement approach (The through the Social Responsibility Committee. Kellogg Foundation, a separate and distinct en- W.K. tity, makes its own investments and is governed by its own independent Board of Trustees.) W.K. Kellogg’s strong legacy of giving continues care about our communi- We at our company today. and believe we have a responsibility to invest ties – whether we are donating products to the them in hungry, educating young people about proper nutrition or working to reduce global malnutrition. Our founder, W.K. Kellogg, was as passionate about his community as he was about as passionate was Kellogg, W.K. Our founder, well was responsible business and his vision of a socially his company, about more to care plant in 1928 provide in the company’s opened a nursery He to time. ahead of his workday six-hour a created He employees. of Kellogg children the W.K. for the launched he 1930, in And, Depression. Great the during jobs on behalf of others. fortune to work his personal putting Foundation, community

62 Kellogg Company’s 2008 Corporate Responsibility Report w w w w w w following: obesity tohealthandfitness.Oursupportincludesthe on multipleaspectsofnutrition,frommalnutritionto focus that programs supporting to committed are We Nutrition andPhysical FitnessPrograms

ming aregular partoftheirlives. thousands of people getactivebymaking swim- with theAmateurSwimming Associationtohelp of athree-year, £3million($5.3million)partnership middle the in is Kellogg U.K., the In Swim Active. food. high-protein supplies Kellogg HIV/AIDS. with people living for program intervention nutritional a Vital, Management ofSouthAfricatodevelopHealthis Aid Joint with partnering is Kellogg Health isVital. Service in2007andasitsDonoroftheYear in2005. organization recognizedKelloggforGroupVolunteer The programs. feeding community-based of sands worth offoodproductsthataredistributedtothou- million $25 approximately donates Kellogg year, largest charitablehungerrelieforganization.Each nation’s the Harvest), Second America’s as known ly has partneredcloselywithFeedingAmerica(former Feeding America.Formorethan25years,Kellogg meals toyoungpeopleeveryyear. hundreds ofclubsthatserveover500,000morning establish helped have ContinYou and Kellogg settings. other and schools in clubs breakfast of ing organizationintheU.K.,topromotebenefits ($1.86 million)withContinYou, acommunitylearn- million £1 than more invested ContinYou.have We young people. country providesphysicalactivityopportunitiesfor the well how into insight offer to designed Youth, Report CardonPhysicalActivityforChildrenand Canada hassponsoredActiveHealthyKidsCanada’s Active HealthyKidsCanada.Since2005,Kellogg childhood obesity. Healthy Kids,aleadingforceinthefightagainst for Action through states U.S. 12 in schools public at policies wellness implement to $400,000 uted Action forHealthyKids.In2008,Kelloggcontrib- - Kellogg Company’s 2008 Corporate Responsibility Report 63 . ®

irit of America Summit Award local communities. Sp received United Way’s received United Way’s Employee Community The previous year, KelloggThe previous year, Kellogg with the prestigious In 2008, honored United Way and volunteer initiatives within or exemplary work in corporate of the organization’s fundraisingof the organization’s f Investment Summit Award philanthropy and for our support - - Over the last two years, Kellogg last two years, Kellogg the USA. Over the YMCA of to the YMCA for $1.25 million has contributed healthy living and programs that encourage physical fitness. for Olympia. Kellogg Trains hasYouth been the official partner for Germany’sYouthTrains for Olympia, the world’s biggest school sports 1987. competition, since

tunities for our employees. In 2008, more than 1,800 tunities for our employees. In 2008, more than 1,800 Kellogg employees participated in service projects in their communities, building homes and playgrounds, distributing food to families and preparing meals at homeless shelters, among many other efforts. ing by encouraging and arranging volunteer oppor Each year, Kellogg supports United Way Days of Car Kellogg supports United Way Each year, We have chosen to focus on a few strategic nonprofit partners, like United Way, because we believe we can have the biggest impact when our company and Our com- our employees are aligned in our efforts. munity engagement and philanthropy programs are designed to encourage employees and retirees to contribute their skills, as well as their personal financial resources. Employees and retirees who volunteer a minimum of 25 hours a year to the same organization are eligible to apply for a $250 grant for the Care$ Employee and through the Kellogg’s charity, Retiree Volunteer Program. We strive to make a difference in the communities strive to make a difference in the communities We where we operate, and we assist organizations that social develop- address community economic and efforts fo- ment. One of our largest company-wide Our senior executives lead this cuses on United Way. years through effort, which we have supported for matches corporate contributions and dollar-for-dollar In 2008, Kellogg of employee and retiree donations. will benefit 30 pledged $5.3 million to campaigns that U.S. communities. We have increased our United Way since 2003. contributions by more than $2 million Community Development w w 64 Kellogg Company’s 2008 Corporate Responsibility Report wildfires inCaliforniaandMontana. canes, KatrinaandRita,intheU.S.;2007 tsunami inSouthAsiaandAfrica;the2005hurri- made contributionstoassistvictimsofthe2005 volunteer reliefefforts.Inrecentyears,wehave product donations,cashcontributionsand When disastersstrike,Kelloggrespondswith Kellogg, andtodeterminewhat wecandotocreate long-term,positiveimpacts. companies, arechallenged togainadeeperunderstanding ofcommunitiesthatare newto As ourglobalreachexpands inplacessuchasRussia, ChinaandTurkey, we, like many with objectivesasaglobalfoodcompany. our align that programs those on emphasis greater even place to and which weoperate, community investmentprograms tofocusevenmorestrategically onthecommunities in As wefurtherdevelopourcorporate responsibilitystrategy, wewill work toshiftourcurrent causes. goals –andwewillcontinuetomake donationsthatbenefit themissionsofa variety of nonprofits – including those charities that are unrelated to the corporations’ core business We believe companies can make a significant impact by contributing funds and goods to Looking Ahead w w grounds, including: new opportunitiesforindividualsofdiverseback- We alsofundseveralexternalinitiativestoprovide our programs.) place sectionofthisreportformoreinformationon (See SupplierDiversity, page33,aswelltheWork- employees. talented retain and attract to plan inclusion have beenimplementingourenhanceddiversityand communities inwhichweoperate.Internally, we success –bothwithinourcompanyandthe our of component critical a as diversity view We Diversity Programs

Michigan GayandLesbianAlumniSociety. Society ofWomen Engineers,andtheUniversityof MBAs, SocietyofHispanicProfessionalEngineers, MBA Association,NationalSocietyofHispanic Black National Fund, Scholarship Islander Pacific America, HispanicScholarshipFund,Asianand Black CollegesandUniversities,100Menof diversity asacriterion,including:Historically $300,000 toscholarshipprogramsthatinclude Scholarships. In2007,wecontributednearly ored PeopleinitsBaltimore,Marylandheadquarters. the National Association for the Advancement of Col- mary funding source for the Law Fellows Program of NAACP LawFellowsProgram.We havebeenthepri- Kellogg Company’s 2008 Corporate Responsibility Report 65 66 Kellogg Company’s 2008 Corporate Responsibility Report to theGFNfor useinthefoodbanks. wise be thrown away. The committee also encourages farmers to sell some of their produce restaurants, hotels and other companies to convince them to donate food that would other As a member of the GFN’s Food Sourcing Committee, Mini has to liaise with supermarkets, work here.We’ve beenwaitingforyearssomething likethis.” “When IsawtheU.S.foodbanks,lightsjustwenton forme,”hesaid.“Iknewitwould headquarters communityofBattleCreek. traveled to the U.S. He to running. visit established and food up banks in banks Chicago, food in Milwaukee the and get in Kellogg’sto preparing – time own his on and day business the during both – hours countless spent he followed, that year the In lap. Mini’s into fell project the initiative, the spearheading about 2007 in Kellogg approached GFN the When for food,”Minisaid.“Iknowwhathungerisabout.” “My mother would build a fire, put on a pot of water to boil, and go to our neighbors to ask Many evenings,hesaid,hismotherwouldhavenothingtocookforhersevenchildren. province. KwaZulu-Natal the of part Ladysmith, of town rural the in boyhood apartheid-era his from cry far a It’s Johannesburg. in department resources human Kellogg’s in career Mini, whose first name means “daytime” in Zulu, has had a successful and fulfilling 17-year South Africandivision,hasbeenoneoftheprimarydrivers. Kellogg’s for transformation organizational of director K., Mini And process. the in leader national system of food banks in South Africa. Kellogg Company has been a key donor and In 2009, the Global FoodBanking Network, or GFN, will open the first of what will become a of hungry–untilnow. legions the feeding for mechanism formalized a had never has poverty.Yetcountry in the Africa’slive South residents of million Half 48 world. nearly the in country any of poor and rich between disparities greatest the of one with contrasts, stark of nation a is Africa South Employee Engagement “ boyhood intheruraltownofLadysmith....” It’s afarcryfromhisapartheid-era resources departmentinJohannesburg. 17-year careerinKellogg’s human in Zulu,hashadasuccessfulandfulfilling Mini, whosefirstnamemeans‘daytime’ - Some vendors were initially skeptical. Over the years, many grocers and food companies in South Africa have donated food to what seemed like perfectly legitimate causes – only to discover that the products were later sold on the black market. The foodbanking program will guarantee that the donations will go to the people who truly need them.

Kellogg’s involvement, which will include significant product donations, has lent credibility to the project. Kellogg’s vice president of corporate social responsibility serves on the GFN board of directors. And the managing director of Kellogg Company South Africa, K. “Ven- kat” Venkatachalam, was the first co-chair of the South African Forum for Food Security.

The first pilot food bank is expected to open in the city of Cape Town in the first quarter of 2009. Ultimately, the GFN plans to operate food banks in four cities, including Johannes- burg and Durban, and four rural communities where poverty is particularly pronounced.

The need for food banks has become even more urgent recently, as South Africa has experienced an influx of impoverished immigrants from nations such as Zimbabwe, Nigeria and the Democratic Republic of Congo. In fact, Mini said, there is some concern that the first Kellogg Company’s 2008 Corporate Responsibility Report 67 food banks will be overwhelmed by the numbers of needy individuals. But, he said, “We have to soldier on.”

The GFN volunteers have been taking some cues from other new foodbanking projects that have launched with Kellogg’s help in India, Guatemala, Japan and Mexico. Although each country has its unique challenges, “hunger is hunger” no matter where you go, Mini said.

The foodbanking program is a perfect fit for Kellogg, which has historically focused its philanthropic efforts on ways to improve the health and wellness of individuals. Moreover, the program ties in nicely with Kellogg’s corporate values of respect and integrity, said Mini.

For Mini, the project has struck a deeply personal chord. “Even when my formal working days are over, I will continue with the food bank,” the 58-year-old said. “This is my torch.”

To protect their privacy, this report uses first names and last initials only for our non-executive employees. COMMUNITYISSUEFOCUS 68 Kellogg Company’s 2008 Corporate Responsibility Report For moreinformation,visitwww.foodbanking.org. for challenges food distribution. and opportunities of analysis as well as foods, perishable distributing for refrigerated capacity, trucks storage cold expanded banks, food at members staff additional for paid also has support The languages. several in distribution international for produced be will which Manual, Sourcing How-ToFood Global a create to GFN the enabled example, for funding, This Africa. South and Guatemala Mexico, in projects development bank food of support the for GFN Kellogg is proud to be one of three of partners founding the GFN. We to $500,000 contributed the distribute foodsthataredamagedorunfitforconsumption. never banks Food discontinued. been has that brand a be or label, the on error an have simply may foods these of Many year. each people of millions of tens to it distribute help and – away Food banks acquire surplus food from growers and manufacturers that would otherwise be thrown Brazil, EasternEuropeandJapan. and Israel India, South Colombia, Africa, and it is in working to strengthen networks foodbanking efforts in bank Mexico, Guatemala, Venezuela, food national building currently also is GFN The one-third ofthemalnourishedpeopleinworldlive. than more where countries, 14 in found be can banks food developing and GFN’smembers the ing world hunger by supporting food banks and creating new ones where they are needed. Today, In January 2006, the Global FoodBanking Network (GFN) was established with a mission of - alleviat pounds offoodarewastedeveryyear. of billions Nonetheless, child. and woman man, every feed to food enough produces world The hunger epidemic. widespread the to contribute also disasters flicts,natural droughtsand tuberculosis AIDS, factor.con- primary Civil a course, of is, Poverty combined. from malaria and fatalities the surpassing diseases related its numberonecontributor and hunger from tomortality, toll death the with More than 854 million people face hunger around the world. Hunger is the Malnutrition Kellogg Company’s 2008 Corporate Responsibility Report 69 Contact Us/Feedback feedbackYour will help us improve our future reporting, and we welcome your comments and opinions. [email protected] E-mail us at: . Additional Information . Additional 70 Kellogg Company’s 2008 Corporate Responsibility Report 70 Kellogg Company’s 2008 Corporate Responsibility Report GRI Index * a942-16ee7ad2ee1b/GlobalCodeofEthic.pdf cfm?DocumentID=51 •investor.kelloggs.com/documentdisplay.cfm?DocumentID=52 •files.shareholder.com/downloads/K/493227578x0x196418/ec25a03a-7081-450d- navSubSection=Directors •investor.kelloggs.com/contactus.cfm •investor.kelloggs.com/Proxy.cfm?navSection=Services • investor.kelloggs.com/documentdisplay. Specific informationonindicators4.1–4.10 canbefoundat:investor.kelloggs.com/governance.cfm •investor.kelloggs.com/directors.cfm?navSection=Governance& all core indicators and those additional GRI indicators (shown in italics) on which we have fully or partially reported. Please visit www.globalreporting.org for the full full the for text oftheindicatorsandotherinformation ontheGuidelines. www.globalreporting.org visit Please reported. partially or fully have all coreindicatorsandthoseadditional GRI indicators(showninitalics)onwhichwe This indexshowswheretofindinformation relatingtothe2006SustainabilityReportingGuidelinesofGlobal Initiative(GRI),Version 3.0.Theindexcovers Society Human Rights ENVIRONMENTAL ECONOMIC Engagement Commitments and Governance, Product Responsibility Decent Work Labor Practices and SOCIAL Report Parameters Organizational Profile Strategy and Analysis Keys toIndicators: ReportedPartially ReportedNotCovered Not Applicable

Report Profile3.13.23.33.4 2.1 2.22.32.42.52.62.72.82.92.10 Management Disclosures Stakeholder Engagement4.144.154.164.17 Management Disclosures Management Disclosures Management Disclosures Commitments toExternalInitiatives4.114.124.13 Management Disclosures Employment LA1LA2LA3 GRI Indicators(additionalindicatorsinitalics) Governance 4.14.24.34.44.54.64.74.84.94.10 1.1 1.2 Management Disclosures Labor/Management RelationsLA4LA5LA6 Report ScopeandBoundary3.53.63.73.83.93.103.11 Corruption SO2SO3SO4 Community SO1 Materials EN1EN2 Investment andProcurementPracticesHR1HR2HR3 Customer HealthandSafetyPR1 Economic PerformanceEC1EC2EC3EC4 Occupational HealthandSafetyLA7LA8 GRI ContentIndex3.12 Compliance SO8 Public PolicySO5 Energy EN3EN4EN5EN6EN7 Freedom ofAssociationandCollectiveBargainingHR5 Nondiscrimination HR4 Product andServiceLabelingPR3 Market PresenceEC6EC7 Training andEducationLA10LA11LA12 Assurance 3.13 Water EN8EN10 Child LaborHR6 Marketing CommunicationsPR5PR6 Indirect EconomicImpactsEC8 Diversity andEqualOpportunityLA13LA14 Biodiversity EN11EN12EN13 Forced andCompulsoryLaborHR7 Compliance PR9 Emissions, Effluentsand Waste EN16EN17EN18 Products andServicesEN26EN27 Transportation EN29 Compliance EN28 EN19 EN20EN21EN22EN23

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